SB401 Alabama 2017 Session

Summary

Primary Sponsor

Gerald O. Dial

Republican

Session

Regular Session 2017

Title

Municipalities, gas or diesel tax or business license tax on gas or diesel fuels, use restricted to construction and maintenance

Summary

SB401 would restrict how municipalities may spend money from gasoline/diesel taxes and related business license fees, tying funds to road and bridge projects only.

What This Bill Does

Proceeds from municipal excise taxes or fees on gasoline or diesel, and the portion of a municipal business license fee based on gasoline or diesel sales, would be used only for maintenance, improvement, replacement, and construction of roads and bridges within the municipality. They could not be used for salaries or other compensation for municipal or contract employees or officials; they would be limited to purchasing or leasing equipment or materials essential to a specific road or bridge project. The funds would be audited annually by the Examiners of Public Accounts, with audit costs paid by the municipality from those proceeds. The act applies to existing and future ordinances, municipalities have 60 days to implement changes, and it becomes effective immediately after passage and governor approval.

Who It Affects

• Municipal governments in Alabama, whose gasoline/diesel taxes and fuel-based business license fees would be restricted to use for roads/bridges and require specific equipment/material purchases, while prohibiting salary payments from those funds.
• Examiners of Public Accounts (state auditors), who would audit the affected funds annually, with audits paid for by the municipalities from the proceeds.

Key Provisions

• Proceeds from any municipal ordinance levying an excise tax or fee on gasoline or diesel fuel, and proceeds from any portion of a municipal business license fee based on gross receipts from the sale of gasoline or diesel fuel, may be used only for maintenance, improvement, replacement, and construction of roads and bridges within the municipality; none may be used for salaries or compensation for municipal or contract employees or officials.
• Proceeds may be used only for purchase or lease of equipment or purchase of materials essential to a specific road or bridge project.
• Proceeds shall be audited annually by the Examiners of Public Accounts; the municipality must pay the audit costs from those proceeds.
• The act applies to existing and future ordinances levying such taxes or fees; municipalities have 60 days from the effective date to implement changes.
• The act becomes effective immediately following its passage and approval by the Governor.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Municipalities