HB2 Alabama 2019 1st Special Session

Summary

Primary Sponsor

Bill Poole

Republican

Session

First Special Session 2019

Title

Motor vehicles and motor fuels, Rebuild Ala. Act., add'l tax on gasoline and diesel fuel of ten cents in increments, add'l licensing tax on electric and hybrid electric automobiles, distribution of proceeds for state, county, municipal, and State Port Authority transportation purposes, floor stock tax provided, bond of motor fuel terminal operators increased, taxes increased based on changes in National Highway Construction Cost Index, portion to finance improvements to ship channel related to Ala. St. Docks, ATRIP-II Committee estab., authorized to enter agreements for debt financing, Secs. 11-6-4, 11-6-23, 40-12-242, 40-17-331 am'd.; Sec. 11-6-6 repealed

Summary

HB2 creates the Rebuild Alabama Act, raising fuel and vehicle taxes to fund transportation improvements across the state, counties, municipalities, and port infrastructure, while also funding electric vehicle charging and ATRIP-II projects.

What This Bill Does

It imposes an additional fuel excise tax on gasoline and diesel starting in 2019 and gradually raising to 10 cents per gallon by 2021, with future small changes every other year tied to the National Highway Construction Cost Index. It creates the Rebuild Alabama Fund to collect and distribute these proceeds, finances ship-channel improvements through bonds backed by the tax, and allocates most funds to ALDOT (for the fund) with portions to counties and cities. It also adds new annual license fees for battery electric and plug-in hybrid vehicles, directs a portion of those funds to an electric vehicle charging infrastructure program, and establishes ATRIP-II to fund local road and bridge projects with rules on bidding, DBE participation, and annual reporting.

Who It Affects

• Vehicle owners and drivers statewide: they will pay higher fuel taxes on gasoline and diesel, and owners of battery electric and plug-in hybrid vehicles will pay new annual registration fees (with amounts and future adjustments).
• Local governments and transportation agencies (ALDOT, counties, municipalities, and the Alabama State Port Authority): they will receive and manage funds, issue bonds for port-related improvements, administer grant programs, oversee ATRIP-II projects, and enforce bidding and DBE requirements.

Key Provisions

• Imposes an additional excise tax on gasoline and diesel: 6 cents per net gallon starting in tax periods after August 31, 2019; increases to 8 cents on October 1, 2020; increases to 10 cents on October 1, 2021; annual adjustments beginning October 1, 2023, tied to NHCCI with a maximum +/- 1 cent per adjustment and biennial timing.
• Funds distribution: up to $750,000 monthly of gasoline tax proceeds and up to $230,000 monthly of diesel tax proceeds go to the Alabama Highway Finance Corporation for ship channel improvements (bond security up to $150 million, term not to exceed 20 years). Net tax proceeds after refunds and collection costs are divided so that 66.67% go to ALDOT for the Rebuild Alabama Fund, 25% to counties, and 8.33% to municipalities.
• Rebuild Alabama Fund: proceeds not used for the bond program go into the Rebuild Alabama Fund to support transportation infrastructure and, until EV registrations reach a threshold, fund electric vehicle charging infrastructure through the Electric Transportation Infrastructure Grant Program.
• Electric vehicle fees: battery electric vehicles pay a $200 annual license tax/registration fee and plug-in hybrids pay a $100 annual fee, with these amounts increasing by $3 every four years starting July 1, 2023; initial distribution of the first $150 (battery EV) and $75 (plug-in hybrid) goes to state, counties, and cities, with the remainder funding EV charging infrastructure until EV/HV registrations reach 4% of total; after that point, fees are reduced to $150 and $75 respectively, with continued distribution to state, counties, and municipalities.
• Floor-stocks tax: a floor stocks tax on motor fuel held outside the bulk transfer/terminal system, calculated based on rates in effect September 30, 2012, with timing and payment rules.
• ATRIP-II: creates an Alabama Transportation Rehabilitation and Improvement Program-II (ATRIP-II) and committee to fund local projects on the state-maintained system; includes DBE goals, bidding procedures, annual reporting to state leaders, and a method for project selection and funding.
• Administrative costs and governance: the Department of Revenue retains 0.25% of net tax proceeds for collection costs; the act repeals Section 11-6-6; sets up procedures and reporting requirements for counties and municipalities on fund use and compliance.
• Local project rules: county and municipal projects funded under the act must use ALDOT-approved contractors and DBEs where possible, with bidding and publication requirements and annual transportation plans adopted by local governing bodies.

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

Subjects

Motor Vehicles