HB 254

Under existing law, the Alabama Toll Road, Bridge, and Tunnel Authority is exempt from paying state and local taxes and assessments for a toll road, bridge, or tunnel project acquired or used by the authority

This bill would provide further for the exemptions from state and local taxation

Relating to the Toll Road, Bridge and Tunnel Authority Act; to amend Sections 23-2-142 and 23-2-153, Code of Alabama 1975, to provide further for the exemptions from state and local taxation.

Section 1

Sections 23-2-142 and 23-2-153, Code of Alabama 1975, are amended to read as follows:

§23-2-142.

As used in this article, the following words and terms shall have the meanings, respectively, unless the context clearly indicates otherwise:

(1) AUTHORITY. The Alabama Toll Road, Bridge, and Tunnel Authority created by this article, or any board, body, or commission succeeding to the principal functions thereof or to which the powers given by this article to the authority shall be given by law.

(2) BONDS or TOLL ROAD, BRIDGE, OR TUNNEL REVENUE BONDS. Bonds of the authority authorized under the provisions of this article.

(3) CONSUMABLE MATERIALS. Nondurable tangible personal property used to improve real property that, after being used once for its intended purpose, is completely used or destroyed so that it has no salvage value. The term includes, but is not limited to, non-reusable concrete forms, non-reusable drop cloths, and barricade tape.

(3) (4) COST. As applied to a toll road, bridge, or tunnel project, the cost shall include, but not be limited to, the following:

a. The cost of construction, including bridges over or under existing highways and railroads.

b. The cost of the acquisition of all land, rights-of-way, property, rights, easements, and interests acquired by or on behalf of the authority for construction.

c. The cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which buildings or structures may be moved.

d. The cost of diverting highways, interchange of highways, and access roads to private property, including the cost of land for easements therefor.

e. The cost of all machinery and equipment.

f. The cost of financing charges, including interest prior to and during construction and for one year after completion of construction.

g. The cost of traffic estimates, feasibility studies, engineering studies, design and other related studies and analyses, and legal fees and expenses.

h. Plans, specifications, surveys, and estimates of cost and of revenues.

i. The cost of other expenses necessary or incident to determining the feasibility or practicability of constructing a project.

j. The cost of administrative expense and other expense as may be necessary or incident to the construction of a project.

k. The cost of the financing of construction.

l. The cost of placing a project in operation.

m. Any other cost or expenditure necessary or incidental to the construction of a project, the financing of a project, and the placing of a project in operation.

n. Any obligation or expense which may be incurred by the State Department of Transportation for traffic surveys, borings, preparation of plans and specifications, and other engineering services in connection with the planning or construction of a project shall be regarded as a part of the cost of such project and shall be reimbursed to the State Department of Transportation by the authority.

(4)(5) DEPARTMENT. The State Department of Transportation.

(6) EXPENDABLE MATERIALS. Consumable materials and nonconsumable materials.

(7) NONCONSUMABLE MATERIALS. Tangible personal property that loses its distinct and separate identity when incorporated into real property. The term includes, but is not limited to, framing lumber, bricks, steel, re-bar, and concrete.

(5)(8) PROJECT, TOLL ROAD, BRIDGE, AND TUNNEL PROJECT or TOLL ROAD, BRIDGE, OR TUNNEL PROJECT. Any type of toll road, bridge, causeway, tunnel, or other transportation facility established and constructed or to be constructed by or on behalf of the authority, in conjunction with the department, under this article, and shall include, but shall. The term includes, but is not be limited to, all toll roads, bridges, causeways, tunnels, overpasses, underpasses, interchanges, entrance plazas, approaches, access roads, toll houses, electronic tolling facilities and equipment, service areas, service stations, service facilities, communication and video and other surveillance facilities, and administration, storage, and other buildings which the authority may deem necessary for the operation of a project, together with. The term also includes, but is not limited to, all property, rights, easements, and interests which may be acquired by the authority for the construction, operation, and maintenance of a project, including a project that is leased to a user by the authority or the department.

(9) USER. An individual, organization, or legal entity described in subdivision (12) of subsection (a) of Section 23-2-144.

§23-2-153.

(a) The exercise of the powers granted by this article will shall be in all respects for the benefit of the people of the state, for the increase of their commerce and prosperity, and for the improvement of their health and living conditions. Since the ownership, operation, and maintenance of toll road, bridge, or tunnel projects by the authority will constitute the performance of essential functions, the authority, department, and users shall not be required to pay any the taxes or assessments under this section upon any toll road, bridge, or tunnel project or any property acquired or used by the authority, department, or users under the provisions of this article or upon the income therefrom. Any toll road, bridge or tunnel project, any property acquired or used by the authority under the provisions of this article and the income therefrom and the bonds issued under the provisions of this article, their transfer and the income therefrom (including any profit made on the sale thereof) shall be exempt from taxation.

(b) An income, excise, or license tax or assessment may not be levied upon or collected in the state with respect to any corporate activities of the authority or the department or any of their revenues, income, or profit. The exemptions provided in this section do not extend to the taxes or fees levied under Chapter 17 of Title 40 and Article 5, commencing with Section 8-17-80, of Chapter 17 of Title 8.

(c) No ad valorem tax or assessment for any public improvement shall be levied upon or collected in the state with respect to any toll road, bridge, or tunnel project during any time that title to the toll road, bridge, or tunnel project is held by the authority or the department and any time that title to the toll road, bridge, or tunnel project is retained by the authority or the department pursuant to a lease with a user.

(d) No privilege or license taxes or assessments payable with respect to the recording or filing for record of any mortgage, deed, or other instrument, including, but not limited to, the privilege taxes under Chapter 22 of Title 40, shall be levied, charged, or collected in connection with the recording or filing for record of any mortgage, deed, or other instrument evidencing a conveyance to or the creation of any property interest in the authority or the department, any agreement or instrument to which the authority or the department is a party, or any mortgage, deed, or other instrument evidencing a conveyance from the authority or the department to another party or the creation by the authority or the department of any property interest in another party.

(e)(1) The gross proceeds of the sale of nonconsumable materials and the gross receipts of services that are related to a toll road, bridge, or tunnel project, regardless of whether the sale is to the authority, department, or a user, or any contractor, subcontractor, or agent thereof, shall be exempt from the sales tax imposed by Article 1, commencing with Section 40-23-1, of Chapter 23 of Title 40, including the contractor's gross receipts tax levied under Section 40-23-50, and from any local sales tax now or hereafter levied on or with respect to the gross proceeds of any such sale by the state or a county, municipality, or other political subdivision or instrumentality thereof.

(2) Nonconsumable materials related to a toll road, bridge, or tunnel project, regardless of whether the nonconsumable materials have been purchased by the authority, department, or a user, or any contractor, subcontractor, or agent thereof, are exempt from the use tax imposed by Article 2, commencing with Section 40-23-60, of Chapter 23 of Title 40 and from any local use tax now or hereafter levied on or with respect to any nonconsumable materials by the state or a county, municipality, or other political subdivision or instrumentality thereof.

(f)(1) The gross proceeds of the sale of consumable materials and the gross receipts of services that are related to a toll road, bridge, or tunnel project, regardless of whether the sale is to the authority, department, or a user, or any contractor, subcontractor, or agent thereof, are exempt from the sales tax imposed by Article 1, commencing with Section 40-23-1, of Chapter 23 of Title 40, including the contractor's gross receipts tax levied under Section 40-23-50, and from any local sales tax now or hereafter levied on or with respect to the gross proceeds of any such sale by the state or a county, municipality, or other political subdivision or instrumentality thereof.

(2) Consumable materials related to a toll road, bridge, or tunnel project, regardless of whether the consumable materials have been purchased by the authority, department, or a user, or any contractor, subcontractor, or agent thereof, are exempt from the use tax imposed by Article 2, commencing with Section 40-23-60, of Chapter 23 of Title 40 and from any local use tax now or hereafter levied on or with respect to any consumable materials by the state or a county, municipality, or other political subdivision or instrumentality thereof.

(g) The interest paid or accrued on all bonds, notes, or other obligations issued by the authority shall be free from taxation by the state or a county, municipality, or other political subdivision or instrumentality thereof.

(h)(1) The Department of Revenue shall issue one or more certificates of exemption to the authority, the department, and each user, and any contractor, subcontractor, or agent thereof, for each toll road, bridge, or tunnel project. To aid in the administration of this section, the Department of Revenue may issue separate certificates for nonconsumable materials and consumable materials.

(2) The use of a certificate of exemption for the purchase of tangible personal property pursuant to this section may only include expendable materials related to a toll road, bridge, or tunnel project. Any user or a contractor, subcontractor, or agent thereof who purchases any tangible personal property pursuant to a certificate of exemption shall maintain an accurate cost accounting of the purchase and use of the property in the construction of the project. A user or a contractor, subcontractor, or agent thereof who has an exemption from sales and use tax for the purchase of tangible personal property to use on a toll road, bridge, or tunnel project shall file, in a manner as prescribed by the Department of Revenue, reports of all exempt purchases. The Department of Revenue may assess any user or a contractor, subcontractor, or agent thereof with state and local sales or use taxes on items purchased with a certificate of exemption that are not expendable materials related to a toll road, bridge, or tunnel project or that are not properly accounted for and reported as required.

(3) It is the intent of the Legislature for this subsection to lower the administrative cost for the authority, department, and each user, and any contractor, subcontractor, or agent thereof, for toll road, bridge, or tunnel projects.

(i) Nothing in this section exempts any user or any contractor, subcontractor, or agent thereof from state income taxes.

(j) The Department of Revenue may adopt rules to implement, administer, and provide for accurate accounting and enforcement of this section."

Section 2

This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.