HB556 Alabama 2021 Session

Summary

Primary Sponsor

Chris SellsRepresentative

Republican

Session

Regular Session 2021

Title

Gasoline and motor fuel taxes, levied by muns. and counties, use restricted to road and bridge construction and maintenance, exceptions if pledged for bonds, special projects, or after approval by referendum

Summary

HB556 would restrict motor fuel tax revenues raised by municipalities and counties to funding road and bridge construction and maintenance, with limited exceptions for debt financing, referendums on tax increases, and a transition period.

What This Bill Does

It requires municipal and county motor fuel tax proceeds to be used only for road and bridge work. If some of that revenue is already pledged to pay bonds or other debt, the locality may continue using it for up to five years, but must use other revenue to fully pay the debt after five years. Any proposed increase in a motor fuel tax that would be used for non-road purposes must be approved by a local referendum before the levy. The act also repeals conflicting laws and provides an effective date.

Who It Affects

• Municipalities and counties that levy motor fuel taxes (will be restricted to road/bridge use).
• Local governments that currently pledge motor fuel tax revenue to debt (may continue for up to five years, with a plan to replace with other revenue afterward).
• Residents and taxpayers in those municipalities/counties (may be affected by the need for referendums before tax increases).

Key Provisions

• Section 1(a): After the act takes effect, motor fuel taxes levied by municipalities/counties may be used only for road and bridge construction and maintenance.
• Section 1(b): If revenue is used for a non-road purpose but pledged to securitize or fund debt, the municipality/county may continue to use it for up to five years and must pledge other revenue to fully pay the debt after five years; after five years, the revenue must be used only for road/bridge work or the provision is repealed.
• Section 1(c): Any proposed increase in a motor fuel tax that would be used for non-road purposes is not effective unless approved by a local referendum before the levy.
• Section 2: Repeals conflicting laws.
• Section 3: Effective date set as the first day of the third month after passage and governor's approval.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Gasoline Tax