HB566 Alabama 2021 Session

Summary

Primary Sponsor

Nathaniel LedbetterRepresentative

Republican

Co-Sponsor

Wes Kitchens

Session

Regular Session 2021

Title

Taxation, sales tax revenue, distribution and expenditure of further provided, Sec. 40-23-35 am'd.

Summary

HB566 changes how Alabama's sales tax revenue is distributed and spent, prioritizing government operating costs, replacement of lost school and veterans levies, and funding for counties, welfare programs, parks, and education.

What This Bill Does

The bill sets a new order for using sales tax money: first, pay the Department of Revenue's salaries and operating costs; then replace money lost from certain school and veterans levies due to exemptions; after those priorities, distribute the remaining funds to various programs and accounts. It assigns specific portions to counties, the Department of Human Resources, and the Department of Conservation and Natural Resources for parks, with amounts tied to changes in license discount revenue and debt obligations. It also establishes ongoing funding rules for welfare programs, food stamp administration, and a minimum transfer to the Education Trust Fund, while creating a separate path for any consumable vapor product tax receipts to go to the State General Fund and adjusting park funding over time with CPI-based adjustments.

Who It Affects

• Counties of Alabama (and their health and extension services) by receiving a share of the tax proceeds distributed to the counties, with half the share allocated by population and half equally among counties.
• State agencies and funds (Department of Revenue, Department of Human Resources, Department of Conservation and Natural Resources, State General Fund, and the Education Trust Fund) by defining their funding sources and purposes, including admin costs, welfare programs, park-related capital outlay, and the handling of debt service and specific tax receipts.
• Note: This entry summarizes the groups into two broad categories as required by the structure; the bill also specifies detailed allocations within these groups.

Key Provisions

• (a) First charge on sales tax receipts pays the Department of Revenue's salaries and operations; after those expenses, funds replace the three-mill school levy, the one-mill soldiers' relief levy, and the two and one-half mills for general purposes lost by homestead exemptions; the Comptroller draws warrants to cover these replacements.
• (b) After administration and levy replacements, the remaining proceeds are distributed as: (1) $378,000 to the 67 counties; (2) $1,322,000 to the Department of Human Resources; (3) starting June 1, 2000, to the Department of Conservation and Natural Resources for park-related capital outlay equal to the increase in receipts from the cap on license discounts (with debt service payments to the State General Fund if park bonds are outstanding), plus a historical $1,000,000 to DHR for the foster children program until 2002.
• (4) From Oct 1, 2002, at least $5,000,000 to DCR for state parks capital outlay (with a formula 2003-2021 based on the prior increases in receipts and CPI adjustments beginning Oct 1, 2022); certain years (2012-2013) transfer $5,000,000 to the State General Fund; and starting Oct 1, 2021, a dedicated annual amount (adjusted by CPI from 2022) to DCR for parks capital outlay (explicit dollar figures shown in the bill).
• (c) Of the county distribution, half is divided by population and half equally among counties; funds are to be used for health services and extension services in cooperation with state and federal partners.
• (d) The amounts for the Department of Human Resources are for general welfare purposes, covering public assistance, welfare-related services, and related programs.
• (e) Beginning Jan 1, 1978 (with quarterly updates), a portion of food stamp program administration funds is directed to the DHR Trust Fund for administering the program; staff levels are capped to historical levels, with annual accounting and any unspent balance returned to the Education Trust Fund.
• (f) After all the above allocations, remaining tax proceeds go to the Education Trust Fund; receipts from consumable vapor products go to the State General Fund as specified in the bill. The act becomes effective immediately upon the Governor's signature.

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

Subjects

Taxation