Senate Bill 86 Alabama 2026 Session

Summary

Primary Sponsor

Josh CarnleySenator

Republican

Session

2026 Regular Session

Title

Surety bonds and motor fuel assessments; filing period for new or replacement surety bonds extended, payment period for assessments on illegally imported or transported motor fuels extended

Summary

SB86 would extend bond filing and payment deadlines for certain CNG/LNG and motor fuel licenses and update related bond rules.

What This Bill Does

It extends the 30-day filing period for new or replacement surety bonds for certain CNG/LNG and motor fuel licensees. It extends the payment period for assessments on illegally imported or transported motor fuels beyond the current 30-day window. It updates bond requirements for different license categories—setting minimums and how bond amounts are calculated (often tied to twice the average monthly tax liability) and adding a periodic five-year review to ensure sufficiency, with limits on new or additional bonds. It preserves existing cancellation, replacement, and appeal processes and adds nonsubstantive, technical updates; the act takes effect immediately.

Who It Affects

• Licensees and bondholders required to post surety bonds for CNG/LNG and motor fuels (such as public sellers of CNG/LNG, fleet producers of CNG/LNG, suppliers, exporters, blenders, importers, distributors, permissive suppliers, and terminal operators) who face revised deadlines and bond requirements.
• Owners and operators of motor fuel storage, handling, and transportation who could be subject to seizure, sale of motor fuel, or other penalties if tax assessments are not paid within the extended period, and the Alabama Department of Revenue enforcing these rules.

Key Provisions

• Public sellers of CNG/LNG and fleet producers must post a bond of at least $25,000 or twice the average monthly tax liability, whichever is greater.
• For other license types (such as suppliers, permissive suppliers, terminal operators, exporters, blenders, importers, and distributors): bond amounts are generally based on twice the average monthly tax liability, with minimums and caps; personal producers of CNG are not required to post a bond.
• Bonds tied to separate licenses may be governed by a grandfathered level if licensed on October 1, 2012, and the form and sufficiency of bonds must be approved by the commissioner.
• The department must review bond amounts every five years (starting January 2023) to ensure sufficiency and may require an additional bond if the bond is unsatisfactory, if a surety cancels, or if the licensee’s payment history shows insufficiency, with a cap that the new or additional bond cannot exceed two months of average excise tax.
• Licensees must be notified of bond requirements and have 30–60 days to file the new or additional bond or to appeal to the Alabama Tax Tribunal; failure to comply can lead to immediate license cancellation.
• Sureties may cancel bonds with notice; licensees have 30–60 days to provide a replacement bond, and the department may cancel the license if replacement or appeal does not occur; bonds indemnify the state against motor fuel taxes.

AI-generated summary using openai/gpt-5-nano on Feb 12, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation & Revenue