AL Code § 40-20-8 (2021)
2021 Code of Alabama|Title 40 - Revenue and Taxation.|Chapter 20 - Oil and Gas.|Article 1 - Privilege Tax on Production.|Section 40-20-8 - Allocation and Distribution of Net Taxes Collected; Property Which Consists of Submerged Lands and Onshore Lands; Onshore Lands Defined; Applicability of Section; Final Determination Establishing Allocation Base.

Section 40-20-8Allocation and distribution of net taxes collected; property which consists of submerged lands and onshore lands; onshore lands defined; applicability of section; final determination establishing allocation base. (a) Ninety percent of the net amount of all taxes herein levied and collected by the department on oil or gas produced from submerged lands as herein defined shall be deposited to the State General Fund. The remaining 10 percent of such net amount shall be allocated and distributed by the Comptroller to the county in which the oil or gas was produced for county purposes or to be expended at the discretion of the county governing body. (b) Twenty-five percent of the net amount of all taxes herein levied and collected by the department, except as provided herein in subsection (a), shall be deposited by the department to the General Fund of the state. (c) Sixty-six and two-thirds percent of the remaining 75 percent of all taxes herein levied and collected by the department, after the same has been certified into the State Treasury, shall be allocated and distributed by the Comptroller to the credit of the General Fund of the state and to the county in which the oil or gas was produced and to the municipalities therein in the proportion set out in the following schedule: (1) Twenty-five percent of all taxes herein levied and collected on oil and gas produced from oil or gas wells located within any county, shall be allocated and distributed to each such county for county purposes or to be expended at the discretion of the county governing body. In all counties having a population of not less than 34,875 nor more than 36,000, according to the 1970 Federal Decennial Census, such funds shall be allocated and distributed by the counties to the boards of education of the public schools in such counties on a pro rata basis as established by the number of children in net enrollment in the public schools during the prior school attendance year. In all counties having a population of not less than 16,000 nor more than 16,250, according to the 1970 Federal Decennial Census, such funds shall be allocated and distributed by the counties as follows: Each year the first $150,000 shall be paid to the custodian of the county school funds, and after the payment of said $150,000 each year, the balance of the funds shall be divided and paid one-third to the custodian of the county school funds and two-thirds to the county general funds. (2) Ten percent of all taxes herein levied and collected on oil and gas produced from oil or gas wells located within the corporate limits or the police jurisdiction of any municipality shall be allocated and distributed to each such municipality; except that all wells within the corporate limits of police jurisdiction of any municipality where taxes are levied and collected at a rate of four percent, 10 percent of all the four percent taxes shall be distributed to each such municipality. (3) Fifty percent of the first $150,000 remaining, or any part thereof, collected per year under the provisions of this article, shall be allocated and distributed to the state, 42 1/2 percent to the county, and seven and one-half percent to municipalities therein on a population basis. (4) Eighty-four percent of all remaining sums collected per year under the provisions of this article shall be allocated and distributed to the state, 14 percent to the county and two percent to municipalities therein on a population basis. (d) Sixteen and two-thirds percent of the remaining 75 percent of all taxes herein levied and collected by the department shall be certified into the State Treasury to the credit of the State General Fund. (e) Sixteen and two-thirds percent of the remaining 75 percent of all taxes herein levied and collected by the department on oil and gas produced from oil or gas wells located within any county shall be allocated and distributed to each such county for county purposes, to be expended at the discretion of the county governing body. (f) For the purposes of this section, when part of the property within the drilling or production unit or within the unit area for any producing well(s) consists of submerged lands and part consists of lands other than submerged lands (herein called onshore lands), the following shall apply: (1) Only that portion of production (oil or gas or both) from the well(s) allocated (under or pursuant to an order of the State Oil and Gas Board) to the submerged lands shall be deemed to have been produced from submerged lands, regardless of where the actual well(s) from which the production was obtained is (are) located; (2) The portion of the production allocated (under or pursuant to an order of the State Oil and Gas Board) to the onshore lands shall be deemed to have been produced from a well located on the onshore lands to which such production is allocated, and the portion of the production allocated (under or pursuant to such an order) to any onshore lands located within the police jurisdiction or the corporate limits of any municipality shall be deemed to have been produced from a well located within the corporate limits or police jurisdiction; (3) If, because of common ownership or otherwise, no specific portion of the production from the well(s) has been separately allocated (under or pursuant to an order of the State Oil and Gas Board) to any or all of the onshore lands located within the drilling or production unit or within a designated tract in the unit area, then, for the purposes of this section, a portion of the production shall be deemed to have been allocated (under or pursuant to such an order) to the onshore lands in question, such portion to be in the proportion that the acreage of the onshore land to which no specific portion of the production has been separately allocated bears to the total acreage included within the unit or designated tract (whichever is applicable); and (4) Any production not allocated to or deemed to have been allocated to the onshore lands shall be deemed to have been allocated (under or pursuant to an order of the State Oil and Gas Board) to the submerged lands. (g) Anything herein to the contrary notwithstanding, onshore lands shall mean all lands that are not submerged lands (as elsewhere herein defined); provided, however, if any submerged lands are located within the police jurisdiction or corporate limits of any municipality, those submerged lands shall, for the purposes of this section, be defined as, and deemed to be, onshore lands and not submerged lands. (h) The provisions of this section shall apply only to the allocation and distribution of taxes and shall not apply to the levy and collection of taxes; and nothing contained in this section shall be construed to affect in any way the provisions of Section 40-20-2 or Section 40-20-21. (i) A final determination establishing the allocation base shall be made within 90 days of April 23, 1990. (Acts 1945, No. 2, p. 20, §8; Acts 1971, No. 2057, p. 3317, §1; Acts 1979, No. 79-434, p. 687, §2; Acts 1983, 1st Ex. Sess., No. 83-39, p. 39, §2; Acts 1983, 4th Ex. Sess., No. 83-889, p. 116, §3; Acts 1984, No. 84-662, p. 1326; Acts 1990, No. 90-652, p. 1249; Act 2009-147, p. 284, §3.)