AL Code § 40-17-359 (2021)
2021 Code of Alabama|Title 40 - Revenue and Taxation.|Chapter 17 - Gasoline and Other Motor Fuels; Lubricating Oils.|Article 12 - Alabama Terminal Excise Tax Act.|Section 40-17-359 - Distribution and Use of Proceeds.

Section 40-17-359Distribution and use of proceeds. (a) For the purpose of this section, the following terms shall have the meanings ascribed below: (1) BASE ANNUAL COUNTY DISTRIBUTION. Five hundred fifty thousand dollars ($550,000). (2) COST OF COLLECTION. The amounts from the proceeds of the highway gasoline tax that may be appropriated by the Legislature to the department for its operating expenses. (3) COUNTY. Each county in the state. (4) FISCAL YEAR. The fiscal year of the state. (5) DEPARTMENT OF TRANSPORTATION. The Department of Transportation of the state. (6) HIGHWAY GASOLINE TAX. Both of the following: a. The excise tax levied under subdivision (1) of subsection (a) of Section 40-17-325, with the exception of those portions of the tax levied on aviation fuel and marine gasoline. b. The excise tax levied by Sections 40-17-140 to 40-17-155, inclusive, except that portion of the tax imposed on diesel fuel. (7) LOCAL SUBDIVISIONS' SHARES OF THE NET TAX PROCEEDS. The 55 percent of the net tax proceeds referred to in the first sentence of subsection (d). (8) MUNICIPALITY. An incorporated city or town in the state. (9) NET TAX PROCEEDS. The entire proceeds from the highway gasoline tax, except the proceeds from the supplemental excise tax of five cents ($.05) per gallon and additional six cents ($.06) imposed by subdivision (1) of subsection (a) of Section 40-17-325, less the cost of collection and less any refunds pursuant to the provisions of this article. (10) PUBLIC HIGHWAY. Every highway, road, street, alley, lane, court, place, trail, drive, bridge, viaduct, or trestle located either within a municipality or in unincorporated territory and laid out or erected by the public or dedicated or abandoned to the public or intended for use by or for the public. The term "public highway" shall apply to and include driveways upon the grounds of universities, colleges, schools, and institutions but shall not be deemed to include private driveways, private roads, or private places not intended for use by the public. (11) STATE. The State of Alabama. (12) STATE'S SHARE OF THE NET TAX PROCEEDS. The 45 percent of the net tax proceeds referred to in the first sentence of subsection (c). (13) SUPPLEMENTAL NET TAX PROCEEDS. That portion of the highway gasoline tax remaining after the deduction of the net tax proceeds and one-third of all revenues received or collected by the department remaining after the payment of refunds from the additional six cents ($.06) tax levied on gasoline under Section 40-17-325(a)(1) and two-thirds revenues received or collected by the department after the payment of refunds and the expense of administration and enforcement of this article from the additional six cents ($.06) tax levied on gasoline under Section 40-17-325(a)(1), less the cost of collection and less any refunds of the highway gasoline tax applicable to the supplemental gasoline excise tax imposed in subdivision (1) of subsection (a) of Section 40-17-325. The foregoing definitions shall be deemed applicable whether terms defined are used in the singular or plural. (b) The revenue, less the cost of collection and refunds authorized by law, from the seven cents ($.07) excise tax and the supplemental excise tax of five cents ($.05) per gallon on gasoline, shall not be used for any purposes other than the following: (1) The Legislature hereby finds as a fact that of all the gasoline sold in this state not less than one and twenty-three hundredths percent thereof is used for marine purposes to propel vessels on inland and coastal waterways of this state. The Legislature hereby declares that it is the policy of this state to use the funds derived pursuant to this section from the sale of marine gasoline to provide for the programs and activities of the Marine Police, Marine Resources, and Wildlife and Freshwater Fisheries Divisions of the Department of Conservation and Natural Resources in this state as follows: a. Thirty-five one hundredths of one percent of all state-imposed taxes collected pursuant to this subsection on the sale of gasoline, except gasoline and other fuels consumed in airplanes, shall be credited as follows: 60 percent to the State Water Safety Fund of the Marine Police Division and 40 percent to the Seafood Fund of the Marine Resources Division. b. An amount equal to seventy-one hundredths of one percent of all state-imposed taxes levied pursuant to this subsection and collected on the sale of gasoline, except gasoline and other fuels consumed in airplanes, and which would otherwise be credited to the Public Road and Bridge Fund pursuant to this section shall be credited to the Game and Fish Fund of the Division of Wildlife and Freshwater Fisheries. Provided, however, that the above credit to the Game and Fish Fund shall not diminish the allocations provided by subsection (d). c. An amount equal to eighteen one hundredths of one percent of all state-imposed taxes levied pursuant to this subsection and collected on the sale of gasoline, except gasoline and other fuels consumed in airplanes, and which would otherwise be credited to the Public Road and Bridge Fund pursuant to this section shall be credited as follows: 60 percent to the State Water Safety Fund of the Marine Police Division and 40 percent to the Seafood Fund of the Marine Resources Division. Provided, however, that this additional credit to the State Water Safety Fund and Seafood Fund shall not diminish the allocations provided by subsection (d). (2) The revenue arising from the sale of gasoline as herein defined, except gasoline sold for use as fuel to propel aircraft and which gasoline is subject to the tax imposed in subdivision (3) of subsection (a) of Section 40-17-325, and except for revenues from the supplemental net tax proceeds, for all other purposes shall not be used for any purpose other than for the construction, improvement, maintenance, and supervision of highways, bridges, and streets, including the retirement of bonds for the payment of which such revenues have been or may hereafter be pledged. The payment of the per diem and mileage of members of county governing bodies when engaged in supervising the construction, improvement, and maintenance of highways, bridges, and streets shall be construed as used in supervision. The governing body of each county may expend an amount not to exceed one third of the total amount of such revenue that may be received by such county in the payment of any debt that may have been incurred by such county for the construction or maintenance of roads or bridges. This fund shall be allocated in the manner now provided by law. On the 20th day of each month following that quarter of any fiscal year, all revenue derived from the sale of gasoline to be consumed in the motor of a boat or vessel as defined in subdivision (1) shall be allocated to the State Water Safety Fund, Seafood Fund, and Game and Fish Fund. (c) Distribution of forty-five percent of net tax proceeds shall be distributed as follows: (1) Forty-five percent of the net tax proceeds are hereby allocated and appropriated for state highway purposes and as the state's share of the net tax proceeds to be covered into the State Treasury to the credit of the Public Road and Bridge Fund and to be disbursed as hereinafter provided in this section. (2) A portion of the state's share of the net tax proceeds that is equal in amount to two sevenths (equivalent to six twenty-firsts) of the net tax proceeds shall be disbursed, to pay at their respective maturities the principal of and interest on the bonds issued prior to March 1, 1967, by the Alabama Highway Authority, a public corporation organized and existing under the provisions of Sections 23-1-150 to 23-1-160, inclusive, in the order in which the two sevenths of the net tax proceeds were pledged for the bonds. (3) A portion of the state's share of the net tax proceeds that is equal in amount to two twenty-firsts of the net tax proceeds shall be disbursed to pay at their respective maturities the principal of and interest on the bonds issued prior to March 1, 1967, by the Alabama Highway Authority, in the order in which the two twenty-firsts of the net tax proceeds were pledged for the bonds. (4) A portion of the state's share of the net tax proceeds that is equal in amount to one twenty-first of the net tax proceeds shall be disbursed to pay at their respective maturities the principal of and interest on the bonds issued by the Alabama Highway Authority after March 1, 1959, and prior to March 1, 1967, in the order in which the one twenty-first of the net tax proceeds was pledged for the bonds. (5) The residue of the state's share of the net tax proceeds remaining after provision shall have been made out of the aforesaid nine twenty-firsts of the net tax proceeds for payment of the obligations referred to in the foregoing subdivisions (2), (3), and (4) shall be disbursed for the following purposes, in the following order and to the extent necessary: a. For payment at their respective maturities of the principal of and interest on bonds, other than refunding bonds, issued by the Alabama Highway Authority under the provisions of Act No. 225, 1967 Special Session (Acts 1967, p. 302), to the extent that the portion of the motor vehicle license taxes and registration fees provided in Section 40-12-270, to be used for the payment of the principal of and interest on the bonds, other than refunding bonds, issued by the Alabama Highway Authority under the provisions of Act No. 225, should be insufficient to pay the principal and interest at their respective maturities. b. For payment at their respective maturities of the principal of and interest on the bonds, other than refunding bonds, issued by the Alabama Highway Authority under the provisions of Act No. 781, 1969 Regular Session (Acts 1969, p. 1398), to the extent that the portion of the motor vehicle license taxes and registration fees provided in Section 40-12-270, to be used for the payment of the principal of and interest on the bonds, other than refunding bonds, issued by the Alabama Highway Authority under the provisions of Act No. 781, should be insufficient to pay the principal and interest at their respective maturities. c. For payment at their respective maturities of the principal of and interest on the bonds, other than refunding bonds, issued by the Alabama Highway Authority under the provisions of Act No. 1416, 1971 Regular Session (Acts 1971, p. 2412), to the extent that the portion of the motor vehicle license taxes and registration fees provided in Section 40-12-270, to be used for the payment of the principal of and interest on the bonds, other than refunding bonds, issued by the Alabama Highway Authority under the provisions of Act No. 1416, should be insufficient to pay the principal and interest at their respective maturities. d. For payment at their respective maturities of the principal of and interest on any bonds or other obligations, including refunding obligations, issued after December 1, 1977, by a public corporation existing at the time of issuance under the laws of the state pursuant to then existing statutory authorization, or by the state pursuant to then existing authorization, effective at the time of issuance, under the constitution and laws of the state, and for which the aforesaid residue, referred to in this subdivision, of the state's share of the net tax proceeds shall have been appropriated and pledged in a then effective statute or constitutional provision (including any enabling act under a constitutional provision) under which the bonds may be issued, all in the manner and to the extent and subject to the priorities in rank as may be provided in a statute or constitutional provision or in any authorizing resolution thereunder. e. For allocation on September 30 of each fiscal year to each county to which allocation shall have been made under the provisions of subsection (d), during that fiscal year less than the base annual county distribution, which, when added to the amounts so allocated to that county under subsection (d), will equal the base annual county distribution. (6) The state's share of the net tax proceeds paid into the Public Road and Bridge Fund and not required for any of the purposes referred to in any of the foregoing subdivisions (2), (3), (4), and (5) may be withdrawn by the Department of Transportation and used by it for highway purposes. (d) Fifty-five percent of net tax proceeds shall be distributed as follows: (1) Fifty-five percent of the net tax proceeds are hereby allocated and appropriated to be used for highway purposes by the counties and municipalities to be covered into the State Treasury and shall be disbursed and allocated as hereinafter provided in this section. (2) A portion of the local subdivisions' shares of the net tax proceeds that is equal to 25 percent of the net tax proceeds shall be allocated equally among the 67 counties of the state. (3) The entire residue of the local subdivisions' shares of the net tax proceeds, being an amount equal to 30 percent of the net tax proceeds less any amount paid pursuant to the contingent appropriation in subdivision (2), shall be allocated among the 67 counties of the state on the basis of the ratio of the population of each county to the total population of the state according to the then next preceding federal decennial census, or any special federal census heretofore held in any county subsequent to the effective date of the 1960 Federal Decennial Census. The allocation provided for in this subdivision shall be made on or prior to the tenth day of each month with respect to receipts of the highway gasoline tax by the state during the preceding month. (e)(1) The amounts allocated or apportioned to each county pursuant to each of subsections (c) and (d) shall be disposed of as follows: a. Ten percent of the amount so allocated or apportioned to each county shall be distributed among the municipalities in the county with respect to which the allocation or apportionment is made; each distribution among the municipalities shall be made on the basis of the ratio of the population of each municipality to the total population of all municipalities in the applicable county according to the then next preceding federal decennial census. b. The remaining portion of the amount so allocated or apportioned to each county shall be distributed to the county with respect to which the allocation or apportionment is made. The distributions provided for in this subsection shall be made monthly. (2) The population of any municipality incorporated subsequent to the taking of the then next preceding federal decennial census shall be deemed to be the population shown by the census for that municipality taken pursuant to the requirements of Section 11-41-4. Any municipality incorporated after September 30, 1967, shall not participate in the distribution provided for in this section until the fiscal year next succeeding the fiscal year during which it is incorporated, the first distribution to the municipality to be made from the receipts of the highway gasoline tax by the state during October of the fiscal year next succeeding its incorporation. (3) When requested to do so by any municipality, the Department of Transportation may make available the services and advice of its engineers and other employees with respect to any work for which that municipality proposes to expend moneys distributed to it under this section. Any services and advice that may be made available shall be provided under the terms and conditions that may be mutually agreeable to the Department of Transportation and the municipality. (f) Three-fifths of the supplemental net tax proceeds on gasoline, as defined in subsection (a), shall be deposited in the State Treasury to the credit of the Public Road and Bridge Fund of the Department of Transportation and shall be used exclusively in the construction, repair, maintenance, and operation of public roads and bridges in this state, including public roads in state parks and any toll road or toll bridge constructed by the state Department of Transportation or maintained and operated by it or under its supervision. It is further provided that of the receipts collected under this section dedicated to the Public Road and Bridge Fund, the sum of one million dollars ($1,000,000) shall be set aside in the fiscal year ending September 30, 1992, and the sum of at least five hundred thousand dollars ($500,000) for the fiscal year ending September 30, 1993, and in each fiscal year thereafter, to coordinate with the Department of Conservation and Natural Resources on the construction, maintenance, and repair of public roads in the state's park system. The remaining two-fifths of the supplemental net tax proceeds shall be distributed, as provided for distribution of the net tax proceeds, according to subsections (c), (d), and (e). Any local laws or general laws of local application now in effect regarding the distribution of the tax levied by Section 40-17-325 shall govern the distribution of the amounts allocated or apportioned within every county by this section. The Legislature may by general or local laws prescribe other distributions within counties to local governments. The two fifths of the supplemental net tax proceeds shall be used for the same purposes and deposited in the same state, county, and municipal funds as provided by Section 40-17-362. Where the use is by a county, the funds may be used to match federal aid on any projects that meet the requirements for federal funding and the funds may also be used for new construction without regard to the provision that 90 percent of the county's paved road system has achieved a grade of 85 percent based on the State of Alabama Department of Transportation's annual maintenance report of county roads and bridges. (g) In all counties wherein members of the county governing bodies are compensated or paid on a salary basis, the county governing bodies may pay a part of the salary out of the county gasoline tax revenues. The part paid out of county gasoline tax revenues shall bear the same proportion to the total salary paid to the member as the time devoted by the member to supervising, inspecting, accepting, building, or repairing county roads or bridges bears to the total time devoted by the member to all of his or her duties as a member of the county governing body. The county governing body may determine the proportions set out in this section. (h) The county commissions may pay a portion of the compensation of their clerks out of the Public Road and Bridge Fund or gasoline tax funds in the county treasury; provided, that not more than 75 percent of the total salary payable shall be paid out of the fund or funds. (i) For the purpose of this section, each federal decennial census shall be deemed to be effective on October 1 next following the publication of the results of the decennial census. (j) Wherever in this section any portion of the net tax proceeds is provided to be applied or used for highway purposes, it shall be used as follows: (1) Where the use is by the Department of Transportation, with the approval of the Governor, the use shall be for the construction of public roads and bridges in the state, the maintenance of public roads and bridges on the state highway system, the equipment and preparation of convicts for use upon the public roads and bridges in the state, the maintenance of the convicts while at work upon the roads and bridges, the compensation to the state for the use of any convicts, and for other public road and bridge purposes in the state as may be authorized by the Department of Transportation with the approval of the Governor. (2) Where the use is by a county, the use shall be for transportation planning, the construction, reconstruction, maintenance, widening, alteration, and improvement of public roads and bridges as is now or may hereafter be provided by law, including payment of the principal of and interest on any securities at any time issued by the county pursuant to law for payment of which all or any of the net tax proceeds were or may be lawfully pledged, and the use may also be for the purpose and subject to the provisions contained in subsection (g). (3) Where the use is by a municipality, the use shall be for transportation planning, the construction, reconstruction, maintenance, widening, alteration, and improvement of public roads, bridges, streets, and other public ways, including payment of the principal of and interest on any securities at any time issued by the municipality pursuant to law for the payment of which any part of the net tax proceeds were or may be lawfully pledged; provided, that no part of the net tax proceeds referred to in this section shall be expended contrary to the provisions of the constitution; and provided further, that funds distributed to municipalities under the provisions of this section shall not be commingled with other funds of the municipality and shall be kept and disbursed by the municipality from a special fund only for the purposes hereinabove provided. (k) The county commission of each of the counties may use or expend the proceeds of the state gasoline tax levied by Section 40-17-325, distributed to the county pursuant to this section, for the construction and maintenance of streets within the corporate limits of any municipality located within the county, anything in Sections 40-17-322 to 40-17-356, inclusive, to the contrary notwithstanding. (l) The county commission of each of the counties may use or expend the state gasoline tax proceeds referred to in subsection (k) for the construction, reconstruction, maintenance, and repair of public highways and traffic control areas located on public school property or state school property within the county. (m) The State Treasurer shall make all allocations of the net tax proceeds and the supplemental net tax proceeds and shall make the distributions and payments thereof pursuant to the allocations provided for in this section. (n) It is the intention of the Legislature in enacting this section to preserve inviolate all pledges heretofore made pursuant to law of any portion of the proceeds derived from the highway gasoline tax for the benefit of those bonds now outstanding that are referred to in subsection (c), or for the benefit of securities now outstanding that were issued pursuant to law by any county or municipality. (o) One-third of all revenues received or collected by the department from the additional six cents ($.06) tax levied on gasoline under subdivision (1) of subsection (a) of Section 40-17-325, remaining after the payment of refunds of this article shall be paid into the State Treasury and distributed by the State Treasurer as prescribed under Section 8-17-91. (p) The remaining two-thirds revenues received or collected by the department from the additional six cents ($.06) tax levied on gasoline under subdivision (1) of subsection (a) of Section 40-17-325, after the payment of refunds and the expense of administration and enforcement of this article shall be paid into the State Treasury and distributed by the State Treasurer as follows: (1) Forty-five percent for state highway purposes and as the state's share of the remaining two-thirds revenues received or collected by the department from the additional six cents ($.06) tax levied. This 45 percent shall be deposited into the State Treasury to the credit of the Public Road and Bridge Fund and shall be disbursed as provided in this article. (2) Fifty-five percent for highway purposes by the counties and municipalities. The 55 percent of the remaining two-thirds revenues received or collected by the department from the additional six cents ($.06) tax levied shall be deposited into the State Treasury and shall be disbursed and allocated as hereinafter provided in this section. a. A portion of the local subdivisions' shares of the remaining two-thirds revenue received or collected by the department from the additional six cents ($.06) tax levied that is equal to 25 percent of the remaining two-thirds revenue received or collected by the department from the additional six cents ($.06) tax levied shall be allocated equally among the 67 counties of the state. b. The entire residue of the local subdivisions' shares of the remaining two-thirds revenues received or collected by the department from the additional six cents ($.06) tax levied, being an amount equal to 30 percent of the remaining two-thirds revenues received or collected by the department from the additional six cents ($.06) tax levied, shall be allocated among the 67 counties of the state on the basis of the ratio of the population of each county to the total population of the state according to the then next preceding federal decennial census, or any special federal census heretofore held in any county subsequent to the effective date of the 1970 Federal Decennial Census. The allocation provided for in this subsection shall be made on or prior to the tenth day of each month with respect to receipts of the highway gasoline tax by the state during the preceding month. c. The distributions provided for in this subdivision shall be made monthly. The amounts allocated or apportioned to each county shall be disposed of as follows: 1. Ten percent of the amount so allocated or apportioned to each county shall be distributed among the municipalities in the county with respect to which the allocation or apportionment is made, each distribution among the municipalities shall be made on the basis of the ratio of the population of each municipality to the total population of all municipalities in the applicable county according to the then next preceding federal decennial census. Provided, that any local laws or general laws of local application now in effect regarding the distribution of the tax levied by Section 40-17-325 shall govern the distribution of the amounts allocated or apportioned within every county by this section; provided further, that the Legislature may by general or local laws prescribe other distributions within counties to local governments. 2. The remaining portion of the amount so allocated or apportioned to each county shall be distributed to the county with respect to which such allocation or apportionment is made. d. The population of any municipality incorporated subsequent to the taking of the then next preceding federal decennial census shall be deemed to be the population shown by the census for that municipality taken pursuant to the requirements of Section 11-41-4. Any municipality incorporated after September 30, 1978, shall not participate in the distribution provided for in this section until the fiscal year next succeeding the fiscal year during which it is incorporated, the first distribution to the municipality shall be made in respect of receipts of the highway gasoline tax by the state during October of the fiscal year next succeeding its incorporation. e. When requested to do so by any municipality, the Department of Transportation may at its discretion make available the services and advice of its engineers and other employees with respect to any work for which that municipality proposes to expend moneys distributed to it under this subdivision. Any services and advice that may be so made available shall be provided under the terms and conditions as may be mutually agreeable to the Department of Transportation and the municipality. (q) The State Treasurer shall make all allocations of the revenue collections and shall make the distribution and payments thereof pursuant to such allocations provided for in this article. (Act 2011-565, p. 1084, §40; Act 2015-54, §4.)