The 2019 Special Session of the Alabama Legislature has come to a close.

Governor Kay Ivey called the special session to have legislators to consider her Rebuild Alabama Act. The Alabama House approved HB-2, Friday, March 8, (84-20) the Senate approved the bill (28-6) last Tuesday. The governor signed piece into law later that day.
The Act will impose an addition 10 cents per gallon gasoline and diesel fuel taxes.
Effective August 31, 2019, an additional excise tax of six cents will be imposed on each net gallon of gasoline and diesel fuel. Effective October 1, 2020 the additional excise tax will be increased by two cents per gallon and effective October 1, 2021 the additional excise tax will be increased by another two cents for a total of 10 cents per gallon new taxes.
The Act will also gives the State the authority to adjust the gasoline tax by one-cent beginning October 1, 2023 and July 1 of every other year in accordance with the National Highway Construction Cost Index (NHCCI) issued by the Federal Highway Administration.
Of the funds raised from the new taxes the Alabama Department of Revenue will retain one quarter of one percent of the proceeds of the gasoline and diesel fuel tax. Each month up to $750,000 of the tax proceeds from the gasoline tax and up to $230,000 of the proceeds of the tax on diesel fuel will be distributed to the Alabama Highway Finance Corporation for the payment of the principal and interests on bonds issued to finance improvements to the Alabama State Docks, not to exceed $150 million. The proceeds will expire at the final maturity of the bonds.
Of the remaining proceeds from the tax, 66.67 percent will be allocated to ALDOT and deposited in the Rebuild Alabama Fund to be used for transportation infrastructure improvement, preservation and maintenance projects. The funds may also be used to match available federal, state and local transportation. Up to 50 percent of those funds may also be used as security for the issuance or refinancing of any loan or debt used for transportation infrastructure improvement. The money cannot be used in any form of compensation for state or contract employees except as included as direct project costs.
Beginning October 1, 2019 ALDOT will allocate $400,000 to each county in exchange for the annual federal allocation of $533,000 which was being distributed to each county on the effective date of the Act.
Twenty-five percent of the proceeds shall be allocated to the counties of the state to be used for transportation infrastructure improvement. Forty-five percent of that 25 percent will be allocated equally among the 67 counties of the state. The remaining 55 percent of that 25 percent of proceeds will be allocated to counties by population. Beginning in 2020, the ratio of the population of each county to the total population of the state will be updated every five years.
The municipalities of the state will receive the final 8.33 percent of the proceeds from the new tax. Of that 8.33 percent of the proceeds, 25 percent will be allocated equally among the municipalities of the state. The other 75 percent will be allocated among the municipalities of the state based on population.
According to the Association of County Commissioners of Alabama, the estimated tax revenue from the new tax proceeds for Jackson County will be $1,015,150, up from 2017 gas tax revenue of $2,314,600 for an annual total of $3,329,760. DeKalb County will receive an estimated additional $1,182,110.
Jackson County Commission Chairman Tim Guffey said it would take about $9 million annually to pave all the roads in Jackson County on a 15-year rotation (repaving the road every 15 years).
The City of Scottsboro is estimated to receive $114,091 in additional tax funds, that includes the $14,109 allocation every municipality will receive and the additional $99,983 from the 75 percent based on population of the 8.33 percent allocated to the municipalities. Woodville’s part will be an estimated $19,159; Skyline, $19,869; Section, $19,321; Stevenson, $27,959; Pisgah, $18,996; Hytop, $16,505; Hollywood, $20,878; Dutton, $16,241; Bridgeport $30,477.
Madison County is expected to receive an estimated $3,715,692 new funds and Huntsville is expected to receive $1,233,293. Jefferson County will receive $6,532,907 and Birmingham will receive an estimated $1,450,804
Also, a $13 license tax and registration fee will be imposed to all private passenger automobiles and $7 will be imposed on motorcycles when purchasing tags. An annual license tax and registration fee of $200.00 will be imposed on each battery electric vehicle; $100.00 on each plug-in hybrid electric vehicle effective January 1, 2020.
Beginning on July 1, 2023 and every fourth year thereafter, the additional license tax and registration fee shall increase by three dollars ($3).

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