HB122 By Representative Lee RFD Agriculture and Forestry Rd 1 03-MAR-15

SYNOPSIS: Existing law requires that an inspection fee is collected on petroleum products sold, offered for sale, stored, or used in the state. Currently, this fee is collected by the Alabama Department of Agriculture and Industries.

This bill would move the collection of the inspection fee that pertains to gasoline to the terminal excise tax return and dyed diesel fuel, dyed kerosene, and lubricating oil products to a separate return.

This bill would require the Alabama Department of Revenue to collect the fees.

This bill would clarify the definitions used for petroleum products fee under Title 8, Chapter 17, Code of Alabama 1975.

This bill would change the disposition of the funds to provide for an amount to the Alabama Department of Revenue for administration in collecting the fees.

This bill would change the date which importers importing motor fuel from a bulk plank or some other non-terminal storage location would pay the tax levied pursuant to the Alabama Terminal Excise Tax.

A BILL TO BE ENTITLED AN ACT

To amend Sections 8-17-80, 8-17-84, 8-17-87, 8-17-91, 8-17-92, and 8-17-93, Code of Alabama 1975; to repeal Section 8-17-89 of the Code of Alabama 1975; to add Sections 8-17-95, 8-17-96, 8-17-97, 8-17-98, 8-17-99, 8-17-100, 8-17-101, and 8-17-102 to Chapter 17, Article 5, Title 8 of the Code of Alabama 1975; and to amend Sections 40-17-325, 40-17-329, 40-17-340, 40-17-359, and 40-17-362, Code of Alabama 1975, relating to the collection and distribution of certain petroleum products by the Department of Revenue.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:Section 1. Sections 8-17-80, 8-17-84, 8-17-87, 8-17-91, 8-17-92, and 8-17-93, Code of Alabama 1975, are amended to read as follows:

§8-17-80.

"(a) The following words and phrases, when used in this division article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:

"(1) GASOLINE. Gasoline, naphtha and other liquid motor fuels or any devices or substitutes therefor that are commonly used in internal combustion engines and are there ignited by electric spark.

"(2) DIESEL FUEL. Those products of petroleum that are commonly used in internal combustion engines and are there ignited by pressure and not by electric spark and that are of the types commonly referred to and known commercially as diesel fuel No. 1 and diesel fuel No. 2; provided, however, that "diesel fuel" shall not mean any petroleum product used in firing steam boilers or combustion generating turbines by compression.

"(3) KEROSENE. That certain product of petroleum commonly referred to as kerosene and commonly used for illuminating, heating, or cooking purposes and other like products of petroleum used for the same purposes for which kerosene is commonly used, regardless of the actual purpose or purposes for which the said kerosene or other product may actually be used; provided, however, that "kerosene" shall not mean any petroleum product used in firing steam boilers or combustion generating turbines by compression.

"(4) LUBRICATING OIL. Those products of petroleum that are commonly used in lubricating or oiling engines and any devices or substitutes for such products of petroleum.

"(5) PETROLEUM PRODUCTS. Gasoline, diesel fuel, kerosene, and lubricating oil.

"(6) COMMISSIONER. The Alabama Commissioner of Agriculture and Industries.

"(7) DEPARTMENT. The Alabama Department of Agriculture and Industries.

"(8) BOARD. The Alabama Board of Agriculture and Industries.

"(9) STATE. The State of Alabama.

"(10) PERSON. Any natural person, firm, partnership, association, corporation, receiver, trust, estate, or other entity as well as any other group or combination thereof acting as a unit.

"(11) BRAND. The trade name or other designation under which a particular petroleum product is sold, offered for sale or otherwise identified.

"(12) PERSON FIRST SELLING. Any person, as herein defined, who first sells petroleum products in Alabama on which inspection fees are imposed by this division, unless such first sale is made to a reseller who elects in writing to qualify as a first seller by complying with the following provisions:

"a. By making application which shall be approved by the Commissioner of Agriculture and Industries, the reseller shall file with the Department of Agriculture and Industries a bond in an approximate amount equal to the average monthly inspection fee estimated by the commissioner which will be due by the reseller; provided, that in no case shall the bond be less than $2,500 or more than $5,000. The bond shall be in such form and amount as may be approved by the commissioner, shall be executed by a surety company licensed and duly authorized to do business in Alabama, shall be payable to the State of Alabama and shall be conditioned upon the prompt filing of true reports and the payment by the reseller to the Department of Agriculture and Industries of any and all inspection fees which are imposed by this division with respect to any petroleum products and which, but for the election made pursuant to this section, would be payable by the person from whom said petroleum products are purchased by the reseller, together with all penalties and interest thereon, and generally upon faithful compliance with the provisions of this division. In lieu of a guaranty bond, the reseller may post Alabama state coupon bonds or United States government bonds under such terms, rules and regulations as may be approved by the commissioner.

"b. In the event that liability upon any bond filed under the provisions of this subsection shall be discharged or reduced, whether by judgment entered, payment made or otherwise, or if in the opinion of the commissioner any surety on the bond theretofore given shall become unsatisfactory or unacceptable, then the commissioner may require the filing of a new or additional bond conditioned as hereinabove provided, and, in the event of the failure of any reseller within 10 days after written notice to it by the commissioner to file such new or additional bond, the commissioner shall cancel the permit issued to such reseller.

"c. If upon a hearing had by the Commissioner of Agriculture and Industries after five days' written notice to any reseller the commissioner shall decide that the amount of any existing bond filed by any reseller is insufficient, the commissioner may order such reseller to file, within 10 days after written notice by the commissioner to such reseller, a new or additional bond in such amount as the commissioner upon said hearing may find reasonably necessary to insure payment of all amounts due or to become due to the State of Alabama, conditioned as hereinabove provided; and, if such new or additional bond is not filed within 10 days after such notice from the commissioner, the commissioner may cancel the permit already issued to such reseller.

"d. The commissioner may reduce the amount of any bond upon written application of any reseller if satisfied that a bond in a reduced amount will insure payment of all amounts due or to become due to the State of Alabama. The total amount of bond or bonds to be given by any reseller under this subdivision shall in no event be less than $2,500 nor more than $5,000; provided, however, that the commissioner may require such additional bond as may be deemed necessary to insure the prompt payment of all inspection fees on the sale or withdrawal of petroleum products due, or to become due, the state by the reseller, but no demand for additional bond above $5,000 shall be made without first determining from a study of the reseller's financial statement which shall be supplied upon request of the commissioner that such additional bond is necessary.

"e. Any surety on any bond furnished by any reseller, as above provided, shall be released and discharged from any and all liability to the State of Alabama accruing on such bond after the expiration of 60 days from the date upon which surety shall have filed with the Department of Agriculture and Industries written request to be released and discharged; provided, however, that such request shall not operate to relieve, release or discharge such surety from any liability already accrued or which shall accrue before the expiration of such 60-day period. The Commissioner of Agriculture and Industries shall promptly, upon receipt of notice of such request, notify the reseller who furnished such bond of the request of the surety on said bond and, unless such reseller shall file, on or before the expiration of such 60-day period, with the Department of Agriculture and Industries a new bond in the amount and form hereinbefore in this subdivision provided, the commissioner shall forthwith cancel the permit of said reseller.

"(1) AVIATION GASOLINE. Motor fuel designed for use in the operation of aircraft other than jet aircraft, and sold or used for that purpose.

"(2) BIODIESEL FUEL. Any motor fuel or mixture of motor fuels that is derived, in whole or in part, from agricultural products or animal fats, or the wastes of such products or fats, and is advertised as, offered for sale as, suitable for use, or used as motor fuel in a diesel engine.

"(3) BLENDED FUEL. A mixture composed of gasoline or diesel fuel and any other liquid that can be used as a motor fuel in a highway vehicle.

"(4) BOARD. The Alabama Board of Agriculture and Industries.

"(5) BONDED DISTRIBUTOR. A reseller of dyed diesel fuel, dyed kerosene, and/or lubricating oil who elects to be bonded in accordance with Section 8-17-96.

"(6) BRAND. The trade name or other designation under which a particular petroleum product is sold, offered for sale, or otherwise identified.

"(7) BULK TRANSFER. Any transfer of motor fuel from one location to another by pipeline tender or marine delivery within a bulk transfer/terminal system, including, but not limited to, the following:

"a. The movement of motor fuel from a refinery or terminal to a terminal by marine vessel or barge.

"b. The movement of motor fuel from a refinery or terminal to a terminal by pipeline.

"c. The book or in-tank transfer of motor fuel within a terminal between licensed suppliers prior to the completion of removal across the rack.

"d. A two-party exchange between licensed suppliers or between licensed suppliers and permissive suppliers.

"(8) BULK TRANSFER/TERMINAL SYSTEM. The motor fuel distribution system consisting of refineries, pipelines, marine vessels, and terminals.

"(9) BULK USER. A person who receives into his or her own storage facilities, in transport truck lots, taxable motor fuel for his or her own consumption.

"(10) COMMISSIONER. The Alabama Commissioner of Agriculture and Industries.

"(11) DEPARTMENT. The Alabama Department of Agriculture and Industries.

"(12) DIESEL FUEL. Any liquid that is advertised, offered for sale, or sold for use as or used as a motor fuel in a diesel-powered engine. Diesel fuel includes #1 and #2 fuel oils, kerosene, special fuels, and blended fuels which contain diesel fuel, but shall not include gasoline or aviation fuel.

"(13) DYED DIESEL FUEL. Diesel fuel that meets the dyeing and marking requirements of Section 4082, Title 26 of the United States Code.

"(14) DYED KEROSENE. Kerosene that meets the dyeing and marking requirements of Section 4082, Title 26 of the United States Code.

"(15) GASOHOL. A blended motor fuel composed of gasoline and motor fuel grade alcohol.

"(16) GASOLINE. Any product commonly or commercially known as gasoline, regardless of classification, that is advertised, offered for sale, or sold for use as or used as motor fuel in an internal combustion engine, including gasohol and blended fuel which contains gasoline. Gasoline also includes gasoline blendstocks as defined under Section 4081, Title 26 of the United States Code and the regulations promulgated thereunder. Gasoline does not include special fuel or aviation gasoline sold to a licensed aviation fuel purchaser for use in an aircraft motor.

"(17) IMPORT. To bring petroleum products into this state for sale, use, or storage by any means of conveyance other than in the fuel supply tank of a motor vehicle. Petroleum products delivered into this state from out-of-state by or for the seller constitutes an import by the seller. Petroleum products delivered into this state from out-of-state by or for the purchaser constitutes an import by the purchaser.

"(18) IMPORTER. A person who imports petroleum products into this state.

"(19) K-1 KEROSENE. A petroleum product having an A.P.I. gravity of not less than 40 degrees, at a temperature of 60 degrees Fahrenheit and a minimum flash point of 100 degrees Fahrenheit, and which meets American Society for Testing Materials Standard D-3699 as in effect on January 1, 1999.

"(20) KEROSENE. All grades of kerosene, including, but not limited to, the two grades of kerosene, No. 1-K and No. 2-K, commonly known as K-1 kerosene and K-2 kerosene, respectively, described in the American Society for Testing Materials Standard D-3699, in effect on January 1, 1999, and kerosene-type jet fuel described in the American Society for Testing Materials Standard D-1655 and military specifications MIL-t-5624r and MIL-t-83133d (grades jp-5 and jp8) and any grade described as kerosene or kerosene-type jet fuel by the Internal Revenue Code and administrative guidance promulgated thereunder.

"(21) LUBRICATING OIL. Those products of petroleum that are commonly used in lubricating or oiling engines and any devices or substitutes for such products of petroleum.

"(22) NET GALLONS. The amount of dyed diesel fuel and dyed kerosene measured in gallons when adjusted to a temperature of 60 degrees Fahrenheit and a pressure of fourteen and seven-tenths pounds pressure per square inch.

"(23) PERMISSIVE SUPPLIER. An out-of-state supplier that elects, but is not required, to have a supplier's license as required in Section 40-17-332.

"(24) PERSON. Any natural person, firm, partnership, association, corporation, receiver, trust, estate, or other entity as well as any other group or combination thereof acting as a unit.

"(25) PERSON FIRST SELLING. Any person, as herein defined, who first sells dyed diesel fuel, dyed kerosene, and/or lubricating oil in Alabama on which an inspection fee is imposed by this article. The first seller of dyed diesel fuel, dyed kerosene, and/or lubricating oil must obtain an inspection fee permit by making application to the Department of Revenue.

"(26) PETROLEUM PRODUCTS. Gasoline, diesel fuel, and lubricating oil.

"(27) RETAILER. A person other than a wholesale distributor that engages in the business of selling or distributing taxable motor fuel to the end user within this state.

"(28) REVENUE COMMISSIONER. The Commissioner of the Alabama Department of Revenue.

"(29) SPECIAL FUEL. Any gas or liquid, other than gasoline, used or suitable for use as motor fuel in an internal combustion engine or motor to propel any form of vehicle, machine, or mechanical contrivance, and includes products commonly known as natural or casing-head gasoline, biodiesel fuel, and transmix. Special fuel does not include any petroleum product or chemical compound such as alcohol, industrial solvent, or lubricant, unless blended in or sold for use as motor fuel in an internal combustion engine.

"(30) STATE. The State of Alabama.

"(31) SUPPLIER. A person who is subject to the general taxing jurisdiction of this state and registered under Section 4101 of the Internal Revenue Code for transactions in motor fuel in the bulk transfer/terminal distribution system and who owns motor fuel in the bulk transfer/terminal system, or a person who receives motor fuel in this state pursuant to a two-party exchange. A terminal operator shall not be considered a supplier based solely on the fact that the terminal operator handles motor fuel consigned to it within a terminal.

"(32) UNDYED DIESEL FUEL. Diesel fuel that has not been dyed in accordance with the Internal Revenue Service fuel dyeing provisions.

"(b) The definitions set forth in this section shall be deemed applicable whether the words defined are herein used in the singular or plural.

"(c) Any pronoun or pronouns used herein shall be deemed to include both singular and plural and to cover all genders.

§8-17-84.

"(a) Every person selling, offering for sale, storing or using petroleum products in the state shall keep a record of all such petroleum products manufactured, refined, purchased, received, sold, imported, stored, delivered, or used by him, which record shall show the number of gallons so manufactured, refined, purchased, received, sold, imported, stored, delivered, or used and the date or dates of each such transaction. Each person required to be licensed under Section 40-17-332(a), (b), or (f) for gasoline, or permitted under Section 8-17-96 for dyed diesel fuel, dyed kerosene, or lubricating oil, and each bulk user and retailer shall keep and maintain all records pertaining to the petroleum products received, produced, manufactured, refined, compounded, used, sold, imported, or delivered, together with delivery tickets, invoices, bills of lading, and other pertinent records and papers required by the Department of Revenue for the reasonable administration of this article, for a period of no less than three years.

"(b) All such records shall be preserved for a period of two three years and shall at all times during the business hours of the day be subject to inspection by the Revenue Commissioner of Agriculture and Industries or his agents or representatives.

"(c) The Commissioner of Agriculture and Industries shall Revenue Commissioner may prescribe regulations respecting the keeping of the records required in this section and the forms thereof.

§8-17-87.

"(a) An inspection fee is hereby imposed and shall be collected in respect of petroleum products sold, offered for sale, stored, or used in the state, the said fee to be measured by the number of gallons and to be at the following rates: on the ultimate consumer of gasoline at the rate of two cents ($.02) per gallon, if the excise tax levied on gasoline under Section 40-17-325(a)(1) is refunded by the Department of Revenue unless the ultimate consumer is specifically exempted from the inspection fee by the Code of Alabama. The Department of Revenue is authorized to reduce the excise tax refund by the amount due for the inspection fee.

"(1) Gasoline, $.02 per gallon.

"(2) Diesel(b) An inspection fee is imposed on the ultimate consumer of undyed diesel fuel other than that referred to in subdivisions (a)(5), (a)(6), (a)(7), (a)(8), and (a)(9) of this section, $.02 at the rate of two cents ($.02) per gallon, if the excise tax levied on diesel fuel under Section 40-17-325(a)(2) is refunded by the Department of Revenue unless the ultimate consumer is specifically exempted from the inspection fee by the Code of Alabama or unless the undyed diesel fuel is subject to a reduced rate inspection fee in subdivision (i). The Department of Revenue is authorized to reduce the excise tax refund by the amount due for the inspection fee. Provided, however, diesel fuel that is subject to the excise taxes levied on motor fuel under Sections 40-17-2 and 40-17-220 shall be exempt from the inspection fee levied on diesel fuel pursuant to this subdivision.

"(3) Kerosene other than that referred to in subdivisions (a)(5), (a)(6), (a)(7), and (a)(9) of this section, $.01 per gallon.

"(4) Lubricating oil, $.15 per gallon.

"(5) Kerosene or diesel fuel that is of the types customarily used as, and that is intended to be used only as, fuel to propel jet aircraft, one fortieth of $.01 per gallon.

"(6) Kerosene or diesel fuel that is used by the ultimate consumer thereof as motor fuel to operate boats, yachts, ships, or other maritime vehicles, whether such boats, yachts, ships, or other maritime vehicles are used commercially or for pleasure, one fortieth of $.01 per gallon.

"(7) Kerosene or diesel fuel used by the ultimate consumer thereof to propel or operate tractors which are not operated on public highways but which are used exclusively in preparing and cultivating land, harvesting any agricultural commodity, or for other agricultural purposes, including pasture and hay production; provided, however, that the term "tractors" as used herein shall not include automobiles, trucks, pickups, trailers, semitrailers, or other such vehicles, one fortieth of $.01 per gallon.

"(8) Diesel fuel that is of the types customarily used as, and that is intended to be used as, only fuel to propel railroad locomotives, one fortieth of $.01 per gallon. Diesel fuel of the types referred to in this subdivision shall be inspected in a manner determined and prescribed by the Commissioner of Agriculture and Industries.

"(9) Kerosene or diesel fuel used by the ultimate consumer thereof as a solvent or other agent in the treatment or preservation of wood products, one fortieth of $.01 per gallon.

"(b) It shall be the duty of the person first selling, storing, or using any petroleum product in the state to pay such inspection fee. The inspection fee shall be paid to the Commissioner of Agriculture and Industries on or before the twentieth day of each month in respect of all petroleum products sold, stored, or used in the state during the preceding month. Each remittance shall be accompanied by a certificate stating that the amount remitted is correct and that the petroleum products so sold, stored, or used are of standard not less than the minimum specified for that petroleum product in the standards prescribed by the board pursuant to Section 8-17-81.

"(c) If, at the time the inspection fee is due, the person liable therefor is unable to ascertain the correct amount of such inspection fee because the use to be made of any diesel fuel or kerosene with respect to which the inspection fee is then due has not been or cannot be ascertained at such time, then such person shall pay to the Commissioner of Agriculture and Industries as the inspection fee payable with respect to such diesel fuel and kerosene, $.02 for each gallon of such diesel fuel and $.01 for each gallon of such kerosene.

"(d) Upon furnishing proof satisfactory to the Commissioner of Agriculture and Industries that all or any portion of such diesel fuel or kerosene with respect to which an inspection fee at the rate of $.02 or $.01 per gallon respectively has been paid or has been or will be used for a purpose or purposes specified in subdivisions (a)(5), (a)(6), (a)(7), (a)(8), and (a)(9), then such person shall be entitled to a credit against the amount of inspection fee becoming due from such person on the twentieth day of the then next following calendar month, such credit to be in an amount equal to thirty-nine fortieths of $.01 for each gallon of kerosene or one thirty-nine fortieths cents for each gallon of diesel fuel proved to have been used or to be used for such specified purpose or purposes; provided, that should the credit to which a person is entitled hereunder exceed the amount of the inspection fee becoming due from such person on the twentieth day of the then next following calendar month, then the excess of the credit over the amount of the inspection fee becoming due shall be refunded to such person or, at such person's election, credited against the amount of any inspection fees subsequently becoming due from such person.

"(e) The Board of Agriculture and Industries shall have authority to promulgate rules and regulations with respect to the form and content of the proof of use which must be supplied by a person seeking such a credit or refund and with respect to the procedure to be followed in applying for such a credit or refund.

"(f) The inspection fee provided for in this section shall be paid but once with respect to the same product; but in the event any person fails to make payment as herein provided on or before the date such payment is due, the Commissioner of Agriculture and Industries shall add to the inspection fee already due an amount equal to 10 percent thereof as a penalty for the failure of such person to make such report and payment upon the date provided in this section and shall proceed to collect such inspection fee, together with all costs incident to such collection, including the penalty.

"(g) The inspection fee and any penalty added thereto shall constitute and operate as a lien at all times until paid upon any petroleum products sold, offered for sale, stored, or used in the state by the person liable for the fee, and shall be immediately enforceable by the Commissioner of Agriculture and Industries when due in the same manner as are tax liens upon personal property of a delinquent taxpayer.

"(c) An inspection fee of two cents ($.02) per gallon is imposed on the first sale within this state or upon importation into this state of dyed diesel fuel unless (1) the purchaser or importer is a bonded distributor, in which case the inspection fee is imposed at the point the bonded distributor makes a sale to a purchaser who is not a bonded distributor, or (2) the purchaser is subject to a reduced rate inspection fee in subsections (e), (f), (g), and (h). The person first selling, the person importing, or the bonded distributor shall collect the fee imposed by this article. If the importer purchases dyed diesel fuel destined for Alabama from a supplier or permissive supplier and the importer is not a bonded distributor and does not have a valid inspection fee permit issued by the Alabama Department of Revenue, the supplier or permissive supplier shall collect and remit the inspection fee imposed by this article. If the importer brings dyed diesel fuel in from bulk storage outside the terminal system, the importer is responsible for collecting and remitting the inspection fee imposed by this article.

"(d) An inspection fee of one cent ($.01) per gallon is imposed on the first sale within this state or upon importation into this state of dyed kerosene unless (1) the purchaser or importer is a bonded distributor, in which case the inspection fee is imposed at the point the bonded distributor makes a sale to a purchaser who is not a bonded distributor, or (2) the purchaser is subject to a reduced rate inspection fee in subsections (e), (f), (g), and (h). The person first selling, the person importing, or the bonded distributor shall collect the fee imposed by this article. If the importer purchases dyed kerosene destined for Alabama from a supplier or permissive supplier and the importer is not a bonded distributor and does not have a valid inspection fee permit issued by the Alabama Department of Revenue, the supplier or permissive supplier shall collect and remit the inspection fee imposed by this article. If the importer brings dyed kerosene in from bulk storage outside the terminal system, the importer is responsible for collecting and remitting the inspection fee imposed by this article.

"(e) Dyed diesel fuel and dyed kerosene that is used by the ultimate consumer thereof as motor fuel to operate boats, yachts, ships, or other maritime vehicles, whether such boats, yachts, ships, or other maritime vehicles are used commercially or for pleasure, shall be subject to the reduced inspection fee of one fortieth of $.01 ($.00025) per gallon. This reduced rate only applies to purchases by the ultimate consumer directly from a bonded distributor. The person first selling, the person importing, or the bonded distributor shall collect the fee imposed by this article.

"(f) Dyed diesel fuel or dyed kerosene used by the ultimate consumer thereof to propel or operate tractors which are not operated on public highways but which are used exclusively in preparing and cultivating land, harvesting any agricultural commodity, or for other agricultural purposes, including pasture and hay production; provided, however, that the term "tractors" as used herein shall not include automobiles, trucks, pickups, trailers, semitrailers, or other such vehicles, shall be subject to the reduced inspection fee of one fortieth of $.01 ($.00025) per gallon. This reduced rate only applies to purchases by the ultimate consumer directly from a bonded distributor. The person first selling, the person importing, or the bonded distributor shall collect the fee imposed by this article.

"(g) Dyed diesel fuel or dyed kerosene that is of the types customarily used as, and that is intended to be used only as, fuel to propel railroad locomotives, shall be subject to the reduced inspection fee of one fortieth of $.01 ($.00025) per gallon. This reduced rate only applies to purchases by the ultimate consumer directly from a bonded distributor. The person first selling, the person importing, or the bonded distributor shall collect the fee imposed by this article.

"(h) Dyed diesel fuel or dyed kerosene used by the ultimate consumer thereof as a solvent or other agent in the treatment or preservation of wood products, shall be subject to the reduced inspection fee of one fortieth of $.01 ($.00025) per gallon. This reduced rate only applies to purchases by the ultimate consumer directly from a bonded distributor. The person first selling, the person importing, or the bonded distributor shall collect the fee imposed by this article.

"(i) An inspection fee is imposed on the ultimate consumer of undyed diesel fuel at the rate of one fortieth of $.01 ($.00025) per gallon, if the excise tax levied on undyed diesel fuel under Section 40-17-325(a)(2) is refunded by the Department of Revenue and the ultimate consumer specifically used the undyed diesel fuel:

"(1) To operate boats, yachts, ships, or other maritime vehicles, whether such boats, yachts, ships, or other maritime vehicles are used commercially or for pleasure;

"(2) To propel or operate tractors which are not operated on public highways but which are used exclusively in preparing and cultivating land, harvesting any agricultural commodity, or for other agricultural purposes, including pasture and hay production; provided, however, that the term "tractors" as used herein shall not include automobiles, trucks, pickups, trailers, semitrailers, or other such vehicles;

"(3) To propel railroad locomotives; or

"(4) As solvent or other agent in the treatment or preservation of wood products.

"The Department of Revenue is authorized to reduce the excise tax refund by the amount due for the inspection fee.

"(j) An inspection fee of fifteen cents ($.15) per gallon is imposed on the person first selling lubricating oil in this state or importing lubricating oil into this state, regardless of whether the excise taxes levied on lube oil under Sections 40-17-171 and 40-17-220 are paid, unless the purchaser or importer is a bonded distributor, in which case the inspection fee is imposed at the point the bonded distributor makes a sale to a purchaser who is not a bonded distributor. The person first selling, the person importing, or bonded distributor shall collect the fee imposed by this article.

"(k) An inspection fee of two cents ($.02) per gallon is imposed on removal within this state of gasoline and undyed diesel fuel from the terminal using the terminal rack, other than by bulk transfer, if the supplier sells the gasoline or undyed diesel fuel to a licensed entity which is exempt from the excise tax levied on gasoline or diesel fuel under Section 40-17-325(a); unless the purchaser is the federal government. The supplier shall collect the inspection fee imposed by this article from the purchaser at the time of sale of the gasoline or undyed diesel fuel.

"(l) An inspection fee of two cents ($.02) per gallon is imposed at the time gasoline and undyed diesel fuel is imported into this state, other than by bulk transfer, for delivery to a destination in this state, if the supplier sells the gasoline or undyed diesel fuel to a licensed entity which is exempt from the excise tax levied on gasoline or diesel fuel under Section 40-17-325(a); unless the purchaser is the federal government. The supplier or permissive supplier shall collect the inspection fee imposed by this article from the person who imports the gasoline or undyed diesel fuel into this state.

"(m) In each subsequent sale of petroleum products on which the inspection fee has been paid, the amount of the inspection fee shall be added to the selling price so that the inspection fee is paid ultimately by the person using or consuming the petroleum product.

"(n) Petroleum products in a refinery, a pipeline, a terminal, or a marine vessel transporting petroleum products to a refinery or terminal is in the bulk transfer/terminal system. Petroleum products in a motor fuel storage facility including, but not limited to, a bulk plant that is not part of a refinery or terminal, in the motor fuel supply tank of any engine or motor vehicle, or in any tank car, rail car, trailer, truck, or other equipment suitable for ground transportation is not in the bulk transfer/terminal system.

"(h)(o) The inspection fee provided for in this section is in addition to all other fees and all taxes payable with respect to petroleum products. The inspection fee shall be paid on the net gallons of dyed diesel fuel or dyed kerosene.

"(p) Aviation gasoline and aviation jet fuel are exempt from the inspection fee.

"(i) Notwithstanding anything to the contrary in this section, no inspection fee or penalty shall be due or payable with respect to petroleum products which are sold, offered for sale, stored, or used while they are in interstate or international commerce; but if, after such petroleum products are removed from interstate or international commerce, such petroleum products are sold, offered for sale, stored or used in the state, the fee provided for in this section shall be payable with respect to such petroleum products.

"(j) The Board of Agriculture and Industries shall have authority to adopt and promulgate reasonable rules and regulations to effectuate the evident intent and purpose of this section with respect to reporting, collection, remittance, and payments of the petroleum products inspection fees imposed under this section which shall not conflict with any of the express provisions and requirements of this section.

§8-17-91.

"(a) The proceeds from the permit fees, inspection fees, and penalties, if any, collected by the Commissioner of Agriculture and Industries and the Revenue Commissioner pursuant to the provisions of this division Section 8-17-87 together with one-third of the proceeds of the six cent ($.06) additional motor fuel excise tax levied on gasoline under subdivision (1) of subsection (a) of Section 40-17-325, shall be paid into the State Treasury and distributed by the State Treasurer as follows:

"(1) An amount equal to five percent or no less than $175,000, whichever is greater, of the combined proceeds received each month shall accrue to the credit of, and be deposited in, the Agricultural Fund; and

"(2) The balance of the proceeds shall be distributed as follows:

"a. 13.87 percent of the balance of the proceeds shall be distributed equally among each of the 67 counties of the state monthly. Such funds shall be used by the counties for the following purpose:

"When the use is by a county, such use shall be for the construction, including draining, grading, basing, paving, signing, and erosion items, of certain high density unpaved roads as herein provided and for the construction or reconstruction of bridges on such high density roads. The use may also be for the reconstruction, resurfacing, restoration, and rehabilitation of the paved county roads and bridges or bridge replacement on the county road system. The use may also be for the construction, including draining, grading, basing, and paving of certain unpaved roads, and reconstruction of certain paved roads accessing certain public and private recreational facilities and areas.

"There is hereby created a committee to be referred to as the Secondary Road Committee comprised of two county engineers appointed by the Director of the State Department of Transportation, two county commission members appointed by the Governor, and the Chief of the Bureau of Secondary Roads. The committee members shall serve at the pleasure of the appointing authority. The committee shall elect one of its members to serve as chairman. A quorum of the committee shall consist of no less than three members. Committee members shall serve without compensation.

"The Secondary Road Committee shall develop and publish criteria for the designation of high density roads and bridges and for the designation of eligible recreational access roads. The committee may in its discretion provide different criteria for counties according to population, topography, and road mileage. The committee shall also develop and publish minimum design standards, including allowable cost items, for the construction, reconstruction, surfacing, resurfacing, restoration, and rehabilitation of such high density roads and bridges and recreational access roads. Criteria and standards developed by the committee shall be published by distributing printed copies thereof to the chairman of each county commission in Alabama no later than 90 days after May 1, 1984. The committee may from time to time amend the criteria and standards developed provided that at least 60 days' notice is provided in writing to the chairman of each county commission before the effective date of such amendment. The State Department of Transportation shall provide all supplies and clerical help necessary for the committee to execute its responsibilities.

"County commissions are hereby required to submit all plans for the use of such proceeds to the Director of the State Department of Transportation or his designee for approval. The Director of the State Department of Transportation or his designee shall review all plans and approve them or disapprove them, based on the criteria and standards developed by the committee.

"The funds distributed to the counties under this subsection shall not be commingled with other funds of the county except the counties' portion of the auto license tax distributed under Section 40-12-270(a)(1), as amended and shall be kept and disbursed by such county from a special fund only for the purposes hereinabove provided.

"The provisions of this section notwithstanding, any county may at any time deposit all or any portion of such The county shall deposit the proceeds into the county's special RRR Fund as provided for in Section 40-17-224 40-17-362, and may use the proceeds so deposited for any purpose authorized under said that section.

"b. $408,981 shall be allocated to the State Department of Transportation monthly and deposited in the State Treasury to the credit of the Public Road and Bridge Fund. Such funds are hereby appropriated to the State Department of Transportation to be used to match federal aid discretionary funds that may from time to time become available to the State Department of Transportation. In the event that in any fiscal year other State Department of Transportation funds are insufficient to match the department's regular federal aid apportionment, then at the Director of the State Department of Transportation's recommendation, and approval by the Governor, funds appropriated under this subsection may be used to match said the federal aid apportionment.

"c. 2.76 percent of the balance of the proceeds shall be allocated among the incorporated municipalities of the state as follows:

"1. A portion of the municipalities' share of the balance of the proceeds that is equal to 45.45 percent of the municipalities' share of the balance of the proceeds shall be allocated equally among the 67 counties of the state.

"2. The entire residue of the municipalities' share of the balance of the proceeds being an amount equal to 54.55 percent of the municipalities' share of the balance of the proceeds shall be allocated among the 67 counties of the state on the basis of the ratio of the population of each such 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 1980 federal decennial census.

"3. 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 such distribution among the said municipalities to be on the basis of the ratio of the population of each such municipality to the total population of all municipalities in the applicable county according to the then next preceding federal decennial census.

"4. 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, 1983, 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 such municipality to be made in respect of receipts of the inspection fee by the state during October of the fiscal year next succeeding the said incorporation.

"5. Use of the inspection fee by a municipality 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 balance of the 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 division shall not be commingled with other funds of the municipality, except the municipalities' portion of the highway gasoline tax, and shall be kept and disbursed by such municipality from a special fund only for the purposes hereinabove provided.

"d. An additional five percent of the balance each month computed after deducting the distributions in paragraphs a. and c. shall accrue to the credit of, and be deposited in, the Agricultural Fund.

"e. In addition to any and all other funds heretofore or hereafter appropriated, for the fiscal year beginning October 1, 2015, there is appropriated to the Department of Revenue as a first charge against the fees collected pursuant to this article, the sum of five hundred thousand dollars ($500,000) to offset the Revenue Department's costs to implement and administer this article. Beginning October 1, 2016, and every year thereafter an amount equal to two and one-half percent of the balance of the proceeds received each month after deducting the distributions in paragraphs a., b., c., and d. or no less than eighty-seven thousand five hundred dollars ($87,500), whichever is greater, is appropriated and shall accrue to the credit of, and be deposited to, the Department of Revenue to offset its costs of collection.

"e.f. The balance of the proceeds after a., b., c., and d., and e. above have been distributed monthly shall accrue to the credit of and be deposited in the Public Road and Bridge Fund.

"(b) In the event of the collection hereunder from any person of an amount in excess of the amount of all permit fees, inspection fees, interest, or penalties properly and lawfully required to be paid by such person, such person may apply to the Revenue Commissioner in the case of the inspection fees, interest, and penalties paid to the Revenue Commissioner. In the case of overpayment of the permit fees or penalties paid to the Commissioner of Agriculture and Industries, the person may apply to the Commissioner of Agriculture and Industries for a refund of the amount of such overpayment. If such application for refund is approved in whole or in part by the commissioner, the commissioner shall submit to the state Comptroller a statement, approved by the state Attorney General, setting forth the amount determined to have been overpaid and the date of the overpayment. The If an application for refund submitted to the Revenue Commissioner is approved in whole or in part by the Revenue Commissioner, he or she shall submit to the state Comptroller a statement, setting forth the amount determined to have been overpaid and the date of the overpayment. In each case, the state Comptroller shall then draw his warrant in favor of the person making such overpayment upon the State Treasurer for the amount specified in the said statement, and such amount shall be paid out of current months' collections before any distribution is made under subsection (a) of this section.

"(c) The application for refund of the permit fees provided for in this section must article shall be filed with the Commissioner of Agriculture and Industries within 12 calendar months from the date upon which the overpayment was made, and no amount shall be refunded unless the application therefor is filed within the time prescribed herein.

"For any period prior to October 1, 2016, the application for refund of the inspection fee provided for in this article shall be filed with the Revenue Commissioner within 12 calendar months from the date upon which the overpayment was made, and no amount shall be refunded unless the application therefor is filed within the time prescribed herein. For the period beginning October 1, 2016, the application for refund of the inspection fee provided for in this article must be filed with the Revenue Commissioner within the time limits provided by the Taxpayer Bill of Rights in Chapter 2A of Title 40. No amount shall be approved for refund by the Revenue Commissioner unless the application therefor is filed within the time prescribed therein.

"(d) The Department of Agriculture and Industries or the Department of Revenue shall have authority to make and issue rules and regulations relating to the procedure to be followed in filing an application for a refund and for payment of any refund made under this section article.

"(e) In the event of the collection from any person by the Revenue Commissioner of an amount in excess of the amount lawfully required for the six cent ($.06) additional motor fuel excise tax levied on gasoline under subdivision (1) of subsection (a) of Section 40-17-325, when one-third of the amounts so collected have been deposited in the State Treasury and distributed as provided herein, any refund properly approved by the Revenue Commissioner shall be paid out of current months' collections before any distribution of the current months' collections is made under subsection (a) of this section.

§8-17-92.

"(a) In addition to penalty and other enforcement provisions of this division and notwithstanding the existence of another adequate remedy, the circuit court shall have jurisdiction for cause shown to grant a temporary restraining order or permanent injunction, or both, restraining and enjoining any person from violation or continuing to violate any requirements of this division declared to be unlawful.

"(b) Any such person may also be restrained or enjoined from selling, offering for sale, storing, or using any petroleum product without having a permit as required by this division Section 8-17-96, from selling, distributing, offering for sale, storing, or using in this state any petroleum product upon which the inspection fee imposed by this division Section 8-17-87 is not paid or from otherwise violating any of the provisions and requirements of this division Title 8, Chapter 17.

"(c) Such injunction or restraining order shall be issued without bond.

"(d) Any action commenced under this section shall be brought in the name of the State of Alabama upon the relation of the Attorney General.

§8-17-93.

"(a) Any person who sells, offers for sale, stores, or uses any petroleum product in the state which is below the legal standard, who makes a false statement or certificate as to the quantity or standard of such petroleum product, sells, offers for sale, stores, or uses any petroleum product without having procured a permit as required by this division Section 8-17-85, fails to make any report to the Revenue Commissioner of Agriculture and Industries as required by this division article, makes a false certificate of the number of gallons of such petroleum product sold, stored, or used during the preceding month or who otherwise violates or fails to comply with the provisions of this division article shall be guilty of a misdemeanor.

"(b) The Commissioner of Agriculture and Industries may revoke the permit, referenced in Section 8-17-85, of any person found upon investigation to have sold, offered for sale, stored, or used any petroleum product below the minimum standards adopted by the Board of Agriculture and Industries pursuant to the provisions of this division article or who when the Revenue Commissioner has notified the Commissioner of Agriculture and Industries that the taxpayer has failed or refused, after 10 days' notice by registered, or certified, mail of such delinquency, subject to the appeal provisions of Chapter 2A of Title 40, to file the delinquent tax return or to pay the inspection fee required by this division article.

"(c) The holder of any permit, referenced in Section 8-17-85, that may be revoked pursuant to the provisions of this section shall have the right, upon request of such holder, to a hearing before the Commissioner of Agriculture and Industries, at which such holder may appear personally or by legal representative, and he may appeal from the decision of the commissioner by filing in the Circuit Court of Montgomery County a petition for an injunction against the commissioner. In the event such an injunction is sought, sufficient bond shall be filed with the court and conditioned as the law now provides relative to injunction bonds. The findings of the commissioner shall be presumed to be correct."

Section 2. Section 8-17-89, Code of Alabama 1975, is repealed.

Section 3. Sections 8-17-95, 8-17-96, 8-17-97, 8-17-98, 8-17-99, 8-17-100, 8-17-101, and 8-17-102 are added to Chapter 17, Article 5, Title 8 of the Code of Alabama 1975, to read as follows:

§8-17-95.

(a) There is hereby imposed a floor-stocks inspection fee on gasoline held in inventory outside of the bulk transfer/terminal system, as defined in Section 40-17-322, but not at the retail level, on October 1, 2016, if:

(1) No inspection fee was imposed on the gasoline under Section 8-17-87, as of September 30, 2016; and

(2) The inspection fee would have been imposed on the gasoline by this article had it been in effect for the periods prior to October 1, 2016.

(b) The rate of the inspection fee imposed by this section shall be the amount of the fee imposed under Section 8-17-87, on September 30, 2016.

(c) Any person owning gasoline on October 1, 2016, to which the inspection fee imposed by this section applies, shall be liable for the inspection fee. The inspection fee imposed by this section shall be paid on or before December 31, 2016, and shall be paid in the manner prescribed by the Department of Revenue.

§8-17-96.

(a) The supplier or permissive supplier of gasoline or undyed diesel fuel sold to a licensed exempt entity other than the federal government at the rack, or the supplier or permissive supplier selling dyed diesel fuel or dyed kerosene at the rack at an out-of-state terminal to an importer for delivery into Alabama that is not a bonded distributor and does not have a valid inspection fee permit used by the Alabama Department of Revenue, or the person first selling, the person importing, or the person who makes application to become a bonded distributor of dyed diesel fuel, dyed kerosene, or lubricating oil in this state shall submit an application for an inspection fee permit to the Department of Revenue, which shall be approved by the Department of Revenue. Upon approval of the inspection fee application, the supplier or permissive supplier of gasoline or undyed diesel fuel sold to a licensed exempt entity other than the federal government by a supplier or permissive supplier at the rack, or the supplier or permissive supplier selling dyed diesel fuel or dyed kerosene at the rack at an out-of-state terminal to an importer for delivery into Alabama that is not a bonded distributor and does not have a valid inspection fee permit issued by the Alabama Department of Revenue, or the first person selling, the person importing, or the bonded distributor of dyed diesel, dyed kerosene, or lubricating oil shall file with the Department of Revenue a bond in the amount of five thousand dollars ($5,000) prior to the issuance of an inspection fee permit. The bond shall be in such form and amount as may be approved by the Revenue Commissioner, shall be executed by a surety company licensed and duly authorized to do business in Alabama, shall be payable to the State of Alabama and shall be conditioned upon the prompt filing of true reports and the payment by the supplier or permissive supplier of gasoline or undyed diesel fuel sold to a licensed exempt entity other than the federal government by a supplier or permissive supplier at the rack, or the supplier or permissive supplier selling dyed diesel fuel or dyed kerosene at the rack at an out-of-state terminal to an importer for delivery into Alabama that is not a bonded distributor and does not have a valid inspection fee permit issued by the Alabama Department of Revenue, or the first person selling, the person importing, or the bonded distributor of dyed diesel fuel, dyed kerosene, or lubricating oil to the Department of Revenue of all inspection fees which are imposed by Section 8-17-87 with respect to gasoline, undyed diesel fuel, dyed diesel fuel, dyed kerosene, or lubricating oil, together with all penalties and interest thereon, and generally upon faithful compliance with the provisions of this division. Upon approval of the required bond, the Revenue Department shall issue to the applicant an inspection fee permit. This permit is not transferable and remains in effect until surrendered or canceled.

(b) In the event that liability upon any bond filed under the provisions of this subsection shall be discharged or reduced, whether by judgment entered, payment made, or otherwise, or if in the opinion of the Revenue Commissioner any surety on the bond theretofore given shall become unsatisfactory or unacceptable, then the Revenue Commissioner may require the filing of a new or additional bond conditioned as hereinabove provided.

(c) The Department of Revenue shall notify a permit holder at his or her last known address by first class U.S. mail or, at the option of the Department of Revenue, certified mail, return receipt requested, that it is requiring such new or additional bond for any reason as provided above, and the permit holder, within 30 days from the date such notice is mailed by the Department of Revenue, shall (1) file the new or additional bond as requested by the Department of Revenue, or (2) file a notice of appeal as allowed in Section 40-2A-8. The Department of Revenue may immediately cancel the permit upon the expiration of the 30-day appeal period set out in Section 40-2A-8 if the permit holder fails to either provide the new or additional bond requested by the Department of Revenue or timely appeal under Section 40-2A-8.

(d) The total amount of bond or bonds to be given by any supplier, permissive supplier, importer, first seller, or bonded distributor under this subsection shall in no event be less than five thousand dollars ($5,000); except that the Revenue Commissioner may require such additional bond as may be deemed necessary to insure the prompt payment of all inspection fees on the sale of gasoline or undyed diesel fuel sold to exempt entities, other than the federal government, by the supplier or permissive supplier at the terminal rack, or the supplier or permissive supplier selling dyed diesel fuel or dyed kerosene at the rack at an out-of-state terminal to an importer for delivery into Alabama that is not a bonded distributor and does not have a valid inspection fee permit issued by the Alabama Department of Revenue, or on the sale of dyed diesel fuel, dyed kerosene, or lubricating oil due, or to become due, the state by the supplier or permissive supplier of gasoline or undyed diesel fuel to exempt entities, other than the federal government, by the supplier or permissive supplier at the terminal rack, or the supplier or permissive supplier selling dyed diesel fuel or dyed kerosene at the rack at an out-of-state terminal to an importer for delivery into Alabama that is not a bonded distributor and does not have a valid inspection fee permit issued by the Alabama Department of Revenue, or by the person first selling, the person importing, or the bonded distributor of dyed diesel fuel, dyed kerosene, or lubricating oil.

(e) Any surety on any bond furnished by the supplier or permissive supplier of gasoline or undyed diesel fuel sold to exempt entities, other than the federal government by the supplier or permissive supplier at the terminal rack, or the supplier or permissive supplier selling dyed diesel fuel or dyed kerosene at the rack at an out-of-state terminal to an importer for delivery into Alabama that is not a bonded distributor and does not have a valid inspection fee permit issued by the Alabama Department of Revenue, or by the person first selling, the person importing, or the bonded distributor of dyed diesel fuel, dyed kerosene, or lubricating oil, as above provided, shall be released and discharged from any and all liability to the State of Alabama accruing on such bond after the expiration of 30 days from the date upon which surety shall have filed with the Department of Revenue written request to be released and discharged; provided, however, that such request shall not operate to relieve, release, or discharge such surety from any liability already accrued or which shall accrue before the expiration of such 30-day period. The Revenue Commissioner shall promptly, upon receipt of notice of such request, notify the supplier or permissive supplier of gasoline or undyed diesel fuel to exempt entities, other than the federal government, or the supplier or permissive supplier selling dyed diesel fuel or dyed kerosene at the rack at an out-of-state terminal to an importer for delivery into Alabama that is not a bonded distributor and does not have a valid inspection fee permit issued by the Alabama Department of Revenue, or the person first selling, the person importing, or the bonded distributor of dyed diesel fuel, dyed kerosene, or lubricating oil who furnished such bond of the request of the surety on the bond and, unless such supplier or permissive supplier of gasoline or undyed diesel fuel to exempt entities, other than the federal government, or the supplier or permissive supplier selling dyed diesel fuel or dyed kerosene at the rack at an out-of-state terminal to an importer for delivery into Alabama that is not a bonded distributor and does not have a valid inspection fee permit issued by the Alabama Department of Revenue, or the person first selling, the person importing, or the bonded distributor of dyed diesel fuel, dyed kerosene, or lubricating oil shall file, on or before the expiration of such 30-day period, with the Department of Revenue a new bond in the amount and form hereinbefore in this subsection provided, the Revenue Commissioner shall cancel the permit of the supplier or permissive supplier of gasoline or undyed diesel fuel to exempt entities, other than the federal government, or the supplier or permissive supplier selling dyed diesel fuel or dyed kerosene at the rack at an out-of-state terminal to an importer for delivery into Alabama that is not a bonded distributor and does not have a valid inspection fee permit issued by the Alabama Department of Revenue, or the person first selling, person importing, or the bonded distributor of dyed diesel fuel, dyed kerosene, or lubricating oil in accordance with the provisions of Section 40-2A-8.

§8-17-97.

(a) It shall be the duty of the person first selling dyed diesel fuel, dyed kerosene, or lubricating oil in this state or importing dyed diesel fuel, dyed kerosene, or lubricating oil into the state, on which an inspection fee is due to collect and pay such inspection fee to the Department of Revenue each month in respect of all dyed diesel fuel, dyed kerosene, or lubricating oil sold or imported in the state during the preceding month unless the purchaser is a bonded distributor. It shall be the duty of the supplier or permissive supplier to collect and pay the inspection fee to the Department of Revenue each month in respect of all dyed diesel fuel or dyed kerosene destined for Alabama that is sold to an importer that is not a bonded distributor and does not have a valid inspection fee permit issued by the Alabama Department of Revenue.

(b) It shall be the duty of the supplier or permissive supplier to collect and pay the inspection fee to the Department of Revenue each month in respect of all dyed diesel fuel or dyed kerosene destined for Alabama that is sold to an importer that is not a bonded distributor and does not have a valid inspection fee permit issued by the Alabama Department of Revenue.

(c) It shall be the duty of the supplier or permissive supplier to collect the inspection fee imposed by this article from the licensed exempt entity unless the licensed exempt entity is an entity of the federal government on sales at the terminal rack and remit payment each month in respect of all gasoline or undyed diesel fuel sold in the state during the preceding month to licensed exempt entities other than the federal government.

(d) Each supplier, permissive supplier, importer, first seller, or bonded distributor shall file the monthly returns and monthly remittance, in a format prescribed by the Revenue Commissioner, on or before the 20th day of each calendar month for the preceding month with the Department of Revenue. The taxpayer is required to file an electronic report through the Department of Revenue's electronic filing system.

(e) The inspection fee provided for in this section shall be paid but once with respect to the same product; but in the event any person fails to make the required electronic report or payment as herein provided on or before the date such payment is due, the Revenue Commissioner shall add to the inspection fee already due interest as prescribed in Section 40-1-44 and any applicable penalties as prescribed in Chapter 2A of Title 40. The Revenue Commissioner shall then proceed to collect the inspection fee, together with the interest and penalties, in accordance with the provisions of Title 40.

(f) The inspection fee, interest, and any penalties added thereto shall constitute and operate as a lien at all times until paid upon any petroleum products sold, offered for sale, stored, or used in the state by the person liable for the fee, and shall be immediately enforceable by the Revenue Commissioner in accordance with established collection procedures of the Department of Revenue.

(g) The Revenue Commissioner shall have authority to adopt and promulgate reasonable rules and regulations to effectuate the evident intent and purpose of this section with respect to reporting, collection, remittance, and payments of the petroleum products inspection fees imposed under this article which shall not conflict with any of the express provisions and requirements of this section.

§8-17-98.

(a) Having submitted a refund petition for the excise tax under the provisions of Section 40-17-329(h), the following ultimate consumers shall owe an inspection fee to the Department of Revenue at a reduced rate of one-fortieth of a cent ($.00025) per gallon on undyed diesel fuel. The Department of Revenue is authorized to reduce the excise tax refund by the amount of the inspection fee that is due.

(1) Undyed diesel fuel used by the ultimate consumer to operate boats, yachts, ships, or other maritime vehicles, whether such boats, yachts, ships, or other maritime vehicles are used commercially or for pleasure.

(2) Undyed diesel fuel used by the ultimate consumer to propel or operate tractors which are not operated on public highways but which are used exclusively in preparing and cultivating land, harvesting any agricultural commodity, or for other agricultural purposes, including pasture and hay production; provided, however, that the term "tractors" as used herein shall not include automobiles, trucks, pickups, trailers, semitrailers, or other such vehicles.

(3) Undyed diesel fuel used to propel railroad locomotives.

(4) Undyed diesel fuel used by the ultimate consumer as a solvent or other agent in the treatment or preservation of wood products.

(b) Having submitted a refund petition for the excise tax under the provisions of Section 40-17-329(h) on undyed diesel fuel used by the ultimate consumer in firing steam boilers or combustion generating turbines by compression, the ultimate consumer shall be exempt from the inspection fee on undyed diesel fuel used in firing steam boilers or combustion generating turbines by compression.

(c) If a refund is issued by the Department of Revenue for excise taxes levied under Section 40-17-325(1) on gasoline or Section 40-17-325(2) on undyed diesel fuel for sales to the United States government or any agency thereof, the inspection fee levied under this article shall not be due.

(d) If a refund is issued by the Department of Revenue for excise taxes levied under Section 40-17-325(1) on gasoline or Section 40-17-325(2) on undyed diesel exported out of Alabama, the inspection fee levied under this article shall not be due.

§8-17-99.

(a) The person first selling, the person importing, or the bonded distributor of dyed diesel fuel or dyed kerosene may take a deduction on the monthly return for sales of dyed diesel fuel or dyed kerosene to the following:

(1) United States Government.

(2) Exports by the bonded distributor.

(3) Sales from one Alabama bonded distributor to another Alabama bonded distributor.

(4) Sales to the ultimate consumer for use in firing steam boilers or combustion generating turbines by compression.

(b) The person first selling, the person importing, or the bonded distributor of lubricating oil may take a deduction on the monthly return for sales of lubricating oil to the following:

(1) United States Government.

(2) Exports by the bonded distributor.

(3) Sales from one Alabama bonded distributor to another Alabama bonded distributor.

§8-17-100.

(a) The Department of Revenue may refuse to issue an inspection fee permit under this article if the applicant or any principal of the applicant has done any of the following:

(1) Had a motor fuel license or registration issued by this state or another state canceled for cause.

(2) Been convicted of any offense involving fraud or misrepresentation.

(3) Been convicted of any other offense that indicates that the applicant may not comply with this article if issued an inspection fee permit.

(b) The Department of Revenue may also refuse to issue an inspection fee permit if the applicant is in arrears to the state for any taxes or fees or for other good cause shown.

(c) Any refusal by the Department of Revenue under this section to issue an inspection fee permit may be appealed under the provisions of Title 40, Chapter 2A.

§8-17-101.

(a) In accordance with the provisions of Title 40, Chapter 2A, the Department of Revenue may cancel the inspection fee permit required under Section 8-17-96, upon written notice sent to the permit holder's last known address, as it appears in the Department of Revenue's files, for any of the following reasons:

(1) Filing by the permit holder of a false report of the data or information required by this article.

(2) Failure, refusal, or neglect of the permit holder to file a report or to provide any information required by this article.

(3) Failure of the permit holder to pay the full amount of all excise taxes and inspection fees due or to pay any penalties or interest due.

(4) Failure of the permit holder to keep accurate records of the quantities of petroleum products received, produced, refined, manufactured, compounded, sold, imported, or used in Alabama.

(5) Failure to file a new or additional surety bond upon request of the Department of Revenue pursuant to Section 40-17-96.

(6) Conviction of the permit holder or a principal of the permit holder for any act prohibited under this article.

(7) Failure, refusal, or neglect of a permit holder to comply with any other provision of this article or any rule promulgated pursuant to this article.

(8) Having a motor fuel license or registration issued by this state or another state canceled for cause.

(9) For any change in the ownership or control of the business.

(b) Upon cancellation of any permit for any cause listed above, the inspection fee levied under this article becomes due and payable on all untaxed petroleum products held in storage or otherwise in the possession of the permit holder and all petroleum products sold, delivered, imported, or used prior to the cancellation on which the fee has not been paid.

(c) The permit can be canceled upon the written request of the permit holder.

§8-17-102.

Every return required to be filed under this article shall be on forms and by means prescribed by the Revenue Commissioner and furnished by the Department of Revenue and shall contain any information the Department of Revenue considers necessary for the enforcement of this article.Section 4. Sections 40-17-325, 40-17-329, 40-17-340, 40-17-359, and 40-17-362, Code of Alabama 1975, are amended to read as follows:

§40-17-325.

"(a) Subject to the exemptions provided for in this article, the tax is imposed on net gallons of motor fuel according to Section 40-17-326 at the following rates:

"(1) Sixteen Eighteen cents ($.18) per gallon on gasoline, which is comprised of a seven cents ($.07) excise tax, a supplemental five cents ($.05) excise tax, and an additional $.04 six cent ($.06) excise tax.

"(2) Nineteen cents ($.19) per gallon on diesel fuel, comprised of a thirteen cents ($.13) excise tax and an additional six cents ($.06) excise tax.

"(3) Nine and one-half cents per gallon ($.095) on aviation gasoline and three and one-half cents per gallon ($.035) on aviation jet fuel when the aviation fuel is sold to a licensed aviation fuel purchaser. Aviation gasoline is to be taxed as gasoline and aviation jet fuel is to be taxed as diesel fuel when not sold to a licensed aviation fuel purchaser.

"(b) The motor fuel subject to the excise tax levied by this section shall not be subject to any other excise tax levied by this state.

"However, the payment of the motor fuel excise tax levied by this section shall not exempt the seller or importer of fuel from the license fees levied by Section 40-17-174.

§40-17-329.

"(a) Unless otherwise provided for in this subsection, sales of motor fuel to the following are exempt from the tax levied by subsection (a) of Section 40-17-325 and shall not be paid at the rack:

"(1) All motor fuel exported from this state for which proof of export is available in the form of a terminal issued destination state shipping document that is a. exported by a supplier who is licensed in the destination state or b. is sold by a supplier to a licensed exporter for immediate export to a state for which the applicable destination state motor fuel excise tax has been collected by the supplier who is licensed to remit the tax to the destination state. If the motor fuel is exempt from the excise tax due to the product being exported from this state, then the motor fuel exported from this state shall also be exempt from the inspection fee imposed under Section 8-17-87. This exemption shall not apply to any motor fuel which is transported and delivered outside this state in the motor fuel supply tank of a highway vehicle.

"(2) All K-1 Kerosene or aviation jet fuel that is produced at a refinery in this state and is either exported from this state directly by the operator of that refinery or is sold for immediate export by the operator to a licensed exporter. In either case proof of export is to be available in the form of a terminal destination state shipping document and in addition all relevant sales documents are to reference the product known as "K-1 Kerosene" or "aviation jet fuel," as applicable. If the K-1 Kerosene is exempt from the excise tax due to the product being exported from this state, then the K-1 Kerosene that is exported shall also be exempt from the inspection fee imposed under Section 8-17-87.

"(3) All sales of dyed diesel fuel.

"(4) Gasoline blendstocks or cellulosic biofuel, as defined in Section 40-17-322, when sold to a. a licensed supplier or b. a person who will not be using the blendstocks or cellulosic biofuel in the manufacture of gasoline or as a motor fuel, as evidenced by the exemption certificate prescribed under regulations promulgated under Section 4081, Title 26 of the United States Code. If the gasoline blendstocks or cellulosic biofuel is exempt from the excise tax due to the product being sold to a licensed supplier or to a person who will not be using the blendstocks or cellulosic biofuel in the manufacture of gasoline or as a motor fuel, then the gasoline blendstocks or cellulosic biofuel shall also be exempt from the inspection fee imposed under Section 8-17-87.

"(5) All motor fuel sold by a licensed supplier or licensed permissive supplier to an exempt agency electing to be licensed under Section 40-17-332. If the motor fuel is exempt from the excise tax due to the product being sold to the United States government or any agency thereof, who is a licensed exempt entity in this state, then the motor fuel sold to the United States government or any agency thereof shall also be exempt from the inspection fee imposed under Section 8-17-87. If the motor fuel is exempt from the excise tax due to the product being sold to a licensed exempt entity, other than the federal government, then the motor fuel sold to the licensed exempt entity shall be subject to the inspection fee imposed under Section 8-17-87 and the inspection fee shall be remitted by the supplier or permissive supplier on the monthly inspection fee return.

"(6) Motor fuel that is delivered by a licensed supplier from one terminal to another terminal when ownership in the motor fuel has not changed, or by a licensed supplier from a terminal to a refinery operated by the licensed supplier. If the motor fuel is exempt from the excise tax due to the product being transferred from one terminal to another terminal, then the motor fuel transferred from one terminal to another terminal shall also be exempt from the inspection fee imposed under Section 8-17-87.

"(b) Having first paid the tax owed under this article, a licensed distributor shall have the right to apply to the department on a monthly basis for a refund of the taxes paid on the gallons sold by that licensed distributor to the exempt agencies listed under subsection (e), provided the exempt agency has elected to obtain a license under Section 40-17-332. If the motor fuel is exempt from the excise tax due to the product being sold to the United States government or any agency thereof, who is a licensed exempt entity in this state, then the motor fuel sold to the United States government or any agency thereof shall also be exempt from the inspection fee imposed by Section 8-17-87. If the motor fuel is exempt from the excise tax due to the product being sold to a licensed exempt entity, other than the federal government, then the motor fuel sold to the licensed exempt entity shall be subject to the inspection fee imposed under Section 8-17-87. The department is authorized to reduce the excise tax refund by the amount of the inspection fee that is due.

"(c) Having first paid the tax owed under this article, an exporter shall have the right to apply to the department on a monthly basis for a refund of the taxes paid to this state on the gallons of motor fuel that are ultimately exported by the exporter. The department will require the exporter to provide proof of payment of the applicable destination state excise taxes before issuing a refund. If the motor fuel is exempt from the excise tax due to the product being exported from this state, then the motor fuel exported from this state shall also be exempt from the inspection fee imposed under Section 8-17-87.

"(d) Having first paid the tax owed under this article, a licensed aviation fuel purchaser shall have the right to apply to the department on a monthly basis for a refund of the taxes paid to this state on the gallons of jet fuel sold to a certificated or licensed air carrier that purchases jet fuel within this state and uses the jet fuel to propel aircraft powered by jet or turbine engines operated in scheduled all-cargo operations being conducted on international flights or in international commerce. For the purposes of this subsection, the following words or terms shall be defined and interpreted as follows:

"(1) AIR CARRIER. Any person, firm, corporation, or entity undertaking by any means, directly or indirectly, to provide air transportation.

"(2) ALL-CARGO OPERATIONS. Any flight conducted by an air carrier for compensation or hire other than a passenger carrying flight, except passengers as specified in Section 121.583 (a) or 135.85 of the Federal Aviation Regulations, as amended.

"(3) INTERNATIONAL COMMERCE. Any air carrier engaged in all-cargo operations transporting goods for compensation or hire on international flights.

"(4) INTERNATIONAL FLIGHTS. Any air carrier conducting scheduled all-cargo operations between any point within the 50 states of the United States and the District of Columbia and any point outside the 50 states of the United States and the District of Columbia, including any interim stops within the United States so long as the ultimate origin or destination of the aircraft is outside the United States and the District of Columbia.

"(e) Having first paid the tax to its vendor, the following entities shall have the right to apply to the department for a refund on a quarterly basis for any purchases of motor fuel:

"(1) The United States government or any agency thereof. If the motor fuel is exempt from the excise tax due to the product being sold to the United States government or any agency thereof, which is a licensed exempt entity in this state, then the motor fuel sold to the United States government or any agency thereof shall also be exempt from the inspection fee imposed under Section 8-17-87.

"(2) Any county governing body of this state. If the motor fuel is exempt from the excise tax due to the product being sold to a licensed exempt entity, which is a county governing body, then the motor fuel sold to the licensed exempt entity shall be subject to the inspection fee imposed under Section 8-17-87. The department is authorized to reduce the excise tax refund by the amount of the inspection fee that is due.

"(3) Any incorporated municipal governing body of this state. If the motor fuel is exempt from the excise tax due to the product being sold to a licensed exempt entity, which is an incorporated municipal governing body, then the motor fuel sold to the licensed exempt entity shall be subject to the inspection fee imposed under Section 8-17-87. The department is authorized to reduce the excise tax refund by the amount of the inspection fee that is due.

"(4) City and county boards of education of this state. If the motor fuel is exempt from the excise tax due to the product being sold to a licensed exempt entity, which is a city or county board of education, then the motor fuel sold to the licensed exempt entity shall be subject to the inspection fee imposed under Section 8-17-87. The department is authorized to reduce the excise tax refund by the amount of the inspection fee that is due.

"(5) The Alabama Institute for Deaf and Blind, the Department of Youth Services school district, and private and church school systems as defined in Section 16-28-1, and which offer essentially the same curriculum as offered in grades K-12 in the public schools of this state. If the motor fuel is exempt from the excise tax due to the product being sold to a licensed exempt entity, as listed herein, then the motor fuel sold to the licensed exempt entity shall be subject to the inspection fee imposed under Section 8-17-87. The department is authorized to reduce the excise tax refund by the amount of the inspection fee that is due.

"(f) If the sale of taxable motor fuel to exempt entities listed in subsection (e) occurs at a fixed retail pump available to the general public and is charged to a credit card issued to the exempt entity, the issuer of the card, having billed the exempt entity without the tax, may apply on a quarterly basis for a refund of the motor fuel excise taxes by submitting the application and supporting documentation as prescribed by the department. If the motor fuel is exempt from the excise tax due to the product being sold to the United States government or any agency thereof, which is a licensed exempt entity in this state, then the motor fuel sold to the United States government or any agency thereof shall also be exempt from the inspection fee imposed under Section 8-17-87. If the motor fuel is exempt from the excise tax due to the product being sold to any of the entities listed in subdivisions (2) through (5) of subsection (e), which is a licensed exempt entity in this state, then the motor fuel sold to the entities listed in subdivisions (2) through (5) of subsection (e) shall be subject to the inspection fee imposed under Section 8-17-87. The department is authorized to reduce the excise tax refund by the amount of the inspection fee that is due.

"(g) Having first paid the tax, a licensed air carrier with a hub operation within this state shall have the right to apply to the department for a refund on a quarterly basis for any purchases of jet fuel used to propel aircraft. For the purposes of this subsection, the words "hub operation within this state" shall be construed to have all of the following criteria:

"(1) There originates from the location 15 or more flight departures and five or more different first-stop destinations five days per week for six or more months during the calendar year; and

"(2) Passengers and/or property are regularly exchanged at the location between flights of the same or a different certificated or licensed air carrier.

"(h) End users who first pay the tax levied by subdivision (2) of subsection (a) of Section 40-17-325 on all gallons of diesel fuel used in designated off-road vehicles, other off-road equipment, or for other off-road use may apply to the department for a refund on a quarterly basis. The end users who apply for a refund under this subsection shall be subject to the inspection fee levied under Section 8-17-87 unless the end user is taxed at a reduced rate or exempt from the inspection fee under Section 8-17-98. The department is authorized to reduce the excise tax refund by the amount of the inspection fee that is due.

"(i) End users who first pay the tax levied by subdivision (1) of subsection (a) of Section 40-17-325 on gallons of gasoline blendstocks not used in the manufacture of gasoline or as a motor fuel may apply to the department for a refund on a quarterly basis. The end user shall be exempt from the inspection fee on blendstocks not used in the manufacture of gasoline or as a motor fuel.

"(j) Tax paid on motor fuel that (1) is lost or destroyed as a direct result of a sudden and unexpected casualty, or (2) becomes unsalable or unusable as highway fuel due to such things as the contamination by dye or mixture of gasoline and diesel shall be refundable. If a refund is issued for the excise tax due to a casualty or contamination, the inspection fee levied under Section 8-17-87 shall not be due.

"(k) Tax paid on transmix not used as a motor fuel or that is delivered to a refinery for further processing shall be refundable, with the person so using the transmix being eligible to file for the refund on a quarterly basis or if a licensed supplier, a credit may be taken on its monthly supplier return. If a refund or credit is issued for the excise tax on transmix, the inspection fee levied under Section 8-17-87 shall not be due.

"(l) Tax paid on motor fuel within the bulk transfer system may be refunded upon sufficient proof that (1) a second tax had been paid pursuant to Section 40-17-325 or (2) the fuel was exported to another state or country. The party paying the second tax or exporting the fuel may file for a refund on a monthly basis. If a refund is issued for the excise tax due to payment of a second tax or exported in the bulk transfer system, the inspection fee levied under Section 8-17-87 shall not be due.

"§40-17-340.

"(a) Each supplier, importer, blender, permissive supplier, and exporter shall file the monthly return required herein, in a format prescribed by the commissioner, on or before the 22nd day of each calendar month for the preceding month.

"(b) Other than importers, the tax levied by this article shall be paid to the department by each taxpayer on or before the 22nd day of each calendar month for the preceding month and shall be accompanied by any required returns. The department may require all or certain taxpayers to file tax returns and payments electronically.

"(c) Importers importing motor fuel from a bulk plant or some other non-terminal storage location shall pay the tax levied by this article to the department on or before the 3rd business day following the day of importation 22nd day of each calendar month for the preceding month, and the payment shall be accompanied by any required returns. The department may require all or certain taxpayers to file tax returns and payments electronically.

"(d) Importers importing motor fuel acquired at an out-of-state terminal from a supplier who has not precollected the tax imposed under Section 40-17-325 at the time of such removal shall pay the tax so levied to the department on or before the 3rd business day following the day of importation, and the payment shall be accompanied by any required returns.

"(e) A supplier or permissive supplier who timely files a return with the payment due may deduct from the amount of tax payable with the return an administrative discount of one half of one percent (.005) of the amount of tax payable to the state.

§40-17-359.

"(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 ($.05) per gallon and additional four six cents ($.04) ($.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 additional four cents ($.04) and applicable costs of collection and refunds have been deducted, one-third of all revenues received or collected by the department remaining after the payment of refunds from the additional six cents ($.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 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) All One-third of all revenues received or collected by the department from the additional four six cents ($.04) ($.06) tax levied on gasoline under subdivision (1) of subsection (a) of Section 40-17-325, remaining after the payment of refunds and the expense of administration and enforcement of this article are hereby allocated and appropriated in the following manner: 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 $.04 six cents ($.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 $.04 six cents ($.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 $.04 six cents ($.06) tax levied that is equal to 25 percent of the remaining two-thirds revenue received or collected by the department from the additional $.04 six cents ($.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 $.04 six cents ($.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 $.04 six cents ($.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.

"(p)(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.

§40-17-362.

"(a) For the purposes of this section, the following words and phrases shall have the following meanings:

"(1) BRIDGE REPLACEMENT. Bridge replacement includes the replacement of existing bridge structures and, if necessary, the realignment of the adjacent approaches.

"(2) RESURFACING, RESTORATION, AND REHABILITATION. Work undertaken primarily to preserve an existing facility. Restoration and rehabilitation is work required to return the existing pavement or bridge deck, including shoulders, to a condition of adequate structural support or to a condition adequate for placement of an additional state of construction. Resurfacing consists of the placement of additional surface material over the existing, restored, or rehabilitated roadway or bridge deck to improve serviceability or to provide additional strength. Resurfacing, restoration, and rehabilitation work may include changes to geometric features, such as minor widening, flattening curves, or improving sight distances.

"(3) VEGETATION MANAGEMENT. Action taken to maintain the right-of-way of a paved road in a condition that is beneficial to public safety and the longevity of the road infrastructure including, but not limited to, restoration and maintenance and cleaning of the full width of the right-of-way through the use of herbicides, heavy equipment, and other means.

"(b) It is the intent of the Legislature that the proceeds of the tax collected on remaining two-thirds revenues received or collected by the department from the additional six cents ($.06) diesel fuel gasoline excise tax levied under Section 40-17-325(a)(1) and the revenues received or collected by the department from the additional four six cents ($.04) ($.06) gasoline diesel fuel excise tax under the provisions of this article Section 40-17-325(a)(2) shall be used in the following manner:

"(1) Where the use is by the Department of Transportation, the use shall, with the approval of the Governor, be for the construction and maintenance of public roads and bridges on the state highway system.

"(2) Where the use is by a county, the use shall be for vegetation management or resurfacing, restoration, and rehabilitation of the paved county roads and bridges or bridge replacement on the county road system. These funds shall not be used for new construction unless 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. These funds shall not be used for the purchase of equipment or herbicides. The net tax proceeds distributed to the county shall not be commingled with other funds of the county, including any other gasoline tax revenues, and shall be kept and disbursed by the county from a special fund only for the purposes hereinabove provided.

"(3) Where the use is by a municipality, the use shall be for resurfacing, restoration, and rehabilitation of roads, bridges, and streets within the municipality. The use may also be for bridge replacement within the municipality. From time to time, the funds may also be used to construct new roads and streets within the municipality. These funds shall not be commingled with other funds of the municipality, including any other gasoline tax revenues, and shall be kept and disbursed by the municipality from a special fund only for the purposes hereinabove provided."

Section 5. All laws or parts of laws which conflict with this act are repealed.

Section 6. In Section 4, Section 40-17-340, Code of Alabama 1975, shall become effective on the first day of the second month following its passage and approval by the Governor, or its otherwise becoming law. In Section 1, in the amended Section 8-17-91(a)(2)e., the new paragraph e. shall become effective October 1, 2015, following its passage and approval by the Governor, or its otherwise becoming law. All other parts of this act shall become effective on October 1, 2016, following its passage and approval by the Governor, or its otherwise becoming law.

Taxation

Gasoline

Motor Fuel

Revenue Department

Code Added

Code Repealed

Code Amended