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HB224 ENROLLED
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HB224
XDIAR7Z-2
By Representatives McCampbell, Reynolds, Travis, Hall,
Blackshear, Sorrells, Whitt, Givens, Lamb
RFD: Ways and Means General Fund
First Read: 14-Jan-26
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First Read: 14-Jan-26
Enrolled, An Act,
To amend Sections 40-23-35 and 40-23-85, Code of
Alabama 1975 to provide further distribution of sales and use
tax funds.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 40-23-35 Code of Alabama 1975 is
amended as follows:
"§40-23-35
(a) Such amount of money as shall be appropriated for
each fiscal year by the Legislature to the Department of
Revenue with which to pay the salaries, the cost of operation
and management of the department shall be deducted, as a first
charge thereon, from the taxes collected under the provisions
of this division; provided, that the expenditure of the sum so
appropriated shall be budgeted and allotted pursuant to
Article 4 of Chapter 4 of Title 41, and limited to the amount
appropriated to defray the expenses of operating the
department for each fiscal year. After the payment of the
expenses, so much of the amount remaining as may be necessary,
after first applying all sums of money received by reason of
the application of the surplus in the income tax as provided
by Section 40-18-58, for the replacement in the public school
fund of the three-mill constitutional levy for schools and in
the General Fund of the one-mill levy for soldiers' relief and
the two and one-half mills for general purposes lost by
exemption of homestead provided for in this division shall be
first charges against the proceeds of the licenses, taxes, or
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first charges against the proceeds of the licenses, taxes, or
receipts levied or collected under this division. The
Comptroller, with the approval of the Governor, is hereby
directed to draw his or her warrants payable out of the total
proceeds of the licenses, taxes, or receipts levied or
collected under this division as herein provided in such sum
as shall be found necessary to take care of and replace the
three-mill constitutional school levy, the one-mill soldiers'
relief levy, and the two and one-half mill levy for general
purposes of the state ad valorem taxes lost as above set
forth.
(b) Of the amounts of such collections in any fiscal
year remaining after the payment of the expenses of
administration and replacement of the amounts in the several
funds as herein provided there shall be paid into the Treasury
sums to be credited as follows:
(1) To the credit of the 67 counties of the state, to
be divided and distributed as hereinafter provided, $378,000;
(2) To the Department of Human Resources, $1,322,000;
(3) Beginning June 1, 2000, to the Department of
Conservation and Natural Resources for capital outlay for
acquisition of land contiguous to existing state parks and
land acquired for lakes and or water reservoirs, provision,
construction, improvement, renovation, equipping, and
maintenance of the state parks system only and not for use by
the Department of Conservation and Natural Resources for
personnel or administrative use, the sum equal to the increase
in receipts accruing to the State of Alabama due to the cap on
discounts per license holder in Section 40-23-36(b), which
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discounts per license holder in Section 40-23-36(b), which
increase shall be equal to the difference between the discount
rate or amount allowed under Section 40-23-36(b) and the
maximum discount rate allowable under Section 40-23-36(a);
provided, however, if at any time any bonds of the Alabama
State Parks System Improvement Corporation or the Alabama
Public Historical Sites and Parks Improvement Corporation are
outstanding (excluding bonds that have been refunded by the
establishment of an escrow trust for the payment thereof
consisting solely of bonds or other obligations which as to
principal and interest constitute direct obligations of, or
are unconditionally guaranteed by, the United States of
America) there shall first be paid into the State General Fund
from such collections an amount equal to the debt service
(principal, interest, and premium, if any) payable on such
bonds in the then current fiscal year of the state. Provided,
however, that one million dollars ($1,000,000) of such
increase in receipts per fiscal year shall be credited to the
Department of Human Resources beginning October 1, 1996, until
September 30, 2002, and shall be expended for the foster
children program.
(4)a. On October 1, 2002, to the Department of
Conservation and Natural Resources for capital outlay, repairs
and maintenance of the state parks system only, the minimum
sum of five million dollars ($5,000,000) from the increase in
receipts accruing to the State of Alabama due to the cap on
discounts per license holder in Section 40-23-36(b) as
calculated in Section 40-23-35(b)(3). Beginning October 1,
2003 through September 30, 2021, annually, to the Department
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2003 through September 30, 2021, annually, to the Department
of Conservation and Natural Resources for capital outlay,
repairs, and maintenance of the state parks system only, the
sum calculated by a fraction, the numerator of which is five
million dollars ($5,000,000) and the denominator of which is
equal to the increase in receipts as calculated in Section
40-23-35(b)(3) for fiscal year 2002 accruing to the State of
Alabama multiplied by the increase in receipts as calculated
in Section 40-23-35(b)(3) for the then current fiscal year, or
the sum of five million dollars ($5,000,000), whichever is
greater. Notwithstanding the previous sentence, for the fiscal
years ending September 30, 2012, and September 30, 2013, only,
the five million dollars ($5,000,000) shall be transferred to
the State General Fund.
b. Beginning October 1, 2021, annually, to the
Department of Conservation and Natural Resources for capital
outlay, repairs, and maintenance of the state parks system
only, seven million dollars ($7,000,000). Beginning with the
fiscal year that starts October 1, 2022, the State Treasurer
shall annually adjust the dollar amount in this paragraph to
reflect the cumulative change in the Consumer Price Index for
All Urban Consumers (CPI-U), as published by the Bureau of
Labor Statistics of the United States Department of Labor, or
a successor index, for the annual period ending on the
December 31 preceding the adjustment date and rounded to the
nearest one thousand dollars ($1,000).
c. Beginning October 1, 2002, to the credit of the
State General Fund, the balance of the sum equal to the
increase in receipts accruing to the State of Alabama due to
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increase in receipts accruing to the State of Alabama due to
the cap on discounts per license holder in Section
40-23-36(b).
(c) One-half of the amount deposited to the credit of
the 67 counties as above provided, shall be divided and
distributed proportionately among the 67 counties of the state
according to the population of the counties as shown by the
last federal census as proclaimed, published, or certified by
the Director of the Bureau of the Census; and one-half of the
proceeds shall be divided or distributed equally among 67
counties; provided, that the funds divided and distributed to
the several counties of the state as hereinabove provided for
shall be used exclusively for full-time health service in
cooperation with the State Board of Health or the federal
government, and for extension services in cooperation with the
Alabama Agriculture Extension Service or the federal
government, at the discretion of the county commissions of the
several counties of the state.
(d) The amounts provided in subsection (b) for the
Department of Human Resources shall be used for general
welfare purposes. For purposes of this division, "general
welfare purposes" means:
(1) The administration of public assistance as set out
in Sections 38-2-5 and 38-4-1;
(2) Services, including supplementation and
supplementary services under the federal Social Security Act,
to or on behalf of persons to whom such public assistance may
be given under Section 38-4-1;
(3) Services to and on behalf of dependent, neglected,
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(3) Services to and on behalf of dependent, neglected,
or delinquent children; and
(4) Investigative and referral services to and on
behalf of needy persons.
(e) In addition, there shall be paid, commencing on
January 1, 1978, and on the first day of each fiscal quarter
thereafter, to the Department of Human Resources for a
statewide, state-administered food stamp program, as
authorized by the Food Stamp Act of 1964, Public Law 88-525,
88th Congress, and amendments thereto, an amount equal to five
seven and one-half percent of the value of food stamp
benefits issued statewide in excess of the amount paid by
recipients (bonus or free stamps) during the immediate prior
fiscal quarter, which sum so appropriated shall be paid
quarterly to the Department of Human Resources Trust Fund for
administration of the food stamp program in conformity with
rules and regulations promulgated by the United States
Department of Agriculture and in conformity with Sections
38-1-1 through 38-6-9. The administrative funds shall be
limited to and based on fiscal year 1976-77 administrative
costs, normal inflationary increases, and mandated
administration requirements of the Alabama Legislature and the
United States Department of Agriculture. The Department of
Human Resources will not staff any county food stamp office at
a level that exceeds the average staff-to-recipient ratios
that existed in Alabama during fiscal year 1976-77. This
restriction will apply in coordination with those provided
hereinabove and, should conflict occur, the lesser amount of
expenditure shall be required. At the end of each fiscal year,
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expenditure shall be required. At the end of each fiscal year,
an accounting shall be made of the sum so that any unexpended
and unencumbered balance of funds may be determined for the
purpose of paying such balance to the Education Trust Fund.
(f) The amount of the proceeds of all taxes levied by
this division remaining after the payment of the expenses of
administration and enforcement and the replacement in the
several funds of the amount lost by any homestead exemptions
and the distribution as provided in subsections (b) and (d),
shall be paid into the Education Trust Fund except as provided
in subdivision (4) of Section 40-23-2 and subsection (c) of
Section 40-23-61 and, beginning January 1, 2016, except those
collected on consumable vapor products as defined in
subdivision (15) of subsection (a) of Section 40-23-1, which
shall be distributed to the State General Fund."
Section 2. Section 40-23-85 Code of Alabama 1975 is
amended as follows:
"§40-23-85
All taxes, fees, interest, or penalties imposed and all
amounts of tax herein required to be paid to the state under
this article must be paid to the Department of Revenue at
Montgomery, Alabama, with remittance payable to the Treasurer
of Alabama. Such amount of money as shall be appropriated for
each fiscal year by the Legislature to the Department of
Revenue with which to pay the salaries, the cost of operation
and the management of the department shall be deducted, as a
first charge thereon, from the taxes collected under and
pursuant to Section 40-23-61; provided, that the expenditure
of the sum so appropriated shall be budgeted and allotted
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of the sum so appropriated shall be budgeted and allotted
pursuant to Article 4 of Chapter 4 of Title 41, and limited to
the amount appropriated to defray the expenses of operating
the department for each fiscal year. After the distributions
provided herein and the distributions of use tax on
automobiles to the General Fund as provided in Section
40-23-61(c), the balance of the tax collected under and
pursuant to Section 40-23-61 shall be distributed as follows:
(1) remote use tax amounts, seventy-five percent (75%) to the
General Fund and twenty-five percent (25%) to the Education
Trust Fund, and (2) any remaining amounts, forty-seven percent
(47%) to the Education Trust Fund and fifty-three percent
(53%) to the General Fund . An amount sufficient to fund the
Children's Health Insurance Program (CHIP) shall be
distributed annually as a first charge against the amounts
allocated to the General Fund under this section . It is the
legislative intent that all amounts collected on transactions
involving a seller located outside the State of Alabama when
the property is shipped or transported from outside the state
shall be considered use tax for the purpose of this
distribution, regardless of whether the taxes may be
considered sales taxes for other purposes."
Section 3. This act shall become effective September 1,
2026.
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2026.
________________________________________________
Speaker of the House of Representatives
________________________________________________
President and Presiding Officer of the Senate
House of Representatives
I hereby certify that the within Act originated in and
was passed by the House 01-Apr-26.
John Treadwell
Clerk
Senate 08-Apr-26 Passed
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