HB28 • 2026

Taxation; to establish an income tax credit for oyster shell recycling

Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Brown (C)
Last action: 2026-04-07
Official status: Read Second Time in Second House
Effective date: Not listed

Plain English Breakdown

The specific list of licenses or permits is referenced by code section numbers but not fully described in this text; readers must look up Sections 9-12-82, 9-12-87, and 9-12-125 to know exactly which residents qualify.

Tax Credit for Recycling Oyster Shells

This law gives a tax credit to restaurants and other eligible people in Alabama who donate oyster shells to approved recycling programs.

What This Bill Does

Creates an income tax credit of $1 for every 50 pounds of donated oyster shell material, up to a maximum of $2,000 per taxpayer per year.
Sets a total cap of $100,000 on all credits given out in one calendar year.
Requires taxpayers to submit a signed certificate from an approved program to get the credit; failure to file this results in denial.
Allows any unused tax credit amount larger than taxes owed to be refunded as cash.

Who It Names or Affects

Restaurants that prepare and sell food directly to consumers for immediate consumption.
State residents who hold specific licenses or permits listed in state law (Sections 9-12-82, 9-12-87, or 9-12-125).
Corporations, individuals, partnerships, S-corporations, and other pass-through entities filing Alabama income taxes.

Terms To Know

Tax Credit: An amount that reduces the total tax a person or business must pay to the state government; if it exceeds what is owed, the extra is refunded as cash.
Oyster Shell Recycling Program: A program approved by rule from the Alabama Department of Revenue where oyster shells are collected and reused for water quality and habitat protection.

Limits and Unknowns

Credits are given on a first-come, first-served basis until the $100,000 yearly limit is reached.
The credit can only be claimed for tax years starting in 2027 and ending after 2031.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

2JV3QKS-1

R 47

Adopted

Plain English: This amendment creates a new state income tax credit for restaurants and other eligible people who donate oyster shells to approved recycling programs.

Restaurants or licensed residents can get $1 in tax credits for every 50 pounds of oyster shells they donate, up to a maximum of $2,000 per person each year.
The total amount of money the state will give out as these credits is limited to $100,000 per calendar year on a first-come, first-served basis.
If the credit reduces your tax bill below zero, you can get the extra amount back from the government instead of losing it.
To claim this credit starting in 2027 and ending after 2031, taxpayers must submit a special certificate signed by both them and the recycling program.

The specific rules for which programs count as 'approved' will be decided later by state officials.
It is not clear exactly how many restaurants or people can claim this credit before the $100,000 yearly limit runs out.

3P7APZE-1

Ways and Means Education

Reported Out Committee House of Origin- Committee Amendment

Plain English: This amendment adds specific rules for who can get the oyster shell recycling tax credit, how credits are awarded if there is a limit, and what paperwork restaurants must provide to claim it.

It defines 'other eligible persons' as state residents with valid licenses under specific Alabama laws regarding fishing or aquaculture.
It states that the tax credits will be given on a first-come, first-served basis for each tax year if there is not enough money to cover everyone.
It requires restaurants and other eligible people to get a special certificate signed by both them and the Oyster Shell Recycling Program proving how many shells were recycled.
It mandates that taxpayers must submit this certificate with their claim, or they will automatically be denied the credit.

The amendment text does not explain what specific licenses are listed in Sections 9-12-82, 9-12-87, or 9-12-125 of the Alabama Code.
It is unclear from this text alone if there is a total dollar limit on how many credits can be given before people stop getting them.

Bill History

2026-04-07 Senate
Read for the Second Time and placed on the Calendar
2026-04-07 Senate
Reported Out of Committee Second House
2026-01-20 House
Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 48 (Yeas 101, Nays 0)
2026-01-20 House
Motion to Adopt - Adopted Roll Call 47 (Yeas 101, Nays 0)
2026-01-20 House
Third Reading in House of Origin (Yeas 100, Nays 0)
2026-01-20 Senate
Pending Committee Action in Second House
2026-01-20 Senate
Read for the first time and referred to the Senate Committee on Finance and Taxation Education
2026-01-20 House
Engrossed
2026-01-20 House
Ways and Means Education Engrossed Substitute Offered
2026-01-14 House
Read for the Second Time and placed on the Calendar
2026-01-14 House
Reported Out of Committee House of Origin
2026-01-14 House
Reported Out Committee House of Origin- Committee Amendment
2026-01-13 House
Pending Committee Action in House of Origin
2026-01-13 House
Read for the first time and referred to the House Committee on Ways and Means Education

Official Summary Text

Taxation; to establish an income tax credit for oyster shell recycling

Current Bill Text

Read the full stored bill text

HB28 ENGROSSED
Page 0
HB28
2JV3QKS-2
By Representative Brown
RFD: Ways and Means Education
First Read: 13-Jan-26
PFD: 11-Aug-25
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HB28 Engrossed
Page 1
PFD: 11-Aug-25
A BILL
TO BE ENTITLED
AN ACT
Relating to income tax; to establish a tax credit for
restaurants that recycle oyster shells.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. The Legislature finds and declares that
oyster shell material is a beneficial natural resource for
local water quality, aquatic habitats, and the protection of
the coastline of this state. An income tax credit for
restaurants that participate in approved oyster recycling
programs would incentivize the facilitation of more of this
resource to the benefit of the state.
Section 2. (a) For purposes of this section, the
following terms have the following meanings:
(1) DEPARTMENT. The Alabama Department of Revenue.
(2) INCOME TAX. The tax imposed by Chapter 18 of Title
40, Code of Alabama 1975.
(3) OYSTER SHELL RECYCLING PROGRAM. The Oyster Shell
Recycling Program or any other oyster shell recycling program
or activity designated by rule by the Alabama Department of
Revenue as an approved program or activity.
(4) OTHER ELIGIBLE PERSON. A state resident who
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HB28 Engrossed
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(4) OTHER ELIGIBLE PERSON. A state resident who
possesses a valid license or permit issued pursuant to Section
9-12-82, 9-12-87, or 9-12-125, Code of Alabama 1975.
(5) RESTAURANT. A facility that prepares and sells food
directly to consumers for immediate consumption.
(b)(1) A restaurant or other eligible person that
donates oyster shell material to an oyster shell recycling
program may claim a credit against the state income tax
liability as provided by this section. The amount of the
credit shall equal the lesser of:
a. One dollar ($1) for every 50 pounds of oyster shell
material donated to a qualifying oyster shell recycling
program or activity during the tax year; or
b. Two thousand dollars ($2,000).
(2) The total amount of credits granted shall not
exceed one hundred thousand dollars ($100,000) per calendar
year.
(3) The granting of the tax credits authorized by this
section shall be on a first-come, first-served basis for the
tax year in which the oyster shell recycling occurred.
(c) If the amount of the credit exceeds the amount of
the taxpayer's tax liability for the taxable year, the excess
tax credit amount shall constitute an overpayment as defined
in Section 40-18-79, Code of Alabama 1975, and the department
shall refund the overpayment from the collections of the taxes
imposed.
(d) No tax credit provided by this section may be
transferred or sold to another taxpayer.
(e) The department shall do the following:
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HB28 Engrossed
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(e) The department shall do the following:
(1) Provide a standardized format for a certificate to
be signed by the restaurant and certified by the Oyster Shell
Recycling Program to indicate the amount of oyster shells
recycled to substantiate the credit being claimed.
(2) Require the taxpayer to provide a copy of the
certificate when claiming the tax credit pursuant to this
section. Failure to file the required certificate shall result
in the automatic denial of the credit.
(f) The credit authorized in this section may be
claimed by corporations, individuals, and other entities in
accordance with the following provisions:
(1) An entity taxed as a corporation for Alabama income
tax purposes shall claim any credit authorized by this section
on its corporation income tax return.
(2) An individual shall claim any credit authorized by
this section on its income tax return.
(3) An entity taxed as a partnership, S-corporation, or
electing pass-through entity shall pass through any credit
authorized by the section to the partners, members, or
shareholders on a pro rata share basis.
(g) The department shall adopt rules to implement the
provisions of this section. The department shall engage and
collaborate with the Commissioner of the Department of
Conservation and Natural Resources and may incorporate
recommendations of the commissioner in any rules designating
oyster shell recycling programs and activities.
(h) The tax credit allowed under this section may be
claimed beginning with the 2027 tax year and may not be
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HB28 Engrossed
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claimed beginning with the 2027 tax year and may not be
claimed for tax years after the 2031 tax year.
Section 3. This act shall become effective on June 1,
2026.
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HB28 Engrossed
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2026.
House of Representatives
Read for the first time and referred
to the House of Representatives
committee on Ways and Means
Education
................13-Jan-26
Read for the second time and placed
on the calendar:
1 amendment
................14-Jan-26
Read for the third time and passed
as amended
Yeas 101
Nays 0
Abstains 1
................20-Jan-26
John Treadwell
Clerk
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