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HB431 ENGROSSED
Page 0
HB431
V71E2LL-2
By Representatives Hammett, Whitt, Reynolds, Hulsey
RFD: Ways and Means General Fund
First Read: 12-Feb-26
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HB431 Engrossed
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First Read: 12-Feb-26
A BILL
TO BE ENTITLED
AN ACT
Relating to Carbon Dioxide Injection Wells; to
establish the Study Commission on Carbon Dioxide Storage
Facility Fees; to amend Section 9-17-162, Code of Alabama
1975, to require carbon dioxide storage facility operators to
provide notice of filling an approval petition for a facility
with the board to certain local governments; to authorize
local governments to participate in hearings on these
petitions; and to add Section 9-17-167 to the Code of Alabama
1975, to levy certain fees on operators for carbon dioxide
injected into facilities.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 9-17-162, Code of Alabama 1975, is
amended to read as follows:
"§9-17-162
(a) For a storage facility that is used for the storage
and sequestration of carbon dioxide, all of the following
shall apply:
(1) A storage operator shall adhere to all rules
adopted by the board relating to the underground storage of
carbon dioxide.
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carbon dioxide.
(2) A storage operator shall make a good faith effort
to obtain the consent of all persons that own a storage
facility's pore space and storage rights for carbon dioxide.
(3) A storage operator shall obtain the consent of
persons that own not less than 66 and two-thirds percent of a
storage facility's pore space and storage rights for carbon
dioxide.
(4) Upon a storage operator obtaining the consent of
persons that own not less than 66 and two-thirds percent of a
storage facility's pore space and storage rights for carbon
dioxide, the board, after providing notice and a public
hearing, may enter an order to amalgamate and pool the pore
space and storage rights for carbon dioxide owned by
nonconsenting owners into the storage facility on terms that
are just and reasonable as determined by the board.
(5) All nonconsenting owners of a storage facility's
pore space and storage rights for carbon dioxide shall be
fairly and equitably compensated.
(6) A storage operator shall use commercially
reasonable efforts to limit the adverse surface-use impact
upon the lands of nonconsenting owners of a storage facility's
pore space and storage rights.
(7) A storage operator seeking approval to operate in
the Blue Creek or Mary Lee coal seams in Jefferson,
Tuscaloosa, or Walker counties or within a 10-mile radius of
any coal mine operation shall obtain the written consent of
the coal mine operator and mineral owner with an operation or
mineral interest in the seams or within the radius; provided,
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mineral interest in the seams or within the radius; provided,
however, that the consent shall not be unreasonably withheld
or delayed.
(b)(1) In addition to any other notice required by rule
of the board, upon the submission to the board of a petition
to approve a storage facility for the storage and
sequestration of carbon dioxide, a storage operator shall
provide the petition and copies of all technical exhibits and
other data and information submitted to the board supporting
the petition to any local governing body having jurisdiction
over the land of the proposed storage facility not more than
three business days after submitting the petition to the
board.
(2) The board shall hold a hearing on a petition to
approve a storage facility for the storage and sequestration
of carbon dioxide as soon as practicable but not less than 60
days after receiving the petition. The board shall provide to
any local governing body having jurisdiction over the land of
the proposed storage facility notice of the time, date, and
location of the hearing not less than 30 days before the
hearing.
(3) Upon receiving a petition and any information
pursuant to subdivision (1), and prior to any hearing
conducted pursuant to subdivision (2), a local governing body
may submit written comments regarding the petition to the
board and may participate in the hearing to the same extent as
the storage facility operator. "
Section 2. Section 9-17-167 is added to the Code of
Alabama 1975, to read as follows:
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Alabama 1975, to read as follows:
§9-17-167
(a) Beginning October 1, 2027, the following fees shall
be levied on each ton of carbon dioxide stored or sequestered
in any storage facility to be collected and disbursed
accordingly by the board:
(1) Seven cents ($0.07) to the State General Fund.
(2) Seven cents ($0.07) to the county in which the
carbon dioxide was injected, or if carbon dioxide was injected
within a municipality, to the county and municipality equally,
to be expended at the discretion of the relevant governing
body.
(b) By the end of each November, the State Oil and Gas
Supervisor may submit to the State Oil and Gas Board a
recommendation of an increase to any fee levied pursuant to
subsection (a) based on the percentage increase in the
Consumer Price Index for All Urban Consumers (CPI-U) (All
Items-U.S. City Average) maintained by the U.S. Department of
Labor, Bureau of Labor Statistics, for the immediately
preceding fiscal year, rounded down to the nearest five cents
($0.05). If the increase is approved by the board, the
supervisor, by the end of March of each year, shall submit the
recommended increase to the Legislative Council for approval.
In the event the recommended increase is not disapproved by
the council by the end of April, the recommendation shall be
deemed approved. In the event one or more years elapse during
which there is no adjustment, the same procedure may be
followed to obtain a net cumulative increase since the
previous increase.
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previous increase.
Section 3. (a) The Study Commission on Carbon Dioxide
Storage Facility Fees is established. The commission shall
consist of the following members:
(1) One member of the Alabama House of Representatives,
appointed by the Speaker of the House of Representatives, to
serve as chair.
(2) One member of the Alabama Senate, appointed by the
President Pro Tempore of the Senate, to serve as vice chair.
(3) One member appointed by the Minority Leader of the
House of Representatives.
(4) One member appointed by the Minority Leader of the
Senate.
(5) One member appointed by the Governor.
(6) One member appointed by the Lieutenant Governor.
(7) The State Oil and Gas Supervisor, or his or her
designee.
(8) A representative of the Energy Institute of
Alabama.
(9) A representative of Manufacture Alabama.
(10) A representative of the American Petroleum
Institute.
(11) A representative of the Southeast Oil and Gas
Association.
(b) The appointing authorities shall coordinate their
appointments to ensure the task force membership is inclusive
and reflects the racial, gender, geographic, urban, rural, and
economic diversity of the state.
(c) The first meeting of the study commission shall be
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(c) The first meeting of the study commission shall be
held at the call of the chair no later than August 1, 2026.
The study commission may then meet as necessary to conduct
business.
(d)(1) The study commission shall assess all of the
following matters:
a. The current practices and laws of other states
regarding assessing fees on storage facilities used for carbon
dioxide storage.
b. At what level such fees become barriers to entering
the market and place the state at a competitive disadvantage
compared to other states, while considering the state's unique
geology.
c. At what level fees facilitate the protection and
maintenance of natural resources potentially affected by such
facilities.
(e) The study commission shall prepare and submit a
comprehensive report of its findings, conclusions, and
recommendations for proposed legislation, if any, to the
Legislature not later than the fifteenth legislative day of
the 2027 Regular Session, at which point the commission shall
stand dissolved.
(f)(1) The legislative members of the study commission
shall be entitled to their legislative compensation, per diem,
and travel expenses for each day they attend a meeting of the
task force pursuant to Section 49 of the Constitution of
Alabama of 2022.
(2) The nonlegislative members of the study commission
shall serve without compensation but may be reimbursed for
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shall serve without compensation but may be reimbursed for
necessary expenses in attending meetings of the study
commission pursuant to the policies of their respective
appointing authority.
(g) Pursuant to Section 36-14-17.1, Code of Alabama
1975, the study commission shall provide a notice of all
meetings, the name of each member serving on the study
commission, and a copy of the final report and any other
documents produced by the study commission throughout its
duration to the Secretary of State.
Section 4. Sections 1 and 2 shall become effective on
October 1, 2026. Section 3 shall become effective on June 1,
2026.
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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 General
Fund
................12-Feb-26
Read for the second time and placed
on the calendar:
0 amendments
................11-Mar-26
Read for the third time and passed
as amended
Yays.........61
Nays.........10
Abstains.....31
................19-Mar-26
John Treadwell
Clerk
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