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SB86 ENROLLED
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SB86
FK8BR5D-2
By Senator Carnley
RFD: State Governmental Affairs
First Read: 13-Jan-26
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First Read: 13-Jan-26
Enrolled, An Act,
Relating to surety bonds and motor fuel assessments; to
amend Sections 40-17-168.5 and 40-17-335 to extend the filing
period for new or replacement surety bonds; to amend Section
40-17-353 to extend the payment period for assessments made on
certain unlawful transactions of motor fuels; and to make
nonsubstantive, technical revisions to update the existing
code language to current style.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 40-17-168.5, 40-17-335, and
40-17-353, Code of Alabama 1975, are amended to read as
follows:
"§40-17-168.5
(a) Upon approval of the application by the department,
the applicant must file with the department a surety bond. The
bond amount for an applicant for a license as a public seller
of CNG/LNG or a fleet producer of CNG/LNG shall be a minimum
of twenty-five thousand dollars ($25,000) or in the
approximate amount of twice the average monthly tax liability,
whichever is greater.
(b) The department shall review the bond amounts every
five years beginning January 2023 to ensure that each public
seller of CNG/LNG and each fleet producer of CNG/LNG has
posted a surety bond sufficient to cover twice the average
monthly tax liability as referenced in subdivision (a). Based
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monthly tax liability as referenced in subdivision (a). Based
upon this review , or if at any time that the department
determines that the bond amount is insufficient to cover twice
the average monthly tax liability, the commissioner may
require an additional surety bond from any licensee ifunder
one or more of the following circumstances :
(1) The commissioner determines that the surety on an
existing bond is unsatisfactory .;
(2) A surety notifies the department that it intends to
cancel a bond as provided in subsection (d) .; or
(3) The commissioner, after reviewing the payment
history of the licensee, determines that the existing bond of
the licensee is insufficient in an amount to insure the prompt
payment of all excise taxes that are due or may become due to
the state by the licensee upon the sale or withdrawal of
compressed natural gas or liquefied natural gas. However, in
no case shall a new or additional bond be more than two months
of average excise tax owed by the licensee.
(c)(1) The department shall notify a licensee at his or
her last known address by first class U.S. mail or, at the
option of the department, certified mail, return receipt
requested, that it is requiring such new or additional bond
for any reason as provided abovein subsection(b) , and the
licensee, within 3060 days from the date the notice is mailed
by the department, shall do either of the following :
a. File the new or additional bond as requested by the
department .; or
b. File a notice of appeal with the Alabama Tax
Tribunal as allowed in Chapter 2A.
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Tribunal as allowed in Chapter 2A.
(2) The department may immediately cancel the
licensee's license upon the expiration of the 3060-day period
set out abovein subdivision(1) if the licensee fails to either
provide the new or additional bond requested by the department
or timely appeal to the Alabama Tax Tribunal.
(d)(1) Any surety on an existing bond furnished by a
licensee may notify the department in writing of its intent to
cancel the bond. The department shall immediately notify the
licensee of the intent of the surety to cancel the surety
bond, and the licensee shall have 3060 days from the date the
notice is mailed by the department to provide a sufficient
replacement bond as requested by the department.
(2) The department may immediately cancel the
licensee's license upon expiration of the 3060-day period set
out abovein subdivision(1) if the licensee fails to either
provide a new replacement bond as requested by the department
or appeal the proposed revocation to the Alabama Tax Tribunal
within the 3060 days as allowed by Chapter 2A.
(3) The surety requesting to be released shall remain
liable for any liability already accrued or which shall accrue
during the 3060-day period set out abovein subdivision(1) , but
shall not be responsible for any liability which accrues after
the 3060-day period.
(e) A surety providing a bond must be authorized to
engage in business within this state. The surety bonds are
conditioned upon faithful compliance with this article,
including the filing of returns and the payment of all tax
prescribed herein in this article . The commissioner shall
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prescribed herein in this article . The commissioner shall
approve surety bonds shall be approved by the commissioner as
to sufficiency that are sufficient in content and form, and the
surety bonds shall indemnify the state against any loss
arising from the failure of the licensee to pay, for any
cause, the motor fuel excise tax levied by this article.
(f) A personal producer of CNG is not required to post
a bond."
"§40-17-335
(a) Upon approval of the application by the department,
the applicant shall file with the department a surety bond as
herein provided: .
(1) Except as provided under subdivision (3), the The
bond amount for an applicant for a license as a supplier,
permissive supplier, or terminal operator shall be in the
approximate amount of twice the average monthly tax liability,
not to exceed two million dollars ($2,000,000) , except as
provided under subdivision (3) .
(2) Except as provided under subdivision (3), the The
bond amount for an applicant for a license as an exporter,
blender, importer, or distributor shall be a minimum of two
thousand dollars ($2,000) or the approximate amount of twice
the average monthly tax liability, whichever is greater ,
except as provided under subdivision (3) .
(3) The bond for distributors, suppliers, and
permissive suppliers who are licensed with the department on
October 1, 2012, shall remain at the amount that is filed with
the department on that date, except as provided under
subsection (b).
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subsection (b).
(4) For an applicant for a license only as a motor fuel
transporter or aviation fuel purchaser, there shall be no
bond.
(5) Only one bond shall be required of an applicant for
multiple licenses. Except as provided under subdivision (3),
the bond amount shall be based on the highest average monthly
tax liability of the separate licenses, but shall cover all
licenses.
(b) The commissioner may require an additional surety
bond from any licensee if: (1)(i) the commissioner determines
that the surety on an existing bond is unsatisfactory; (2)(ii)
a surety notifies the department that it intends to cancel a
bond as provided in subsection (d); or (3)(iii) the
commissioner, after reviewing the financial condition of the
licensee, determines that the existing bond of the licensee is
insufficient in an amount to insure the prompt payment of all
excise taxes that are due or may become due the state by the
licensee upon the sale or withdrawal of motor fuel. However,
in no case shall a new or additional bond be more than two
months of average excise tax owed by the licensee.
(c) The department shall notify a licensee at his or
her last known address by first class U.S. mail or, at the
option of the department, certified mail, return receipt
requested, that itthe department is requiring sucha new or
additional bond for any reason as provided above, and the
licensee, within 3060 days from the date suchthe notice is
mailed by the department, shall either : (1)(i) file the new or
additional bond as requested by the department ,; or (2)(ii)
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additional bond as requested by the department ,; or (2)(ii)
file a notice of appeal with the Alabama Tax Tribunal as
allowed in Chapter 2B of this title. The department may
immediately cancel the licensee's license upon the expiration
of the 3060-day period set out above if the licensee fails to
either provide the new or additional bond requested by the
department or timely appeal to the Alabama Tax Tribunal.
(d) Any surety on an existing bond furnished by a
licensee may notify the department in writing of its intent to
cancel the bond. The department shall immediately notify the
licensee of the intent of the surety to cancel and the
licensee shall have 3060 days from the date the notice is
mailed by the department to provide a sufficient replacement
bond as requested by the department. The department may
immediately cancel the licensee's license upon expiration of
the 3060-day period set out above if the licensee fails to
either provide a new replacement bond as requested by the
department or appeal the proposed revocation to the Alabama
Tax Tribunal within the 3060 days as allowed by Chapter 2B of
this title. The surety requesting to be released shall remain
liable for any liability already accrued or which shall accrue
during the 3060-day period set out above , but shall not be
responsible for any liability which accrues after the 3060-day
period.
(e) A surety providing a bond must be authorized to
engage in business within this state. The surety bonds are
conditioned upon faithful compliance with the provisions of
this article, including the filing of returns and the payment
of all tax prescribed herein in this article . The commissioner
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of all tax prescribed herein in this article . The commissioner
shall approve surety bonds shall be approved by the
commissioner as to sufficiency that are sufficient in content
and form, and the surety bonds shall indemnify the state
against any loss arising from the failure of the licensee to
pay, for any cause, the motor fuel excise tax levied by this
article and Article 12A, Chapter 17 of this title."
"§40-17-353
(a) Upon the discovery of any motor fuel illegally
imported into or illegally transported, delivered, stored, or
sold in this state, the commissioner shall order the tank or
other storage receptacle in which the motor fuel is located to
be seized and locked or sealed until the tax, interest, and
penalties levied under this article are assessed and paid.
(b) If the assessment for the above tax described in
subsection(a) is not paid within 3060 days, the commissioner,
in addition to the other remedies in this article, may sell
the motor fuel and use the proceeds of the sale to satisfy the
assessment due, with any excess funds after payment of the
assessment and costs of the sale being returned to the owner
of the motor fuel.
(c) All motor fuel and any property, tangible or
intangible, which is found upon the person or in any vehicle
which the person is using, including the vehicle itself, to
transport or sell illegally transported, delivered, stored,
sold, imported, or acquired motor fuel, and any property found
in the immediate vicinity, including motor vehicles, tanks,
and other storage devices, used to aid in the illegal
transportation or sale of motor fuel, shall be considered
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transportation or sale of motor fuel, shall be considered
contraband and shall be forfeited to this state."
Section 2. This act shall become effective immediately.
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Section 2. This act shall become effective immediately.
________________________________________________
President and Presiding Officer of the Senate
________________________________________________
Speaker of the House of Representatives
SB86
Senate 05-Feb-26
I hereby certify that the within Act originated in and passed
the Senate.
Patrick Harris,
Secretary.
House of Representatives
Passed: 07-Apr-26
By: Senator Carnley
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