Gov. Kay Ivey last month signed into law the Rebuild Alabama infrastructure plan, which provides funding for state, county and city roads and bridges, as well as improvements to the Port of Mobile shipping channel.

“Today is an historic day for the great state of Alabama,” Ivey said March 12 when she signed the bills into law. “What the members of the Alabama Legislature have done today is improve Alabama’s infrastructure for generations to come. Legislators from different parties from different parts of the state have come together not to make an easy decision, but to make a bold statement that they are ‘all in’ when investing in Alabama’s future.” 

The Rebuild Alabama plan authorizes a 6-cent-per-gallon tax on gas and on-road diesel fuel beginning Sept. 1, followed by an additional 2 cents per gallon Oct. 1 of 2020 and 2021, bringing the total increase to 10 cents per gallon. The current state fuel tax is 18 cents per gallon for gasoline and 19 cents for diesel. The measure passed the Alabama House of Representatives 83-20 and the Senate 28-6.

The Alabama Farmers Federation, whose policy supports increased funding for farm-to-market roads, worked to ensure the plan included strong accountability measures.

“We commend Gov. Ivey and legislative leadership for their courage and foresight to tackle some of Alabama’s biggest challenges,” said Federation President Jimmy Parnell. “Our members rely on roads and bridges to receive supplies; get their crops, livestock and poultry to market; and travel for work and school. Poor and inadequate infrastructure is one of the greatest barriers to rural Alabama enjoying the same economic growth as larger cities.”

Rebuild Alabama, a package of three bills, was sponsored by Rep. Bill Poole, R-Tuscaloosa and Sen. Clyde Chambliss, R-Prattville. 

Beginning Oct. 1, 2023, the state fuel tax will be adjusted based on the National Highway Construction Cost Index, not to exceed a 1-cent increase every other year. The plan also increases fees for electric and plug-in hybrid vehicles of $200 and $100, respectively. The legislation does not change exemptions for off-road diesel fuel.

A portion of the new fuel tax will service a $150 million bond issue to secure federal funds to deepen the shipping channel at the Port of Mobile. 

“Agricultural and forestry exports already are an important part of the farm economy in Alabama,” Parnell said. “Making Mobile a deep-water port would greatly enhance markets for Alabama-grown products like poultry and timber.”

The legislation prohibits increased tax dollars from being spent on salaries and benefits of employees, or equipment, buildings and contractors unless directly related to an infrastructure project. It also strengthens the Permanent Joint Transportation Committee and gives it additional oversight for Alabama Department of Transportation (ALDOT) projects.

Aside from Port of Mobile improvements, the additional tax revenue would be distributed through the Rebuild Alabama Fund with 66.67 percent going to ALDOT, 25 percent to counties, and 8.33 percent to municipalities. In addition, ALDOT would provide $400,000 to each county in exchange for a federal allocation which previously was reduced due to administrative costs. Counties also may apply for funds from a $10 million annual grant program administered by ALDOT. Beginning in fiscal year 2020, another $30-50 million would be available for local projects through the Alabama Transportation Rehabilitation and Improvement Program-II.