Code of Alabama - Title 11: Counties and Municipal Corporations - Section 11-50A-7 - Tax exemptions; payments in lieu of taxes

Section 11-50A-7 - Tax exemptions; payments in lieu of taxes.

All bonds, bond anticipation notes, and notes issued by the authority, the interest thereon, and the income therefrom shall be forever exempt from all taxation in the state. All income of the authority, all obligations, lease agreements, and mortgages of the authority, all conveyances by or to the authority, and all lien notices or other filings with respect to the property of the authority and the transfer thereof shall be forever exempt from any and all taxation in the state. The purchase, sale, or use of property by the authority shall be exempt from all sales, use, and license taxes levied by the state and all political subdivisions of the state. All property of the authority shall be exempt from ad valorem property taxation. Nevertheless, the authority, or any agent of the authority designated for the purpose of constructing, maintaining, or operating any project of the authority, shall pay to any validly constituted taxing authority of the state, or any county or municipality or other political subdivision thereof, that levies ad valorem, sales, use, license, or severance taxes, payments in lieu of those taxes equal in amount to the ad valorem, sales, use, license and severance taxes which would have been paid by private persons engaged in the same or similar business within the state with respect to real and personal property owned, leased, or otherwise used, and with respect to the purchases, sales, or use of property, within the taxing jurisdictions of those entities had the properties of the authority been owned, leased, used, or purchased by such private persons. Payment of such amounts in lieu of taxes shall be made at the time taxes of such nature would be payable by private persons and shall be received, treated, deposited, and appropriated by those taxing jurisdictions for all purposes in the same manner as if those amounts were payments of those taxes. Payments in lieu of taxes shall be enforceable by the taxing authority in civil action brought by such taxing authority. It is the intent of the Legislature that while the authority is a political subdivision of the state, the business in which it is engaged should be responsible for the payment, in lieu of taxes, of amounts which other similar businesses are required to pay, to support essential government services. In the event of the dissolution of the authority pursuant to Section 11-50A-27, if any of the then remaining reserves of the authority provided for in this chapter (except those funded with proceeds of bonds, bond anticipation notes, or notes of the authority) are distributed (other than for those purposes for which such reserves were established or as credits respecting amounts previously overbilled by the authority) to municipalities contracting with the authority pursuant to Section 11-50A-17, the authority shall, with respect to those distributions, pay to the state, in lieu of income taxes levied by the state, amounts equal to the income taxes that would be payable by the authority with respect to the amounts distributed as if the authority had taxable income in the year of the distributions in the amount of such distributions and the authority were an entity subject to income taxes. Such amounts shall be payable at the time and received, treated, and appropriated by the state for all purposes in the same manner, as if those amounts were payments of state income taxes.

The authority shall also pay a fee to the state in the amount of 2.2 percent of the gross receipts in lieu of taxes from all electric power sold by the authority. The proceeds of such fee shall be deposited and paid to the general fund.

(Acts 1981, No. 81-681, p. 1114, §7.)

Last modified: May 3, 2021