HB 431 Alabama House · 2026 Regular Session

Injection wells; fees assessed on certain wells, notice and participation for local governments provided, study commission established

HB 431 imposes a 20% tax on companies storing carbon dioxide underground in designated wells (like those used for carbon capture projects), based on the market value of the stored CO2 at injection time. It directly affects businesses using underground storage facilities for carbon management, such as those operating Class VI wells regulated under federal law. The tax revenue is split equally: 50% goes to Alabama’s state General Fund, and the other 50% is distributed to the local county or municipality where the storage occurs, to be spent at the discretion of local officials. The bill takes effect on October 1, 2026, and requires monthly tax payments to the state Department of Revenue.

Bill status passed 3 of 5 stages cleared

Introduction

Feb 2026

Committee Review

Mar 2026

House Passage

Mar 2026

Senate Passage

Governor

Introduced Feb 12, 2026 Last action Mar 31, 2026

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What changed between versions

Introduced → Engrossed · 5 edits · Mar 19, 2026

MODERATE

The bill was significantly rewritten to shift from a general revenue tax on oil and gas wells to a specific regulatory framework for carbon dioxide storage. The new version adds detailed requirements for operators to obtain landowner consent and establishes a new fee structure to fund state and local governments.

Scope change

The bill's scope expanded from a broad tax on existing oil and gas wells to a targeted program specifically for carbon dioxide injection facilities, including new rules for landowner rights and local government involvement.

SCOPE

The bill's purpose changed from levying a tax on oil and gas wells to regulating carbon dioxide storage facilities and establishing specific fees for that activity.

REQUIREMENT

New requirements were added mandating that storage operators must obtain consent from landowners (or a majority of them) before injecting carbon dioxide, with specific protections for coal mine operators.

Local governments are now authorized to receive copies of approval petitions and participate in hearings regarding carbon dioxide storage facilities.

FISCAL

The funding mechanism changed from a 20% tax on the value of injected gas to a fixed fee of seven cents per ton of carbon dioxide stored, split between the state and local governments.

TIMELINE

The effective date for the new fees was set to October 1, 2027, whereas the previous draft had an effective date of October 1, 2026.

Floor votes

How they voted

This bill passed the House by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Mar 31, 2026

Upper · Passed

Pending Committee Action in Second House (Finance and Taxation General Fund)

upper

Mar 19, 2026

Lower · Passed

Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 1011

lower

Mar 19, 2026

Lower · Passed

Hammett motion to Table - Adopted Roll Call 1010

lower

Mar 19, 2026

Introduced

Drummond 1st Amendment Offered

lower

Mar 19, 2026

Lower · Passed

Motion to Adopt - Adopted Roll Call 1009

lower

Mar 19, 2026

Introduced

Hammett 1st Substitute Offered

lower

Mar 19, 2026

Lower · Passed

Hammett motion to Table - Adopted Roll Call 1008

lower

Mar 19, 2026

Introduced

Ways and Means General Fund 1st Substitute Offered (Ways and Means General Fund)

lower

Mar 11, 2026

Lower · Passed

Reported Out of Committee House of Origin

lower

Feb 12, 2026

Lower · Passed

Pending Committee Action in House of Origin (Ways and Means General Fund)

lower

0 primary · 0 co-sponsors

What changed between versions

How they voted

Actions timeline

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