In Legal Terms - January/February 1999

Identifying Road and Bridge Revenue Sources is Complicated Task
As we look for new revenue sources for county roads and bridges, and battle to reduce the destruction and deterioration of our county roads and bridges, I thought it appropriate to look at the existing revenues available to counties for the upkeep of these roads and bridges. The statutes distributing the counties' share of state monies for roads and bridges place restrictions on the uses of these monies, and those vary depending upon the source of the money. Therefore, it is important to identify the source of state road and bridge fund revenues and to understand what uses may be made of the differing proceeds - often a complicated and confusing task.

The following is an overview of some of the statutory requirements and restrictions for use of road and bridge monies received from the state, and some of the attorney general's opinions addressing the permissible uses of these funds. This is by no means a comprehensive listing of the relevant laws or applicable rules. However, it will hopefully provide some general guidelines to follow in sorting out the restrictions and permissible uses for these badly needed, albeit insufficient funds.

The "7¢" Gasoline Tax
The 7¢ excise tax on gasoline is addressed in Code of Alabama 1975, § 40-17-30 et seq. The counties' portion of this tax must be used for construction, improvement, maintenance, and supervision of highways, bridges, and streets. This includes the retirement of bonds and payment of any county debt incurred for the construction or maintenance of roads or bridges. Code of Alabama 1975, § 40-17-30(c)(2). With certain restrictions, it also includes salaries, per diem, and mileage for county commissioners and up to 75% of the clerk's compensation. Code of Alabama 1975, § § 40-17-30(c)(2), 40-17-75, and 40-17-76. See, also, AG's Opinion # 87-259.

Counties may use 7¢ tax proceeds for the construction and maintenance of streets within a municipality located in the county. Code of Alabama 1975, § 40-17-79. See, also, AG's Opinion # 98-14, # 91-133, and 9/2/87 Opinion to Hon. Gary Sherrer. They may also use the proceeds for the construction, reconstruction, maintenance and repair of public highways and traffic control areas located on public school property or state school property within the county. Code of Alabama 1975, § 40-17-80.
The attorney general's office has issued several opinions on other permissible and prohibited uses of 7¢ gas monies. For example, counties may use these funds to maintain flood structures on county roads (AG's Opinion # 86-387); to repair, maintain, and construct ditches and culverts along the right of way (AG's Opinion # 98-189); for labor costs related to work on roads and bridges (AG's Opinion # 91-267); and for equipment and labor related to drainage improvement and cleaning or digging out drains (9/2/87 Opinion to Hon. Gary Sherrer). However, the attorney general has held that counties may not use 7¢ gas tax monies to pay the costs of litigation (AG's Opinion # 87-279) or for scales and personnel to enforce weight limits (AG's Opinion # 89-442).

The "4¢" Excise Tax on Gasoline and Lubricating Oil
The county proceeds of the 4¢ excise tax, found at Code of Alabama 1975, § 40-17-220 to § 40-17-225, are to be used for resurfacing, restoration, and rehabilitation of paved county roads and bridges or bridge replacement on the county road system, and shall not be used for new construction unless 90% of the county's paved road system has a grade of 85% based on the transportation department's annual maintenance report of county roads and bridges. The attorney general's office has held that 4¢ tax proceeds may be used for:

• renting equipment to be used on RRR projects. AG's Opinion # 81-254.
• repairing, but not constructing storm drains. AG's Opinion # 86-20.
• repairing and restoring culverts, bridges, and highways. AG's Opinion # 82-30. See also, AG's Opinion # 98-189.
• equipment and labor associated with drainage improvements and cleaning or digging out drains. 9/2/87 Opinion to Hon. Gary Sherrer.
• materials, fuels, and labor costs in RRR projects. AG's Opinion # 82-469.
• removing storm debris from roads. AG's Opinion # 93-172.
• repairing flood structures. AG's Opinion # 86-387.
• widening a Federal Aid Secondary Route shoulder for a resurfacing project. AG's Opinion # 85-409.
• restripping and resigning of county roads. AG's Opinion # 85-241.

However, these funds cannot be used to purchase equipment and cannot be commingled with other funds of the county. Code of Alabama 1975, § 40-17-224. Additionally, 4¢ tax monies cannot be used for:
• salaries of county commissioners and county clerks. AG's Opinion # 87-259.
• scales and personnel to enforce weight limits. AG's Opinion # 89-442.
• shaping and placing base and pavement on an existing graded (but unpaved) road. AG's Opinion # 84-12.
• cutting and maintaining right of ways. AG's Opinion # 82-332.
• equipment for a restripping or resigning project. AG's Opinion # 85-241.

"5¢" Supplemental Excise Tax on Gasoline
The 5¢ supplemental excise tax on gasoline is levied under Code of Alabama 1975, § 40-17-31. Counties do receive a portion of these revenues, although it is a smaller percentage than from the 7¢ or 4¢ monies.
Code of Alabama 1975, § 40-17-74.1 provides that these funds shall be used for the resurfacing, restoration, and rehabilitation (RRR) projects. However, it also provides that the county may use the funds to match federal aid on any projects that meet the requirements for federal funding and, "for new construction without regard to the provision that 90% of the county's paved road system has achieved a grade of 85% based on the [transportation department's] annual maintenance report of county roads and bridges." Code of Alabama 1975, 40-17-74.1

Petroleum Inspection Fees
In addition to the excise taxes, counties also receive a portion of the inspection fee imposed on petroleum products to be used for construction of certain high density unpaved roads, and for reconstruction, resurfacing, restoration, and rehabilitation of county paved roads and bridges or bridge replacement on the county road system. See, Code of Alabama 1975, § 8-17-87 and § 8-17-91. These funds may also be used for construction of certain unpaved roads and for reconstruction of certain paved roads accessing certain public and private recreational facilities and areas. Code of Alabama 1975, § 8-17-91.

Section 8-17-91 contains special requirements for counties in regard to use of inspection fee proceeds. For example, all plans must be submitted to the transportation department for approval. Additionally, these funds cannot be commingled with other funds, although they may be deposited into the county's 3R fund.

The attorney general has held that inspection fee monies cannot be used for salaries of county commissioners and county clerks (AG's Opinion # 87-259), or for purchasing scales and hiring personnel to enforce weight limits on county roads (AG's Opinion # 89-442). However, they can be used to match federal secondary road funds for road projects which qualify for these funds. (AG's Opinion # 88-187).