Energy (Oil & Gas)

HB 531 would exempt contractors working on public highway, road, or bridge construction projects from paying state taxes on natural gas and liquefied petroleum gas (LPG) used during construction. Specifically, it removes utility gross receipts tax, utility service use tax, and state sales and use tax on these fuels for licensed contractors or subcontractors under government contracts. Counties and municipalities may also adopt similar local tax exemptions for the same purpose. The bill, set to take effect on September 1, 2026, applies only to projects funded by governmental entities as defined in Alabama law.

SB 174 authorizes the conversion of existing oil and gas wells into alternative energy facilities (like geothermal or hydrogen production) and expands the commissioner of conservation's authority to lease state lands for various energy projects. It directly affects energy developers seeking to repurpose wells or use state lands for new energy infrastructure. Key provisions include allowing well conversions without requiring new permits and enabling the commissioner to lease public lands for energy development under specific conditions. The bill explicitly states it does not change existing conservation laws (Title 37 of Alabama Code) or apply to federally licensed hydropower projects.