Municipalities, natural and manufactured gas utilities, certain fees and charges in connection with the use public streets and places restricted
Summary
SB271 amends Alabama Code Section 11-49-1 to restrict what municipalities may charge natural or manufactured gas utilities, and to clarify related municipal authority over utility use of public streets and places. The bill preserves the existing requirement that utilities obtain municipal consent to use streets, avenues, alleys, and other public places, but adds a new limitation on additional fees, charges, taxes, or other payments tied to that consent for certain gas utilities subject to state Public Service Commission oversight and local gross-receipts-based taxes.
Under the bill, franchise fees or similar payments paid by covered natural or manufactured gas utilities may not be increased after December 31, 2025, unless the increase is approved by a majority of qualified municipal voters at an election held under Chapter 46. The bill also makes technical and nonsubstantive revisions to update statutory language and expressly states that it does not alter Chapter 14 of Title 37.
Impact
The bill narrows municipal authority to impose or increase certain franchise-related fees on natural and manufactured gas utilities, while leaving intact existing gross-receipts tax structures and municipal consent requirements. It also preserves municipal power to collect reasonable permit fees, publication costs, and enforce franchise provisions requiring repair, remediation, and indemnification, and it does not affect independent tort or contract liability. The act becomes effective June 1, 2025, and applies prospectively to limit future fee increases unless approved by local voters.
Sentiment
The bill appears to have been broadly supported and moved with little visible opposition. It passed the Senate unanimously and the House overwhelmingly, with only one dissenting vote in the House final passage vote. The voting pattern suggests general agreement with the bill’s effort to standardize and limit municipal charges on gas utilities, while still preserving core municipal and consumer protections.
Contention
The main point of contention is the balance between municipal revenue authority and utility cost protection. Municipalities may view the bill as limiting their ability to negotiate or increase franchise-related payments from gas utilities, especially after the 2025 cutoff date. By contrast, utilities and supporters likely favor the bill for preventing new or higher local charges without direct voter approval. The bill also carefully carves out exceptions for permit fees, publication costs, franchise repair and indemnity obligations, and unrelated civil liability, indicating an effort to avoid broader interference with municipal regulatory powers.