(UPDATED) CULLMAN, Ala. – With the passage of Senate Bill 322 into law, questions surrounding a proposed Smith Lake Resort project have continued to circulate throughout Cullman County.
The new law allows certain large developments — like destination resorts with hotels, marinas and restaurants — to be annexed into the city of Cullman even if the property doesn’t touch city limits. It also allows these developments to create their own community development districts (CDDs), which can levy taxes, build infrastructure and issue bonds like a small town, all without a public vote. The bill was designed to help one specific resort project on Smith Lake.
Developer Jeff Tolbert, whose plans include a resort-style development near Smith Lake, said the legislation enables the project to move forward through annexation into the city of Cullman and the creation of a CDD.
A CDD, by law, can only be formed by a city or county government. This is why Tolbert said he first approached the Cullman County Commission. Tolbert said the district would not have cost the County any money, but the commission’s refusal would have cost the development millions of dollars. It is his belief the commission’s verbal “no” vote and subsequent resolution opposing SB322 were an effort to block the development.
As of publication, the Cullman City Council has not been formally asked to annex the property nor has the City of Cullman Planning Commission. There has been no direct contact between Tolbert and the council since the initial meeting arranged by Sen. Garlan Gudger, R-Cullman, during which, said Tolbert, Tolbert first presented the resort and CDD concept.
Before annexation can be considered by the council, the process must begin with the planning commission, which has not occurred at the time of publication.
The planning commission reviews applications for annexation and zoning and determines whether to issue a favorable or unfavorable recommendation based on the submission of required information and satisfactory answers to any outstanding questions.
The city council may accept or reject the planning commission’s recommendation, and has done both in the past.
As debate around SB322 continues, Gudger said it’s important for the public to understand that the resort development has been in the works for more than a year and a half — and that legislation tied to the project began well before the annexation component was introduced.
“People don’t know this, but a bill related to this project, SB328, passed two years ago and no one said a word to me,” Gudger said.
That earlier legislation, SB328, authorized alcohol sales on the property and approved the use of a dinner cruise yacht.
SB322, passed this year, only added the annexation language allowing a wet municipality to potentially incorporate the property if requested by the developer, he said.
“SB322 only added the annexation part for a wet municipality after the County turned the developer down,” said Gudger. “So Hanceville, Good Hope or Cullman could create an improvement district and the project would have a chance to be funded before the legislative session ended.”
Annexation without contiguity allowed
One of the most discussed provisions in SB322 is the ability to annex the resort property into the city of Cullman despite the land not being contiguous to existing city limits.
“People have jumped to conclusions without reading the bill,” Tolbert said. “SB322 outlines the requirements in black and white. We’re just following what the law allows.”
The bill states: “An annexation conducted pursuant to this subdivision does not require contiguity…” (Page 14, lines 367–369).
Gudger emphasized that the authority to create this type of CDD structure already existed within the legislature’s power; SB322 simply exercised that authority in this instance.
“The legislature already has this authority, if they so choose to exercise it, to create a CDD starting back in 1992. Since that date, 19 districts have been created throughout different parts of the state” Gudger said. “It is not an authority that the legislature made up for this project.”
Annexation limited to resort-owned property
As speculation continues to swirl around the potential reach of SB322, both the legislation and the developer have made clear that only property owned or controlled by the resort can be included in any annexation request.
“We (resort/developer) can’t annex anything we don’t own or control. That’s not how the bill works, and it’s not even logistically possible,” said Tolbert.
For example, property that is contiguous to the CDD resort could not be annexed unless the owner first sells the property to the CDD and follows all bylaws set forth by the resort property.
The bill confirms this limitation: “An annexation pursuant to this subdivision shall be initiated by the governing body of the resort community development district and may include only territory within the district that is owned or under the control of the governing body or the municipality.” (Pages 13/14, lines 353–370)
Gudger also addressed persistent misinformation that Smith Lake itself, or other properties not tied to the resort, could somehow be annexed under SB322.
“There have been false rumors circulating that Smith Lake can be annexed,” he said. “That’s simply not true. The law only applies to land owned or controlled by the developer or the district.”
Gaming and gambling prohibited
Public concerns about the potential for casinos or gaming operations at the resort were also addressed by the legislation.
“This isn’t about gaming or casinos — those things are explicitly banned in the bill,” Tolbert said.
The bill confirms that: “This section does not authorize the conducting of any form of gaming or gambling…” (Page 14, lines 377–379).
Gudger said the language banning gambling was not accidental; it was a direct response to public misconceptions.
“This amendment was added because people thought the resort was all done for a casino,” Gudger said. “So the legislature added this amendment so it is very clear gaming activity cannot be played on this resort property.”
CDD to fund infrastructure
SB322 allows for the creation of a CDD, which Tolbert says will help privately fund necessary infrastructure like roads, walkways and utilities. These features would later be turned over to the public.
“The CDD allows us to privately fund infrastructure… and then turn them over to the public once complete,” he said. “It takes the burden off taxpayers and ensures the project is held to a higher standard of planning and design.”
According to the bill: “The purpose of a resort community development district shall be to provide for development and the funding and maintenance of infrastructure within the district.” (Page 15, lines 365–382).
Elections required after 100 residents
While the initial CDD board will be appointed by the developer, the law requires that once 100 residents live in the district, public elections must be held to transition governance to an elected board.
“In the early stages, when no one lives there yet, the board is appointed by the developer. But once there are 100 residents or more, the district will have to hold elections,” Tolbert said.
SB322 states: “The initial members of the board shall be appointed by the developer.” (Page 18, lines 499–502). While Alabama Code § 11‑49A‑7 — Organization of Authority; Board of Directors states, “If at any time there are at least 100 qualified electors…a new board shall be elected.”
No blanket approval for other districts
Tolbert emphasized that the law does not grant broad authority for similar developments elsewhere in Cullman County.
“This bill doesn’t open the floodgates,” he said. “Any other resort district would have to go through the same legislative process we did. It’s not a blanket approval.”
Gudger added that the bill was written specifically for the Smith Lake property and does not apply to surrounding counties.
“So Winston County or Walker County could not fall under this bill,” Gudger said. “This bill was created for this property only.”
Timeline of key events and legislative actions related to SB322
- March 28, 2025 – Tolbert contacted The Cullman Tribune, stating Cullman County officials declined to support the project
- April 9, 2025 – SB322 introduced in the Alabama Senate by Sens. Jabo Waggoner, R-Vestavia Hills, and Garlan Gudger, R-Cullman
- April 22, 2025 – Passed by the Alabama Senate
- April 29, 2025 – Received favorable report from the House Economic Development and Tourism Committee
- May 1, 2025 – Passed by the Alabama House of Representatives
- May 6, 2025 – Received by the Governor’s Office
- May 7, 2025, 1:30 p.m. – Signed into law by Gov. Kay Ivey as Act 2025-294
- May 7, 2025, 2:57 p.m. – Recorded by the Alabama Secretary of State
- June 1, 2026 – Deadline for annexation actions under SB322 to begin
Chronology of events related to Smith Lake Resort and SB322
- Feb. 12, 2024 – Tolbert meets with Gudger and Waggoner to introduce the resort concept
- March 18, 2024 – Tribal council visits Trident Marina for a water tour and discussion of the proposed resort
- April 30, 2024 – SB328 is introduced in the Alabama Legislature to allow alcohol sales on the resort property and authorize operation of a dinner cruise yacht
- May 14, 2024 – Tolbert sells 44.4 acres to Poarch Band of Creek Indians with repurchase option
- May 15, 2024 – SB328 signed into law by Ivey
- May 17, 2024 – Cookout held with landowners; Cullman County Commission Chairman Jeff Clemons attends
- May 28, 2024 – Meeting with underwriters on bond funding
- July 7, 2024 – Meeting with Alabama Department of Conservation and Natural Resources Commissioner Chris Blankenship
- Oct. 18, 2024 – Gudger facilitates meeting so Tolbert can brief County and City officials on bond structure; attendees include Clemons, Cullman County Commissioner Corey Freeman and Cullman County Administrator John Bullard
- Oct. 25, 2024 – Cold Springs School involvement requested via Dr. Shane Barnette and T.J. Franey
- Nov. 13, 2024 – Proposal presented to Cullman County Commission
- Dec. 12, 2024 – Meeting with local and state officials, ADECA and EDA leaders
- Jan. 3, 2025 – Lawsuit posted to Facebook: Melissa Curtis v. Jeff Tolbert
- Jan. 14, 2025 – Formal lawsuit filed: Jeff Tolbert v. Melissa Curtis
- March 18, 2025 – Handout presented to county commissioners; unanimous verbal “no” given
- March 19, 2025 – Gudger contacted about possible amendment language
- April 15, 2025 – County commission passes resolution opposing SB322
- May 7, 2025 – SB322 signed into law
Download – Smith Lake Resort – Tax Implications | PowerPoint
Download – Smith Lake Resort – Tax Implications – PDF
UPDATED-Tax-Implications-as-of-111224TIMELINE-OF-KEY-EVENTS-AND-LEGISLATIVE-ACTIONS-RELATED-TO-SB322
