The Alabama Legislature completed its 27th legislative day last week, out of a maximum of 30. Lawmakers will convene on Tuesday for what could be the final three days of the legislative session this week.
General Fund Budget Passes House, Returns to Senate for Final Approval
The House approved its $3.74 billion version of the General Fund budget on Wednesday, with little discussion, moving the budget closer to final passage. The floor vote came one day after the House Ways and Means General Fund Committee approved minor changes from the Senate-passed version.
Budget Details (SB146):
The House version of the budget is $12.6 million higher than the Senate’s $3.72 billion spending bill. The Senate’s version was $37.1 million higher than what Governor Kay Ivey sent to lawmakers two months ago.
Key Provisions:
- Modest Growth: Only a 1% increase over the FY 2026 budget
- State Employee Raises: 2% pay raise for all state non-educational employees
- Health Insurance: $18 million increase to help offset rising healthcare premium costs for state employees, raising per-member, per-month funding to $1,175
- Major Agency Funding:
- $1.179 billion for Medicaid
- $867.9 million to the Department of Corrections (includes $10.4 million in debt service for new prison construction)
- $240.5 million to the Department of Mental Health
- $148.4 million to the Department of Human Resources
- $2.56 billion in total appropriations to ALDOT
Other Increases:
- $5 million increase for the Unified Judicial System
- $2.5 million increase for the Department of Commerce, including $2 million earmarked for Birmingham’s Innovation Depot
- $3 million for the Metro Area Crime Suppression Unit
- Additional funding for district attorneys and the Alabama Law Enforcement Agency
Conditional Appropriations:
The budget includes requirements that the Departments of Corrections, Human Resources, and Mental Health complete specific tasks before receiving all of their 2027 funding:
- DHR: Must lower SNAP error rate to below 6%
- DOC: $40 million contingent on completing at least 90% of the new prison in Elmore County and utility infrastructure
- Reporting Requirement: All state agencies providing direct assistance to local governments must report such spending before the 2027 Regular Session begins
General Fund Supplemental (SB226):
The companion supplemental appropriations bill includes:
- $587.5 million from the Public Road and Bridge Fund and Rebuild Alabama Fund to ALDOT
- $68 million to the State Industrial Development Authority
- $6.4 million to the state’s court system
- $59.8 million increase for highway project bond repayment, raising the total to $193.5 million (some senators suggested this increase is for the West Alabama Corridor project along Highway 43)
Status: Both bills passed the House on Wednesday; returns to Senate for concurrence or conference committee.
Education Budget Passes Senate, Returns to House for Final Approval
The Senate passed the $12.4 billion Education Trust Fund budget package on Thursday after adding a one-time bonus for education retirees. The package now returns to the House for final approval before heading to Governor Ivey for her signature.
Senate Committee Changes:
The Senate Finance and Taxation Education Committee, chaired by Sen. Arthur Orr, made several modifications to the House-passed budget before sending it to the Senate floor.
One-Time Retiree Bonus Added:
The most significant change was the addition of SB380, which provides a one-time bonus for education retirees equal to $1 per month for each year of service. For example:
- A retiree who worked 25 years would receive $300 total (or $25 per month for one year) before taxes
- A retiree with 30 years of service would receive $360 total
Funding Source: The $32.3 million allocation to pay for the bonus will come from any excess tax revenue at the end of the 2026 fiscal year (September 30), not directly from the regular ETF budget.
Other Senate Committee Changes:
- Dual Enrollment Protection:Added language prohibiting colleges and universities that receive ETF funding from setting a per-credit-hour amount for dual enrollment or early college that is lower than what the Alabama Community College System charges
- Supplemental Earmark Shift (HB235): Moved $400,000 from Birmingham’s McWane Center to the Barber Motorsports Museum at the request of the Birmingham delegation
- Technology Fund Earmarks (HB236): Shifted funding for school-level earmarks in the $1 billion Education Advancement and Technology Fund appropriation, but the amounts distributed based on enrollment stayed the same for K-12 and higher education
FY 2027 ETF Budget Highlights (HB238 – $10.5 billion):
The ETF budget approved by the House and modified by the Senate includes:
- $7.1 billion to K-12 public school systems
- $2.7 billion to higher education
- $658 million to the Community College system
- $226 million to the state’s Pre-K program
- $100 million to the CHOOSE Act (education savings account program); with funding from other bills, total CHOOSE Act funding reaches $251.25 million
- $180 million increase to PEEHIP (state health insurance plan for employees). The PEEHIP board had requested a $380 million increase—$200 million more than approved.
- 2% pay raise for all education employees
ETF Supplemental (HB235 – $420 million):
The supplemental for the current fiscal year includes:
- $25 million to state school systems for school bus purchases or debt retirement
- $25 million to school systems for school safety purposes
- $20 million for College and Career Readiness Grants
- $30 million for the state’s Summer and Afterschool Program
- $10 million to the state’s Child Health Insurance Program
- $27 million to the Community College system for one-time expenses
- Various amounts to each of Alabama’s public higher education institutions
Advancement and Technology Fund (HB236 – $1 billion):
The technology fund allocates:
- $275 million to the Community College system and higher education institutions
- $570 million to local boards of education
- $150 million to local boards of education for grants for career and technical education
Status: All three bills (HB238, HB235, HB236) passed the Senate on Thursday; now return to the House for concurrence or conference on Senate changes.
House Agrees with Senate PSC Reform Bill, Governor Quickly Signs
HB475 – Representative Mack Butler / Senator Clyde Chambliss
Presented with competing options on how to address electricity rates across the state, the Senate and House’s different approaches to PSC reform were resolved when the House adopted a substitute version of HB475 that contained most of the Senate’s priorities under SB360.
Key Provisions:
The bill, which was signed by Governor Ivey, now does the following:
- PSC Size Increased to Seven Members: The PSC will expand from three to seven members based on the state’s congressional districts, allowing Governor Ivey to appoint four commissioners to serve staggered initial terms, which will then be popularly elected in the coming years
- Creation of Secretary of Energy: Creates a Secretary of Energy cabinet-level position appointed by the Governor who will direct the activities of the PSC and set its agenda, subject to five of the seven members being able to amend the agenda if desired
- Rate Hearings: Five of the seven members may vote to hold formal rate hearings, or the Secretary of Energy may approve such hearings
- Costs Prohibited from Being Included: Prevents electric utilities from including grant funding, lobbyist costs, and advertisement expenses in calculations for new rates
Status: Signed into law by Governor Ivey.
Solar Bills Face Long Odds as Session Nears End
Multiple bills filed in both the Senate and the House to place a moratorium on new solar construction and allow counties more power to regulate solar farm development in unincorporated sections of their jurisdiction have significant hurdles to clear if they want to see Governor Ivey’s signature this year.
- SB354/HB617: One-year moratorium on new solar facility construction
- SB358/HB618: Allow Mobile and Baldwin County commissions to regulate solar farm permitting and placement
Status: All four bills are pending floor votes in their respective chambers. With only three legislative days remaining, they must clear a floor vote on Tuesday, April 7, to be enacted.
Overtime Income Tax Deduction Passes House, Includes Grocery Tax Holiday
HB527 – Representative James Lomax
The House passed Rep. James Lomax’s bill to align Alabama’s income tax code with federal tax code with respect to taxation of overtime. An amendment was also adopted that provides for a state sales tax holiday on groceries.
Key Provisions:
- Match Federal Law: The bill provides up to a $1,000 state income tax deduction each year when taxes are filed for state income taxes related to overtime pay
- Cost to ETF: The fiscal note originally estimated a cost to the Education Trust Fund of approximately $37.4 million, but the addition of the grocery sales tax holiday has now increased the expected cost to $83.4 million
- Sunset Date: The bill provides for three years of deductions, with a sunset date expiring at the end of the 2028 tax year
- Grocery Sales Tax Holiday:The state’s 2% sales tax on groceries will be suspended from May 1 through June 30, 2026
Status: Passed House on Tuesday; pending in the Senate Finance and Taxation Education Committee.
Immigration Enforcement Expansion Bill One Step Away from Final Passage
HB13 – Representative Ernie Yarbrough
The Senate Veterans, Military Affairs, and Public Safety Committee gave its approval to Rep. Ernie Yarbrough’s bill to give new powers to local law enforcement regarding immigration enforcement.
Key Provisions:
- New Authorization: Law enforcement agencies may enter into Memoranda of Understanding (MOUs) with federal agencies to enforce federal immigration laws, such as detaining and transporting people who are in the country illegally
- Requirement to Honor Detainer Requests: County and municipal jails would be required to honor immigration detainer requests issued by the Department of Homeland Security
- Data Tracking: Information on foreign nationals in custody must be reported quarterly, including information on detainees’ visas and immigration status
Status: Passed House 76-1 with 23 abstentions; passed Senate Veterans, Military Affairs, and Public Safety Committee; pending Senate floor vote. If passed by the Senate with no amendments in the remaining three legislative days, the bill will go to Governor Ivey for her signature.
Mandatory Reimbursement Rate for Ambulance Services Heads to Governor
SB269 – Senator Bobby Singleton
The House gave final approval to Senator Bobby Singleton’s bill to increase reimbursement rates for ambulance service providers.
Key Provisions:
- Standardize Reimbursements: Health insurers would be required to contract with any willing licensed EMS provider for in-network coverage under terms similar to other comparable providers. For in-network providers, 200% of the Medicare rate would be the minimum reimbursement rate provided for emergency ground transport and treat-in-place care. For out-of-network providers, 180% of the Medicare rate would be reimbursed.
- Require Certain Reporting:Ambulance providers will be required to annually report to the Alabama Department of Public Health operational details such as their vehicle and employee counts, transport volumes, income, and net profits. Similarly, health insurers will be required to report the number of denied claims and their value, as well as out-of-pocket charges and total payments for ambulance services compared to all other health claims. A study, provided by a business school that is an expert in risk management and insurance, must evaluate the bill’s effects and issue a report by December 1, 2028.
- Effective Date and Sunset:The bill would go into effect on October 1, 2026, and would stand repealed as of June 1, 2029.
Status: Passed Senate 27-2 with 1 abstention; passed House with final approval; heading to Governor Ivey for signature.
Our governmental relations team is tracking the following bills:
| Bill | Sponsors | Title | Last Action | Latest Version |
| AL 2026rs SB 221 |
Orr | Taxation; to exclude credit card transaction fees from sales and use tax calculations
House Calendar: Regular Calendar (April 07, 2026) Position: 139 |
House, Apr 1, 2026: Read for the Second Time and placed on the Calendar (Ways and Means Education) | Introduced |
| AL 2026rs HB 303 |
Bedsole | Cryptocurrency; measures to prevent fraud by cryptocurrency kiosk operators imposed, penalties established, Alabama Securities Commission authorized to enforce | Senate, Apr 1, 2026: Signature Requested | Enrolled |
| AL 2026rs HB 259 |
Shaw | Stablecoin; license required for issuance or sale of stablecoins, Alabama Securities Commission to enforce and authorize, penalties provided | Senate, Mar 31, 2026: Signature Requested | Enrolled |
| AL 2026rs HB 104 |
Blackshear | Uniform Disposition of Unclaimed Property; allow finders to contract and locate State Treasurer property, account for digital assets | House, Mar 26, 2026: Enacted | Act Number 2026-285 |
| AL 2026rs HB 77 |
Paschal | Taxation and Revenue; disabled veterans’ homestead taxes inclusion in debt-to-income ratio under certain circumstances prohibited | House, Mar 17, 2026: Enacted | Act Number 2026-268 |
| AL 2026rs HB 55 |
Hollis | Mortgages; authorize lenders to mortgagors to make additional mortgage payments
Senate Calendar: Regular Calendar (April 02, 2026) Position: 102 |
Senate, Mar 17, 2026: Read for the Second Time and placed on the Calendar (Banking and Insurance) | Engrossed |
| AL 2026rs HB 615 |
Robbins | Catastrophe savings accounts, required to be held in Alabama banks, credit unions, or veterans financial institutions and approved by the Commissioner of Insurance (Financial Services (House)) | House, Mar 12, 2026: Pending Committee Action in House of Origin (Financial Services) | Introduced |
| AL 2026rs HB 351 |
Shaw | Data privacy; processing of data regulated, consumer actions related to data authorized
Senate Calendar: Regular Calendar (April 02, 2026) Position: 77 |
Senate, Mar 10, 2026: Read for the Second Time and placed on the Calendar (County and Municipal Government) | Engrossed |
| AL 2026rs SB 130 |
Elliott | Taxation and Revenue; Homestead ad valorum taxes of certain veterans prohibited from inclusion in debt-to-income ratio under certain circumstances
Senate Calendar: Regular Calendar (April 02, 2026) Position: 74 |
Senate, Mar 5, 2026: Read for the Second Time and placed on the Calendar (Finance and Taxation General Fund) | Introduced |
| AL 2026rs HB 585 |
Fidler | Money transmissions, transaction fee imposed for certain outgoing international wire transfers, income tax credit established to offset transaction fees imposed on taxpayer, reporting of certain suspicious cash transactions required, Securities Commission to enforce (Financial Services (House)) | House, Mar 5, 2026: Pending Committee Action in House of Origin (Financial Services) | Introduced |
| AL 2026rs HB 96 |
Pringle | Debtors homestead exemption; in bankruptcy cases; increase homestead exemption for seniors and disabled | House, Mar 5, 2026: Enacted | Act Number 2026-203 |
| AL 2026rs HB 544 |
Shaw | Cryptocurrency; governmental entities authorized to use stablecoins as payment to vendors and contractors (Financial Services (House)) | House, Mar 3, 2026: Pending Committee Action in House of Origin (Financial Services) | Introduced |
| AL 2026rs HB 402 |
Datcher | Local land bank authorities; shorten tax sale redemption period; restrictions on geographic scope; creation of multijurisdictional land banks by agreement; Governor’s emergency authorization to create land bank (Fiscal Responsibility (House)) | House, Feb 5, 2026: Pending Committee Action in House of Origin (Fiscal Responsibility) | Introduced |
| AL 2026rs SB 232 |
Stewart | Volunteer fire departments; authorized to deposit funds with financial institutions (Banking and Insurance (Senate)) | Senate, Jan 29, 2026: Pending Committee Action in House of Origin (Banking and Insurance) | Introduced |
| AL 2026rs HB 344 |
Lipscomb | Volunteer fire departments; authorized to deposit funds with financial institutions (County and Municipal Government (House)) | House, Jan 29, 2026: Pending Committee Action in House of Origin (County and Municipal Government) | Introduced |
| AL 2026rs HB 207 |
Wadsworth | Alabama Uniform Trust Code; amended to conform with Alabama Qualified Dispositions in Trust Act, limit property subject to creditors’ claims
House Calendar: Regular Calendar (April 07, 2026) Position: 24 Companion Bills: SB 179 |
House, Jan 29, 2026: Read for the Second Time and placed on the Calendar (Financial Services) | Introduced |
| AL 2026rs HB 206 |
Wadsworth | Trusts; amend Alabama Principal and Income Act, permit trustee to adjust between principal and income
House Calendar: Regular Calendar (April 07, 2026) Position: 23 Companion Bills: SB 178 |
House, Jan 29, 2026: Read for the Second Time and placed on the Calendar (Financial Services) | Introduced |
| AL 2026rs HB 324 |
Moore (P) | Artificial intelligence; age verification systems required for chatbots, safeguard protocols required, therapy chatbot requirements established, private right of action and enforcement provided for (Judiciary (House)) | House, Jan 22, 2026: Pending Committee Action in House of Origin (Judiciary) | Introduced |
| AL 2026rs HB 252 |
Shaw | Campaign finance; campaign contributions required to be held in federally insured institution (Ethics and Campaign Finance (House)) | House, Jan 15, 2026: Pending Committee Action in House of Origin (Ethics and Campaign Finance) | Introduced |
