2026 Alabama Legislative Update: Regular Session - Week Ten

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Public Service Commission 

This week, the House unanimously approved Representative Mack Butler’s Public Service Commission reform bill. The legislation requires the Public Service Commission (PSC) to hold formal rate case hearings at least once every three years and places utilities under oath with subpoena authority granted to regulators. It also bars utilities from passing lobbying, political, and trade association expenses to customers and directs the PSC to align utility returns on equity with national averages.

A separate Senate bill sponsored by Senator Clyde Chambliss is also moving its way through the legislative process, proposing to expand the PSC to seven district‑elected commissioners and establish a new energy secretary. 

Overtime Tax Deduction

A House committee this week advanced legislation to reinstate a capped overtime tax deduction for Alabama workers. The legislation, sponsored by Representative James Lomax, would create an individual income tax deduction of up to $1,000 per year for overtime pay earned between January 1, 2026 and December 31, 2028.

Lomax told members the bill is designed to provide targeted tax relief without significantly reducing Education Trust Fund revenues. The fiscal note estimates a recurring annual reduction of $37.4 million.  The committee vote marks the first step toward restoring overtime tax benefits that expired in June 2025. The bill now moves to the House floor.

Closed Primaries

The House this week approved legislation to close Alabama’s party primaries by requiring voters to register with a political party to participate in that party’s primary or runoff. The bill, sponsored by Representative Ernie Yarbrough, passed after an extended floor debate. 

Under the proposal, voters would be subject to a 60‑day blackout period before a primary during which party affiliation changes could not be made. Supporters argued the change would strengthen party identity, while opponents warned it would reduce voter access.  The bill now advances to the Senate, where its prospects remain uncertain.

Gulf of America

On Thursday, the Senate carried over legislation that would require state and local entities to refer to the Gulf of Mexico as the “Gulf of America.” A Democratic filibuster stalled the vote, with Senate Democrats questioning the bill’s necessity.

The bill includes exemptions for financial or operational burdens and allows K‑12 schools and higher‑education institutions to use “Gulf of Mexico” for historical instruction. Democratic lawmakers argued the proposal offers no tangible benefit to Alabama residents and could create confusion for students, as other states have not adopted similar naming requirements.

Camp Safety – Sarah Marsh Heaven’s 27 Act

Legislation to strengthen safety standards at residential camps received a favorable committee report this week. The amended bill requires camps to obtain an emergency‑preparedness license from the Alabama Emergency Management Agency and comply with updated safety protocols. The legislation, sponsored by Representative David Faulkner and Senator Dan Roberts, continues to advance following broad bipartisan support earlier in the session. 

Health Insurer Reorganization Legislation

Legislation sponsored by Senator Andrew Jones and carried in the House by Representative Chris Pringle was signed into law this week, allowing Alabama’s nonprofit health insurers to reorganize under a nonprofit holding company. The new structure is intended to allow insurers in Alabama to remain competitive as other insurance plans consolidate nationwide.

The law adds modern corporate flexibility, but keeps full Department of Insurance oversight in place, which includes strict regulation, and prohibits the new holding company from acquiring Alabama insurers or healthcare providers. Supporters said the measure strengthens long‑term market stability without changing rates, coverage, or tax obligations for insurers in Alabama. 

Outdoor Dog Care Standards

Legislation establishing minimum care standards for dogs kept outdoors advanced this week receiving a favorable report from the House Agriculture and Forestry Committee after previously receiving passage in the Senate. 

The legislation, sponsored by Senate President Pro Tem Garlan Gudger, sets baseline requirements for adequate shelter, food, and water, and bans inhumane tethering practices, including tying dogs to stationary objects without a trolley system, as well as the use of logging chains and choke or pinch collars. Violations would constitute a Class C misdemeanor with subsequent offenses elevated to a Class A misdemeanor. This bill will now move to the full House for consideration.

Data Center Abatement Reform Bill

Both chambers advanced amended versions of the data center abatement reform bills this week through committees. The legislation, sponsored by Representative Leigh Hulsey and Senator Andrew Jones, would tighten the duration and qualifications of certain state abated taxes. The changes apply only to future agreements, aiming to narrow state incentives while protecting existing commitments. The House and Senate versions have now swapped chambers and will continue to move through the legislative process in both.

Large‑Load Data Center PSC Review Bill

This week, the House advanced legislation, sponsored by Senator Lance Bell and Representative Neil Rafferty, concerning facilities pulling large amounts of electricity. The legislation would require the Public Service Commission to review and approve certain large load facilities. This legislation will likely be amended before final passage to ensure the legislation applies as intended. 

Status of the Legislature

The Legislature held two working days this week, bringing the total to twenty‑four of its allotted thirty legislative days.

As of March 20, 645 bills have been filed in the House, and 375 bills have been filed in the Senate.

Both chambers will break next week for spring break recess and will reconvene on Tuesday, March 31. Upon return, lawmakers are expected to use three working days as the session resumes.