Alabama Legislative Update: Regular Session - Week Eleven

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Birmingham Water Works

On Thursday, the House passed legislation, sponsored by Senator Dan Roberts and Representative Jim Carns, to reform the composition and functionality of the Birmingham Water Works Board. The bill initially aimed to reduce the board from nine to five members, but after negotiations, the amended version now includes seven members. The appointments will come from various local authorities, including the Birmingham mayor, lieutenant governor, Jefferson County Commission president, Blount County Commission, Shelby County Commission, the governor, and the Birmingham City Council.

Currently, the board consists of nine members, with appointments from the Birmingham mayor, Birmingham City Council, Jefferson County Mayors Association, Shelby County Commission, and Blount County Commission. Senator Roberts emphasized that the bill aims to address billing, service, and past corruption issues at the Birmingham Water Works Board. This bill now moves to the House for consideration.

General Fund Budget

This week, the Senate passed the $3.7 billion General Fund Budget for the 2026 fiscal year after a filibuster. The budget, crafted by Representative Rex Reynolds and Senator Greg Albritton, includes appropriations of $18 million for economic development, $2.5 million for Capitol Police, $3 million for crime suppression, and $244 million for mental health services. The budget has been sent to Governor Ivey for her signature.

ALFA Health Plan

This week, the Senate passed a bill creating a new type of "health plan" in Alabama. The Alabama Farmers Federation (ALFA), the primary supporter of the bill, will be authorized to market and sell these plans, which are exempt from most state and federal regulations followed by traditional health insurers. On the Senate floor, there were concerns expressed about the lack of consumer protections in the bill and the tax rate at which this plan will be taxed by the state, but no changes were made to the legislation. Proponents argued that the plan offers an alternative to traditional health insurance for a small group of farmers. This bill has been sent to the governor for her signature. 

Police Immunity 

This week, the Alabama Senate Judiciary Committee advanced the police immunity bill, sponsored by Representative Rex Reynolds and Senator Lance Bell. The bill aims to expand legal protections for law enforcement officers, altering the process to prosecute or sue them for actions taken within their discretionary authority. The legislation includes provisions for pretrial immunity hearings and higher standards for civil complaints against officers.

Supporters argue that the bill will aid in the recruitment and retention of officers by providing clearer legal standards and protections. However, opponents express concerns that the bill could reduce accountability and disproportionately affect minority communities. Senate Democrats have vowed to fight this bill on the Senate floor. The bill now moves to the full Senate for consideration.

Lulu’s Law

On Thursday, the Senate passed legislation, sponsored by Representative David Faulkner and Senator Dan Roberts, to establish a shark alert system for Alabama beaches. This legislation, titled Lulu’s Law, is inspired by Mountain Brook teen Lulu Gribbin, who survived a shark attack last summer off the Florida Panhandle. The alert system will function similarly to Amber and Silver Alerts, sharing information with mobile devices and first responders. This bill has been sent to the governor, a vocal supporter of this legislation, for her signature.

Cellphone Filters 

On Tuesday, the House passed a bill sponsored by Senator Clyde Chambliss that mandates that manufacturers of specific Internet-enabled devices, such as smartphones and tablets, include a filter on devices produced after June 1. This filter must be activated during the device's setup if the user is a minor and can only be deactivated or reactivated with a password. Manufacturers who fail to comply with this requirement will face civil liability and penalties. This legislation has been sent to the governor for her signature.

Rural Hospital Tax Incentive 

This week, the Senate Finance and Taxation Education Committee gave a favorable report to legislation related to rural hospitals, sponsored by Representative Terri Collins. This legislation aims to provide financial support to rural hospitals by providing a dollar-for-dollar tax incentive program for individuals and businesses that donate to rural hospitals. This legislation sets annual statewide caps of $20 million for 2026, $25 million for 2027, and $30 million for 2028 and beyond. Hospitals must submit a five-year plan detailing their financial stability and how they will use the donations. In the first year, a hospital could receive up to $750,000. This legislation now moves to the full Senate for approval.

Powering Growth Package

This week, the House passed a bill to create the Alabama Energy Infrastructure Bank under the State Industrial Development Authority. The bank would help finance energy infrastructure projects that support economic development and industrial recruitment, with a focus on getting critical assets like substations and transmission lines in place to meet growing demand. This bill has passed the House and has been sent to the Senate for concurrence.

This bill would allow any 21st Century Fund dollars not allocated for bond payments to be shifted over to the State Industrial Development Authority and used to support projects through the Alabama Energy Infrastructure Bank. This bill has passed the House and has been sent to the Senate for concurrence.

Another bill aims to streamline the permitting process for electric transmission work on state-controlled rights-of-way. It sets firm deadlines for ALDOT to act on permit requests, allows automatic approval if those deadlines aren’t met, and requires regular coordination between ALDOT and electric providers to improve efficiency and predictability. This bill has passed the House, and a signature has been requested from the governor. 

A fourth bill would allow 21st Century Fund dollars to be used to cover other project costs and help pay off bonds issued by the State Industrial Development Authority. In addition, it transfers $5 million from the fund to the Alabama Department of Commerce to open new international offices, strengthen rural development efforts, and support day-to-day operations and staffing. This bill has received a favorable report from the House Tourism Committee and now moves to the full House for consideration.

Tax Cut Package

This week, the Senate Finance and Taxation Education Committee gave favorable reports to multiple pieces of tax cut legislation sponsored by Representative Danny Garrett.

1. Grocery Tax: This bill reduces the sales tax on most grocery items by one percent, with a potential further reduction if the Education Trust Fund grows by at least 3.5% in a year. The bill is expected to save Alabamians about $122 million per year. It also includes provisions allowing local municipalities to lower their local sales tax on groceries by resolution or ordinance without legislative approval.
2. Machinery Tax: This legislation was substituted from its original form to reduce the sales and use tax on machinery as defined in the bill to 1.25%. 
3. Income Tax Exemption: This legislation doubles the state’s income tax exemption from $6,000 to $12,000 for individuals 65 years or older withdrawing funds from defined contribution retirement plans. The bill was amended to phase in the reduction by $2,000 per year over three years. 
4. Standard Deduction: This bill raises the standard deduction from $2,500 to $3,000 for individuals and expands dependency exemptions starting in the 2026 tax year. 

Laken Riley Act 

This week, the Alabama Senate Judiciary Committee gave a favorable report to the Laken Riley Act along party lines. Sponsored by Representative Ernie Yarbrough, the bill permits state and local law enforcement agencies to enter into agreements with federal agencies to facilitate the deportation of undocumented immigrants charged with crimes. Named after Laken Riley, the bill aims to enhance cooperation between state and federal authorities. The bill now moves to the full Senate for consideration.

Status of the Legislature

The legislature used two working days this week, bringing its current total to 27 of its allotted 30 legislative working days.

As of May 2, 620 bills have been filed in the House, and 347 bills have been filed in the Senate.

The House will reconvene on Tuesday, May 6, at 1:00 PM, and the Senate will reconvene on the same day at 2:00 PM. Upon return, the legislature is expected to use two legislative working days. After the legislature finishes conducting business next week, it is expected to reconvene on May 14th to use the final legislative day.