Alabama Advances Budget Bills, Utility Overhaul
Written by Brent Wilson on
March 16, 2026
This Week in Brief
The Alabama Legislature logged another busy week in the 2026 Regular Session, with 81 new bills introduced, 10 bills passing a chamber by recorded vote, and 39 bills signed into law. Budget and education funding bills made up much of the confirmed floor action, while a proposal to remake the Public Service Commission also advanced.
Bills Moving Forward
Education and budget. Four budget-related education bills moved in the Senate. HB235 would make supplemental appropriations for the fiscal year ending September 30, 2026, totaling $419,717,091 from the Education Trust Fund to various agencies and entities, along with $100 million from gross income tax receipts from the CHOOSE Act Fund to the Department of Revenue. HB236 would make supplemental appropriations from the Education Trust Fund Advancement and Technology Fund for the same fiscal year, although the amount was not provided in the source material.
HB237 would transfer $362,450,000 from the Educational Opportunities Reserve Fund to the RAISE Fund for fiscal year 2026 and appropriate another $137,550,000 from the reserve fund to various higher education institutions. HB238 would make appropriations for support, maintenance, and development of public education, debt service, and capital outlay for the fiscal year ending September 30, 2027.
Another education bill, HB565, would create the College and Higher Education Excellence and Results Act, or CHEER Act. The bill would set up a bonus-funding program for higher education institutions that meet identified student and institutional performance goals and would create an Outcomes-Based Higher Education Funding Coordinating Committee to oversee the framework. The source material does not include a dollar amount for that incentive structure, but the bill would clearly affect public colleges and universities competing for performance-based funding.
Taxes and economic development. SB265 passed the House and would revise tax abatements for data processing centers. Starting January 1, 2027, the bill would limit the maximum exemption period for those abatements to 20 years, require certain large data processing centers to pay state sales and use taxes on purchases, provide for distribution of the tax proceeds, and extend the sunset date for data processing center abatements. The bill affects data center operators and state revenue collections at the same time: it preserves abatements in narrower form while requiring some tax payments that current law does not require.
Utilities and regulation. SB360 passed the House and would make one of the broadest structural changes of the week. The bill would expand the Public Service Commission from three at-large elected members to one commissioner elected from each congressional district, phase in those seats, and set terms at six years. It would also prohibit an increase in electric retail base rates until June 1, 2029, and after that would bar utilities from including costs related to certain grants, lobbying, or advertising in rate-setting, except for public-safety advertising approved by commissioners.
The same bill would create a cabinet-level Secretary of Energy, appointed by the governor, to serve as administrative director of the Public Service Commission. Households and businesses that pay electric bills would be affected by the rate provisions, while utilities and regulators would face a new political and administrative structure. The source material does not include stated support or opposition, but the bill plainly combines governance changes with direct restrictions on what costs can be passed into utility rates.
Land use, local government, and licensing. SB337 passed the House and would require the Department of Conservation and Natural Resources to sell certain school lands upon request of the relevant local board of education, with the proceeds used as provided by the bill. SB107 passed the House and would let the Alabama Board of Funeral Services impose an administrative fee on funeral establishments for each funeral arranged, increase several certificate and registration fees, and require annual statements and reports on preneed activities and preneed contract activity.
HB532, a local bill for Shelby County, passed the Senate and would authorize the sale of solid waste commodities and provide for distribution of the proceeds.
Signed Into Law
Gov. Kay Ivey signed a mix of local and statewide bills during the week. Among the statewide measures, SB239 changes how temporary emergency child custody determinations become final under the Uniform Child Custody Jurisdiction Enforcement Act. Instead of requiring a court to explicitly say that a temporary-emergency custody determination becomes final, the law now provides that if no custody proceeding is started in a state with jurisdiction within six months, the emergency determination automatically becomes final. That change affects families involved in interstate custody disputes and the courts handling them.
SB249 increases fees for volunteer and professional firefighter distinctive license plates and provides for distribution of those fees. The law affects motorists who buy the tags and the entities that receive the revenue, though the source material does not list the new fee amounts.
SB259 rewrites parts of the pay structure for county officials. It provides that certain local officials will receive the annual compensation they are getting on May 31, 2026, changes how base compensation is calculated for officials first elected or appointed after July 1, 2025, and restricts local uniform increases for officials whose compensation is tied to a state official. The law also has retroactive effect. County officeholders and county budgets are the clearest groups affected.
Several local bills also became law: SB312 on Marshall County volunteer fire districts and annexation of new areas, SB314 on the Municipal Utilities Board of Decatur’s operating parameters, HB479 on salaries and an expense account for Coosa County’s probate judge, sheriff, and revenue commissioner, HB493 creating a civil service system in the City of Helena, HB410 on the Limestone County sheriff’s compensation, HB412 removing the expense-allowance limit for boards of registrars and letting county commissions set the amount, and SB202 on the Montgomery County sheriff’s salary and expense allowance.
What to Watch
Education budget bills are already moving in a cluster, and the Public Service Commission overhaul in SB360 has now cleared the House. High-interest proposals including SB257, HB118, SB21, SB43, and SB17 remain among the session’s most closely watched bills for readers looking ahead to the next week of floor and committee action.
