SB326 Alabama 2023 Session

Summary

Primary Sponsor

April WeaverSenator

Republican

Session

Regular Session 2023

Title

Relating to rural hospitals; to provide for funding of rural hospitals by creating the Rural Hospital Investment Program; to establish a governing board to administer the program, to provide for a state income tax credit in exchange for donations to rural hospitals; and to provide for coordination with the Department of Revenue.

Summary

SB326 would create a Rural Hospital Investment Program that funds rural Alabama hospitals through a state income tax credit for donations, overseen by a board in the State Treasurer’s Office with coordination from the Department of Revenue.

What This Bill Does

It creates the Rural Hospital Investment Program and a governing board to manage donations to rural hospitals. It offers a state income tax credit for qualified donations to eligible rural hospitals, with specific annual limits by donor type and a statewide cap, and credits are nonrefundable but can be carried forward up to three years. It sets eligibility rules for rural hospitals and requires five-year plans and annual reporting; funds donated can be used for care, operations, maintenance, and facility upgrades. It requires annual and joint reporting to the Legislature and coordinates with the Department of Revenue for implementation and compliance.

Who It Affects

• Donors (individuals and business entities) who donate to eligible rural hospitals; they would receive a state income tax credit against Alabama tax liability, with annual limits (individuals up to $15,000; married filing jointly up to $30,000; certain entities up to $450,000 for pass-throughs and up to $500,000 for corporations) and a statewide cap on total credits; credits are nonrefundable and may be carried forward up to three years.
• Rural hospitals that meet eligibility criteria; they would be able to receive qualified donations to fund care, operations, maintenance, and capital improvements, but must meet statutory requirements, submit five-year plans, and comply with reporting and oversight by the board and Department of Revenue.

Key Provisions

• Establishes the Rural Hospital Investment Program and a Rural Hospital Investment Program Board within the Office of the State Treasurer; board includes Governor, State Treasurer, Commissioner of Revenue, Senate President Pro Tempore, Speaker, and two Alabama Hospital Association representatives; board appointments within 30 days; diversity requirements for appointees.
• Defines eligible rural hospitals as general acute care or critical access hospitals located in rural areas, providing services to Medicaid/Medicare and indigent patients, complying with audits, and submitting a five-year plan on use of donations, with updates every five years.
• Annual determination of eligible hospitals by the board, with publication of eligible hospitals to the Department of Revenue by December 1 and a list of eligible hospitals for the next tax year published by December 31.
• Tax credits for donors: credits equal to 100% of donated amounts in initial and subsequent years, with per-year limits by donor type; nonrefundable and transferable restrictions; carryforward up to three years; credits may be limited by the donor’s income tax liability; program effective January 1, 2024.
• statewide credit cap: $38 million for 2024, $60 million for 2025, and $80 million per year thereafter; per-hospital annual cap of $2 million; department preapproval of qualified donations for compliance.
• Donations may be used for operating expenses, maintenance, capital upgrades, and improvements; hospitals may employ personnel to solicit/manage donations with fees up to 5% of donations; annual reporting by hospitals of donations and spending; joint annual report to Legislature.
• Program rules and oversight include coordination with the Department of Revenue, implementation through rules, and potential promotional activities to publicize the program.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Establishing a tax credit for financial support of rural hospitals