SB105 Alabama 2025 Session

Summary

Primary Sponsor

April WeaverSenator

Republican

Session

2025 Regular Session

Title

Rural Hospital Investment Program established, tax credits for donations to rural hospitals authorized

Summary

SB105 would create a Rural Hospital Investment Program to financially support rural Alabama hospitals and offer tax credits to encourage donations to those hospitals.

What This Bill Does

It establishes a Rural Hospital Investment Program and a board within the State Treasurer’s Office to run it, with coordination from the Department of Revenue. It offers state tax credits to donors that offset various taxes for donations to eligible rural hospitals, and sets rules on how donations can be used by the hospitals (care, operations, and facility upgrades). It requires hospitals to meet eligibility criteria and to file plans and reports, and it places annual caps on total credits and per-hospital donation amounts, with credits starting in 2026 and ending after 2030 (plus carryforward provisions). It also requires preapproval of qualified donations and periodic public reporting.

Who It Affects

• Eligible rural hospitals (general acute care, emergency, or critical access) in rural areas that would receive donations and must meet criteria and reporting requirements.
• Donors including individuals, households, married couples, pass-through entities, corporations, and financial institutions who could receive tax credits for qualified donations.
• State agencies, specifically the State Treasurer’s Office, Department of Revenue, and the Rural Hospital Investment Program Board, responsible for administration, eligibility determinations, and oversight.
• Rural residents served by these hospitals who could benefit from improved care and facilities.

Key Provisions

• Establishes the Rural Hospital Investment Program and the Rural Hospital Investment Program Board within the Office of the State Treasurer to administer the program with support from the Department of Revenue.
• Defines eligible rural hospitals as rural general acute care, rural emergency, or critical access hospitals licensed by the Alabama Department of Public Health and located in rural areas as defined for CMS rural eligibility; requires indigent care and compliance with reports.
• Allows donations to qualify for a tax credit offsetting income, excise, premium, and utility taxes; hospitals may use donated funds for direct care, operations, and facility maintenance/upgrades; hospitals may retain up to 5% of donations as a solicitation/management fee.
• Sets eligibility and reporting requirements for hospitals, including a five-year financial plan, annual reports on donations and expenditures, and a 30-day donation reporting requirement to the Department.
• Creates a board composition including the Governor, State Treasurer, Commissioner of Revenue, legislative leaders, and two Alabama Hospital Association representatives; outlines terms, diversity considerations, and meeting rules.
• Imposes annual statewide tax credit caps: $20 million for 2026, $25 million for 2027, and $30 million thereafter; imposes hospital donation caps of $750,000 (2026), $1,000,000 (2027), and $1,250,000 (thereafter).
• Specifies per-taxpayer credit limits by taxpayer type (individuals, pass-through entities, corporations) and requires credits not exceed tax liability; allows up to 3 years of carryforward and non-transferability.
• Requires Department preapproval of qualified donations and Department rulemaking to implement the act; statewide credits do not reduce the distribution to the Special Mental Health Trust Fund.
• Credits may be claimed starting January 1, 2026 (tax year 2026) and are not available after 2030 except for carryforward provisions; credits may potentially qualify for federal credits or deductions but are not guaranteed.

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

Subjects

Taxation & Revenue