HB542 Alabama 2026 Session

Summary

Primary Sponsor

Chris BlackshearRepresentative

Republican

Session

2026 Regular Session

Title

Highways; Department of Transportation required to reimburse certain utilities for required facility relocation, subject to conditions

Summary

HB542 changes how Alabama pays utilities to relocate facilities needed for highway projects, adding income-based rules, caps, and annual reporting.

What This Bill Does

It defines relocation costs and utility lines, and adds rules for when the Department of Transportation must reimburse utility relocation costs. For projects on the national system, if relocation costs are eligible for federal reimbursement, the state pays upfront and the utility repays any difference after the federal audit plus the state's matching share. For non-national-system highway projects, utilities with $250 million or less in annual gross income may have relocation costs paid by the state as part of construction, with repayment after the federal audit; starting October 1, 2027, utilities with greater incomes face annual caps (up to $10 million total per year, with a $500,000 cap per relocation) and a minimum annual state expenditure of $20 million, with any excess costs borne by the utility. The Director of Transportation must report annually to the Legislature on payments, and the act applies to projects funded with federal or state funds.

Who It Affects

• Utilities with gross annual income of $250 million or less: their relocation costs on non-national-system highway projects can be paid by the state as part of construction, with repayment after federal audit.
• Utilities with gross annual income over $250 million: subject to a new reimbursement framework starting 10/01/2027, with annual caps and per-relocation limits on reimbursements.
• Alabama Department of Transportation: administers reimbursements, collects documentation, and reports to the Legislature.
• The Alabama Legislature: receives an annual report detailing relocation payments and reimbursements.
• Projects funded with federal or state funds: affected because reimbursements and cost-sharing apply to their utility relocations.

Key Provisions

• Adds definitions for cost of relocation, distribution line, transmission line, national system, and utility to clarify scope.
• Requires DOT to reimburse eligible relocation costs on projects within the national system if federal reimbursement is available; after final federal audit, utilities repay the difference plus the state's matching share.
• For non-national-system projects, utilities with $250 million or less in gross income may have relocation costs paid by the state as part of construction, with post-audit repayment requirements; utilities with greater incomes face a new reimbursement framework beginning 10/01/2027 with caps.
• Beginning 10/01/2027, total reimbursements for eligible utilities may not exceed $10,000,000 per state fiscal year and per-relocation reimbursements may not exceed $500,000; any excess is the utility's responsibility; and reimbursements are subject to the same documentation and repayment rules as others.
• Starting 10/01/2027, the state must reimburse at least $20,000,000 per year for these relocations, under the applicable subdivision.
• The Director may enter into contracts or adjust existing contracts with utilities to effectuate the bill's purposes.
• The Director must file an annual report to the Legislature about the total number and cost of relocations paid and whether they were reimbursed.
• The provisions apply to any project requiring relocation of a utility facility funded with federal or state funds and treat transmission and distribution line relocations as separate relocations.
• If a relocation is revised before project completion, the state pays all further costs of relocation after the revision.
• Definitions clarify that 'utility' covers public, private, and cooperatively owned entities, and 'cost of relocation' includes total payments attributable to relocation after deductions for increased facility value and salvage value.
• Effective date: October 1, 2026.

AI-generated summary using openai/gpt-5-nano-2025-08-07 on Mar 3, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Transportation