House Bill 163 Alabama 2026 Session

Summary

Primary Sponsor

Troy StubbsRepresentative

Republican

Session

2026 Regular Session

Title

Property Insurance and Energy Reduction Act; require financing of projects through private funding

Summary

HB163 would rename and expand Alabama's Property Insurance Reduction Act to let counties and municipalities finance energy efficiency and resilience upgrades on certain commercial properties through private financing, with repayment secured by a property lien.

What This Bill Does

HB163 designates regions and allows local governments to fund qualified projects either by issuing bonds or by private financing. The repayment is secured by a voluntary assessment lien on the benefited property, and payments can be assigned to the private capital provider. Public funds would not be used to repay private loans, and the local government would not guarantee repayment or be liable for program actions. The bill also repeals a prior loss reserve fund and state regulatory jurisdiction, renames the act, and requires mortgagee consent and recordation of consent and subordination before contracts.

Who It Affects

• Real qualifying property owners (non-residential properties such as commercial, industrial, agricultural, and multifamily buildings; residential units under five are excluded) in designated regions who voluntarily participate and would repay the financing via a property assessment lien.
• Local governments (counties and municipalities) and private capital providers (lenders) who would administer, designate regions, fund projects, and collect or enforce the assessment payments.

Key Provisions

• Renames the act to the Property Insurance Reduction and Capital Expenditure Act of Alabama and clarifies it applies to counties and municipalities.
• Allows local governments to finance qualifying projects in designated regions using private capital or bonds, with repayment secured by a lien on the real property and not as a general obligation of government.
• Defines qualifying projects and improvements to include energy efficiency, flood resilience, and water conservation upgrades (e.g., wind resistance, safe rooms, flood mitigation, energy systems, EV charging).
• Requires owner consent and mortgagee/subordination agreements before contract; records the consent and subordination in public records; lien priority is equal to other liens except tax liens; payments go to the private lender.
• Prohibits use of public funds to repay private financing; local government cannot guarantee repayment and is not liable for program actions; the private lender bears repayment risk.
• Details about liens and enforcement: the lien runs with the property; delinquent installments accrue interest; enforcement similar to ad valorem/non-ad valorem tax liens; mortgagees must receive 60 days’ notice before enforcement; collection is handled by the capital provider.
• Sets a cap: total assessment cannot exceed 20% of the property’s just value; requires energy/water efficiency and other audits and qualifications; may require professional certifications (e.g., energy audits for residential and commercial work).
• Imposes program administration and funding rules (fees up to 1% of financed principal or $50,000, payable via application fees or interest components, and may be charged to offset administrative costs).
• Repeals Sections related to a loss reserve fund and state regulatory jurisdiction; effective date is June 1, 2026.

AI-generated summary using openai/gpt-5-nano on Feb 11, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Counties & Municipalities