An Update from the Legislature

The legislature concluded a three-day workweek, completing day 22 of the 2026 legislative session.

This week, both state budgets advanced through the legislative process. The House passed the Education Trust Fund (ETF) budget, while the Senate approved the General Fund budget. Each budget will now move to the opposite chamber for consideration next week.

The proposed General Fund budget totals $3.72 billion, approximately $37.1 million above Governor Kay Ivey’s recommended budget and nearly $8.5 million more than the current fiscal year. The increase includes funding for the Legislature’s first payment on the new State House building, additional support for the state court system, a 2% pay raise for state employees, and increased contributions to the State Employees’ Insurance Board, which is projected to face a shortfall next year.

The ETF budget totals a record $10.5 billion and includes funding for the RAISE Fund, a 2% pay raise for state-funded education employees, additional funding to address rising health insurance costs, and increased support for schools and higher education institutions.

The Senate also introduced and passed legislation addressing Public Service Commission (PSC) reform. SB360, sponsored by Senator Clyde Chambliss and co-sponsored by the remaining 34 senators, would expand the PSC from three elected members to seven and create a Secretary of Energy position to oversee the administrative functions of the commission. Senate President Pro Tem Garlan Gudger said the proposal, known as the “Power to the People Act,” would give Alabamians greater representation by allowing voters to elect seven commissioners rather than three and would prohibit regulated utilities from participating in the campaign process.

Two bills related to data centers passed the Senate this week. SB265, sponsored by Senator Andrew Jones, would limit the maximum exemption period for abatements available to data processing centers to 20 years. SB270, sponsored by Senator Lance Bell, would require the PSC to consider specific factors when determining whether a contract between a utility and a large-load data center is in the public interest, including ensuring incremental costs attributable to the data center are recovered from the facility and that the agreement provides benefits to other utility customers. Together, the bills establish clearer parameters for evaluating and incentivizing data center projects in Alabama, helping create greater predictability for the business community. 

The House also approved a proposed constitutional amendment that will appear on the November ballot asking Alabama voters whether public schools should be required to allow voluntary, student-led prayer and the Pledge of Allegiance at the beginning of each school day. If approved by voters, participation would remain optional, and local school boards would adopt policies governing how the prayer period would be implemented.

The legislature will reconvene next week for what we hear will likely be a two-day workweek.