The 2026 regular session of the Alabama Legislature adjourned sine die last week, marking the conclusion of several months of policymaking that will shape the state’s economic and regulatory landscape.
Throughout the session, lawmakers considered a wide range of proposals affecting employers, industries, and the broader business climate. The following is an overview of key legislation passed and debated this session, and what it means for Alabama businesses.
Career Readiness & Workforce Development (HB517 & HB520): These measures expand support for career and technical education (CTE) by creating tax incentives for employers who loan qualified employees to teach CTE courses, helping bridge the gap between industry and the classroom. The legislation also establishes an expedited pathway for individuals to obtain certification to teach CTE courses, making it easier for experienced professionals to enter the teaching workforce. Together, these efforts strengthen Alabama’s Talent pipeline and better align workforce training with real-world business needs. Sponsors: Rep. James Lomax & Rep. Marcus Paramore
Overtime Tax Deduction (HB527): Provides tax relief on overtime wages, incentivizing additional work hours and offering both employers and employees greater flexibility. This deduction is temporary and expires in 2028. Sponsor: Rep. James Lomax
Data Center Investment Incentives (HB399): Revises targeted incentives to attract and support data center development in Alabama, positioning the state to compete for large-scale technology infrastructure projects and the jobs and capital investment they bring. Sponsors: Rep. Leigh Hulsey & Sen. Andrew Jones
Military Spouse Hiring Preference (HB307): Encourages employment opportunities for military spouses, helping businesses access a broader and highly capable workforce. Sponsors: Rep. Rick Rehm & Sen. Will Barfoot
Workforce Board Expansion (HB477): Expands the composition of Alabama’s workforce development board to include broader industry representation, ensuring workforce strategies are more closely aligned with current and future business needs. Sponsor: Rep. James Lomax
Living Organ Donation Protections (HB361): Provides protections and support for living organ donors, contributing to workforce stability and employee well-being. Sponsor: Rep. Anthony Daniels
Public Service Commission Reform (HB475): This Legislation enhances transparency and oversight within the Public Service Commission, helping protect ratepayers and promote accountability in utility regulation—an important step toward maintaining a stable cost environment for businesses. Sponsors: Rep. Mack Butler & Sen. Clyde Chambliss
Large Load Data Centers (SB270): Establishes a clearer framework for large-scale data center developments, providing greater predictability for infrastructure planning and economic development opportunities in Alabama. Sponsors: Sen. Lance Bell & Rep. Neil Rafferty
Solar Development Moratorium (SB354): A proposal to pause new solar farm developments for one year ultimately did not pass, preserving ongoing renewable energy investment opportunities. Sponsors: Sen. Greg Albritton & Rep. Matt Simpson
Sound Science in Environmental Regulation (SB71): Ensures Alabama’s environmental regulations do not exceed federal standards, creating a more predictable and consistent regulatory environment for businesses operating in the state. Sponsors: Sen. Donnie Chesteen & Rep. Troy Stubbs
State Health Planning & Development Agency Reform (HB605): Updates to the State Health Planning & Development Agency processes aim to improve efficiency and clarity in healthcare facility approvals, impacting healthcare providers and related industries statewide. Sponsors: Rep. Jamie Kiel & Sen. Donnie Chesteen
App Store Age Verification (HB161): Introduces new requirements for age verification on app platforms, with potential compliance considerations for tech companies and digital service providers. Sponsors: Rep. Chris Sells & Sen. Clyde Chambliss
Data Privacy Legislation (HB351): Establishes new data privacy standards, increasing consumer protections while requiring businesses to evaluate data handling and compliance practices. Sponsor: Rep. Mike Shaw
We have seen a significant increase in AI-related legislation in recent sessions, particularly this year, and while thoughtful guardrails are needed, a rapid approach to regulation could create unintended challenges for businesses. Earlier this year, President Trump issued an Executive Order encouraging a more unified federal framework, and BCA will continue to monitor developments and keep members informed on potential impacts.
HB324: This bill ultimately did not pass, but it would impose age verification requirements, content restrictions, and liability standards on AI chatbots—particularly those interacting with minors—raising concerns about compliance burdens and unintended consequences for businesses operating in this emerging space. Sponsor: Rep. Parker Moore
HB325: This bill, if enacted, would have required businesses to disclose when consumers are interacting with AI chatbots and creates new private rights of action for violations, contributing to a growing patchwork of state-level regulations that could increase legal and operational risk. This bill did not pass. Sponsor: Rep. Parker Moore
HB327: HB327 aimed to establish additional regulatory requirements and private rights of action related to AI systems, reflecting a broader trend of state-level intervention that may conflict with calls for a more uniform, less burdensome federal framework. This bill did not pass. Sponsor: Rep. Ben Robbins
BCA-endorsed candidate Senator Arthur Orr has consistently been at the forefront of legislative development. In addition to leading the passage of a record $10.9 billion Education Trust Fund budget, Orr passed a significant portfolio of legislation this session, including the following bills:
SB57: Excludes soda and candy from SNAP-eligible purchases.
SB63: Establishes guidelines for the use of artificial intelligence in healthcare, supporting innovation while ensuring appropriate oversight and patient protections.
SB58: Requires forfeiture or suspension of retirement benefits for public servants convicted of certain felony offenses related to their public service, directing forfeited funds toward restitution to affected public entities and updating procedures for notifying retirement systems of qualifying convictions.
SB59: Revises reporting requirements for Alabama’s public higher education institutions by requiring annual disclosures of state and federal fund receipts and expenditures, along with contingency planning for potential funding reductions.
SB62: Establishes the Alabama Charter School Finance Authority to issue bonds and provide financing for state charter schools.
SB92: Restricts online credit card campaign contributions by prohibiting principal campaign committees, political action committees, and political parties from accepting such donations with non-U.S. billing addresses.
SB167: Revises the Alabama Administrative Procedure Act by clarifying standards and timelines for judicial review of agency decisions, including appeal deadlines, requirements for bonds in certain rate-related cases, and provisions allowing courts to compel agency action in cases of unreasonable delay.
SB221: Excludes credit card transaction fees from sales and use tax calculations—providing a more accurate tax structure and reducing unnecessary costs for businesses.
SB272: Strengthens protections for personal information in public records held by local boards of education by requiring the redaction of sensitive financial data and prohibiting the commercial sale or distribution of name and address lists derived from those records.
SB273: Amends Alabama’s stalking in the second-degree statute to clarify definitions and enhance penalties, including elevating second or subsequent offenses to a Class C felony while maintaining the first offense as a Class B misdemeanor.
SB292: Creates safeguards against fraudulent property transactions, enhancing security in real estate markets and protecting property owners.
SB317: Reestablishes the Alabama Commission on the Evaluation of Services within the legislative branch, revises its duties and leadership structure, and creates a Legislative Committee on the Evaluation of Services to provide oversight and governance of the commission’s operations.
The outcomes of the 2026 session reflect continued efforts to promote economic growth, enhance workforce readiness, and maintain a competitive business environment in Alabama.
BCA will continue to monitor implementation of these measures and advocate for policies that support Alabama’s employers and job creators in the months ahead.
If you have any questions about how these measures may impact your business, please do not hesitate to reach out to our team.
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