Goat Hill Report- Week Ending February 13, 2026
This week the Alabama legislature completed Week 5 of the 2026 session. The legislature held another two-day week, convening on the floor on Tuesday and Thursday while holding committee meetings on Wednesday. The legislature is approaching the half-way point of legislative session, having completed 12 days out of a possible 30 legislative days. As previously mentioned, the session still is expected to wrap up in early to mid-April.
Details of this week’s notable action and news items are provided below.
Increased Focus and Debate on Package of Bills Aimed at Data Center Costs and Utility Oversight
The week’s most high-profile battle was focused on the bi-partisan, three-bill package touted as the “Affordability Protection Plan” to address utility costs and regulatory oversight. HB392 by Rep. Chip Brown (R-Hollingers Island) would restructure the selection process of the Alabama Public Service Commission from an election to a Gubernatorial appointment; HB403 by Rep. Neil Rafferty (D-Birmingham) would require data centers to pay the full cost of grid and infrastructure upgrades that their operations require, preventing those costs from being passed to existing utility customers; and HB399 by Rep. Leigh Hulsey (R-Helena), would reform data center incentives to require measurable public benefits consistent with other economic development incentives. Most of the fireworks centered around the PSC appointment bill, with a spirited public hearing on Tuesday in the House where proponents argued they were bringing more accountability and qualified commissioners to the PSC. Renewable energy advocates strongly criticized HB392, saying it would do little to cut bills and limit public input in utility regulation. The three bills were voted out of House Committee and due to be heard on the floor on Thursday, but as criticism increased during the week and Senate support softened for the measures – particularly the PSC appointment bill – House leaders pulled the bills from consideration. Speaker of the House Nathaniel Ledbetter (R-Rainsville) publicly stated the votes are there to pass the House, but if the Senate vote was uncertain then he would not subject his House members to the criticism if the final outcome was uncertain. Ledbetter left open the possibility that the bill might not be brought back for consideration, but there are no indications at this time if the less controversial data center bills will be separately considered.
Online Sales Tax Litigation Dropped to Pursue Legislation
This week the City of Tuscaloosa and other larger Alabama cities have dismissed their lawsuit over the state’s collection and distribution of sales tax revenue from online purchases, instead hoping to find a solution in the Legislature. The lawsuit was dismissed without prejudice, allowing for a refiling later if no legislative or other solution is reached. Last August, Tuscaloosa, Mountain Brook and Tuscaloosa City Schools sued the Alabama Department of Revenue over the flat 8% tax paid on online purchases, known as the Simplified Sellers Use Tax (“SSUT” or “online sales tax”). Other large cities in the state later joined Tuscaloosa in pursuing the litigation. Those cities have said the SSUT structure doesn’t return enough of their residents’ tax dollars to the local community, making it harder to pay for city services. The state’s larger cities prefer a tax collection system where retailers with stores and facilities in the state remit for online purchases the same state and local taxes they would for in-store purchases, estimating that system would generate millions of dollars more per year for the larger cities. However, a total of 201 cities and all 67 counties intervened on behalf of the state asking that the lawsuit be dismissed, noting that the SSUT has become an integral part of annual budgets for counties and smaller cities. Those intervenors see no need to disrupt or otherwise endanger that source of revenue. With the growth in online purchases, SSUT revenue is approaching $1 billion per year. In a formula created by legislation more than a decade ago, 50% of that goes to the state where that portion is divided with 75% going to the state General Fund and 25% to the Education Trust Fund. The other 50% of the SSUT goes to local governments, with 40% to counties and 60% to municipalities based on population. Leaders from several cities have described the move to drop the lawsuit as a good-faith step intended to reach a faster and more stable policy fix, which legislative leaders are committed to doing. With more than a third of the session gone, it is up in the air if a legislative fix can be accomplished this session.
Artificial Intelligence & Emerging Technologies Come Into Focus
This legislative session has seen an increased number of introduced bills related to artificial intelligence and other emerging technologies. Many of the bills are focused on consumer protection and youth exposure to tools like AI chatbots (which has been championed at the federal level by Alabama U.S. Senator Katie Britt). At this juncture, it is unknown if any of the state proposals will gain enough consensus to advance fully through the full legislative process and reach the Governor’s desk. To that end, legislative leadership is grappling with how best to address the influx of these often very technical bills. One such avenue for further study has emerged with Rep. Ben Robbins (R-Sylacauga) introducing House Joint Resolution 51 – which establishes a Study Commission on Artificial Intelligence and Children’s Internet Safety. If HJR51 is enacted, the Commission will meet through the summer and fall with a goal of delivering recommendations by November 1, 2026. In related news, Governor Kay Ivey announced the establishment of Technology Quality Assurance Board (TQAB) this week. This action is a follow up to Governor Ivey’s formation of a Generative AI Task Force – which concluded its work in November 2024 and issued its final recommendations shortly thereafter. In the TQAB announcement, Governor Ivey: “The TQAB is a critical step forward in ensuring Alabama’s use of technology is not only innovative, but also secure, ethical and aligned with the public interest,” Ivey said. “This board will help us evaluate new tools through a lens of cybersecurity, privacy and operational excellence.” Seven cabinet level agencies will be involved in the initial work of the TQAB with a range of goals including the development of AI risk management frameworks and training for public employees.
Bills of Interest to the Concrete Industry
We are tracking SB304 by Senator Albritton related to business licenses required for contractors and subcontractors. The bill would allow contractors and subcontractors to exclude any gross receipts which were used to calculate the amount of a business license paid in another municipality when the general contractor, subcontractor, engineer, or land surveyor maintains a physical place of business in the municipality where the application for a business license has been filed. The ready-mix industry typically operates under the concept of a delivery or manufacturing business license and pays a delivery license for all areas they deliver concrete. Please let us know if you have seen a dramatic increase in your business license based on the municipality charging on the gross receipts of the entire company and not just for the plant in the jurisdiction or deliveries to an area.
The legislature will reconvene on Tuesday, February 17, 2026. Please contact our office if you have any questions. To view a list of the bills the association is tracking, click here.