Budget & Taxes (Income Tax)

HB 115 replaces Alabama's existing rural physician tax credit with a new program. It ends the current $5,000 annual credit (set to expire in 2028) by moving the termination date to December 31, 2026, while allowing physicians who used the old credit for fewer than five years to continue claiming it under the new rules through 2026. The new credit provides $10,000 annually for up to four years (for tax years 2027-2031) to physicians practicing in defined rural communities (populations under 75,000, including small municipalities or unincorporated areas). Physicians must apply through the Alabama Statewide Area Health Education Center Program Office, which verifies eligibility and issues certification before claiming the credit.

HB 27 expands Alabama's catastrophe savings accounts to cover additional expenses beyond insurance deductibles, including storm-resistant home upgrades (like reroofing) and FORTIFIED endorsement costs for hurricane-prone properties. It sets contribution limits based on a homeowner's deductible amount - capping total contributions at $15,000 or less for most residents, and up to $250,000 for self-insured homeowners. The bill maintains tax benefits, allowing deductions for contributions and exempting account interest from state income tax, while requiring distributions to cover only eligible disaster-related costs. This directly affects Alabama homeowners with residential properties in hurricane-risk areas who use these accounts to prepare for or recover from severe storms.

HB 28 would create a state income tax credit for Alabama restaurants that donate oyster shells to approved recycling programs. Restaurants can claim up to $2,000 per year (based on $1 for every 50 pounds of shells donated), with a total annual cap of $100,000 across all participating businesses. Credits are awarded on a first-come, first-served basis and are only available for tax years 2026 through 2030. The Alabama Department of Revenue will collaborate with conservation officials to designate eligible recycling programs.