Public utilities; maximum fees payable to directors of certain public utility corporations increased, terms of certain directors extended

Energy

Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor: Brown (C)
Last action: 2026-04-17
Official status: Enacted
Effective date: 2026-04-16

Plain English Breakdown

Checked against official source text during the last sync.

Public Utilities; Increased Fees and Extended Terms

This act increases the maximum fees that can be paid to directors of public utility corporations in small municipalities, extends their terms if certain conditions are met, and updates some technical language.

What This Bill Does

Increases the fee for the chair of a board from $600 to $1,200 per meeting attended, up to $7,200 annually, for municipalities with fewer than 5,000 residents.
Raises the fee for other board members in small municipalities from $400 to $600 per meeting attended, up to $7,200 annually.
Extends the term of any board member whose term would end before the extended terms of the mayor or city council members if those terms were previously extended by law.

Who It Names or Affects

Directors and chairs of boards in municipalities with fewer than 5,000 residents.
Municipalities that have a population under 5,000 according to the most recent federal census.

Terms To Know

Public utility corporation: A company or organization that provides public services like water, gas, and electricity in a municipality.
Board of directors: The group of people who manage the operations of a corporation or organization.

Limits and Unknowns

This act only applies to municipalities with fewer than 5,000 residents.
It does not specify how many meetings are held annually, so the actual amount paid may vary.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

NRC94J8-1

R 637

Adopted

Plain English: NRC94J8-1 01/21/2026 ZAK (H) HSE 2025-3011 House County and Municipal Government Reported Substitute for HB141 Page 1 A BILL TO BE ENTITLED AN ACT Relating to public utilities; to amend Section 11-50-313, Code of Alabama 1975, to increase the maximum amount of fees that may be paid to members of boards of directors of certain public corporations operating utilities; to extend the terms of certain board members; and to make nonsubstantive, technical revisions to update the existing code language to current style.

NRC94J8-1 01/21/2026 ZAK (H) HSE 2025-3011 House County and Municipal Government Reported Substitute for HB141 Page 1 A BILL TO BE ENTITLED AN ACT Relating to public utilities; to amend Section 11-50-313, Code of Alabama 1975, to increase the maximum amount of fees that may be paid to members of boards of directors of certain public corporations operating utilities; to extend the terms of certain board members; and to make nonsubstantive, technical revisions to update the existing code language to current style.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA: Section 1.
Section 11-50-313, Code of Alabama 1975, is amended to read as follows: "§11-50-313 (a)(1) Each corporation that is formed or the that has amended its certificate of incorporation of which is amended under pursuant to this article shall have a board of directors which that shall constitute be the governing body of the corporation , which board shall .
Except as otherwise provided by law, the board shall consist of at least three members.

This amendment summary is using official source text because generated interpretation was skipped for this run.

Bill History

2026-04-17 House
Enacted
2026-04-09 Senate
Motion to Read a Third Time and Pass - Adopted Roll Call 1320 (Yeas 33, Nays 0)
2026-04-09 House
Delivered to Governor
2026-04-09 Senate
Signature Requested
2026-04-09 Senate
Signature Requested
2026-04-09 Senate
Signature Requested
2026-04-09 House
Enrolled
2026-04-09 House
Ready to Enroll
2026-04-09 House
Ready to Enroll
2026-03-10 Senate
Read for the Second Time and placed on the Calendar
2026-03-10 Senate
Reported Out of Committee Second House
2026-02-26 House
Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 638 (Yeas 94, Nays 0)
2026-02-26 House
Motion to Adopt - Adopted Roll Call 637 (Yeas 97, Nays 0)
2026-02-26 House
Third Reading in House of Origin (Yeas 99, Nays 0)
2026-02-26 Senate
Pending Committee Action in Second House
2026-02-26 Senate
Read for the first time and referred to the Senate Committee on County and Municipal Government
2026-02-26 House
Engrossed
2026-02-26 House
County and Municipal Government Engrossed Substitute Offered
2026-01-21 House
Read for the Second Time and placed on the Calendar
2026-01-21 House
Reported Out of Committee House of Origin
2026-01-13 House
Pending Committee Action in House of Origin
2026-01-13 House
Read for the first time and referred to the House Committee on County and Municipal Government

Official Summary Text

This act amends Section 11-50-313, Code of Alabama 1975, relating to municipal utilities boards, to: (1) for municipalities with a population less than 5,000, increase the director's fees that may be paid to the chair of a board from $600 to $1,200 and to all other board members from $400 to $600, not to exceed from $4,800 to $7,200; and (2) for boards located in these municipalities for which an act of the Legislature extended the terms of the mayor and members of the city council, provide that the term of any board member which will expire before the extended terms of the mayor or any city council member is extended by one year.

Current Bill Text

Read the full stored bill text

HB141 ENROLLED
Page 0
HB141
NRC94J8-3
By Representative Brown
RFD: County and Municipal Government
First Read: 13-Jan-26
PFD: 09-Jan-26
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HB141 Enrolled
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PFD: 09-Jan-26
Enrolled, An Act,
Relating to public utilities; to amend Section
11-50-313, Code of Alabama 1975, to increase the maximum
amount of fees that may be paid to members of boards of
directors of certain public corporations operating utilities;
to extend the terms of certain board members; and to make
nonsubstantive, technical revisions to update the existing
code language to current style.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 11-50-313, Code of Alabama 1975, is
amended to read as follows:
"§11-50-313
(a)(1) Each corporation that is formed or the that has
amended its certificate of incorporation of which is amended
under pursuant to this article shall have a board of directors
which that shall constitute be the governing body of the
corporation , which board shall . Except as otherwise provided
by law, the board shall consist of at least three members.
(2) The governing body of any municipality that has
authorized the creation of a corporation as provided in this
article may increase the membership of the board of directors
from three to five members. In the event the governing body
elects to increase the membership of the board of directors
from three to five members, one member added to the board
shall be appointed for an initial term of four years and the
remaining newly added member for an initial term of six years,
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remaining newly added member for an initial term of six years,
and thereafter the term of each additional director shall be
six years.
(3) In any Class 4 municipality which that has adopted
a mayor-council form of government pursuant to Chapter 43B
(commencing with Section 11-43B-1) of this title , any
corporation formed pursuant to this chapter may have a
governing body which shall consist that consists of seven
members.
(4) Any corporation , located in any Class 5
municipality , which that is governed by a local law enacted in
the 1995 Regular Session may have a governing body which shall
consist that consists of seven members.
(5) The governing body of any municipality that has a
population of less than 5,000 according to the most recent
federal decennial census and that has authorized the creation
of a corporation as provided in this article may increase the
membership of the board of directors from five to seven
members. In the event the governing body elects to increase
the membership of the board of directors from five to seven
members, one member added to the board shall be appointed for
an initial term of four years and the remaining newly added
member for an initial term of six years, and thereafter the
term of each additional director shall be six years.
(b)(1) The directors of a corporation shall be elected
by the governing body of the municipality in regard to which
the corporation was formed, and they shall be elected to hold
office for staggered terms. The first term of office of one
director shall be two years, of another director shall be four
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director shall be two years, of another director shall be four
years, and of a third director shall be six years, as shall be
designated at the time of their election, and thereafter the
term of office of each director shall be six years.
(2) In any municipality: (i) with a population of less
than 5,000 according to the most recent federal decennial
census; (ii) that has authorized the creation of a corporation
as provided in this article; and (iii) for which the term of
the mayor and members of the municipal governing body were
extended by an act of the Legislature; the term of any board
member which will expire before the mayor's and members' of
the municipal governing body extended terms expire shall be
extended by one year.
(b)(c) No A fee shall may not be paid to any a director
for services rendered with respect to a sanitary sewer system.
(d)(1) Except as otherwise provided by this subsection,
In in any instance where the system or systems owned and
operated by the a corporation are any one or more of a water
system, a gas system, and an electric system, the chair of the
board of directors may, at the discretion of the governing
body of the municipality with respect to which the corporation
was primarily organized, may be paid a director's fee in an
amount to be set and established by the governing body in an
amount not exceeding six hundred dollars ($600) per meeting
attended, not to exceed seven thousand two hundred dollars
($7,200) per year, for one system and ten dollars ($10) each
meeting for each additional system. Each member of the board
of directors, director other than the chair , may be paid a
director's fee in an amount to be set and established by the
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director's fee in an amount to be set and established by the
governing body in an amount not exceeding four hundred dollars
($400) per meeting attended, not to exceed four thousand eight
hundred dollars ($4,800) per year for the system.
Notwithstanding the foregoing, where
(2) the municipality with respect to which the
corporation was primarily organized has In all municipalities
with a population of less than 5,000 inhabitants according to
the most recent official federal decennial census, the maximum
total amount of director's fees which that may be paid to the
chair of its the board of directors shall may not exceed six
hundred dollars ($600) one thousand two hundred dollars
($1,200) per meeting attended , not to exceed seven thousand
two hundred dollars ($7,200) per year, and the . The maximum
total amount of director's fees which that may be paid to any
other member of the board of directors shall may not exceed
four hundred dollars ($400) six hundred dollars ($600) per
meeting attended, not to exceed four thousand eight hundred
dollars ($4,800) seven thousand two hundred dollars ($7,200)
per year.
(3) In all cities having populations municipalities
with a population of not less than 6,500 nor more than 8,500
according to the most recent federal decennial census, the
members of the board of directors, including the chair, may
each be paid a director's fee. The chair of the board shall be
compensated in an amount not to exceed exceeding six hundred
dollars ($600) per meeting attended, not to exceed seven
thousand two hundred dollars ($7,200) per year. Each director ,
other than the chair , shall be compensated in an amount not to
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other than the chair , shall be compensated in an amount not to
exceed exceeding four hundred dollars ($400) per meeting
attended, not to exceed four thousand eight hundred dollars
($4,800) per year.
(4) In all cities having populations municipalities
with a population of not less than 12,500 nor more than 13,500
according to the most recent federal decennial census, the
chair of the board of directors, at the discretion of the
board, may be paid a director's fee in an amount not exceeding
six hundred dollars ($600) per meeting attended, not to exceed
seven thousand two hundred dollars ($7,200) per year , and each
member of the board . Each director other than the chair may be
paid a director's fee in an amount not exceeding four hundred
dollars ($400) per meeting attended, not to exceed four
thousand eight hundred dollars ($4,800) per year.
(5) In all cities having populations municipalities
with a population of not less than 23,000 nor more than 27,000
according to the most recent federal decennial census, the
chair of the board of directors, at the discretion of the
board, may be paid a director's fee in an amount not exceeding
six hundred dollars ($600) per meeting attended, not to exceed
seven thousand two hundred dollars ($7,200) per year , and each
member of the board . Each director other than the chair may be
paid a director's fee in an amount not exceeding four hundred
dollars ($400) per meeting attended, but not to exceed four
thousand eight hundred dollars ($4,800) per year.
(6) In all cities municipalities located in Jefferson
County, Alabama, the chair of the board of directors, at the
discretion of the board, may be paid a director's fee in an
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discretion of the board, may be paid a director's fee in an
amount not exceeding four hundred fifty dollars ($450) each
month for one system and fifty dollars ($50) per month for
each additional system ; and each member of the board . Each
director other than the chair may be paid a director's fee in
an amount not exceeding four hundred dollars ($400) each month
for one system and forty dollars ($40) per month for each
additional system.
(7) In all the cities municipalities in Franklin
County, including all Franklin County water or sewer board or
utility system or boards, or both, located therein, the
director's fee shall not exceed six hundred dollars ($600)
each month for each system. The board in the cities
municipalities of Franklin County may also establish a chair's
fee in a higher amount by a vote of such the body not to
exceed seven hundred fifty dollars ($750) per meeting.
(8) All members of the board of directors of any
corporation organized pursuant to this article shall be
reimbursed for actual expenses incurred in and about the
performance of their duties pursuant to this article.
Notwithstanding the foregoing, in In a Class 7 municipality,
the chair of the board of directors of a corporation formed
under this chapter which owns and operates a water system, an
electric system, and a sewer system, at the discretion of the
governing body of the municipality with respect to which the
corporation was primarily organized, may be paid a director's
fee in an amount to be set and established by the governing
body. Each member of the board of directors, director other
than the chair , may be paid a director's fee in an amount to
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than the chair , may be paid a director's fee in an amount to
be set and established by the governing body.
(e) In addition to any other compensation authorized,
all members of the board of directors of any corporation
organized pursuant to this article shall be reimbursed for
actual expenses incurred in the performance of their duties
pursuant to this article.
(f)(1) (c) Except as provided herein, any Any officer of
the a municipality shall be eligible for appointment with
respect to which a corporation was formed may be appointed and
may serve as a member of the board of directors of the
corporation for the term for which he or she is appointed or
during his or her tenure as a municipal officer, whichever
expires first, and may receive a fee for his or her services,
provided it the appointment is first approved by the board of
directors. At no time shall the board consist of more than two
officers of the municipality. The directors of the corporation
shall be elected by the governing body of the municipality,
and they shall be elected to hold office for staggered terms.
The first term of office of one director shall be two years,
of another director shall be four years, and of a third
director shall be six years, as shall be designated at the
time of their election, and thereafter the term of office of
each director shall be six years. The governing body of any
municipality which has heretofore or hereafter authorized the
creation of a corporation as provided in this article may
increase the board of directors from three to five members to
serve according to all the conditions and terms set forth in
this article. In the event the governing body elects to
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this article. In the event the governing body elects to
increase the board of directors from three to five members,
one member added to the board shall be appointed for a term of
four years and the remaining member for a term of six years,
and thereafter the term of each director shall be six years.
At no time shall the board
(2)a. Except as provided in paragraph b., a board may
not consist of more than two officers of the municipality with
respect to which the corporation was formed.
b. If the membership of a board has increased pursuant
to subsection (a), the board may not consist of more than
three officers of the municipality with respect to which the
corporation was formed . Any officer of the municipality
appointed to serve as a member of the board of directors shall
serve for the term for which he or she is appointed or during
his or her tenure as a municipal officer, whichever expires
first.
(3) Notwithstanding the foregoing any provision of this
subsection , the certificate of incorporation of a corporation
formed, or an amendment to the certificate heretofore or
hereafter adopted pursuant to this article may restrict or
prohibit service on the board of directors by officers of the
municipality with respect to which the corporation was formed .
(g)(d) Nothing in Act 2007-458 and nothing in
subsection (f) as amended by Act 2010-580 (a)(4) shall apply
to the City of Montgomery or the City of Prichard Water and
Sewer Board.
(h)(e) The amendatory provisions of this section as
provided in Act 2010-580 and the provisions of Act 2007-458
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provided in Act 2010-580 and the provisions of Act 2007-458
shall not affect the current board director and member fees in
the City of Birmingham.
(f) The governing body of any municipality which has a
population of less than 5,000 according to the most recent
federal census and which has heretofore or hereafter
authorized the creation of a corporation as provided in this
division may increase the board of directors from five to
seven members to serve according to all the conditions and
terms set forth in this division. In the event the governing
body elects to increase the board of directors from five to
seven members, one member added to the board shall be
appointed for a term of four years and the remaining member
for a term of six years, and thereafter the term of each
director shall be six years. At no time shall the board
consist of more than three officers of the municipality. Any
officer of the municipality appointed to serve as a member of
the board of directors shall serve for the term for which he
or she is appointed or during his or her tenure as a municipal
officer, whichever expires first. "
Section 2. This act shall become effective immediately.
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Section 2. This act shall become effective immediately.
________________________________________________
Speaker of the House of Representatives
________________________________________________
President and Presiding Officer of the Senate
House of Representatives
I hereby certify that the within Act originated in and
was passed by the House 26-Feb-26, as amended.
John Treadwell
Clerk
Senate 09-Apr-26 Passed
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