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HB245 ENROLLED
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HB245
I3JHTW6-3
By Representative Collins
RFD: Ways and Means Education
First Read: 14-Jan-26
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HB245 Enrolled
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First Read: 14-Jan-26
Enrolled, An Act,
Relating to rural health care; to amend Sections
40-18-551, 40-18-552, 40-18-557, and 40-18-559, Code of
Alabama 1975, as created by Act 2025-404 of the 2025 Regular
Session, to further provide for the oversight of the Rural
Hospital Investment Program Board, to expand the definition of
utility tax, and to repeal Section 40-18-560, Code of Alabama
1975, relating to rulemaking authority of the State Treasurer
and the Rural Hospital Investment Program Board.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 40-18-551, 40-18-552, 40-18-557 and
40-18-559, Code of Alabama 1975, are amended to read as
follows:
"§40-18-551
For the purposes of this article, the following terms
have the following meanings:
(1) BOARD. The Rural Hospital Investment Program Board.
(2) DEPARTMENT. The Alabama Department of Revenue.
(3) ELIGIBLE RURAL HOSPITAL. A hospital that meets the
requirements set out in Section 40-18-553.
(4) ELIGIBLE TAXES. Financial institution excise tax,
income tax, insurance premium tax, and utility tax.
(5) FINANCIAL INSTITUTION EXCISE TAX. The taxes levied
and collected pursuant to Chapter 16.
(6) INCOME TAX. The taxes levied and collected pursuant
to Chapter 18.
(7) INSURANCE PREMIUM TAX. The taxes levied and
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(7) INSURANCE PREMIUM TAX. The taxes levied and
collected pursuant to Chapter 4A of Title 27.
(8) PROGRAM. The Rural Hospital Investment Program.
(9) QUALIFIED DONATION. An unrestricted transfer of
funds for eligible rural hospitals.
(10) QUALIFIED DONOR. Any person, third party, or
organization that makes a qualified donation to an eligible
rural hospital.
(11) RURAL HOSPITAL. A rural general acute care, rural
emergency, or critical access hospital determined to be
located in a rural area as set out in Section 40-18-553(a)(2).
(12) TAX YEAR. The calendar year for which annual
income is reported to the State of Alabama by a person that
makes a qualified donation.
(13) THIRD PARTY. An entity classified as a tax-exempt
nonprofit organization by the Internal Revenue Service which
participates in soliciting, administering, or managing
qualified donations for eligible rural hospitals.
(14) UTILITY TAX. The taxes levied and collected
pursuant to Articles 3 and 4 of Chapter 21 of this title and
the tax levied in Sections 40-21-50, 40-21-51, and 40-21-53 ."
"§40-18-552
(a) The Rural Hospital Investment Program Board is
established within the Office of the State Treasurer department
to oversee the development and operation of the Rural
Hospital Investment Program. The board shall consist of the
following members:
(1) The Governor, or his or her designee.
(2) The State Treasurer, or his or her designee.
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(2) The State Treasurer, or his or her designee.
(3) The Commissioner of Revenue, or his or her
designee.
(4) The President Pro Tempore of the Senate, or his or
her designee.
(5) The Speaker of the House of Representatives, or his
or her designee.
(6) Two representatives of the Alabama Hospital
Association, appointed by the association.
(7) Two representatives of business, appointed by the
Business Council of Alabama.
(b) Members shall be appointed by June 13, 2025.
(c)(b)(1) The appointing authorities for the members
appointed pursuant to subdivisions (a)(6) and (a)(7) shall
each appoint one initial member to the board for a term of two
years and one initial member to the board for a term of four
years.
(2) Members subsequently appointed to the board
pursuant to subdivisions (a)(6) and (a)(7) shall each serve
for a term of four years.
(3) A vacancy on the board of a representative
appointed pursuant to subdivisions (a)(6) and (a)(7) shall be
filled by the respective appointing authority before the next
scheduled meeting of the board, and the appointee shall serve
for the remainder of the unexpired term.
(d)(c) Designees or appointees to the board shall be
inclusive and reflect the racial, gender, geographic, urban,
rural, and economic diversity of the state.
(e)(d)(1) No later than July 14, 2025, the Governor, or
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(e)(d)(1) No later than July 14, 2025, the Governor, or
his or her designee, shall call the first meeting of the
board, at which meeting the members shall elect a chair.
(2)(1) The board shall meet at least once a year in
Montgomery, Alabama, but thereafter shall meet as necessary to
conduct its business.
(3)(2) A quorum for a meeting of the board shall be
five members.
(4)(3) The board may meet by electronic means, so long
as there is a quorum of participating members.
(5)(4) The legislative members of the board shall be
entitled to their legislative compensation, per diem, and
travel expenses for each day they attend a meeting of the
board pursuant to Section 49 of the Constitution of Alabama of
2022.
(6)(5) The nonlegislative members of the board shall
serve without compensation but may be reimbursed for necessary
expenses in attending meetings of the board pursuant to the
policies of his or her respective appointing authority.
"§40-18-557
(a) A taxpayer may claim a tax credit to offset
eligible taxes for each qualified donation as provided in this
section.
(1) For a donor who is a single individual, a head of
household, or married, filing a separate return: an amount
equal to 100 percent of the qualified donations the taxpayer
made during the tax year for which the credit is claimed, not
to exceed fifteen thousand dollars ($15,000).
(2) For a donor who is married, filing a joint return:
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(2) For a donor who is married, filing a joint return:
100 percent of the qualified donations the taxpayer made
during the tax year for which the credit is claimed, not to
exceed thirty thousand dollars ($30,000).
(3)a. For a qualified donor that is taxed as an
electing pass-through entity under Section 40-18-24.4: 100
percent of the qualified donations the taxpayer made during
the tax year for which the credit is claimed, not to exceed
four hundred fifty thousand dollars ($450,000).
b. The tax credit shall be taken by the taxpayer on a
pro rata basis according to the percentage of ownership in the
entity or the limitations set forth in this section, whichever
is less. In the case of a donor that is taxed as a corporation
under the Internal Revenue Code: an amount equal to 100
percent of the qualified donations the taxpayer made during
the tax year for which the credit is claimed, or 75 percent of
the corporation's income, excise, or insurance premium tax,
not to exceed the amount of the corporation's income, excise,
or insurance premium tax liability, whichever is less, with a
contribution limit each tax year of five hundred thousand
dollars ($500,000).
(4)a. A credit for utility taxes may be claimed in an
amount equal to 100 percent of total qualified donations
during the taxable year for which the credit is claimed. In
order to claim a credit against utility tax payments levied in
Articles 3 and 4 of Chapter 21 of this title under this
subdivision, a taxpayer must have a utility tax direct pay
permit from the department pursuant to its requirements. A
taxpayer shall provide a copy of the utility tax direct pay
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taxpayer shall provide a copy of the utility tax direct pay
permit to each utility provider from whom the taxpayer
receives services. A taxpayer holding a direct pay permit
shall notify the department of each qualified donation
pursuant to the department's procedures. To the extent credits
are available, the department shall reserve credits for a
taxpayer and provide written confirmation thereof.
b. Upon receipt of a qualified donation, the recipient
shall submit to the department certification of the donation
received from a taxpayer under this subdivision pursuant to
procedures established by the department within 30 business
days after receipt of each donation. Upon receipt of the
certification from the recipient, the department shall provide
written confirmation to the taxpayer within 30 business days
that the reserved credits of the taxpayer in the amounts of
qualified donations actually made and not yet claimed are
eligible to be used on its monthly utility tax direct pay
return. A taxpayer may not use a credit against the utility
tax until such time as the department provides the
notification described in the previous sentence.
(b)(1) The total amount of the tax credit for a tax
year may not exceed the taxpayer's tax liability or, for
financial institutions, the state portion of the taxpayer's
financial institution excise tax liability.
(2) Any unused tax credit may be carried forward for up
to three years following the qualified donation but shall not
be transferable.
(c)(1) The tax credits may be claimed beginning January
1, 2026, for the 2026 tax year.
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1, 2026, for the 2026 tax year.
(2) Any unused tax credit may be carried forward for up
to three years following the qualified donations but shall not
be transferable.
"§40-18-559
(a) The department shall adopt rules pursuant to the
Alabama Administrative Procedure Act on or before January 1,
2026, as necessary to administer and implement this article ,
inclusive of the responsibility of the board . The rules shall
provide for all of the following:
(1) That the tax credits will not reduce the
distribution for the Alabama Special Mental Health Fund.
(2) That the tax credits shall be awarded based on the
order in which the credits are requested.
(b) The department shall prescribe the method by which
the tax credits are to be issued to eligible taxpayers."
Section 2. Section 40-18-560, Code of Alabama 1975,
relating to the rulemaking authority of the State Treasurer
and the Rural Hospital Investment Program Board, is repealed.
Section 3. This act shall become effective immediately.
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Section 3. 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 22-Jan-26.
John Treadwell
Clerk
Senate 03-Feb-26 Passed
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