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HB601 INTRODUCED
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HB601
JPEIXFN-1
By Representatives Jackson, Daniels, Clarke, Lands, Jones,
Drummond, Warren, McClammy, Rafferty, Morris, Hendrix, Travis,
Datcher, Sellers, McCampbell, Moore (M), Bracy, Tillman,
Lawrence, Chestnut, Hassell, Hall, Ensler, Hollis, Gray
RFD: Ways and Means General Fund
First Read: 10-Mar-26
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JPEIXFN-1 01/26/2026 TEW ()TEW 2025-3532
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First Read: 10-Mar-26
SYNOPSIS:
This bill creates the Rural Hospital
Sustainability and Innovation Grant Program Act to
provide targeted financial assistance, modernization
funding, and restructuring support to preserve
essential rural hospital services and adapt care
delivery models. This bill also creates the Hospital
Transformation and Innovation Fund.
A BILL
TO BE ENTITLED
AN ACT
Relating to preserving rural hospital services; to
create the Rural Hospital Sustainability and Innovation Grant
Program Act; to establish a grant program to provide financial
relief to certain hospitals; to create the Hospital
Transformation and Innovation Fund.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. This act shall be known as the Rural
Hospital Sustainability and Innovation Grant Program Act.
Section 2. As used in this act, unless otherwise
specified or unless the context requires otherwise, the
following terms will have the following meanings:
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following terms will have the following meanings:
(1) DEPARTMENT. The Alabama Department of Public
Health.
(2) ELIGIBLE HOPSITAL. A critical access hospital,
rural acute care hospital, or other facility designated as
rural as set out in Section 40-18-551(3), Code of Alabama
1975.
(3) TRANSFORMATION PROJECT. A capital or operational
initiative that improves sustainability, care quality, or
access in an eligible hospital.
Section 3. (a) There is created the Hospital
Transformation and Innovation Fund in the State Treasury.
(b) The fund is subject to appropriations by the
Legislature and gifts, grants, and other donations received by
the department for the programs and grants described in this
act. The department may not spend appropriations for the
purposes other than those listed in this act.
(c) Eligible uses for the fund include, but are not
limited to:
(1) Conversion to Rural Emergency Hospital designation;
(2) Infrastructure upgrades or right-sizing of
services; and
(3) Expansion of telehealth and outpatient care models.
(d) Preference shall be given to projects demonstrating
financial viability and local health impact.
(e) Amounts in the fund shall be budgeted and allotted
in accordance with Sections 41-4-80 through 41-4-69 and
Sections 41-19-1 through 41-19-12, Code of Alabama 1975.
Section 4. (a) Subject to funds being available for
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Section 4. (a) Subject to funds being available for
such purpose, the department shall administer a grant program
to provide immediate financial relief to eligible hospitals
facing any of the following:
(1) Imminent closure.
(2) Loss of essential services.
(3) Operational insolvency.
(b) Applicants must submit financial data and a
stabilization plan.
(c) Grant awards shall be time-limited and contingent
on compliance with recovery milestones.
(d) The eligible hospital will comply with any rules
adopted by the department related to the grant.
(e) There shall be a limit of one grant per eligible
hospital per year. The amount of the grant shall be determined
by the department based on the amount of available funds.
Section 5. (a) All grant applicants under this act must
demonstrate how their project aligns with the following:
(1) A current community health needs assessment.
(2) Input from local stakeholders including patients,
providers, and public officials.
(b) The department may require letters of community
support or public input documentation.
(c) The grant recipient shall comply with any rules
adopted by the department related to the grant.
Section 6. (a) The department shall offer grants to
hospitals that:
(1) Enter into collaborative agreements with regional
health systems;
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health systems;
(2) Establish shared services or staffing models; and
(3) Maintain local service availability while improving
financial sustainability.
(b) Partnerships must retain meaningful local
governance.
Section 7. (a) All grant recipients must submit annual
reports on:
(1) Use of funds;
(2) Service levels and quality indicators;
(3) Financial performance; and
(4) Any other metrics adopted by the department related
to the grant.
(b) The department shall publish an annual program
impact report to the Legislature by the third day of each
regular session following the establishment of the grant
program.
Section 8. This act shall become effective on October
1, 2026.
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