Rural areas; create a tiered rural classification schedule

SB362 INTRODUCED
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SB362
KHRWZU5-1
By Senators Kitchens, Gudger, Chesteen, Williams, Livingston,
Shelnutt, Elliott, Barfoot, Carnley, Singleton, Chambliss,
Hatcher, Bell, Price, Sessions, Smitherman, Woods, Kelley,
Stewart, Figures
RFD: Fiscal Responsibility and Economic Development
First Read: 10-Mar-26
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KHRWZU5-1 03/09/2026 JWB (L)JWB 2026-534
Page 1
First Read: 10-Mar-26
SYNOPSIS:
This bill would establish a framework for the
classification of rural areas into tiers and would
authorize state agencies to establish a tiered rural
classification as needed.
A BILL
TO BE ENTITLED
AN ACT
Relating to state government; to establish a framework
for the classification of rural areas into tiers for use by
state governmental agencies as needed.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. For purposes of this act, the following
terms have the following meanings:
(1) AGRICULTURAL ECONOMIC CHARACTER. A community where
the local economy, land use patterns, or employment base is
predominantly oriented toward farming, ranching, forestry,
aquaculture, or related agricultural production and support
activities, without regard to the community's proximity to a
metropolitan area or whether agriculture is the sole economic
activity of the community. Indicators of a community with an
agricultural economic character include, but are not limited
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agricultural economic character include, but are not limited
to, the following characteristics:
a. A significant portion of land is used or zoned for
agricultural or forestry purposes.
b. A measurable share of employment or business
activity is related to farming, livestock, timber, poultry,
row crops, or agricultural services.
c. Agricultural infrastructure, such as feed mills,
processing facilities, grain storage, farm supply businesses,
or forestry operations, is present.
d. Labor patterns are seasonal, cyclical, or otherwise
consistent with agricultural production.
(2) INDUSTRIAL ECONOMIC CHARACTER. A community where
the economy is primarily supported by manufacturing,
processing, fabrication, logistics, or distribution activities
typically located outside dense urban centers. The term
includes both legacy and modern industrial activities and may
exist within small towns or rural employment centers.
Indicators of a community with an industrial economic
character include, but are not limited to, the following
characteristics:
a. A concentration of employment in manufacturing,
processing, or industrial operations.
b. A presence of industrial parks, manufacturing
plants, or large-scale production facilities.
c. An economic reliance on a limited number of
industrial employers.
d. A presence of infrastructure designed to support
industrial activity, such as freight rail access, heavy
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industrial activity, such as freight rail access, heavy
trucking corridors, or utility-intensive facilities.
(3) METROPOLITAN COUNTY. A county included within a
metropolitan statistical area as designated by the United
States Office of Management and Budget.
(4) RESOURCE-BASED ECONOMIC CHARACTER. A community
where the economy is substantially dependent on the
extraction, cultivation, harvesting, or processing of natural
resources. The term may overlap with agricultural or
industrial economic character and is common in forested,
coastal, and mineral-rich regions of this state. Indicators of
a community with a resource-based economic character include,
but are not limited to, the following characteristics:
a. A measurable share of employment or business
activity related to timber, mining, quarrying, energy
production, fisheries, or water resources.
b. An economic sensitivity to commodity markets or
natural resource cycles.
c. A presence of geographic isolation driven by
proximity to natural resources rather than population centers.
d. A lack of economic diversification outside
resource-related industries.
(5) RURAL AREA. A municipality, unincorporated
community, or census tract designated under Alabama's tiered
rural classification system based on population, population
density, geographic isolation, commuting patterns, access to
essential services, and local economic character. A
municipality, unincorporated community, or census tract may be
considered rural regardless of the countywide metropolitan
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considered rural regardless of the countywide metropolitan
classification.
(6) URBANIZED AREA. A geographic area designated as
urban by the United States Census Bureau based on population
size, housing unit density, and land use patterns that include
densely developed cores and adjacent nonresidential urban
land.
Section 2. Rural areas may be classified into the
following tiers based on the following criteria for use by
governmental entities:
(1) Tier One - Remote and Deep Rural Communities.
Municipalities, unincorporated communities, or census tracts
that meet any of the following criteria:
a. The community has a population of 2,500 or fewer
residents or a population density of 50 or fewer individuals
per square mile.
b. The community is located outside of an urbanized
area as defined by the United States Census Bureau.
c. The community demonstrates geographic isolation.
d. The community presents limited access to health
care, broadband, education, workforce opportunities, or other
essential services.
e. The community exhibits constrained local
governmental or administrative capacity.
(2) Tier Two - Rural Communities. Municipalities,
unincorporated communities, or census tracts that meet any of
the following criteria:
a. The community has a population of 10,000 or fewer
residents or a population density of 200 or fewer individuals
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residents or a population density of 200 or fewer individuals
per square mile.
b. The community is not part of an urbanized area or
maintains a predominantly agricultural, industrial, or
resource-based economic character.
(3) Tier Three - Rural-Adjacent or Underserved
Communities. Municipalities, unincorporated communities, or
census tracts that meet any of the following criteria:
a. The community has a population of 20,000 or fewer
residents or a population density of 500 or fewer persons per
square mile.
b. The community is located within or adjacent to a
metropolitan county but demonstrates rural conditions, such as
limited infrastructure, extended travel time to essential
services, workforce shortages, or other economic distress.
Section 3. Rural classification pursuant to Section 2
shall be determined at the municipal, unincorporated
community, or census tract level and shall not be based solely
on countywide population totals, metropolitan status, or
inclusion within a metropolitan statistical area as designated
by the United States Office of Management and Budget.
Section 4. (a) A state agency may reference or
otherwise categorize communities using the tiered rural
classification schedule under Section 2 to do any of the
following:
(1) Establish eligibility thresholds for activities of
the agency.
(2) Prioritize funding, grants, incentives, or
technical assistance.
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technical assistance.
(3) Adjust matching requirements, cost-sharing
agreements, or administrative flexibility.
(4) Target resources to the most remote or underserved
communities.
(b) If an agency uses the tiered rural classification
schedule, the agency shall give priority consideration to
remote and deep rural communities where applicable.
(c) A community may exhibit more than one economic
character. Determinations shall be based on predominant
conditions using the most recent data available from federal,
state, or local sources.
Section 5. An agency that administers any program that
references the tiered rural classification schedule may adopt
rules to implement the tiered classification system into the
specific program the agency administers. These rules may
govern the use of population data, census designations,
commuting patterns, land use data, and other objective
indicators to assist with classification.
Section 6. This act shall become effective on October
1, 2026.
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