The 2026 Alabama legislative session focused heavily on workforce development, energy infrastructure, and tax relief to bolster the state's economic landscape. 

BUSINESS & ECONOMIC DEVELOPMENT

• Workforce Development Package: A major priority was bridging the gap between industry and the classroom. Two pieces of legislation address instructor shortages, align education with workforce needs, and support Alabama’s long‑term economic development goals. 
  • TRAIN (Talent Readiness and Industry Needs) Act: Allows companies to loan experienced employees to teach career-technical education (CTE) courses, establishes a Workforce Teaching Certificate for qualified individuals and provides tax credits for these donations.
  • Expedited Certification: Creates an expedited certification pathway for experienced CTE teachers relocating to Alabama to address instructor shortages.
  • Powering Growth Package: Aimed at boosting energy security and economic competitiveness, streamlines permitting for electric transmission projects and creates an Energy Infrastructure Bank to finance projects that drive industrial growth.
  • Industrial Development Boards: Grants industrial development boards in mid-sized municipalities expanded powers to issue bonds and manage development properties. 
• Childcare Tax Credits: Provides childcare tax credits for employers (up to $600,000 annually) and grants for nonprofit childcare providers to support working families. 

 
EDUCATION

• Budget Increases: The Education Trust Fund reached a record $12.4 billion, including a 2% pay raise for educators and funding for the AL CHOOSE Act (Creating Hope and Opportunity for our Students Education) savings accounts.

 
MILITARY & VETERANS

• Teacher Certification: Creates a temporary teaching certificate for military veterans to help fill the teacher shortage.
• Recruitment Support: Requires high schools to designate a day for the ASVAB (a mandatory, multiple-aptitude test used by the U.S. military to determine enlistment eligibility and job placement) test for students interested in military service.
• Tax Exemptions: Exempts the first $5,000 of inactive duty training income from state income tax for National Guard members. 

 
TOURISM

• Grants and Infrastructure: Creates a grant program for boosting state tourism economies affected by global trade disruptions and foreign travel slowdowns; creates a competitive grant program to fund tourism-related infrastructure projects; creates international and domestic marketing campaigns; establishes the Tourism Sector Economic Monitoring.

BUSINESS & INDUSTRY

• Utility Reform: Expands the Public Service Commission (PSC) from three to seven members and freezes base electric rates until 2029 to provide cost stability for businesses.
• Data Privacy: Requires businesses that collect consumer information to update website disclosures and vendor contracts by May 1, 2027.
• Small Business Support: Allows businesses to round cash transactions to the nearest five cents and ensure credit card processing fees are excluded from sales tax calculations.
• Tax Relief: State income tax deduction of up to $1,000 for qualified overtime pay effective through 2028. 

 
ECONOMIC DEVELOPMENT & TOURISM

• Small Craft Spirits: Creates new license categories for small wineries and distilleries, allowing facility tours to boost local tourism.
• Procurement Exemptions: Exempts the Alabama Industrial Development Training (AIDT) Institute from certain state procurement laws, streamlining its ability to support industry training.
• Grocery Tax Holiday: A state sales tax holiday on groceries approved for May and June 2026. 

 
PUBLIC SAFETY

• School Safety: Tougher felony penalties were established for making hoax threats against schools or hospitals.
• Law Enforcement Support: A new scholarship program created for dependents of law enforcement officers.
• Stricter Penalties: Increased penalties for fleeing from police and discharging firearms into school buildings. 

 
MILITARY

• Spousal Preference: Provides hiring preference points for spouses of active-duty military members applying for state, local, and private sector jobs.
• National Guard Benefits: Expanded the National Guard Educational Assistance Program to include workforce training programs.

 
TAX SAVINGS FOR SMALL BUSINESSES

• Businesses are no longer required to pay state sales tax on the portion of a transaction dedicated to credit card processing fees.
• For tax years 2026–2028, Alabamians can subtract up to $1,000 of qualified overtime pay from their taxable income, a move intended to incentivize labor participation.

 
REGULATORY AND WORKFORCE IMPACTS

• Compliance Costs: The Alabama Personal Data Protection Act requires businesses processing the data of more than 25,000 residents to implement new data security and transparency measures. It’s central enforcement by the Attorney General (rather than individual lawsuits) is designed to minimize litigation risks.
• Workforce Pipeline: The creation of the K-12 Accountability Council mandates annual "return on investment" studies for the education system. Tracking metrics like industry-recognized credentials and employment in high-demand sectors, the state aims to better align student outcomes with business needs.

The legislature will reconvene in early 2027 for an organizational session as they enter a new legislative quadrennium.

More than two hundred bills were passed into law that addressed economic development, public safety, healthcare, taxation, education among other topics and issues. Below is a glance at some of the major new laws.

 

BUDGETS

Passing the state’s two operating budgets is the only thing lawmakers are constitutionally required to do each year.  A record 2026 $3.8 billion General Fund and $9.9 billion education spending plans was signed by Gov. Ivey.  

 

TAXES

• Reduced a penny from the state’s sales tax on most grocery items, bringing it to 2% starting Sept. 1. The cut amounts to approximately $122 million a year. The tax cut on groceries came instead of extending a 2023 law that took the state’s income tax off hourly workers’ overtime earnings.
• state will now require pharmacy benefit managers to reimburse independent pharmacies for drugs an amount equal to or above what is paid by the Alabama Medicaid Agency. That currently includes a dispensing fee of $10.64 per prescription.
• The Alabama Farmers Federation will soon be able to sell health plans to farmers. Premiums cannot be increased or coverage cancelled because of a major medical event. About a dozen other states allow similar plans.
• Increased funding for K-12 students who cost more to educate; those with special needs or whose first language isn’t English.
• The state can now borrow an additional $500 million for new prison construction.

 

ANTI-CRIME BILLS

Seven of Gov. Kay Ivey’s priority 8 anti-crime bills package were passed.  They include: 

• Expands law enforcement officers’ civil and criminal immunity.
• Bans at the state level devices known as Glock switches, firearm modifications that allow semi-automatic weapons to fire at rates similar to that of fully automatic weapons. 
• Expanding electronic monitoring for juvenile delinquents.
• Enhanced criminal penalties for impersonating an officer.
• A constitutional amendment on the 2026 statewide primary election ballot that would expand the list of criminal offenses for which judges may deny bail, including acts of shooting into occupied dwellings and conspiring to commit murder.
• Enhancing criminal penalties for various crimes when a firearm is involved.

And while not a stand-alone bill, lawmakers approved in the state General Fund budget an additional $3 million for the state’s Metro Area Crime Suppression Unit, a coalition of federal, state and local law enforcement officers tasked with improving public safety and reducing crime in Montgomery, and with the additional funding, potentially in other metro areas.

 

EDUCATION

• Record $12.2 billion education spending package
• Targeted funding for students with greater needs (RAISE Act)
• Paid parental leave and workers’ compensation for educators
• Statewide cell phone ban in classrooms
• Move On When Ready Act allows high schoolers to enroll full-time in college
• REACH (Restoring Educational Advancement of Completing High School) offers second chance to earn a high school diploma
• Cut teacher paperwork burden
• “Success Sequence” curriculum required in K-12 schools
  •  Complete their education
  • Secure full-time employment
  • Postpone parenthood until after marriage
• Increased funding for the CHOOSE ACT education savings account
• Principal stipend program narrowed to high-needs schools

 

ECONOMIC DEVELOPMENT

• Powering Growth Package Act,  is  designed to accelerate energy infrastructure projects to boost industrial development in Alabama, particularly its rural areas. the bill will establish the Alabama Energy Infrastructure Bank, a division of the State Industrial Development Authority charged with financing energy infrastructure projects that support economic development. The law authorizes the agency to issue up to $1 billion in bonds to provide loans and other financial assistance to eligible energy infrastructure projects.

Highlights of the Powering Growth package include:

• Streamlined permitting processes to accelerate project timelines
• Strategic support for energy supply chains to ease material shortages and regulatory delays
• Expansion of power-ready industrial sites to attract investment and create jobs
• Establishment of the Energy Infrastructure Bank to finance high-impact energy and industrial projects

 

IMMIGRATION BILLS

• Mandates local law enforcement verifies arrested individuals’ immigration status and criminalizes the transportation of undocumented immigrants into the state.
• Strengthen laws prohibiting undocumented immigrants from voting and require law enforcement to collect DNA samples from undocumented immigrants in custody.

 

PORTABLE BENEFITS FOR GIG WORKERS

• Allows for independent contractors to maintain portable benefit accounts that follow them to other contract work and allow for companies to contribute to said accounts.  

 

SMARTPHONE CONTENT FILTER

• Effective October, all smartphones and tablets will be required to have obscene content filters automatically enabled for minors. The legislation is designed to better guard minors from obscene, sexual and graphic content accessible via smart devices.

 

HEMP REGULATIONS

• Caps THC at 10 milligrams per serving for edibles and beverages, bans any smokable hemp products, prohibits use for those under age 21 and limits THC product availability to specialty shops or dedicated areas of grocery stores of at least 14,000 square feet
• Impose a 10% tax on the sale of all THC products, establishes a licensing requirement for retailers and imposes severe civil and criminal penalties for retailer violations.

 

SHARK ALERT SYSTEM

• Geographic-based alerts will now be broadcast to phones near confirmed shark attacks, a collaboration between the Alabama Department of Conservation and Natural Resources and other local and state agencies.

 

GUN STORAGE LAW

• Designed to facilitate the separation between an individual and their firearm in potential moments of crisis.  This bill establishes a legal framework required for gun and ammo stores, as well as law enforcement officers, to temporarily hold lawfully possessed firearms at the request of the owner for a given period.

Laws and regulations affect your business, so you should make it your business to know who represents you in the Alabama Legislature and in Congress. 

 

Click here to meet Montgomery’s delegation.

The governing body of Montgomery County is the Montgomery County Commission, consisting of five members who are elected by districts. Each Commissioner is elected to a four-year term and represents approximately 45,000 constituents. The Chairperson and Vice Chair are selected by a majority vote of the Commission.

The City of Montgomery consists of a Mayor-Council system of government. Both the Mayor and Council are elected by the people to a four year term. The current term is from 2023-2027. 

 

Click here to meet your local elected officials.