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HB 399ALABAMASession 2026rsState BillBecame law

Enacted

Alabama caps data center tax abatements at 20 years with 10-year local investment extension

Original title: Tax abatements for data processing centers, exemption period limited, collection of certain taxes on purchases required, sunset date extended

Last action · April 17, 2026: EnactedSponsor: Leigh Hulsey

Companion · SB 265same policy, Senate version

Bill progressHistory & official text ↓

Introduced

Committee

Floor Vote

Passed

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What This Bill Does

Alabama restricts for data processing centers granted on or after January 1, 2027, to a maximum 20-year base exemption period, while allowing an additional 10-year extension if operators commit to qualified local investments. The act also directs construction-related transaction tax proceeds into the State General Fund and takes effect June 1.

Why it matters

Data processing center operators gain eligibility for extended tax exemptions up to 30 years by funding local infrastructure, broadband, water upgrades, or education support, while failing to meet these commitments triggers back-taxes and interest.

Background

Data processing centers in Alabama have historically utilized tax abatements under the Tax Incentive Reform Act to encourage large-scale technological infrastructure investments. context

Who It Affects

Groups the bill's text affects, as described in the record. Being affected is not a position for or against it.

Directly affected

Data processing center operators

Operators face a 20-year base cap on tax abatements with an opportunity for a 10-year extension tied to binding local investment commitments.

Directly affected

Benefited local communities

Local counties and municipalities receive required investments in infrastructure, broadband, water systems, or educational support.

Directly affected

State General Fund

The fund receives proceeds collected from construction-related transaction taxes for data processing centers.

Key Facts

You don't have to trust us. Each fact below is taken straight from the official document - click any one to see the exact passage, highlighted in the original.

Frequently Asked Questions

What is the maximum tax abatement period for data processing centers under the new rules?

The base maximum exemption period is 20 years, which can be extended by an additional 10 years for a total of 30 years if specific local investment commitments are met.

What happens if a data center operator fails to fulfill its local investment agreement?

The 10-year abatement extension is revoked, reverting the exemption back to 20 years, and the operator must repay all state taxes abated during the extended period plus interest.

Where do construction-related transaction tax proceeds for data processing centers go?

They are distributed to the State General Fund.

What else do you want to know?

News Coverage

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Votes, people, money & the original source

Where This Stands

Current status: Became law.

Procedural history

30 actions

Apr 17, 2026HouseEnrolled
Enacted
Apr 9, 2026HouseEnrolled
Delivered to Governor
Apr 9, 2026Senate
Signature Requested
Apr 9, 2026Senate
Signature Requested
Apr 9, 2026Senate
Signature Requested
Apr 9, 2026House
Enrolled

Show 24 earlier actions

Apr 9, 2026House
Ready to Enroll
Apr 9, 2026House
Ready to Enroll
Apr 9, 2026House
Hulsey Motion to Concur In and Adopt Senate Amendment - Adopted Roll Call 1357
Apr 9, 2026SenateFloor
Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 1315
Apr 9, 2026Senate
Jones motion to Adopt - Adopted Roll Call 1314
Apr 9, 2026Senate
Jones 1st Amendment Offered
Apr 9, 2026Senate
Jones motion to Table - Adopted Voice Vote
Apr 9, 2026Senate
Fiscal Responsibility and Economic Development 1st Amendment Offered
Mar 17, 2026Senate
Read for the Second Time and placed on the Calendar
Mar 17, 2026SenateCommittee
Reported Out of Committee Second House
Mar 17, 2026Senate
Fiscal Responsibility and Economic Development 1st Amendment
Mar 11, 2026SenateCommittee
Pending Committee Action in Second House
Mar 11, 2026SenateIntroduced
Read for the first time and referred to the Senate Committee on Fiscal Responsibility and Economic Development
Mar 10, 2026House
Engrossed
Mar 10, 2026HouseFloor
Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 832
Mar 10, 2026House
Motion to Adopt - Adopted Roll Call 831
Mar 10, 2026House
Hulsey 1st Amendment Offered
Mar 10, 2026House
Motion to Adopt - Adopted Roll Call 830
Mar 10, 2026House
Transportation, Utilities and Infrastructure Engrossed Substitute Offered
Mar 10, 2026House
Third Reading in House of Origin
Feb 10, 2026House
Read for the Second Time and placed on the Calendar
Feb 10, 2026HouseCommittee
Reported Out of Committee House of Origin
Feb 5, 2026HouseCommittee
Pending Committee Action in House of Origin
Feb 5, 2026HouseIntroduced
Read for the first time and referred to the House Committee on Transportation, Utilities and Infrastructure

Version history

Only one version on file - nothing to compare yet. As later stages (committee substitute, engrossed, enrolled) are captured, the redline appears here.

What This Bill Does

Who It Affects

Key Facts

Frequently Asked Questions

News Coverage

Where This Stands

Procedural history

Version history

Voting Record

Lobbying Activity

Full breakdown

Sponsors

Discoveries

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