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AlabamaHB1632026 Regular SessionHouseWALLET

Property Insurance and Energy Reduction Act; allow financing of projects through private funding

Sponsored By: Troy Stubbs (Republican)

Enacted

Counties & Municipalities

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Bill Overview

Analyzed Economic Effects

9 provisions identified: 3 benefits, 2 costs, 4 mixed.

Debt safeguards for property owners and buyers

A lender that signs the required consent cannot demand early repayment solely because the owner uses this assessment financing. Sellers must give buyers written notice of an unpaid program assessment by the time buyers sign the sale contract. The notice identifies the improvement-related assessment and explains that it is not based on property value.

Easier payment-history rules for property owners

The law removes the requirement for three years of on-time property taxes and related assessments. Applicants must still have paid property taxes and same-bill assessments, keep mortgages current, and clear disqualifying involuntary liens through financing. The supplied sources disagree on the 20% property-value assessment cap: the detailed provision removes it, while the summary retains it. Under the summary's version, a qualified audit waives the cap when annual energy or insurance savings exceed annual repayments.

More building upgrades qualify for financing

Eligible projects include energy and water savings, water-quality improvements, on-site renewable power, batteries, certain generators, and electric-vehicle chargers. Storm protection includes wind upgrades, flood elevation or diversion, and safe rooms meeting ICC-500 or equivalent standards. Improvements must serve qualifying property; unlisted resilience measures need local government approval. New buildings and buildings converted to new uses can qualify. Improvements already installed and operating before the application can also qualify.

Local programs offer no government guarantees

Local governments retain program oversight and can administer programs directly or hire for-profit or nonprofit administrators. A required Program Guidebook sets lending standards, procedures, owner attestations, and application, consent, lien, assignment, and enforcement forms. Administrators can amend that guidebook without separate local government approval; the prior statutory state-oversight provision is repealed. Assessment agreements must say local government approval does not validate application information or guarantee project success or eligibility. They must also identify the private lender's enforcement authority; local officials and employees are shielded from official-capacity liability for covered program decisions and actions.

Property owners must document upgrade benefits

Before signing an assessment agreement, applicants must document intended public benefits from conservation or lower health or emergency-response risks. Existing-building energy or water projects need an energy analysis and a statement explaining their intended benefit. Resilience projects need certification of their resilience purpose. New construction needs a certified study addressing the required energy, water, renewable-resource, or resilience standards. The Program Guidebook sets analysis, installer, and certification requirements.

Property debt follows sales and foreclosure

Assessments create recorded property liens covering principal, interest, and penalties; the debt stays with the property. The lien starts on the earliest assessment-agreement, summary-memorandum, or assessment-notice recording date, after all lienholders provide signed, recorded consent and subordination agreements. It ranks ahead of other liens except tax liens and local special assessments, but uses no property-tax collection process. Private lenders or their assigns alone handle billing, collection, and enforcement; the financing agreement and state law govern default remedies and late-payment charges. Before enforcement, all mortgage and lienholders must receive at least 60 days' notice; foreclosure excludes future installments and neither speeds up nor erases them.

Owners can finance costs with capped fees

Financing can cover construction, installation, land rights, utilities, equipment, permits, and related project costs. Studies, design, legal work, inspections, title costs, and debt-issuance expenses can also be financed. Eligible costs include financing fees, interest, and repayment of assessments, increasing the owner's repayment amount. Local governments can charge administrative fees only to cover program costs. That fee cannot exceed 1% of financed principal or $50,000, whichever is less.

Private property loans lose public backing

Beginning June 1, 2026, state and local public funds cannot fund or repay loans between private lenders and eligible owners. Governments cannot pledge their full faith and credit to back program liens. Financing instruments are not general government debt and are payable from assessments on benefited properties. The law removes the prior local-government borrowing route for improvements and repeals the statutory loss reserve fund provision.

Private upgrade loans for eligible property owners

Beginning June 1, 2026, Alabama replaces its prior program with the Property Insurance Reduction and Capital Expenditure Act. Local governments can offer private project financing in designated areas for commercial, industrial, agricultural, and multifamily properties. Residential properties with fewer than five units are excluded, and local governments cannot force owners to participate. Owners and capital providers apply together; owners accept a property assessment and lien, and all mortgagees and secured lienholders must consent. After the agreements are signed, the local government imposes the lien and assigns assessment or payment rights to the private lender.

Sponsors & Cosponsors

Sponsor

  • Troy Stubbs

    Republican • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 362 • No: 0

Senate vote • 3/5/2026

Motion to Read a Third Time and Pass - Adopted Roll Call 723

Yes: 30 • No: 0

Senate vote • 3/5/2026

Third Reading in Second House

Yes: 30 • No: 0

House vote • 2/26/2026

Third Reading in House of Origin

Yes: 101 • No: 0 • Other: 1

House vote • 2/26/2026

Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 618

Yes: 99 • No: 0 • Other: 5

House vote • 2/26/2026

Motion to Adopt - Adopted Roll Call 617

Yes: 102 • No: 0 • Other: 2

Actions Timeline

  1. Enacted

    3/17/2026House

  2. Delivered to Governor

    3/10/2026House

  3. Signature Requested

    3/10/2026Senate

  4. Third Reading in Second House

    3/5/2026Senate

  5. Motion to Read a Third Time and Pass - Adopted Roll Call 723

    3/5/2026Senate

  6. Ready to Enroll

    3/5/2026House

  7. Enrolled

    3/5/2026House

  8. Reported Out of Committee Second House

    3/3/2026Senate

  9. Read for the Second Time and placed on the Calendar

    3/3/2026Senate

  10. Third Reading in House of Origin

    2/26/2026House

  11. County and Municipal Government Engrossed Substitute Offered

    2/26/2026House

  12. Motion to Adopt - Adopted Roll Call 617

    2/26/2026House

  13. Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 618

    2/26/2026House

  14. Engrossed

    2/26/2026House

  15. Read for the first time and referred to the Senate Committee on County and Municipal Government

    2/26/2026Senate

  16. Pending Committee Action in Second House

    2/26/2026Senate

  17. Read for the Second Time and placed on the Calendar

    2/5/2026House

  18. Reported Out of Committee House of Origin

    2/4/2026House

  19. Read for the first time and referred to the House Committee on County and Municipal Government

    1/13/2026House

  20. Pending Committee Action in House of Origin

    1/13/2026House

Bill Text

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