The Alabama Legislature has reached the halfway point of the 2026 Regular Session. As expected, the pace continues to accelerate, with several bills advancing to the opposite chamber and a number of new proposals introduced.

Cash Acceptance Mandate Introduced
Rep. Ben Harrison, R-Rogersville, has introduced HB526, which would require businesses with six or more employees to accept cash for in-person purchases and prohibit them from requiring customers to pay by credit card. The mandate would apply broadly to retailers and service providers, with limited exceptions.

ARA has communicated with the bill sponsor to emphasize that retailers adopt payment policies for operational and safety reasons. Some choose credit-only models to reduce theft risks, while others prefer cash to avoid credit card processing fees on small-dollar transactions. We believe small businesses should retain the flexibility to determine which forms of payment they accept, and customers may decide whether they wish to shop with a business based on those policies.

Bill Introduced to Update Employee Drug and Alcohol Testing Notice Requirements
Sen. Robert Stewart, D-Selma, introduced SB327 to revise Alabama’s employee drug and alcohol testing law. The bill requires employers to provide both verbal and written notice of their drug or alcohol testing policy to employees upon hire and to post the policy in a prominent employee access area.

The legislation also mandates that employers give at least 10 days’ advance notice of any policy changes using specified delivery methods, including paper copy, electronic transmission, and workplace posting.

Additionally, before terminating an employee for a confirmed positive test in violation of company policy, employers would be required to encourage the employee to seek rehabilitation. The bill clarifies that it does not create a legal duty to conduct drug or alcohol testing and does not otherwise require, restrict, or discourage employer testing programs. The act would take effect October 1, 2026. For employees hired before October 1, 2026, employers would be required to provide updated notice by November 1, 2026.

Seafood Labeling Bill Receives Favorable Report from Second House Committee
Legislation sponsored by Rep. Chip Brown, R-Mobile, to expand Alabama’s seafood country-of-origin labeling requirements for food service establishments received a favorable report this week from the House Ways and Means General Fund Committee after being re-referred.

As previously reported, HB444 would expand Alabama’s existing seafood country-of-origin labeling requirements for food service establishments. In addition to maintaining the State Health Officer’s authority to investigate verified complaints, the measure authorizes the Commissioner of Agriculture and Industries to independently and randomly test seafood served by food service establishments to ensure compliance and report violations for enforcement. The legislation also updates menu and signage disclosure requirements, retains a graduated penalty structure, and includes a five-point reduction in posted health score for violations. The bill provides that establishments acting in reliance on a supplier’s attestation of origin would be held harmless.

Additional SNAP Waiver Bill Filed
Rep. Reed Ingram, R-Matthews, has introduced HB492, which would require the Alabama Department of Human Resources (DHR) to seek a federal waiver to prohibit the purchase of candy, soda, prepared desserts, and energy drinks with SNAP benefits. The bill defines candy and soda similarly to prior proposals, while also defining “energy drinks” based on caffeine content and marketing claims and “prepared desserts” as processed, ready-to-eat, pre-packaged sweet foods.

If the waiver is granted, DHR and the Department of Revenue would coordinate implementation with SNAP-authorized retailers. If denied, the waiver request would be resubmitted annually.

HB492 follows the introduction and committee advancement of SB57, reflecting continued legislative interest in restricting certain SNAP-eligible purchases.

SNAP Expansion Proposal Carried Over
HB44 by Rep. Donna Givens, R–Loxley, was scheduled for consideration by the House Ways and Means General Fund Committee but was carried over indefinitely by the Chair.

As previously reported, the bill would require the Alabama Department of Human Resources to seek federal approval to allow SNAP benefits to be used to purchase hot rotisserie chickens, which are currently excluded under federal guidelines.

Second Amendment Sales Tax Holiday Passes House
HB360 by Rep. Chris Sells, R-Greenville, which would establish an annual Second Amendment Sales Tax Holiday, passed the House of Representatives this week following lengthy floor debate. The bill would designate the last weekend in August as a sales tax holiday for firearms, ammunition, and firearm accessories, and allows local governments the option to participate by providing corresponding local sales tax relief.

Debate centered largely on the policy’s overall need and its projected fiscal impact. According to the fiscal note, the exemption is estimated to reduce annual sales tax receipts to the Education Trust Fund by approximately $386,000. The bill now moves to the Senate for consideration.

Bill to Create Overtime Income Tax Deduction Introduced
Rep. James Lomax, R-Huntsville, has introduced HB527 to amend Alabama tax code to create a temporary individual income tax deduction for qualified overtime compensation. Beginning with tax years on or after January 1, 2025, and continuing through December 31, 2027, taxpayers could deduct up to $1,000 in overtime pay received during the taxable year. The bill specifies that “qualified overtime compensation” would be defined and calculated in accordance with applicable federal tax code provisions. If enacted, the act would take effect October 1, 2026.

Expanding First-Degree Arson Definition Passes House
HB328 by Rep. David Faulkner, R-Birmingham, passed the House unanimously this week. The bill would expand the definition of first-degree arson to include fires or explosions committed in conjunction with, or to facilitate, a theft.

Rep. Faulkner has shared that the legislation and issue was underscored by a December 2025 arson at the Homewood Walmart in his district that caused more than $5 million in damage and forced an extended closure.

Under current law, first-degree arson is a Class A felony requiring intentional damage to a building by fire or explosion when another person is present and the offender knows of, or recklessly disregards, that person’s safety. HB328 now moves to the Senate for consideration.

Legislation Introduced to Repeal 2025 Hemp Law and Tighten Restrictions
Sen. Tom Butler, R-Madison, has introduced SB321 to repeal the 2025 law regulating the sale of consumable hemp products and instead classify psychoactive cannabinoids derived from hemp, including Delta-8, Delta-9, and Delta-10 THC, as Schedule I controlled substances. The proposal follows significant legislative efforts last year to rein in hemp product regulation.

Under current law, certain consumable hemp products containing psychoactive cannabinoids may be sold to individuals age 21 and older, subject to location restrictions, as well as testing and labeling requirements. SB321 would eliminate that framework and impose criminal penalties for possession of these substances, aligning them with existing marijuana possession laws.

Consumer Data Privacy Bill Adopted and Amended by House
HB351 by Rep. Mike Shaw, R-Vestavia Hills, was adopted by the full House this week, with an additional amendment to the substitute version previously approved by the House Commerce and Small Business Committee.

As previously reported, the substitute bill maintains core consumer data rights, including the ability to access, correct, delete, and obtain a copy of personal data, as well as the right to opt out of the sale of personal data, targeted advertising, and certain profiling. It also reflects stakeholder input by establishing a May 1, 2027 effective date, clarifying that enforcement authority rests solely with the Attorney General, refining applicability thresholds, expanding certain exemptions, and simplifying opt-out provisions.

The House amendment further narrows the scope of the bill by removing certain data types and entities from enforcement. HB351 now moves to the Senate for consideration.