AL — State Policy Updated 2026-07-17

Alabama

Chapter 9B abatements Chapter 9G abatements Investment Credit Brownfield abatements Notes on clean energy conditions Statewide legislation Moratoriums / pauses Zoning / land use restrictions Environmental and community constraints

1) Incentive programs

Chapter 9B abatements (Tax Incentive Reform Act of 1992)

  • Statutory authority: Code of Alabama Sections 40-9B-1 through 40-9B-13, with Department of Revenue guidance for Chapter 9B abatements. The program covers industrial development projects, including data processing centers. Alabama Department of Revenue, accessed 2026-07-17
  • Eligible taxes: Chapter 9B abatements can cover state sales and use taxes, non-educational county and city sales and use taxes, non-educational state/county/city property taxes, and mortgage/recording taxes on qualifying property conveyances. Alabama Department of Revenue, accessed 2026-07-17
  • Data processing center thresholds before 2027: The pre-2027 structure remains 10 years for projects up to $200 million within 10 years, 20 years for projects over $200 million but not over $400 million within 10 years, and 30 years for projects over $200 million within 10 years and over $400 million within 20 years. Alabama Department of Revenue, accessed 2026-07-17
  • 2026 change - HB399 / Act 2026-573: HB399 was enacted on April 17, 2026 as Act 2026-573 and became effective June 1, 2026. It changes data-center abatements granted on or after January 1, 2027 by generally limiting data processing center abatements to 20 years, while allowing an additional 10 years, up to 30 years total, only if the project meets capital-investment thresholds and signs a binding local-investment agreement approved by the Department of Revenue, Department of Commerce, and affected local government. LegiScan, 2026-04-17; Alabama Legislature HB399 enrolled, 2026-04-09; Alabama Department of Revenue, accessed 2026-07-17
  • Qualified local investments for the extra 10 years: HB399 defines eligible community investments as infrastructure improvements such as roads, bridges, or public facilities; broadband in unserved areas; water or wastewater system upgrades; and local education support for public K-12 schools, public charter schools, career technical centers, or community college programs serving the benefited community. Alabama Legislature HB399 enrolled, 2026-04-09
  • Large-load tax limitation beginning 2027: For abatements granted on or after January 1, 2027 to data processing centers with total peak demand of 100 MW or greater, HB399 bars state non-educational ad valorem tax abatements from extending beyond the date the private-use industrial property is placed in service. It also limits state construction-related transaction tax abatements after placed-in-service, except for specified computers, servers, software, computing/network/storage equipment, cooling systems, and other operations equipment that remain eligible during the applicable maximum period; the governor may allow maximum-period state construction-tax abatements for qualifying 100 MW-plus projects in targeted counties. Alabama Legislature HB399 enrolled, 2026-04-09
  • Sunset extension: HB399 extends the data-center abatement application sunset from July 31, 2028 to July 31, 2032. The Legislative Services Agency fiscal note says this reduces potential state and local receipts by an undetermined amount for data centers locating or expanding after the old sunset and before the new one. Alabama Legislative Services Agency fiscal note, 2026-03-17
  • Savings clause: HB399 does not apply its new restrictions to incentives that are part of a project executed before the act’s effective date, or to expansions of that project for a 10-year period after the effective date. Alabama Legislature HB399 enrolled, 2026-04-09
  • Technical incentive-code update - HB393: HB393 was enacted April 17, 2026 and became effective June 1. It replaced outdated Accelerate Alabama references with the current CatALyst economic-development plan and updated NAICS references in Chapters 9B and 9G and the Alabama Jobs Act from the 2012 to the 2022 classifications. It did not create a new data-center incentive or change the existing Chapter 9B definition of a data processing center. Alabama Legislature HB393 enrolled, 2026-04-07; LegiScan, 2026-04-17

Chapter 9G abatements (renovation, modification, replacement)

  • Statutory authority: Title 40, Chapter 9G, the Alabama Reinvestment Act of 2015, authorizes abatements for qualifying reinvestment projects. Alabama Department of Revenue, accessed 2026-07-17
  • Eligible taxes and term: Chapter 9G can abate state sales/use taxes except the unabated 0.75% state portion, non-educational county/city sales/use taxes, state property taxes except the unabated 1 mill portion, and non-educational county/city property taxes for up to 20 years. Alabama Department of Revenue, accessed 2026-07-17
  • Eligibility threshold: Chapter 9G requires at least $2 million in capital investment for additions, expansions, improvements, renovations, reopenings, rehabilitations, or replacements. Alabama Department of Revenue, accessed 2026-07-17

Investment Credit (state income tax credit)

  • Credit value and duration: Alabama’s Investment Credit can provide up to 1.5% annually of qualified capital investment for up to 10 years, or up to 15 years for projects in targeted/jumpstart counties or certain underrepresented-company projects. Alabama Department of Revenue, accessed 2026-07-17
  • Taxes eligible for credit: The credit can offset Alabama income tax, financial institution excise tax, insurance premium tax, utility taxes paid, and utility license tax for utilities. Alabama Department of Revenue, accessed 2026-07-17

Brownfield abatements (Chapter 9C)

Notes on clean energy conditions

2) Restrictions and moratoriums

Statewide legislation

  • 2026 session final outcome: The principal enacted data-center-specific measures were HB399/Act 2026-573, addressing abatements and taxes, and SB270/Act 2026-610, addressing PSC review of utility contracts for very large data-center loads. HB393 made technical updates to the incentive statutes, and HB475 made broader PSC and electric-rate changes. No statewide data-center moratorium, water/energy reporting mandate, or separate data-center siting ban was enacted before the regular session adjourned April 9. Alabama Legislature HB399 enrolled, 2026-04-09; Alabama Legislature SB270 enrolled, 2026-04-09; Alabama Legislature HB393 enrolled, 2026-04-07; Alabama Legislature HB475 enrolled, 2026-04-01
  • SB265 did not become the enacted tax vehicle: SB265, the Senate tax-abatement companion, passed the Senate but was carried over to the call of the chair in the House on April 9, 2026; HB399 became the enacted bill instead. LegiScan, 2026-04-09
  • HB403 did not become the enacted utility vehicle: HB403, the House utility-contract companion, was engrossed on March 17, 2026; SB270 became the enacted bill instead. LegiScan, 2026-03-17; LegiScan, 2026-04-17
  • HB392/SB268 died; HB475 became the PSC-restructuring law: The February package also proposed replacing statewide election of the three commissioners with gubernatorial appointment through HB392/SB268. HB392 reached the House calendar and SB268 remained in committee, but neither passed. A later substitute for HB475 instead expanded the PSC from three to seven district-based members, created a governor-appointed Secretary of Energy beginning in 2027, required an annual public utility meeting, and froze regulated electric retail base rates in place on October 1, 2026 through January 1, 2029. HB475 was enacted April 3 and took effect June 1; Governor Ivey named the four initial additional commissioners on June 17 for terms beginning January 18, 2027. LegiScan HB392, 2026-02-10; LegiScan SB268, 2026-02-05; Alabama Legislature HB475 enrolled, 2026-04-01; LegiScan HB475, 2026-04-03; Governor Kay Ivey, 2026-06-17

Moratoriums / pauses

  • Birmingham: On March 3, Birmingham adopted a 180-day moratorium on new large or hyperscale data-center applications; it excluded facilities below 20 MW and complete applications already accepted, including Nebius and the DC BLOX expansion. The pause runs into September 2026 even though permanent zoning standards were adopted June 9. Birmingham Times, 2026-03-03; City of Birmingham, accessed 2026-07-17
  • Leeds: The Leeds City Council unanimously approved a one-year moratorium on data center development in June 2026, halting permits and approvals during the pause. WBRC, 2026-06-09
  • Homewood: On June 22, the City Council unanimously imposed a 12-month moratorium on data centers larger than 1 MW, extendable for six more months; the city reported no pending applications. City of Homewood, 2026-06-22; WBRC, 2026-06-22
  • Cullman: The City Council adopted Resolution 2026-116 on June 22, imposing a 12-month moratorium while it studies zoning and quality-of-life effects. Proposed Ordinance 2026-42 would prohibit data centers in city limits, but the council took no action and referred it to the Planning Commission; it therefore should not be treated as enacted as of July 17. Cullman Tribune, 2026-06-23
  • Morgan County: The County Commission adopted a one-year moratorium on data centers and cryptocurrency-mining facilities on June 23, blocking consideration of a proposed roughly 15-acre VoltCore Bitcoin-mining site near Somerville while officials develop rules; more than 450 residents had signed a petition raising noise, environmental, road, and power concerns. Data Center Dynamics, 2026-06-29
  • Springville: The City Council imposed a proactive one-year moratorium on July 6 while the Planning and Zoning Commission drafts regulations; officials said no project was pending. The Trussville Tribune via AOL, 2026-07-07
  • Jefferson County - administrative pause, not a formal ordinance: County officials said June 24 that unincorporated Jefferson County was under a “de facto moratorium”: the county would not accept data-center proposals until its land-use plan and development rules address the use. Officials were drafting an ordinance, so this should not be described as an enacted legislative moratorium as of July 17. BirminghamWatch, 2026-06-24
  • Rogersville - proposed, not enacted as of July 17: Town officials were still considering a moratorium aimed at large water users, including data centers, while the water system was at capacity and had stopped issuing new construction meters; officials said no data-center developer had approached the town. WAFF, 2026-07-10; WHNT via AOL, 2026-07-15

Zoning / land use restrictions (local)

  • Birmingham ordinance approved June 9, 2026: Birmingham City Council approved 20 conditions for future hyperscale data centers, including at least five acres, a 500-foot residential setback and 1,000-foot major-transit setback, utility-capacity and demand disclosures, pre- and post-construction noise studies, closed-loop cooling, lighting controls, and written notice within 500 feet. Routine fossil-fuel onsite generation is barred, but backup generators may run during outages or emergencies and for daytime testing, and solar panels and fuel cells are allowed; the ordinance removed the special-exception/public-hearing requirement for hyperscale projects that satisfy the conditions. City of Birmingham, 2026-06-09; City of Birmingham, accessed 2026-07-17
  • Birmingham non-retroactivity: The city states that the June 9 rules apply to future projects and expansions and cannot be applied retroactively to already approved permits, including the Nebius project as currently permitted. City of Birmingham, accessed 2026-07-17
  • Hoover: The City Council changed its zoning ordinance in May so future or expanded data centers are conditional uses requiring Planning Commission and City Council review and public input rather than administrative permitting; officials reported no pending application and chose this case-by-case process instead of a moratorium. The city lists the change as Ordinance 26-2701. Hoover Sun, 2026-05-14; City of Hoover ordinance registry, accessed 2026-07-17
  • Columbiana: Columbiana approved zoning restrictions aimed at gaining more control over proposed data centers, with reported attention to zoning codes, dimensional standards, landscape buffers, power standards, water standards, and business-license criteria. WBRC, 2026-02-18
  • Bessemer / Project Marvel: The proposed Bessemer data center campus was revised in February 2026 to expand to 1,600 acres, with the additional property requiring rezoning and approvals by Planning and Zoning and City Council. WBRC, 2026-02-09
  • Bessemer rezoning vote: On April 21, 2026, Bessemer City Council approved rezoning nearly 900 acres for the proposed large-scale data center; local reporting described continuing community concerns over water, power, utilities, land use, and lack of detail about the project and end users. WBRC, 2026-04-22

Environmental and community constraints (local)

  • Bessemer community opposition: February 2026 reporting described opposition to Project Marvel, citing an 18-building campus, a reported $14 billion-plus investment scale, requests for substantial water service, and environmental concerns including potential impacts to species and water resources. Community Sentinel, 2026-02-18
  • Birmingham / Oxmoor opposition: Residents in Birmingham’s Oxmoor area raised concerns about noise, water use, energy demand, transparency, property values, and neighborhood character around Nebius’s proposed BHM01 project. BirminghamWatch, 2026-04-24
  • Nebius litigation and construction: Construction was underway by July 8. On July 10, a judge allowed consolidated Oxmoor-neighbor claims challenging the approval process to proceed, and the Greater Birmingham Humane Society filed a separate action seeking judicial review of approvals and permits because of concerns about effects on animals at its nearby future campus. These cases were pending as of July 17; the allegations are not adjudicated findings. WBRC, 2026-07-08; WBRC, 2026-07-10; WBRC, 2026-07-10
  • Prichard / Project Gateway: Hundreds attended a June 11 town hall on Edged US’s proposed 8 MW project and questioned power, environmental effects, and data privacy. The developer says the project would use waterless closed-loop cooling and remains subject to permitting, infrastructure, customer, and regulatory approvals. FOX10, 2026-06-11; Project Gateway, accessed 2026-07-17
  • Calvert / Mobile County: Residents organized a petition opposing Beacon Data Centers’ proposed Calvert Infrastructure Hub and asked for environmental and community-impact review, citing water, traffic, infrastructure, rural-character, and property-value concerns. Beacon says the project is in planning, engineering, and community engagement and would use closed-loop cooling. Lagniappe, 2026-07-03
  • Tallassee historic mill proposal: In April, two prospective buyers expressed interest in redeveloping the Tallassee Redevelopment Authority’s riverfront mill site as a 10 MW data center that could grow to 20 MW. No formal plan was before the city; residents raised noise, utility-rate, historic-preservation, and Tallapoosa River concerns, and the mayor said experts and an eventual public vote would precede any decision. WSFA via WBRC, 2026-04-29
  • Bessemer NDA disclosure: After environmental groups threatened litigation over public-record requests, Bessemer released the Project Marvel NDA in July. The agreement, amended in February 2026, restricted release of project identities, plans, and studies and required destruction of developer-designated confidential material on request or expiration; the reporting did not establish that records had actually been destroyed. WBHM / Inside Climate News, 2026-07-14

3) Local governance

4) Legislative and regulatory activity (2024-2026)

  • HB399 / Act 2026-573 - enacted: Final status is enacted April 17, 2026. The act limits future abatement duration, adds a community-investment pathway for the extra 10 years, changes treatment of 100 MW-plus data centers, and extends the application sunset to July 31, 2032. LegiScan, 2026-04-17; Alabama Legislature HB399 enrolled, 2026-04-09; Alabama Department of Revenue, accessed 2026-07-17
  • SB270 / Act 2026-610 - enacted: SB270 was enacted April 17, 2026 and becomes effective October 1, 2026. It adds Section 37-4-22.1, defining a large load data center customer as one with expected total peak demand of at least 150 MW at one or more contiguous parcels, meeting the data processing center definition and operating solely for data processing; PSC approval of the retail electric service contract must consider recovery of incremental costs and positive benefits to other utility customers. Its final fiscal note found no direct state or local funding impact. Alabama Legislature SB270 enrolled, 2026-04-09; Alabama Legislative Services Agency SB270 fiscal note, 2026-05-04
  • HB393 - enacted technical update: HB393 was enacted April 17 and updated plan and NAICS references across economic-development statutes without creating a new data-center incentive or changing the Chapter 9B data-processing-center definition. Alabama Legislature HB393 enrolled, 2026-04-07; LegiScan, 2026-04-17
  • HB475 - enacted PSC and rate framework: HB475 was enacted April 3 and effective June 1. It expands the PSC to seven members through appointments and phased district elections, creates a Secretary of Energy beginning January 2027, bars increases in regulated electric retail base rates from October 1, 2026 through January 1, 2029, and requires an annual public meeting covering cost trends, reliability, infrastructure, economic development, and grid security. Alabama Legislature HB475 enrolled, 2026-04-01; LegiScan, 2026-04-03
  • PSC Docket 33709 opened; implementation pending: On June 29, the PSC opened an active generic proceeding to establish how it will consider Alabama Power contracts with large-load data-center customers. After the July 7 vote, a July 10 ruling assigned the chief administrative law judge, and a July 16 ruling recognized the Attorney General’s intervention while confirming that members of the public could participate without formally intervening. Initial comments were due August 6 and replies August 21; no final process, tariff, or cost-benefit methodology had issued by July 17. Alabama PSC Docket 33709, opened 2026-06-29; Alabama PSC July Commission Meeting, 2026-07-07; Alabama PSC procedural ruling, 2026-07-10; Alabama PSC intervention ruling, 2026-07-16; Alabama Daily News, 2026-07-09
  • Utility/energy regulation relevant to data centers: Alabama Power and the Alabama PSC already used special-contract review for large data center service before SB270, including the December 2025 approval of a Meta-related power deal and two solar projects expected by December 31, 2028. Inside Climate News, 2025-12-03

5) Notable projects and operators

Meta (Montgomery and Huntsville)

  • Montgomery - expanded plan under construction: The original 2024 plan was $800 million and 715,000 square feet, but Meta expanded it in September 2025 by two buildings to nearly 1.3 million square feet and more than $1.5 billion. Meta projects more than 100 operational jobs and over 1,000 skilled-trade workers at peak construction; February 2026 reporting described construction as ongoing. Governor Kay Ivey, 2024-05-02; Meta, 2025-09-23; WBRC, 2026-02-18
  • Huntsville: The Montgomery announcement states Meta’s existing Huntsville campus represented a $1.5 billion investment commitment and had expanded to more than 300 operational jobs. Governor Kay Ivey, 2024-05-02

Google (Jackson County)

  • Jackson County expansion: On June 15, Google announced a new $1.5 billion investment during 2026-2027 to expand its operating Jackson County campus. Google says the campus supports hundreds of full-time jobs and will bring more than 1,000 contract workers during construction; it also pledged to pay for all power used and infrastructure costs directly driven by the expansion. Google, 2026-06-15

Project Marvel (Bessemer / Jefferson County)

  • Proposed hyperscale campus: The proposed Bessemer campus is described in 2026 reporting as expanding to 1,600 acres, after earlier plans for a large multi-building data center campus. WBRC, 2026-02-09
  • Rezoning approved: Bessemer City Council approved rezoning nearly 900 acres on April 21, 2026, amid community concerns about water, power, utilities, land use, and transparency. WBRC, 2026-04-22
  • QTS and land acquisition: QTS confirmed July 1 that it is pursuing the proposed campus. Public-record reporting says a QTS affiliate’s final June 25 acquisition covered about 1,607 acres for $431.73 million; the more than $870 million figure reported for the day aggregates consideration across a chain of related transactions and should not be treated as an additional capital-investment commitment. QTS and the city say the project remains in planning; QTS pledged closed-loop cooling and payment of project energy costs, and Bessemer’s city attorney said QTS would not seek local property-tax incentives from the city. Birmingham Business Journal, 2026-06-29; WBRC, 2026-07-01
  • Rezoning litigation ended: The earlier civil challenge to Bessemer’s rezoning was dismissed with prejudice on June 22 through a joint stipulation; the public record did not state why. WBRC, 2026-06-25

Nebius BHM01 (Birmingham / Oxmoor)

  • Project status: Nebius moved from evaluation and permitting into construction at the roughly 80-acre former Regions Bank site by July 8. The company says BHM01 will use closed-loop cooling and pay for needed electrical infrastructure upgrades. Nebius, accessed 2026-07-17; WBRC, 2026-07-08
  • Scale and timing: Local reporting describes BHM01 as a planned 300 MW project with a 100 MW first phase and 200 MW second phase, construction starting in spring 2026, and full buildout targeted by 2028. BirminghamWatch, 2026-04-24
  • Industrial Development Board incentive agreement: On May 29, Birmingham’s Industrial Development Board approved up to 30 years of 65% non-education property-tax abatements and 80% construction sales/use-tax abatements, contingent on investment and payroll with proportional clawbacks. The resolution projected nearly $35.9 billion invested over 30 years and 78 jobs averaging more than $90,000; these are projections, not realized outcomes. Birmingham Times, 2026-06-26
  • Pending litigation: By July 10, consolidated neighbor litigation over zoning and approvals was allowed to proceed and the Greater Birmingham Humane Society filed a separate review action. Construction was continuing as of the latest sourced status; neither case had produced a final merits judgment by July 17. WBRC, 2026-07-10; WBRC, 2026-07-10

Other new and expanded projects

  • DC BLOX Birmingham: In April, DC BLOX said it had executed a contract for a roughly 5 MW, 36,500-square-foot expansion scheduled for construction from Q2 2026 through Q4 2027 and was evaluating a separate adjacent expansion of up to 60 MW and 263,000 square feet. DC BLOX, 2026-04
  • Digi Power X / Cerebras, Columbiana: Digi Power X signed a definitive colocation agreement with Cerebras on May 4 for 40 MW of AI capacity at its Columbiana campus. The filing targets 15 MW ready for service on December 15, 2026 and the full 40 MW by the end of Q1 2027, although the second 25 MW is conditioned on adequate financing. The initial 10-year contract value is approximately $1.1 billion, potentially $2.5 billion with a seven-year extension; those are service-contract values, not disclosed construction investment. U.S. Securities and Exchange Commission, 2026-05-08
  • Construction Partners, Dothan: Construction Partners announced a $20 million combined corporate headquarters and internal data-processing center in March. The entire headquarters project, not the data center alone, is designed to accommodate more than 60 additional professional positions; no MW figure was disclosed. Alabama Department of Commerce, 2026-03-19
  • DC BLOX Montgomery: February reporting said DC BLOX was constructing a two-building Montgomery campus. The state’s earlier project report listed $26.495 million of investment and one job for the initial project, but neither the 2026 report nor DC BLOX published a campus MW figure. WBRC, 2026-02-18; Alabama Department of Commerce, 2025-03
  • Project Gateway / Prichard: Edged US is evaluating an 8 MW, 57,000-square-foot, $93 million data center with 150-200 projected construction jobs and at least 20 permanent positions. The proposal remained subject to permitting, infrastructure, customer, and regulatory approvals as of July 17. Project Gateway, accessed 2026-07-17
  • Calvert Infrastructure Hub / Mobile County: Beacon Data Centers disclosed a proposed $6 billion, two-building campus on a 95-acre build area within a 650-acre industrial parcel. The project remained in planning, engineering, and community engagement; company projections were up to 1,000 construction workers and 250 staff, with construction potentially starting near the end of 2026. Beacon Data Centers, accessed 2026-07-17; Lagniappe, 2026-07-03
  • Fairfield colocation proposal: Fairfield disclosed preliminary talks over a smaller colocation data center on July 16 and scheduled a July 28 town hall. Officials said talks were ongoing, details were not yet public, and no decision had been made as of July 17. WBRC, 2026-07-16
  • Tallassee historic mill - preliminary proposal only: Prospective purchasers discussed a 10 MW project expandable to 20 MW at the Tallassee mill, but no formal plan, investment figure, or jobs estimate was before the city by April 29. WSFA via WBRC, 2026-04-29
  • U.S. Space Command headquarters, Redstone Arsenal: A federal industry notice described a secure data center as one component of the planned approximately 700,000-square-foot command-and-control headquarters complex for roughly 1,800 personnel. The notice did not disclose a stand-alone data-center MW figure or capital budget, and the project is a military headquarters rather than a commercial data-center campus. Data Center Dynamics, 2026-03-12

Gaps and watchlist (for follow-up)