CommitteeHolds Public Hearing on HB 606 to Change Utility Relocation Reimbursement Rules

A House Transportation, Utilities and Infrastructure committee held a public hearing on House Bill 606, a measure that would remove a $250,000,000 gross-income threshold from state law and require departments to obtain relocation cost estimates from utilities when planning state road projects.

Proponents said the change would protect rural broadband expansion plans. Justin Bailey, with the Alvin and Caleb Robbing Association, told the committee the state recently received $1,400,000,000 in federal funding to expand broadband and that broadband projects operate “with very slim margins.” He said unanticipated relocation costs create uncertainty for providers and that HB 606 would help make companies eligible to be considered for reimbursement.

The committee heard detailed fiscal concerns from the Alabama Department of Transportation. Tony Harris, chief of communication and government relations for the Department of Transportation, said the department estimates the bill could introduce “up to a hundred million dollars in new utility relocations every year.” Harris said that increased state expenditures for utility reimbursement would reduce funds available to match federal dollars and could force reductions to the bridge replacement program, estimating a drop from about 8–12 bridges replaced per year to roughly 4–6.

Electric utilities also opposed shifting costs. Sean Strickler, vice president of external affairs for the Amarillo Electric Association and a representative of the Electric Institute of Alabama, said local utility customers are effectively bearing costs when highways are widened for statewide benefit. “If it’s a state deemed, it should be state funded and not put on the backs of the local utility consumers,” Strickler said, and he expressed support for Representative Blackshear’s effort on the bill.

Committee members clarified the bill would not automatically require reimbursement; rather, the change would remove the $250,000,000 exclusion so utilities of any size could be considered for reimbursement. Members noted the bill would not apply to certain categories: funds associated with local gas acts for counties and cities are not part of the change, and federally funded interstate projects would remain excluded. The bill as described would take effect Oct. 1, 2026, so projects awarded contracts before that date would not be affected.

Committee discussion also included the program history: committee staff reported that in the past year 54 projects fell under the existing reimbursement rules, 52 projects received reimbursements totaling about $25,000,000, and 102 projects received no reimbursement. The bill would require agencies to obtain estimates from utilities and include those estimates when seeking federal matching dollars, but would not create an automatic obligation to pay.

The committee did not vote on the bill at this hearing and scheduled a subsequent meeting to continue consideration. An amendment was introduced that would exclude Class 1 municipalities by specifying that “the provisions of subsections b through f shall not apply” to those municipalities; committee text indicated the amendment language would be written and brought back to the committee for discussion.

The hearing included public-comment signups and three public speakers; testimony and departmental estimates framed the debate around broadband expansion, state budgeting priorities, and fairness in allocating relocation costs.

The committee will reconvene to consider HB 606 and the proposed amendment; no final action was taken at this meeting.