Industry backs change to utility‑relocation reimbursements; ALDOT warns of budget impact in hearing on House Bill 542

Representative Black introduced House Bill 542 and described it as a response to a study commission’s work to clarify how utilities are reimbursed when state road projects require line relocations.

Under current practice, utilities with gross annual revenue at or below $250 million are eligible for reimbursement from ALDOT at the department’s discretion; entities above that threshold are not. Representative Black said the bill would extend eligibility to utilities above $250 million and proposed funding parameters that were described in committee as including a $10 million cap for the larger category and a $20 million figure for others (the speaker used the $10M/$20M example to illustrate a $30M total in the construct). He told the committee the change is intended to create predictability and help avoid shifting relocation costs to utility customers.

ALDOT officials and the transportation director testified that the department’s budget is constrained and that reimbursing utilities’ capital costs would redirect funds used for roads and bridges. An ALDOT operations official also described indirect operational costs—including maintenance, restriction on where crews may dig, and uneven compliance by some utilities—that the agency absorbs when utilities occupy the right of way.

Industry groups including Chart Nations and trade associations testified in support, arguing that the current $250 million threshold is unique and that other states do not base reimbursement eligibility on a company’s gross revenue. Witnesses cited an historic five‑year average of reimbursements (225 projects totaling about $109.3 million) and noted 365 projects received no reimbursement during that period; the sponsor said the bill would require tracking of eligible projects beginning Oct. 1, 2026, with annual reporting to the committee.

The committee held a public hearing and took testimony from municipal, industry, and departmental witnesses. Members asked clarifying questions about how reimbursements are calculated today, whether full or partial reimbursement is typical (ALDOT said reimbursement amounts vary and are at the department’s discretion), and how the bill would affect ALDOT’s capital budget. No final committee vote on House Bill 542 was recorded in the transcript; the bill was set for a future vote.

Next steps: committee review and any fiscal analysis; transcript notes the sponsor expects implementation steps beginning Oct. 1, 2026, if enacted.