MONTGOMERY, AL — The Alabama Hospital Association (AlaHA) announced that the $20 million tax credit cap for the Alabama Rural Hospital Investment Program has been reached just one month after the program opened on Jan. 5, reflecting strong participation from individuals and businesses across the state.
The program, approved by the Alabama Legislature during the 2024 legislative session, was created to support the financial stability of rural hospitals by encouraging private donations through a state tax credit incentive. Modeled after Georgia’s HEART program, the initiative allows donors to invest directly in local health care systems serving rural communities.
“This extraordinary response from individuals and businesses across the state speaks volumes about how much rural hospitals matter to the people they serve,” said Vernon Johnson, chair of the AlaHA Board of Trustees and chief executive officer of Dale Medical Center. “Communities across Alabama stepped up immediately because they know access to local health care is essential to caring for families, supporting local jobs and sustaining community economies.”
State lawmakers who helped develop the program said the rapid response demonstrates public support for rural health care.
“As a nurse and someone who has spent years working on health care delivery issues at both the state and federal level, I know how essential local hospitals are to the safety and well-being of families across Alabama,” said Sen. April Weaver, R-Brierfield.
Rep. Terri Collins, R-Decatur, added that the program was designed to give communities a direct way to support local hospitals. “Seeing the cap met so quickly confirms that Alabamians understand the value of these hospitals, not only for health care, but for jobs and economic stability in their hometowns,” Collins said.
AlaHA President and CEO Danne Howard said the initiative was made possible through legislative support and collaboration statewide. “The success of this program would not have been possible without lawmakers who understood the vital role rural hospitals play in their communities,” Howard said.
According to AlaHA leaders, interest in the program was strong enough that the cap could have been reached even sooner, aside from initial administrative steps associated with launching a new statewide program.
Joseph Marchant, chair of the AlaHA Rural Hospital Constituency Section and chief executive officer of Bibb Medical Center, said the participation reflects widespread recognition of rural hospitals’ impact. “Individuals and businesses invested because these hospitals care for their neighbors, provide jobs and anchor their communities,” Marchant said.
With the inaugural cap reached, program leaders said they plan to work with policymakers to explore potential expansion in the future to benefit additional rural hospitals and communities.
Advisory group meets to advance rural health transformation
The announcement comes as Gov. Kay Ivey marked the first meeting of the Alabama Rural Health Transformation Advisory Group, established by executive order to help guide implementation of the Alabama Rural Health Transformation Program (ARHTP).
The inaugural meeting follows Alabama’s receipt of $203,404,327 in year-one federal funding for the program.
“Today’s inaugural meeting is an important step toward implementation of our rural health strategy,” Ivey said. “The Trump Administration has entrusted Alabama with significant funding to make generational reforms to an important but struggling portion of our health care system.”
Members of the advisory group include legislative leaders from both chambers, including House Speaker Nathaniel Ledbetter and Senate President Pro Tem Garlan Gudger, along with several senators and representatives. During the first meeting, Sen. Donnie Chesteen and Rep. Jamie Kiel were selected to serve as chair and vice chair.
Kenneth Boswell, director of the Alabama Department of Economic and Community Affairs, provided an overview of the program, and members discussed timelines, implementation strategies and potential legislative actions to support the effort.
The federal Rural Health Transformation Program is a five-year, $50 billion initiative designed to help states strengthen rural health care delivery systems, improve outcomes and expand access to care.
“The Alabama Rural Health Transformation Program represents a once-in-a-generation opportunity to strengthen healthcare access in our rural communities,” Chesteen said. “By bringing together legislative leaders and healthcare stakeholders, we are positioning Alabama to make smart, sustainable reforms.”
Rep. Kiel said the initiative aims to ensure long-term access to quality care statewide. “Alabama’s Rural Health Transformation Program is about ensuring that every Alabamian, no matter where they live, has access to the quality care they deserve,” Kiel said.
State leaders said the program includes 11 targeted initiatives designed to improve health care delivery and patient outcomes in rural areas. Officials noted that both the investment program and the transformation initiative are intended to strengthen rural health systems and support long-term sustainability across Alabama.
