The Rural Hospital Investment Act will give Alabama’s country hospitals a financial shot in the arm.

The bill, sponsored by Rep. Terri Collins, R-Decatur, gives citizens and industries a tax credit for donating money to rural hospitals.

The bill will provide an additional avenue of funding for rural hospitals in Alabama. Since 2011, at least seven rural hospitals have closed because of lack of funding. In addition, Alabama has 52 rural hospitals that meet federal criteria and more than half of those hospitals are at risk of closing.

Troy Regional Medical Center CEO Rick Smith serves on the Alabama Hospital Association Board and said the new act will provide much needed support for Alabama’s rural hospitals. He said the program was modeled after a highly successful program being used in Georgia.

“We’re very excited that this bill passed,” Smith said. “We’re glad the state has taken an interest in rural hospitals and taken steps to help with their financial stability.”

Smith said the Alabama Hospital Association Board had been consulted on the bill, so he was familiar with the legislation. However, he said, there is some groundwork that will have to be done before the bill goes into effect in 2026.

He said the act called for an oversight committee to be created that would administer the donated money to the state’s rural hospitals. He said he didn’t have any specifics on the

The act will put an annual cap on donations for individuals at $30,000, industries at $450,000 and for businesses with multiple owners, a $500,000 cap is in place. The total amount of donations that would go back to hospitals is $20 million in 2026, $25 million in 2027 and $30 million in 2027 and each successive year thereafter.

“I think the bill could be very successful in Alabama,” Smith said. “It has a $20 million cap the first year. That’s not a lot of money when you spread it out over 52 hospitals. But, if it grows like I think it will, it will provide a lot of money for rural hospitals. Georgia’s program has been in place for several years and it generates hundreds of millions.”

Smith said rural hospitals struggle with tough decisions between maintenance decisions and clinical decisions every day. He said additional funding through the Rural Hospital Investment Program would give rural hospitals some much needed assistance in continuing operations.