New Rural Hospital Investment Program reaches $20 million cap after one month
To say that year one of the new Alabama Rural Hospital Investment Program (ARHIP) was a success would be an understatement—actually a $20 million understatement.
Last week the Alabama Hospital Association announced the $20 million tax credit cap for 2026 has been fully met, barely one month since the program opened.
Russellville Hospital, one of 50 rural hospitals eligible to receive ARHIP funds, received $400,000 in donations out of the $20 million that was available across the state.
The Alabama Legislature enacted the legislation in 2025 as a way to strengthen the financial stability of rural hospitals by encouraging private donations from individuals and businesses, with the added benefit of a state tax credit.
The Rural Hospital Investment Program allows a rural hospital to receive funds directly through donations made by either individuals or business, up to a capped amount each year.
The benefit for donors is a dollar-for-dollar credit off their state income tax obligation. Donors make contributions through the official Alabama Rural Hospital Investment Program website. Donation applications are completed through this website and sent to the Alabama Department of Revenue. Donors can choose their local rural hospital from the list of eligible hospitals.
The law caps annual tax credits under ARHIP to $20 million, with a $750,000 maximum for any rural hospital to receive in 2026. In 2027, the per hospital cap increases to $1,000,000, with the cap maxing out in 2028 at $1,250,000 per hospital.
Caps for individual donors are $15,000 per year. A married couple filing jointly has a $30,000 donation limit. Corporate caps are $500,000 and for pass through entities, $450,000 each year.
There is a catch, though, for a rural hospital to be eligible for the program. The statute states that a rural hospital shall only be eligible for assistance through the Rural Hospital Investment Program in a year where at least 10% of the assistance provided to the hospital comes from the local governing body.
Without this local match, a rural hospital is ineligible to benefit from the program. That’s why Russellville Hospital CEO Chris Ware addressed local governmental bodies late last year to encourage them to participate in the program.
“The Alabama Hospital Association worked tirelessly to get funds,” Ware told the council. “This program is designed to strengthen the stability of rural hospitals and these funds will help Russellville Hospital continue its vital role in the Russellville community.”
In order for Russellville Hospital to receive the maximum $750,000 assistance, the local governing body must allocate $75,000 in 2026, 10% of that cap.
“The Alabama Hospital Association worked tirelessly to get these funds,” Ware told the council. “This program is designed to strengthen the stability of rural hospitals and these funds will help Russellville Hospital continue its vital role in the Russellville community.”
In order for Russellville Hospital to receive the maximum $750,000 assistance, the local governing body must allocate $75,000 in 2026, 10% of that cap.
“We are asking you to match that 10% amount each year,” Ware told the council. “Without it, we can’t participate in the program and receive vital assistance that’s otherwise available.”
Modeled after Georgia’s HEART Program, the initiative enables donors to invest directly in the health care delivery systems serving their community.
AlaHA President and CEO Danne Howard praised strong leadership and broad support from legislators who supported the bill.
“The speed at which the cap was met shows just how eager Alabamians were to support their rural hospitals,” Howard said. “The overwhelming response to this program demonstrates both the need and the opportunity to continue strengthening rural health cares across Alabama.”
To learn more about the Alabama Rural Hospital Investment Program, visit www.alpha.org/invest-in-rural-hospitals/.