I'll even give Alabama credit for being able to hark back to the Confederacy, but doing so in a way that isn't as blatantly offensive as Mississippi's flag or Georgia's old flag (It is reminiscent of an old Spanish flag too, but fewer people today have issues with Spain). However, it is also identical to Saint Patrick's flag, the one which was incorporated into (and still is a part of) the flag of the United Kingdom. I'd put up the Irish flag, but it is exactly the same.
Another strike against this flag is it's similarity to the flag of Florida, the only difference being that Florida has the state seal at the center. This isn't too surprising, both are drawing inspiration from the Confederate battle flag and the Cross of Burgundy, used by the Spanish Empire which controlled areas of both states:
I like this flag, but it needs a little tweaking to make it fit for the whole state. First of all, the words have to go, leaving us with the problem of the stars. This flag has eleven, representing the number of states in the Confederacy, but this isn't so bad, as Alabama was the 22nd state, and with a quick doubling, it will become more Alabama-appropriate. I'm also a fan of the laurel, even if it is a little busy, but it to has to go. Here's what I've come up with:
This flag evokes the state's history without being too offensive (this is for Alabama, after all), the 22 stars reflect the state's position, and it retains the color scheme of the Montgomery, which I thought worked well. Plus, it's a nice twist on the typical tri-color.