HB169: HB169 Ad valorem tax; breach of a covenant for bona fide conservation use related to solar generation of energy; limit exceptions

Although HB 169 was originally introduced to address property tax rules for land under conservation use covenants involving solar energy, the Senate Finance Committee substitute shown here rewrites the bill entirely. It creates the 'Georgia Small Business Resiliency Act,' which adds a new income tax credit under Georgia's tax code (O.C.G.A. § 48-7-40.10) for employers with fewer than 50 employees. To qualify, an employer must give each covered worker at least ten paid days off, some paid parental leave, access to a health savings account, and an individual coverage health reimbursement arrangement (a way for employers to reimburse employees for their own health insurance costs) with contributions of at least $200 per month per employee. The credit starts at $600 per employee for the first three years, drops to $400 in year four and $200 in year five, and cannot be claimed for more than five years total per taxpayer. Statewide credits are capped at $10 million per year, employers must apply for preapproval by October 1 each year, and the program is set to expire on December 31, 2030. It would take effect July 1, 2026, for tax years starting on or after January 1, 2026.

• Creates a new state income tax credit for small businesses (fewer than 50 employees) that offer individual coverage health reimbursement arrangements, or HRAs, to workers.
• Requires qualifying employers to also provide at least ten paid days off, paid parental leave, and health savings account access to claim the credit.
• Sets the maximum credit per employee at $600 for the first three years, $400 in year four, and $200 in year five, with a five year lifetime cap per employer.
• Caps total statewide credits claimed under this program at $10 million per year and requires the Department of Revenue to preapprove applicants each year.
• Allows pass-through entities such as partnerships to pass the credit to their members, shareholders, or partners based on ownership share.
• Automatically repeals the entire credit program on December 31, 2030.

Small Georgia employers with fewer than 50 employees who offer health reimbursement arrangements and related benefits, their covered employees, pass-through business owners such as partners and shareholders, and the Georgia Department of Revenue, which administers the preapproval and credit process.

Small businesses that already offer strong benefits packages, including individual coverage health reimbursement arrangements, paid leave, and health savings accounts, could reduce their state income tax bills by up to $600 per employee annually, potentially encouraging more small employers to offer these benefits instead of traditional group health plans.

• Section 1 names the measure the 'Georgia Small Business Resiliency Act.'
• Section 2 rewrites O.C.G.A. § 48-7-40.10 to define 'qualified taxpayer,' 'covered employee,' and 'individual coverage health reimbursement arrangement,' and sets eligibility rules including a $200 per month minimum contribution per employee.
• Subsection (c) tiers the credit amount: $600 per employee in years one through three, $400 in year four, and $200 in year five, with a five year maximum.
• Subsection (d) caps total statewide credits at $10 million per year.
• Subsection (e) requires employers to submit preapproval applications by October 1 each year, with the Department of Revenue issuing certificates by November 1.
• Subsection (g) bars carrying unused credit forward or backward to other tax years and limits the credit to the taxpayer's actual income tax liability.
• Subsection (i) repeals the entire credit program on December 31, 2030.
• Section 3 sets the effective date as July 1, 2026, applicable to tax years beginning on or after January 1, 2026.

1. 2026-03-25Senate Read Second Time (Senate)
2. 2026-03-25Senate Committee Favorably Reported By Substitute (Senate)
3. 2025-02-28Senate Read and Referred (Senate)
4. 2025-02-27House Passed/Adopted By Substitute (House)
5. 2025-02-27House Third Readers (House)
6. 2025-02-19House Committee Favorably Reported By Substitute (House)
7. 2025-02-03House Second Readers (House)
8. 2025-01-30House First Readers (House)

• Charles Cannon (R, HD-172)Primary sponsor
• Robert Dickey (R, HD-134)
• John Corbett (R, HD-174)
• Angie O'Steen (R, HD-169)
• David Huddleston (R, HD-072)
• Jaclyn Ford (R, HD-170)
• Chuck Hufstetler (R, SD-052)

1. PassedHouse voteFebruary 27, 2025

   160 yea, 0 nay (7 not voting, 13 absent)

   Passage: House Vote #106

• small business tax credit
• health reimbursement arrangements
• income tax
• employee benefits
• Georgia Department of Revenue