SB138: SB138 Incorporation of Municipal Corporations; transition of certain services related to newly incorporated municipalities in certain counties; provide

When a new city incorporates in Georgia, it takes over local services once handled by the county, but current law leaves many transition details unclear, including who pays for police coverage, who maintains roads, and how collected fees get divided. This bill adds a new Code section applying to counties with more than 15 municipalities, covering any newly created city formed by a local law taking effect on or after January 1, 2024. It spells out how police special districts wind down, how road rights of way and storm-water infrastructure are handled, and how the county must transfer a share of taxes, fees, and permit money tied to services the new city is taking over. It also excuses these counties from renegotiating existing service delivery agreements, frees new cities from paying for their own incorporation elections, and makes counties responsible for legal costs if disputes arise from the transition, waiving sovereign immunity in those cases. Separate sections adjust how the state allocates insurance tax proceeds to newly formed cities. The law would take effect once the Governor signs it or it becomes law without a signature.

• Adds a new Code section (O.C.G.A. § 36-31-11.2) governing how newly incorporated cities in counties with more than 15 municipalities take over county services.
• Lets a new city stay inside a county police special taxing district temporarily, then requires the county to return excess tax collections and eventually let the city leave the district.
• Gives new cities control over road rights of way within their borders while keeping storm-water infrastructure like large retention ponds under county responsibility unless the city agrees otherwise.
• Requires counties to transfer a pro rata share of taxes, fees, and pending permit fees tied to services a new city has assumed, with specific refund percentages set by how far permit processing had progressed.
• Exempts these counties from having to renegotiate service delivery strategy agreements and frees new cities from repaying costs of their incorporation or first election.
• Makes a county responsible for a new city's legal costs and damages if disputes arise from the transition, waiving the county's sovereign immunity to that extent.

Large Georgia counties with more than 15 municipalities (a description that fits counties like Fulton County), any city newly incorporated there since January 1, 2024, county police departments, county governments handling road and storm-water infrastructure, and the state insurance commissioner's office that allocates insurance tax proceeds.

Georgia has seen a wave of new city incorporations in recent years, often creating disputes over who pays for police coverage, road upkeep, and shared tax revenue during the handover from county to city government. This bill sets clearer default rules and timelines for that handoff and shifts certain legal and financial risks onto counties.

• Section 1 defines 'county' as one with more than 15 municipalities and 'qualified municipality' as a new city created by local law effective on or after January 1, 2024.
• Under subsection (b)(1), a new city can stay in a county police special district but may leave with as little as one year's notice if the county force is understaffed, and the county must refund excess collected police taxes.
• Subsection (b)(2) gives new cities control over road rights of way, while subsection (b)(3) keeps large storm-water infrastructure under county control unless the city agrees otherwise.
• Subsection (b)(4) and (b)(5) require counties to remit a pro rata share of taxes, fees, and pending permit money tied to services the new city takes over, with refund percentages of 95%, 75%, or 50% depending on how far a permit application had progressed.
• Subsection (b)(6) exempts counties from renegotiating service delivery strategy agreements, letting a new city instead elect to receive services under existing terms.
• Subsection (b)(7) says new cities owe nothing toward the cost of their incorporation referendum or first election.
• Subsection (c) makes counties pay a new city's legal expenses and damages if the county's failure to meet transition duties leads to a lawsuit, waiving sovereign immunity for that purpose.
• Sections 2 and 3 revise O.C.G.A. §§ 33-8-8.1 and 33-8-8.2 so a newly incorporated city that sets up its own insurance premium tax within 18 months of its incorporation referendum can receive that year's tax allocation.

1. 2025-05-14Effective Date 2025-05-14
2. 2025-05-14Act 289
3. 2025-05-14Senate Date Signed by Governor (Senate)
4. 2025-04-07Senate Sent to Governor (Senate)
5. 2025-03-13House Passed/Adopted (House)
6. 2025-03-13House Third Readers (House)
7. 2025-02-26House Committee Favorably Reported (House)
8. 2025-02-24House Second Readers (House)

• Clint Dixon (R, SD-045)Primary sponsor
• Shawn Still (R, SD-048)
• Bill Cowsert (R, SD-046)
• Ed Setzler (R, SD-037)
• Jason Anavitarte (R, SD-031)
• Chuck Efstration (R, HD-104)

1. FailedSenate voteFebruary 20, 2025

   21 yea, 32 nay (1 not voting, 2 absent)

   Adoption Of Amendment #1 By The Senator From The 9th: Senate Vote #72

2. PassedSenate voteFebruary 20, 2025

   32 yea, 22 nay (0 not voting, 2 absent)

   Passage By Substitute: Senate Vote #73

3. PassedHouse voteMarch 13, 2025

   96 yea, 69 nay (5 not voting, 10 absent)

   Passage: House Vote #276

• municipal incorporation
• local government services
• police services funding
• property and insurance taxes
• Fulton County cities