HB416: HB416 Local government; enterprise zones; revise class of retailer from which fees may be collected

Georgia's enterprise zone law (O.C.G.A. Chapter 88 of Title 36) lets local governments designate underdeveloped areas as zones eligible for tax breaks to encourage redevelopment. This bill changes the rules for a specific type of enterprise zone tied to large redevelopment projects worth at least $400 million, located in areas certified as chronically underdeveloped for 20 years or more. The bill clarifies that any local government creating this kind of zone can charge annual infrastructure fees to each retailer operating within the project that qualifies for the sales tax exemption, up to the amount of sales tax that retailer would otherwise owe. These fees can be pledged as security for revenue bonds used to fund development or infrastructure in the zone. The bill also extends how long these special enterprise zones can remain in existence, from a shorter period up to 30 years, or until the redevelopment project is finished and related bonds above $100,000 are retired, whichever comes first. Municipal and county governments retain the ability to modify or end tax and fee exemptions through agreements with qualifying businesses.

• Revises which retailers within a large redevelopment project (at least $400 million in capital investment) can be charged annual enterprise zone infrastructure fees.
• Clarifies that these fees can be pledged as security for revenue bonds used for development or infrastructure within the enterprise zone.
• Extends the maximum life of enterprise zones created under this specific redevelopment provision to 30 years, or until the project is finished and qualifying bonds are retired.
• Confirms that price variations from lease arrangements between a retailer and project owner within these zones are a permitted business practice under Georgia law.
• Keeps property tax incentives for qualifying businesses in effect for the standard ten-year period even if the zone's overall designation ends early.

The bill affects local governing bodies (cities and counties) that create enterprise zones, retailers operating within large qualifying redevelopment projects, businesses that lease space within those projects, and holders of revenue bonds issued to fund zone infrastructure.

For large-scale redevelopment projects, this bill changes how long tax and fee benefits last and clarifies which retailers can be charged fees that help pay for infrastructure or bonds, potentially affecting local financing of major developments and the businesses operating within them for up to 30 years.

• Section 1 revises O.C.G.A. § 36-88-6(g), setting criteria for a nominated area to include a $400 million minimum redevelopment project in a chronically underdeveloped area of 20+ years.
• Section 1 allows local governments to collect annual infrastructure fees from retailers within the project up to the amount of their exempted sales and use tax.
• Section 1 permits these fees to be pledged as security for revenue bonds funding development or infrastructure in the zone.
• Section 1 excludes casino gambling projects from qualifying under this subsection.
• Section 2 revises O.C.G.A. § 36-88-10 to extend the existence of these special enterprise zones to 30 years or until the project is complete and bonds over $100,000 are retired, whichever comes first.
• Section 2 preserves the standard ten-year property tax incentive period for qualifying businesses even if the zone designation ends sooner.
• Section 3 repeals conflicting laws.

1. 2025-05-14Effective Date 2025-07-01
2. 2025-05-14Act 266
3. 2025-05-14House Date Signed by Governor (House)
4. 2025-04-07House Sent to Governor (House)
5. 2025-03-31Senate Passed/Adopted (Senate)
6. 2025-03-31Senate Third Read (Senate)
7. 2025-03-31Senate Taken from Table (Senate)
8. 2025-03-31Senate Tabled (Senate)

• Chuck Efstration (R, HD-104)Primary sponsor
• Shaw Blackmon (R, HD-146)
• Trey Kelley (R, HD-016)
• Bill Cowsert (R, SD-046)

1. PassedHouse voteMarch 3, 2025

   172 yea, 0 nay (6 not voting, 2 absent)

   Passage: House Vote #131

2. PassedSenate voteMarch 31, 2025

   47 yea, 8 nay (0 not voting, 1 absent)

   Passage: Senate Vote #374

• enterprise zones
• local government taxes
• economic development
• sales tax exemptions
• redevelopment projects