HB 1129: Local government; designation of enterprise zones; provisions

Georgia law lets local governments create 'enterprise zones' that offer tax breaks to encourage big redevelopment projects, especially in areas that have been rundown for decades. This bill focuses on a specific type of enterprise zone tied to redevelopment projects worth at least $400 million in areas certified as chronically underdeveloped for 20 years or more. Under current law, projects that qualify for one of these zones automatically get exempted from both local and state sales and use taxes. The bill changes that so the automatic exemption only covers local sales tax; the state sales tax exemption would now require sign-off from the Governor or the Governor's designee. It also lets local governments charge annual infrastructure fees to businesses benefiting from the tax break, limits how those fees and any bonds backed by them can be used, and caps the number of these zones in urban redevelopment areas to four per county. The changes take effect July 1, 2026, and apply to zones designated on or after that date, with the Department of Community Affairs' commissioner now formally approving new zone designations.

• Removes the automatic exemption from state sales and use tax for qualifying enterprise zone redevelopment projects, requiring Governor approval instead.
• Keeps the exemption from local sales and use tax automatic for qualifying projects within these enterprise zones.
• Gives the commissioner of the Department of Community Affairs formal authority to designate nominated areas as enterprise zones rather than treating qualification as automatic.
• Allows local governments to charge annual infrastructure fees to qualifying businesses, capped at the amount of sales tax exempted, which can back revenue bonds for zone infrastructure.
• Bars the use of revenue bond principal to pay back or return the capital investment required to qualify for the zone.
• Limits the number of these large redevelopment enterprise zones to four per county, regardless of which local government created them.

Local governments and urban redevelopment authorities that create enterprise zones, developers behind large redevelopment projects worth $400 million or more, retailers and businesses operating inside those zones, the Governor's office, and the Department of Community Affairs, which now formally approves zone designations.

Big redevelopment projects in these zones would no longer automatically skip state sales tax, meaning the state keeps more revenue unless the Governor approves an exemption. Local governments also face a new four-zone-per-county limit, which could restrict future large-scale redevelopment tax incentives in already-active counties.

• Section 1 revises O.C.G.A. § 36-88-6(g)(2) so the commissioner must designate a nominated area, rather than automatic qualification, before enterprise zone status applies.
• Section 1 adds § 36-88-6(g)(2)(B), removing automatic state sales and use tax exemption for zone projects unless the Governor or designee approves it.
• Section 1 adds § 36-88-6(g)(4), letting local governing bodies collect annual infrastructure fees from qualifying retailers after the commissioner designates the zone, capped at the amount of tax exempted.
• Section 1 adds § 36-88-6(g)(4)(B), prohibiting use of revenue bond principal to repay or return the capital investment required to qualify for the zone.
• Section 1 adds § 36-88-6(g)(5), capping these enterprise zones at four per county regardless of which local government nominated them.
• Section 1 retains the existing exclusion barring casino gambling projects from qualifying under this subsection.
• Section 2 sets the effective date as July 1, 2026, applying only to zones designated on or after that date.

1. 2026-05-11Effective Date 2026-07-01
2. 2026-05-11Act 459
3. 2026-05-11House Date Signed by Governor (House)
4. 2026-04-10House Sent to Governor (House)
5. 2026-04-02House Agreed Senate Amend or Sub (House)
6. 2026-03-31Senate Passed/Adopted By Substitute (Senate)
7. 2026-03-31Senate Third Read (Senate)
8. 2026-03-31Senate Engrossed (Senate)

• Devan Seabaugh (R, HD-034)Primary sponsor
• Matthew Gambill (R, HD-015)
• Will Wade (R, HD-009)
• Chuck Efstration (R, HD-104)
• Soo Hong (R, HD-103)
• Shaw Blackmon (R, HD-146)
• Bo Hatchett (R, SD-050)

1. PassedHouse voteMarch 4, 2026

   160 yea, 1 nay (4 not voting, 12 absent)

   Passage: House Vote #637

2. PassedSenate voteMarch 31, 2026

   33 yea, 15 nay (2 not voting, 4 absent)

   Motion To Engross: Hb 52, Hb 248, Hb 963, Hb 964, Hb 1001, Hb 1077, Hb 1116, Hb 1129, Hb 1132, Hb 1209: Senate Vote #876

3. PassedSenate voteMarch 31, 2026

   45 yea, 2 nay (2 not voting, 5 absent)

   Passage By Substitute: Senate Vote #889

4. PassedHouse voteApril 2, 2026

   170 yea, 1 nay (3 not voting, 2 absent)

   Agree To Senate Substitute: House Vote #868

• enterprise zones
• local sales tax
• economic development
• redevelopment projects
• state tax exemptions