HB 1166: Local government; zoning decisions shall not affect or be required for certain residential dwellings of 400 square feet or fewer; provide

This version of HB 1166, as substituted by a Senate committee, no longer deals with zoning for small dwellings. Instead it amends Georgia's municipal corporations law (O.C.G.A. Chapter 30 of Title 36). First, it updates the rules under O.C.G.A. § 36-30-7.1 for when a municipality is legally considered inactive and its charter dissolved, streamlining old 1994-1995 filing deadlines that have already passed and clarifying that a certified list from the Secretary of State is conclusive proof of a municipality's status. Second, it creates a new process (O.C.G.A. § 36-30-7.2) for handling 'distressed municipalities,' meaning cities that fail financial or service standards, such as missing payroll for 30 days or defaulting on bonds. Local legislators can ask the Governor to appoint a review commission to investigate, and if the commission agrees the city is distressed, the Attorney General can petition a superior court to appoint a receiver. The receiver develops a recovery plan, gains significant powers over the city's finances and contracts, and the receivership typically lasts up to two years, extendable if needed.

• Removes the bill's original zoning subject matter and substitutes an entirely new set of rules on municipal charter termination and financially distressed cities.
• Updates O.C.G.A. § 36-30-7.1 by deleting outdated 1994-1995 filing deadlines while keeping the standards that determine whether a municipality is 'active' or legally dissolved.
• Creates a new legal category of 'distressed municipality' defined by financial red flags such as missed payroll, bond defaults, or budget deficits for two straight years.
• Establishes a process where the Governor appoints a review commission, and the Attorney General can ask a superior court to place a distressed city into receivership for up to two years.
• Grants a court-appointed receiver broad powers to sell municipal assets, renegotiate contracts, and order city officials to follow a state-approved recovery plan.
• Directs the Department of Administrative Services to maintain a roster of financial turnaround specialists and allows emergency procurement of help for distressed cities.

Georgia municipal governments and their elected officials, especially small or financially troubled cities; city employees and residents who depend on municipal services; bondholders and contractors owed money by struggling cities; the Governor, Attorney General, and Department of Administrative Services, which gain new oversight roles; and superior courts handling receivership petitions.

If enacted, a struggling Georgia city could be placed under a state-appointed receiver with power to sell assets, cancel contracts, and direct local officials, overriding normal local control for up to two years. Residents of cities with unclear legal status would also get clearer proof of whether their municipality still legally exists.

• Section 1 amends O.C.G.A. § 36-30-7.1 to remove expired 1994-1995 deadlines and simplify how a certified list from the Secretary of State proves a municipality's termination or continued existence.
• Section 2 adds O.C.G.A. § 36-30-7.2, defining a 'distressed municipality' through nine financial or operational failure criteria, including missed payroll for 30 days or bond default.
• Under subsection (b), a majority of local legislators can request a Governor-appointed review commission to investigate an alleged distressed municipality within 14 days.
• Under subsections (c) and (d), the Attorney General can petition superior court for receivership, and the court must rule within 60 days on whether the municipality is distressed.
• Subsection (e) requires the receiver's recovery plan to keep vital services running and pay debts, but bars the receiver from unilaterally raising taxes or impairing existing bonds.
• Subsection (g) lists the receiver's powers, including ordering asset sales, renegotiating contracts, and recommending disincorporation of the municipality.
• Subsection (i) sets receivership to expire automatically after two years unless extended, and subsection (j) allows emergency state procurement of turnaround specialists.
• Section 3 repeals any conflicting laws.

1. 2026-03-27Senate Read Second Time (Senate)
2. 2026-03-27Senate Committee Favorably Reported By Substitute (Senate)
3. 2026-03-09Senate Read and Referred (Senate)
4. 2026-03-06House Passed/Adopted By Substitute (House)
5. 2026-03-06House Third Readers (House)
6. 2026-02-26House Committee Favorably Reported By Substitute (House)
7. 2026-02-05House Second Readers (House)
8. 2026-02-04House First Readers (House)

• Tangie Herring (D, HD-145)Primary sponsor
• Mary Oliver (D, HD-084)
• Spencer Frye (D, HD-122)
• Dale Washburn (R, HD-144)
• Shea Roberts (D, HD-052)
• Anissa Jones (D, HD-143)
• Jason Anavitarte (R, SD-031)

1. PassedHouse voteMarch 6, 2026

   111 yea, 50 nay (5 not voting, 11 absent)

   Passage: House Vote #674

• municipal receivership
• local government finance
• city dissolution
• distressed municipalities
• state oversight of cities