Skip to content
Georgia Commons
Menu

House · Engrossed · 2025-2026 Regular Session

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

Last action March 27, 2026 · Senate Read Second Time

A Senate committee substitute for HB 1166 would replace its original zoning language with a new process letting Georgia take over financially distressed municipalities through a court-appointed receiver, and update rules for when a municipality's charter is legally dissolved.

Read the full bill text

These buttons carry the bill's own text, not the summaries below. Copy for LLM, View as markdown, and Send to AI use the Markdown version: the text as filed, then the summaries under a heading that names them as ours. View raw is the text alone.

The summaries below were written by an AI model (claude-sonnet-5) from the text of the bill and are not part of it. Quote the text, not the summary. The stored text is the Comm Sub version, the latest the General Assembly's website lists.

In plain language

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.

What the bill does

  • 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  • Updates O.C.G.A. § 36-30-7.1 by deleting outdated 1994-1995 filing deadlines while keeping the standards that determine whether a municipality is 'active' or legally dissolved.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.

Who it affects

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.

Why it matters

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.

Key provisions

  • 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.

From the bill

“The receiver shall have a minimum of five years of experience in local legal, management, or budgetary matters and be a resident of this state.”

Sets minimum qualifications for anyone appointed to run a distressed municipality's finances.

“the receivership shall expire two years after the appointment of the receiver”

Caps how long a state-appointed receiver can control a distressed municipality's affairs.

Discussed in meetings (11)

The House and Senate meetings that took this bill up, from their machine transcripts. Each account was written by Georgia Commons with AI and is not part of the record; the video is what was said.

  1. House Governmental Affairs Committee, February 23, 2026

    From 0:58:00 · Watch on the General Assembly's Vimeo channel

    Summary by Georgia Commons: The sponsor said HB 1166 would remove zoning barriers to dwellings of 400 square feet or less, helping homeowners house relatives or renters. Citing Moody’s Analytics, the sponsor reported shortages of 41,000 ownership homes and 35,000 rental units. The sponsor said building codes, septic rules, historic-district protections and local short-term rental regulation would remain. Several members supported more housing options but questioned whether the language allowed unlimited units, standalone developments, separate lot sales or institutional investor purchases. The sponsor said separate sales were not intended and agreed to review the language. Another member argued the proposal was already narrowly aimed at homeowners. Witnesses for the Georgia Municipal Association and ACCG raised concerns about water, sewer, traffic and loss of local land-use decisions, while acknowledging some safeguards. A Georgia Realtors witness supported the proposal for aging in place and housing adult children, saying permits, fees and property taxes would help local governments. A Home Builders Association of Georgia witness said minimum-size rules increase costs and that building permits and inspections would still apply. The chair made the discussion hearing-only and requested revised language. No amendment or bill vote occurred.

  2. House Governmental Affairs Committee, February 25, 2026

    From 1:05:57 · Watch on the General Assembly's Vimeo channel

    Summary by Georgia Commons: The sponsor said the substitute for HB 1166 would allow one secondary dwelling of 400 square feet or less on residential property without a zoning decision, helping families house relatives or caregivers nearby. The sponsor said building codes, septic requirements, historic-district protections, floodplain rules and manufactured-housing standards would remain. A supporting member said local-government organizations had suggested clarifications. Asked about homeowners associations, the sponsor said association approval would still be necessary. Another member noted that the bill did not restrict occupants to relatives or caregivers, which the sponsor acknowledged. Members discussed limiting eligibility to a primary residence to discourage institutional investors. One member questioned whether that would exclude some family-owned properties. Georgia Realtors supported the proposal. The committee adopted an amendment requiring the main residence to be homesteaded, with no opposition voiced, then approved the amended substitute and sent it to Rules.

  3. House Rules Committee, March 2, 2026

    From 0:30:56 · Watch on the General Assembly's Vimeo channel

    Summary by Georgia Commons: The sponsor described HB 1166 as limiting local zoning requirements for construction or use of a secondary dwelling of 400 square feet or less on land already zoned residential. No questions or decision followed.

  4. House floor session, March 6, 2026 (legislative day 28, PM, part 2)

    From 1:41:29 · Watch on the General Assembly's Vimeo channel · Confirmed by the 2026 House Journal, p. 2168

    Summary by Georgia Commons: The presenting member said HB 1166 would allow a homeowner to build one secondary dwelling of 400 square feet or less on residential property without a zoning decision. The member said these units could house relatives or caregivers, provide rentals for workers and supplement homeowners' income. The member said local governments would retain authority over building codes, septic systems and other health and safety rules. In response to questions, the member confirmed that the units could offer an alternative to assisted living and said the approach had been proposed for several years to address housing shortages. A second supporting member described committee discussions involving the Georgia Municipal Association, home builders and real estate representatives, and said communities need more affordable housing choices. The House adopted the committee substitute and passed the bill 111-50.

  5. House Rules Committee, March 6, 2026

    From 0:45:06 · Watch on the General Assembly's Vimeo channel · Confirmed by the 2026 House Journal, p. 2140

    Summary by Georgia Commons: The committee placed HB 1166 on the day’s supplemental floor calendar under modified structure following a motion and second, with no opposition stated. No substantive discussion occurred.

  6. Senate State and Local Governmental Operations Committee, March 26, 2026

    From 2:26:26 · Watch on the General Assembly's Vimeo channel

    Summary by Georgia Commons: The sponsor presented HB 1166 as a substitute establishing a recovery process for financially distressed cities, rather than the small-dwelling proposal originally associated with it. The sponsor described a locally requested state review, followed by a court-appointed receiver and recovery plan, generally for two years with possible extensions. The sponsor cited cities with missing audits, unpaid obligations and spending exceeding revenue, arguing that intervention could preserve services and avoid dissolving cities. A Georgia Municipal Association witness supported this middle option and explained that the substitute also removed outdated provisions from the 1990s. Members questioned late access to the extensive substitute, safeguards for cities already pursuing recovery, financial pressures outside local control, and whether a short-term deficit could trigger intervention. The sponsor said a majority of the local legislative delegation would have to request review. The committee adopted amendments requiring the 5% deficit condition to persist for two consecutive fiscal years without adequate cash reserves, recognizing a court resolution of certain contractor disputes, and allowing interested parties to challenge allegedly unlawful receiver actions. Legislative counsel said courts would determine whether those parties had standing. The amended substitute passed without a stated vote count.

Status timeline

  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)
Show full history (9 actions)
  1. 2026-02-03House Hopper (House)

Sponsors

  • Tangie Herring (D, HD-145)Primary sponsor
  • Mary Margaret Oliver (D, HD-84)
  • Spencer Frye (D, HD-122)
  • Dale Washburn (R, HD-144)
  • Shea Roberts (D, HD-52)
  • Anissa Jones (D, HD-143)
  • Jason Anavitarte (R, SD-31)

Votes

  1. PassedHouse voteMarch 6, 2026

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

    PASSAGE: House Vote #674

Topics

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

Ask about this bill

Answers come from this document. Not legal advice.

Machine-readable https://georgiacommons.org/bills/2025-2026/hb1166.md · https://georgiacommons.org/bills/index.md · MCP https://mcp.georgiacommons.org/mcp

HB1166: Local government; zoning decisions shall not affect or be required for certain residential dwellings of 400 square feet or fewer; provide | Georgia Commons