---
title: HB 1166. Local government; zoning decisions shall not affect or be required for certain residential dwellings of 400 square feet or fewer; provide
collection: bills
id: 2025-2026/hb1166
cite_as: HB 1166, 2025-2026 Regular Session (Ga.)
canonical_url: https://georgiacommons.org/bills/2025-2026/hb1166
md_url: https://georgiacommons.org/bills/2025-2026/hb1166.md
text_url: https://georgiacommons.org/bills/2025-2026/hb1166/text
source_url: https://www.legis.ga.gov/legislation/72776
date: 2026-03-27
status: engrossed
corpus_version: bills-2026-09-13
license: Public record of the Georgia General Assembly, via LegiScan; see about.md
publisher: Georgia Commons, an independent project of Georgia Civic Data. Not the State of Georgia. Not legal advice.
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omitted: votes and history
omitted_chars: 613
omitted_url: https://georgiacommons.org/bills/2025-2026/hb1166.md?full=1
bill_number: HB 1166
session: 2025-2026 Regular Session
session_slug: 2025-2026
chamber: House
bill_type: bill
status_date: 2026-03-06
last_action: Senate Read Second Time
sponsors:
- Tangie Herring
- Mary Oliver
- Spencer Frye
- Dale Washburn
- Shea Roberts
- Anissa Jones
- Jason Anavitarte
text_version: Comm Sub
has_text: true
legiscan_url: https://legiscan.com/GA/bill/HB1166/2025
upstream_id: 2106699
summaries_model: claude-sonnet-5
topic_tags:
- municipal receivership
- local government finance
- city dissolution
- distressed municipalities
- state oversight of cities
---
# HB 1166. Local government; zoning decisions shall not affect or be required for certain residential dwellings of 400 square feet or fewer; provide
## Text
The Senate Committee on State and Local Governmental Operations - General offered
the following substitute to HB 1166:
A BILL TO BE ENTITLED
AN ACT
To amend Chapter 30 of Title 36 of the Official Code of Georgia Annotated, relating to
general provisions regarding provisions applicable to municipal corporations only, so as to
provide for conclusive evidence of termination or continuation of certain municipal
corporations; to provide for a review commission for distressed municipalities; to provide
for investigation of distressed municipalities; to provide for reports by a review commission;
to provide for petition to appoint a receiver; to provide for certain hearings; to provide for
the appointment of a receiver; to provide for the qualifications, powers, and duties of the
receiver; to provide for certain restrictions on receivers; to provide for a recovery plan; to
provide for extensions to a recovery plan; to provide for automatic end of a receivership; to
provide for certain emergency assistance; to provide for a roster of certain entities and
individuals; to provide for a definition; to provide for related matters; to repeal conflicting
laws; and for other purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
Chapter 30 of Title 36 of the Official Code of Georgia Annotated, relating to general
provisions regarding provisions applicable to municipal corporations only, is amended by
revising Code Section 36-30-7.1, relating to inactive municipalities, as follows:
"36-30-7.1.
(a) On and after July 1, 1995, any Any municipal corporation in this state shall be deemed
an inactive municipality and its charter shall be repealed by operation of law if the
municipal corporation fails to meet any of the minimum standards provided in subsection
(b) of this Code section for determining an active municipality.
(b) An active municipality is any incorporated municipality in this state the governing
body of which meets each of the following minimum standards:
(1) Provides at least three of the following services, either directly or by contract:
(A) Law enforcement;
(B) Fire protection (which may be furnished by a volunteer fire force) and fire safety;
(C) Road and street construction or maintenance;
(D) Solid waste management;
(E) Water supply or distribution or both;
(F) Waste-water treatment;
(G) Storm-water collection and disposal;
(H) Electric or gas utility services;
(I) Enforcement of building, housing, plumbing, and electrical codes and other similar
codes;
(J) Planning and zoning; and
(K) Recreational facilities;
(2) Holds at least six regular, monthly or bimonthly, officially recorded public meetings
within the 12 months next preceding the execution of the certificate required by
subsection (c) of this Code section; and
(3) Qualifies for and holds a regular municipal election as provided by law, other than
a municipality which has a governing authority comprised composed of commissioners
or other members who are appointed by a judge of the superior court.
(c) Not later than July 1, 1994, each municipal corporation in this state shall file with the
Department of Community Affairs either:
(1) A certification from the governing authority that the municipal corporation meets the
minimum standards for determining an active municipality enumerated in subsection (b)
of this Code section; or
(2) A certification from the governing authority that the municipal corporation does not
meet the minimum standards for determining an active municipality enumerated in
subsection (b) of this Code section, including a statement that the governing authority
recognizes that its legal existence will under the provisions of this Code section be
terminated as of July 1, 1995.
(d) After October 15, 1994, the Department of Community Affairs shall transmit to the
governing authority of each municipal corporation in the state either:
(1) A statement confirming that the Department of Community Affairs has received from
the municipal corporation the filing required by subsection (c) of this Code section,
including a statement of which type of filing was received from that municipal
corporation; or
(2) A statement that the Department of Community Affairs has not received from the
municipal corporation the filing required by subsection (c) of this Code section, including
a statement that the municipal corporation's legal existence will be terminated as of July
1, 1995, unless such filing is received by December 31, 1994.
(e) A municipal corporation which does not timely make the filing required by subsection
(c) of this Code section shall have a grace period until December 31, 1994, to make such
filing. However, if such filing is not made by December 31, 1994, the legal status of the
municipal corporation shall be the same as that of a municipal corporation which does not
meet the minimum standards for determining an active municipality enumerated in
subsection (b) of this Code section; and such municipal corporation shall cease to have
legal existence as of July 1, 1995.
(f) As quickly as practicable after December 31, 1994, the Department of Community
Affairs shall compile a listing of all municipal corporations in this state indicating those
whose legal existence will be terminated as of July 1, 1995, and those whose legal
existence will not be so terminated.
(c) A certified copy of such listing shall be the listing of all municipal corporations whose
existence was terminated as of July 1, 1995, or whose legal existence had not been
terminated on such date, which had been provided to the Secretary of State and shall be
conclusive evidence, acceptable in any court and recordable in any public records, of the
termination or continuation of existence of a municipal corporation. The Secretary of State
shall transmit such a certified copy of the listing to the legislative counsel for publication
in the Georgia Laws for the year 1995, and all All courts of this state may take judicial
notice of the listing so published.
(g)(d) Upon the termination of existence of a municipal corporation as provided for in this
Code section, the existence of any local authority created by or for such municipal
corporation shall likewise terminate on the same date. Upon the termination of any
municipal corporation or local authority under this Code section, all assets, property, and
legal rights and obligations of the municipal corporation or local authority shall devolve
by operation of law upon the governing authority of the county in which the legal situs of
the municipal corporation or local authority was located; provided, however, that this
devolution of rights and obligations shall in no manner obligate the county to provide
continued employment for any employee of the abolished municipal corporation or local
authority. In the case of legal indebtedness of a municipal corporation or local authority
devolving upon a county under this Code section, the county shall be authorized but not
required to levy a special district tax, fee, or assessment within the formerly incorporated
territory (or a portion thereof corresponding to any special district for which the
indebtedness was incurred) for the purpose of retiring all or a portion of such indebtedness.
Assets devolved to the county governing authority pursuant to this Code section which are
deemed to be excess by the county shall be used to retire any indebtedness of the
terminated municipal corporation or local authority. Property devolved to the county
governing authority pursuant to this Code section which is deemed to be unnecessary by
the county shall be sold and the proceeds from such sale used to retire any indebtedness of
the terminated municipal corporation or local authority.
(h)(e)(1) Upon the termination of existence of a municipal corporation as provided in this
Code section, the geographic area that was contained in the boundaries of the former
municipal corporation may continue to be identified under the same name and style as the
former municipal corporation, and for such purpose signs and other appropriate insignia
may be erected for such identification.
(2) The Department of Community Affairs shall establish a designation of 'historic
township' for communities created on or before 1900, provide for the establishment of
unincorporated town councils, provide a procedure for converting such municipalities to
townships, and for registration of such.
(i) At the session of the General Assembly held in the year 1996 only, a new charter may
be granted to a municipal corporation which ceased to exist under the provisions of this
Code section solely because of a failure to make the required filing with the Department
of Community Affairs (not including any case where the municipal corporation failed to
meet the minimum standards of an active municipality enumerated in subsection (b) of this
Code section), without regard to the minimum standards for incorporation set out in
Chapter 31 of this title. In such a case the local law granting the new charter shall have
attached thereto, in lieu of the certificate otherwise required by Code Section 36-31-5, a
certificate by the author of the bill stating that the requirements of this subsection are met
by the municipal corporation being reincorporated. In any such case assets and property
and rights and obligations which devolved upon the county shall be retransferred from the
county back to the municipal corporation.
(j)(f) In any case in which the legal dissolution of a municipal corporation has not been
certified under the provisions of subsection (f) (c) of this Code section but the municipal
corporation does not in fact meet the minimum standards for determining an active
municipality enumerated in subsection (b) of this Code section, any citizen of the
municipal corporation or the county in which the legal situs of the municipal corporation
is located may bring at any time on or after July 1, 1995, a declaratory judgment action for
a declaration of the dissolution of the municipal corporation. Any such action shall be
brought in the superior court of the county wherein the legal situs of the municipal
corporation is located. If a judgment is entered declaring the dissolution of the municipal
corporation, the court shall file a certified copy of the judgment with the Secretary of State
and the legislative counsel. A copy of such judgment shall be published in the next
publication of the annual session laws with the same status and effect provided for in
subsection (f) (c) of this Code section; and a certified copy of the judgment from the court
or the Secretary of State shall have the same status and effect as described in subsection (f)
(c) of this Code section."
SECTION 2.
Said chapter is further amended by adding a new Code section to read as follows:
"36-30-7.2.
(a) As used in this Code section, the term 'distressed municipality' means any municipal
corporation in this state, or an authority controlled directly or indirectly by such municipal
corporation, which failed to meet any one of the minimum standards specified for an active
municipality pursuant to subsection (b) of Code Section 36-30-7.1 or has met at least two
of the following criteria:
(1) The municipality has failed to comply with the requirements of Code Section 36-81-7
for two consecutive years;
(2) The municipality has failed to prepare and approve an annual budget for two
consecutive fiscal years pursuant to Code Section 36-81-5;
(3) The municipality has failed to make required payments to judgment creditors for 90
days beyond the date of the recording of the judgment;
(4) The municipality has contracted for one or more of the services listed in
subsection (1) of paragraph (b) of Code Section 36-30-7.1, owes the contractor or other
governing authority payments in excess of 12 months of contracted service price, and has
failed to reach a written agreement or judicial disposition with such contractor or
governing authority on repayment of such outstanding balance;
(5) The municipality's incurred debt exceeds the limits allowed by Article IX, Section V,
Paragraph I of the Georgia Constitution;
(6) The municipality has defaulted in payment of principal or interest on any of its bonds
or notes or in payment of rentals due any authority;
(7) The municipality has been unable to pay employees for 30 days;
(8) The municipality has failed to forward taxes withheld on the income of employees
or has failed to transfer employer or employee contributions for social security for a
period of at least 30 days; or
(9) The municipality has accumulated and operated a deficit equal to 5 percent or more
of its revenues for two consecutive fiscal years without adequate cash reserves.
(b)(1) The Governor shall appoint a review commission upon written request from the
majority of the Senators and Representatives whose districts include all or a portion of
the geographical area of a municipal corporation alleging that the municipal corporation
is a distressed municipality. Such request shall include the specific reasons for alleging
such municipal corporation is a distressed municipality. The review commission shall
be composed of the commissioner of community affairs and two municipal officials who
are not located within the same county or counties as the alleged distressed municipality.
The members of the review commission shall receive no compensation for their services,
but shall be reimbursed for any expenses incurred in connection with the investigation.
The funds necessary to conduct the investigation shall come from funds appropriated to
the executive branch of government.
(2)(A) The review commission shall make a written report of its findings to the
Governor within 14 days of appointment; provided, however, that the Governor may
grant a review commission additional time to report. If the review commission finds
that the municipal corporation is a distressed municipality, then the Governor shall
review such findings and may direct the Attorney General to file a petition in the
superior court of the judicial circuit of the alleged distressed municipality. Such
petition shall name an individual to be appointed, and the superior court shall have no
authority to appoint anyone other than the individual named in the petition.
(B)(i) 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. The receiver's
compensation and reimbursement for actual and necessary expenses shall be paid by
this state and compensation shall be established by the Attorney General; provided,
however, that the Attorney General may seek and shall be entitled to reimbursement
of any such expenses from the distressed municipality within five years of the end of
the receivership.
(ii) A receiver appointed pursuant to this subsection shall not seek or hold a position
as an elected or appointed public official within this state or as a political party officer
during the term of the receivership and within one year of the receivership ending.
The receiver shall also not receive any compensation, fee, or commission from the
distressed municipality, or receive any fee or commission from the sale or lease of
property or other financial transaction involving the distressed municipality.
(iii) A receiver shall not be personally liable for any obligations of the distressed
municipality and shall enjoy sovereign immunity and official immunity and remain
immune from any suit except as the General Assembly shall waive such immunities.
(C) The Attorney General shall serve the petition appointing a receiver upon the
governing body of the distressed municipality and the chief executive officer of the
distressed municipality. Additionally, the Attorney General shall publish notice of the
filing of the petition in the legal organ of the county which is the legal situs of the
municipality or in a newspaper having a general circulation in such county at least
equal to that of the legal organ at least seven days before any hearing on such petition.
(c) The superior court shall conduct a hearing on the petition within 30 days of the
Attorney General filing such petition. The court shall issue an order on the petition within
60 days of the filing of the petition, laying out findings of fact and a determination of
whether a municipal corporation is a distressed municipality.
(d) If the superior court grants the petition and finds that the municipal corporation is a
distressed municipality, such court's order shall:
(1) Set forth findings;
(2) Declare the distressed municipality to be in receivership;
(3) Appoint a receiver for a period not to exceed two years; provided, however, the
Attorney General may request additional two-year extensions if further implementation
of a recovery plan is necessary to bring the municipality out of distress; and
(4) Direct the receiver to develop a recovery plan pursuant to subsection (e) of this Code
section within 30 days and submit such plan to the court, the Attorney General, the
governing body of the distressed municipality, and if applicable, the chief executive
officer of the distressed municipality.
(e)(1) The recovery plan developed by the receiver shall include:
(A) The continued provision of vital and necessary services;
(B) Payment of the financial obligations of the distressed municipality, including, but
not limited to, debt obligations, municipal securities, lease rental obligation, legal
obligations, and consensual modifications of existing obligations; and
(C) Timely deposit of required payments to the pension fund in which the distressed
municipality participates.
(2) The recovery plan may provide for:
(A) The sale, lease, conveyance, assignment, or other use or disposition of the assets
of the distressed municipality or authority;
(B) The approval, modification, rejection, renegotiation, or termination of contracts or
agreement of the distressed municipality, except to the extent prohibited by the
Constitutions of Georgia and of the United States;
(C) The execution of new contracts or agreements; and
(D) Other information the receiver deems appropriate.
(3) The recovery plan shall not and the receiver shall not be authorized to:
(A) Unilaterally adopt any form of taxation beyond what is authorized by law or the
Constitution of Georgia;
(B) Unilaterally abrogate, alter, or otherwise interfere with a lien, charge, covenant, or
relative priority that is held by a holder of a debt obligation of the distressed
municipality and granted by contract, law, rule, or regulation governing debt
obligations;
(C) Unilaterally impair or modify existing bonds, notes, municipal securities, or other
lawful contractual or legal obligations of the distressed municipality; or
(D) Authorize the use of the proceeds of the sale, lease, conveyance, assignment, or
other use or disposition of the assets of the distressed municipality without first
applying such proceeds to the payment of outstanding debt obligations owed by the
distressed municipality, subject to any lien, charge, covenant, restriction, contract, law,
rule, or regulation that encumbers or is otherwise applicable to the assets.
(f)(1) The court shall conduct a hearing on the recovery plan within 30 days of receiving
such plan from the receiver. The court shall confirm the recovery plan within 60 days of
receipt of such plan unless it finds by clear and convincing evidence that the plan is
arbitrary, capricious, or wholly inadequate to alleviate the fiscal emergency in the
distressed municipality.
(2) The receiver shall notify the court of any modification to the recovery plan. The
court may conduct a hearing on the modification plan within 30 days of receiving such
plan. The court shall confirm the modification of the recovery plan within 60 days of
receiving such plan unless it finds by clear and convincing evidence that the plan is
arbitrary, capricious, or wholly inadequate to alleviate the fiscal emergency in the
distressed municipality.
(g) Notwithstanding any other provision of law to the contrary, the receiver shall have the
following powers and duties:
(1) To require the distressed municipality or authority to take actions necessary to
implement the recovery plan;
(2) To modify the recovery plan as necessary to achieve the financial stability of the
distressed municipality;
(3) To require the distressed municipality to negotiate intergovernmental agreements
between itself and another political subdivision of this state to eliminate and avoid
deficits, maintain sound budgetary practices, and avoid interruption of municipal
services;
(4) To submit quarterly reports to the governing body and, if applicable, the chief
executive officer of the distressed municipality and to the Attorney General. Such reports
shall be posted on a publicly accessible website maintained by the distressed
municipality;
(5) To require the distressed municipality to cause the sale, lease, conveyance,
assignment, or other use or disposition of the distressed municipality's assets;
(6) To approve, disapprove, modify, reject, terminate, or renegotiate contracts and
agreements with the distressed municipality except to the extent prohibited by the
Constitutions of Georgia and of the United States;
(7) To direct the distressed municipality to take any other action to implement the
recovery plan;
(8) To attend open and closed meetings of the governing body of the distressed
municipality and make reports to the public on implementation of such plan;
(9) To employ financial or legal experts deemed necessary to develop and implement the
recovery plan; provided, however, that notwithstanding any law to the contrary, the
employment of such experts shall not be subject to any contractual competitive bidding
procedures;
(10) To make a recommendation to the Attorney General that the municipality be
disincorporated; and
(11) To make a recommendation to the Attorney General and the court that the
municipality be removed from receivership.
(h)(1) A receiver appointed pursuant to this Code section shall have the power to issue
orders to elected or appointed officials of the distressed municipality to implement any
provision of the recovery plan and to refrain from taking any action which would
interfere with the powers granted to the receiver or the goals of the recovery plan. Any
such order shall be enforceable by bringing an action pursuant to Article 2 of Chapter 6
of Title 9; provided, however, that the court shall grant or deny the relief from such action
within 14 days of the filing of any such action.
(2) Any elected or appointed official or other interested party of a distressed municipality
may petition the court to enjoin any action of the receiver that is contrary to this Code
section.
(i) Except as otherwise provided for in this Code section, the receivership shall expire two
years after the appointment of the receiver.
(j) Notwithstanding any other provision of law to the contrary, if the Governor determines
that the need for state assistance for, oversight of, or intervention for a distressed
municipality is of an emergency nature such that a delay in action would cause material
harm to the provision of public services or to the financial interests of this state, the
Governor may direct the Department of Administrative Services to authorize an emergency
procurement pursuant to Code Section 50-5-71, or to utilize existing state-wide contracts
or prequalified vender rosters established pursuant to subsection (k) of this Code section
to secure necessary staffing or professional services in an expeditious manner. Any such
emergency procurement shall be reported to the chairpersons of the Senate Finance
Committee and the House Committee on Ways and Means within ten business days.
(k)(1) The Department of Administrative Services, in consultation with the state auditor
and the Department of Community Affairs, shall establish and maintain a master
state-wide contract roster for local government turnaround specialists pursuant to Code
Section 50-5-57.
(2) To qualify for inclusion on such roster, a firm or individual shall demonstrate;
(A) Experience in providing fiscal recovery or financial advisory services to
governmental entities of comparable complexity;
(B) Professional credentials in governmental accounting, public administration, or
municipal finance, including, but not limited to, certified public accountants or
equivalent licensure or certification; and
(C) No disqualifying conflicts of interest with this state or any of its political
subdivisions.
(3) The Department of Administrative Services shall conduct a competitive solicitation
to establish the initial roster and shall update such roster no less frequently than every
three years. The Governor may utilize the roster to procure specialist services for any
local government subject to emergency process pursuant to this Code section, using the
expedited procurement process authorized pursuant to subsection (j) of this Code section."
SECTION 3.
All laws and parts of laws in conflict with this Act are repealed.
## Summaries written by Georgia Commons
The following was written by claude-sonnet-5 from the text above and is not part of the bill. Quote the text, not the summary.
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.
### Plain-language summary
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 it 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.
## Status
- Status: Engrossed (2026-03-06)
- Last action: Senate Read Second Time (2026-03-27)
- Sponsors: Tangie Herring, Mary Oliver, Spencer Frye, Dale Washburn, Shea Roberts, Anissa Jones, Jason Anavitarte
- Official page: https://www.legis.ga.gov/legislation/72776
> The history, votes, and amendments (613 characters) are at https://georgiacommons.org/bills/2025-2026/hb1166.md?full=1