Georgia CommonsHB 328: Revenue and taxation; increase annual aggregate limit for tax credits available for certain contributions to student scholarship organizations
Last action May 11, 2026 · Effective Date 2026-07-01
House Bill 328 raises the yearly cap on Georgia's tax credit for donations to private-school scholarship funds from $120 million to $150 million, while also changing who qualifies for scholarships, restricting virtual school enrollment across district lines, and limiting how transit sales tax money can be used.
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 Enrolled version, the latest LegiScan holds.
In plain language
Georgia allows donors to get a state tax credit for contributing to student scholarship organizations (SSOs), which fund private-school scholarships. This bill raises the annual statewide cap on those credits from $120 million to $150 million, and changes the separate cap on credits businesses can claim against insurance premium taxes from a flat $6 million to 6 percent of the total credit pool. It also raises the cap on a related tax credit for donations to public school grant programs from $15 million to $25 million per year. The bill changes who counts as an eligible scholarship student, waiving the usual six-week public school attendance requirement for children of active-duty military stationed in Georgia and for students with an IEP, a Section 504 Plan, or certain diagnosed disabilities, and lets those students receive scholarships above the normal per-student cap. It bars General Assembly members and their spouses from taking income from an SSO in a year it received credited contributions. Separately, it restricts virtual instruction to out-of-district students where school performance is low, excludes those students from equalization funding counts, and limits how transit sales tax revenue and reelection timing work for local transit ballot measures. Most provisions take effect July 1, 2026, applying to tax years starting January 1, 2027.
What the bill does
- Raises the statewide annual cap on tax credits for donations to student scholarship organizations from $120 million to $150 million.
- Changes the insurance premium tax credit sub-cap from a flat $6 million to 6 percent of the total scholarship tax credit pool.
- Increases the annual cap on tax credits for donations to public school grant programs from $15 million to $25 million.
- Waives the six-week public school attendance requirement for scholarship eligibility for military dependents and students with an IEP, Section 504 Plan, or certain diagnosed disabilities, and lets those students exceed the usual scholarship dollar cap.
- Bars members of the General Assembly and their spouses from receiving income from a scholarship organization in a year it received tax-credited donations.
- Prohibits a local school system from offering virtual instruction to out-of-district students if its performance index average falls below 65 for two straight years, and excludes those students from equalization funding counts.
Who it affects
Private school scholarship donors and recipients, families of active-duty military and students with disabilities seeking scholarships, members of the General Assembly and their spouses, local school systems that run virtual schools enrolling out-of-district students, public school grant donors, and counties considering transit sales tax measures.
Why it matters
More donors could claim scholarship tax credits before the pool runs out each year, potentially expanding private-school access, while military and disability-designated students gain easier eligibility and higher scholarship amounts. Meanwhile, districts with low-performing virtual schools would lose the ability to enroll outside students, and transit sales tax revenue could no longer subsidize free or reduced fares.
Key provisions
- Section 1 waives the six-week public school attendance rule for military dependents and students with an IEP, Section 504 Plan, or designated disability, letting them qualify for scholarships immediately.
- Section 2 exempts students with those same designations from the cap limiting scholarships to the average per-student public school expenditure.
- Section 3 creates new Code Section 20-2A-2.2 barring legislators and their spouses from receiving income from a scholarship organization in a year it received credited donations.
- Section 4 allows parents to authorize scholarship deposits by electronic signature instead of only by physical endorsement.
- Section 5 bars virtual instruction to out-of-district students if a school system's performance index averages below 65 over the prior two years, and excludes such students from equalization fund counts.
- Section 6 raises the overall scholarship tax credit cap from $120 million to $150 million per year and changes the insurance premium tax sub-cap to 6 percent of that total.
- Section 7 raises the cap on tax credits for donations to public school grant nonprofits from $15 million to $25 million per year.
- Section 8 bars transit sales tax revenue from funding free or reduced public transit fares, and Section 9 requires an eight-year wait before resubmitting a failed transit sales tax ballot question.
From the bill
“No member of the General Assembly or a spouse of a member of the General Assembly shall receive any income from a student scholarship organization during a taxable year in which such organization receives a contribution for which a tax credit pursuant to Code Section 48-7-29.16 was approved.”
“Not provide virtual instruction to out-of-system students in the current academic year if the local school system or its virtual school has failed to maintain an average of 65 or above on the College and Career Ready Performance Index over the previous two school years.”
Status timeline
- Effective Date 2026-07-01
- Act 463
- House Date Signed by Governor (House)
- House Sent to Governor (House)
- Senate Agreed House Amend or Sub (Senate)
- House Agreed Senate Amend or Sub As Amended (House)
- Senate Passed/Adopted By Substitute (Senate)
- Senate Third Read (Senate)
Show full history (20 actions)
- Senate Engrossed (Senate)
- Senate Committee Favorably Reported By Substitute (Senate)
- Senate Recommitted (Senate)
- Senate Read Second Time (Senate)
- Senate Committee Favorably Reported By Substitute (Senate)
- Senate Read and Referred (Senate)
- House Passed/Adopted By Substitute (House)
- House Third Readers (House)
- House Committee Favorably Reported By Substitute (House)
- House Second Readers (House)
- House First Readers (House)
- House Hopper (House)
Sponsors
- Kasey Carpenter (R, HD-004)
- Scott Hilton (R, HD-048)
- John Carson (R, HD-046)
- Jason Ridley (R, HD-006)
- Houston Gaines (R, HD-120)
- Martin Momtahan (R, HD-017)
- Shawn Still (R, SD-048)
Votes
- House voteMarch 6, 2025
98 yea, 75 nay (1 not voting, 6 absent)
- Senate voteMarch 25, 2026
32 yea, 19 nay (2 not voting, 1 absent)
- Senate voteMarch 25, 2026
30 yea, 20 nay (2 not voting, 2 absent)
- House voteMarch 31, 2026
99 yea, 67 nay (2 not voting, 8 absent)
- Senate voteApril 2, 2026
30 yea, 22 nay (0 not voting, 2 absent)
- Senate voteApril 2, 2026
30 yea, 22 nay (0 not voting, 2 absent)
Topics
- private school scholarships
- tax credits
- virtual schools
- education funding
- transit sales tax