HB 416: Local government; enterprise zones; revise class of retailer from which fees may be collected

Georgia law allows local governments to designate enterprise zones around large redevelopment projects, worth at least $400 million in investment, that have been chronically underdeveloped for 20 years or more. Businesses in these zones get a sales and use tax exemption, and local governments can charge an annual infrastructure fee to help pay for development, up to the amount of tax those businesses were exempted from. This bill changes who can be charged that fee. Instead of any retailer operating within the project's boundaries, only retailers that qualify as a business or service enterprise making sales exempted from the sales tax under the law can be charged. The bill also changes how long these special enterprise zones last: instead of 30 years from designation or until the redevelopment project is finished and any revenue bonds are paid off (whichever comes first), the 30 year clock now starts when the local government first issues revenue bonds worth more than $100,000 tied to the project. The bill also makes a small technical fix to how an urban redevelopment area is defined by cross-reference.

• Narrows the enterprise zone infrastructure fee so it can only be collected from retailers that qualify as a business or service enterprise with sales exempted from sales and use tax, not every retailer operating in the project.
• Changes when the 30 year existence period for large redevelopment enterprise zones starts, tying it to the first issuance of revenue bonds over $100,000 instead of the zone's designation date or project completion.
• Removes the prior rule that the enterprise zone could end early once the redevelopment project was finished and bonds were retired.
• Fixes a cross-reference in the definition of urban redevelopment area used to qualify a nominated area as an enterprise zone.

Local governments (cities and counties) that create enterprise zones around large redevelopment projects, retailers and businesses operating in those zones, and holders of revenue bonds issued to fund development or infrastructure within an enterprise zone.

The changes affect how much money a local government can collect in enterprise zone fees and from whom, and how long a large redevelopment zone's tax exemptions and fee authority last, which shapes financing for major redevelopment projects with at least $400 million in investment.

• Section 1 revises O.C.G.A. § 36-88-6(g)(1)(A) to clean up how the urban redevelopment area definition is cross-referenced.
• Section 1 revises O.C.G.A. § 36-88-6(g)(4) to limit the enterprise zone infrastructure fee to retailers that are qualifying business or service enterprises making exempted sales, rather than all retailers operating in the project.
• Section 2 revises O.C.G.A. § 36-88-10 so that a large redevelopment enterprise zone remains in existence for 30 years starting from the first issuance of revenue bonds exceeding $100,000 in principal.
• Section 2 removes the earlier end date tied to completion of the redevelopment project and retirement of its bonds.
• Section 3 repeals any conflicting laws.

1. 2025-07-01Effective Date
2. 2025-05-14Act 266
3. 2025-05-14House Date Signed by Governor (House)
4. 2025-04-07House Sent to Governor (House)
5. 2025-03-31Senate Passed/Adopted (Senate)
6. 2025-03-31Senate Third Read (Senate)
7. 2025-03-31Senate Taken from Table (Senate)
8. 2025-03-31Senate Tabled (Senate)

• Chuck Efstration (R, HD-104)Primary sponsor
• Shaw Blackmon (R, HD-146)
• Trey Kelley (R, HD-16)
• Bill Cowsert (R, SD-46)

1. PassedHouse voteMarch 3, 2025

   172 yea, 0 nay (6 not voting, 2 excused)

   PASSAGE: House Vote #131

2. PassedSenate voteMarch 31, 2025

   47 yea, 8 nay (0 not voting, 1 excused)

   PASSAGE: Senate Vote #374

• enterprise zones
• local government finance
• sales tax exemptions
• economic development
• revenue bonds