Georgia CommonsHouse · Introduced · 2025-2026 Regular Session
HB 863: Georgia Small Business Set-Aside Act; enact
Last action February 26, 2026 · House Committee Favorably Reported By Substitute
A House committee substitute would require Georgia state agencies to set aside at least 20 percent of their annual procurement contracts for small businesses, with certification and reporting run through the Department of Administrative Services.
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
Currently, Code Section 50-5-120 in Georgia law is reserved, meaning it holds no active text. This bill fills it in to create the Georgia Small Business Set-Aside Act. It directs the Department of Administrative Services to set up a set-aside program under which every state agency that buys goods, services, or construction must make reasonable efforts to reserve at least 20 percent of its yearly procurement contracts exclusively for small businesses. A small business is defined as one that is independently owned and operated with either fewer than 50 employees or less than $10 million in yearly gross receipts. Businesses must apply and be certified by the department, which will keep a directory of certified small businesses and publish set-aside opportunities online. Agencies must report yearly on how much contract value went to small businesses, and agencies that fall short of the 20 percent target must submit a corrective action plan. The department can also write implementing rules and offer training to help small businesses compete for state contracts.
What the bill does
- Creates a small business set-aside program requiring state agencies to try to reserve at least 20 percent of annual procurement contracts for small businesses.
- Defines a qualifying small business as independently owned and operated with fewer than 50 employees or under $10 million in yearly gross receipts.
- Requires businesses to be certified by the Department of Administrative Services and adds them to an official small business directory.
- Requires each state agency to file an annual report on contract value awarded to small businesses, compiled by the department for the Governor and General Assembly.
- Requires agencies that miss the 20 percent target to submit a corrective action plan to the department.
- Authorizes the department to write implementing rules and provide training and resources to help small businesses navigate state procurement.
Who it affects
Georgia state agencies, departments, commissions, and boards that purchase goods, services, or construction; small businesses seeking state contracts; and the Department of Administrative Services, which would run certification, the directory, and reporting for the new program.
Why it matters
If enacted, small businesses could gain easier access to a defined share of state contracting dollars, while state agencies would face a new procurement target, a certification and reporting process, and a corrective action requirement if they fall short of the 20 percent goal.
Key provisions
- Section 1 titles the bill the 'Georgia Small Business Set-Aside Act.'
- Section 2 rewrites the previously reserved Code Section 50-5-120 to define 'department,' 'set-aside program,' 'small business,' and 'state agency.'
- Subsection (b) requires the department to establish the set-aside program and directs agencies to make reasonable efforts to reserve 20 percent of annual procurement contracts for small businesses.
- Subsection (c) requires department certification for a business to qualify, based on size, revenue, and operational capacity, and creates a small business directory.
- Subsection (d) requires annual agency reporting on contract value to small businesses and requires a corrective action plan from agencies that miss the 20 percent target.
- Subsection (e) authorizes the department to adopt rules and regulations and to provide training and resources to small businesses.
- Section 3 repeals conflicting laws.
From the bill
“each state agency shall make reasonable efforts to set aside at least 20 percent of its annual procurement contracts exclusively for small businesses”
“'Small business' means a business that is independently owned and operated. In addition, such business must have either fewer than 50 employees or less than $10 million in gross receipts per year.”
Discussed in meetings (5)
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.
House Small Business Development Committee, February 17, 2026
From 0:28:23 · Watch on the General Assembly's Vimeo channel
Summary by Georgia Commons: Following a vehicle dealer’s concerns about access to state purchasing opportunities, an NFIB representative highlighted HB 863. The representative described it as bipartisan legislation requiring agencies to consider directing 20% of their purchasing toward small businesses. A committee member asked for confirmation of the bill’s number. No vote was taken.
House Governmental Affairs Committee, February 25, 2026
From 1:41:01 · Watch on the General Assembly's Vimeo channel
Summary by Georgia Commons: The sponsor said the substitute for HB 863 would ask state agencies to make reasonable efforts to award at least 20% of annual procurement contracts to Georgia small businesses, rather than impose a requirement. Asked what share small businesses currently receive, the sponsor said they did not know. An Atlanta Black Chambers witness supported the bill, stating that Georgia has more than 1.3 million small businesses employing nearly half the state's workforce and that state purchasing totals approximately $4 billion annually. The witness said qualified businesses often lack access to contracting opportunities and described procurement training offered through partner organizations. A supporting committee member emphasized that the proposal carried no mandate or penalty. The committee approved the substitute by voice vote, with no opposition voiced.
House Rules Committee, March 2, 2026
From 0:24:25 · Watch on the General Assembly's Vimeo channel
Summary by Georgia Commons: A presenter speaking for the sponsor said HB 863 would establish a small-business set-aside program through the Department of Administrative Services, dedicating 20% of annual procurement contracts to small businesses. No questions or decision followed.
House Small Business Development Committee, March 10, 2026
From 0:18:06 · Watch on the General Assembly's Vimeo channel
Summary by Georgia Commons: The Georgia Micro Enterprise Network's chief executive officer supported HB 863, saying it would give small businesses and micro-enterprises access to government purchasing opportunities. The witness said many businesses were not ready for those opportunities and described the organization's work helping them prepare financial records and build business skills. The witness said the bill had not advanced and expressed hope that it would return the following year. The committee took no action on the bill.
Status timeline
- House Committee Favorably Reported By Substitute (House)
- House Second Readers (House)
- House First Readers (House)
- House Hopper (House)
Sponsors
- Tremaine Teddy Reese (D, HD-140)
- Karen Mathiak (R, HD-82)
- Michael Smith (D, HD-41)
- Jason Ridley (R, HD-6)
- Bryce Berry (D, HD-56)
Topics
- small business
- state contracting
- government procurement
- economic development