---
title: HB 863. Georgia Small Business Set-Aside Act; enact
collection: bills
id: 2025-2026/hb863
cite_as: HB 863, 2025-2026 Regular Session (Ga.)
canonical_url: https://georgiacommons.org/bills/2025-2026/hb863
md_url: https://georgiacommons.org/bills/2025-2026/hb863.md
text_url: https://georgiacommons.org/bills/2025-2026/hb863/text
source_url: https://www.legis.ga.gov/legislation/71665
date: 2026-02-26
status: introduced
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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index: https://georgiacommons.org/bills/index.md
omitted: votes and history
omitted_chars: 199
omitted_url: https://georgiacommons.org/bills/2025-2026/hb863.md?full=1
bill_number: HB 863
session: 2025-2026 Regular Session
session_slug: 2025-2026
chamber: House
bill_type: bill
status_date: 2025-03-25
last_action: House Committee Favorably Reported By Substitute
sponsors:
- Teddy Reese
- Karen Mathiak
- Michael Smith
- Jason Ridley
- Bryce Berry
text_version: Comm Sub
has_text: true
legiscan_url: https://legiscan.com/GA/bill/HB863/2025
upstream_id: 2014709
summaries_model: claude-sonnet-5
topic_tags:
- small business
- state contracting
- government procurement
- economic development
---
# HB 863. Georgia Small Business Set-Aside Act; enact
## Text
The House Committee on Governmental Affairs offers the following substitute to
HB 863:
A BILL TO BE ENTITLED
AN ACT
To amend Part 3 of Article 3 of Chapter 5 of Title 50 of the Official Code of Georgia
Annotated, relating to small business assistance relative to state purchasing, so as to provide
for a small business set-aside program administered by the Department of Administrative
Services under which state agencies would be required to make reasonable efforts to dedicate
20 percent of their annual procurement contracts to projects and contracts involving Georgia
small businesses; to provide for certification of small businesses; to provide for a small
business directory; to provide for an annual reporting requirement; to provide for rules and
regulations; to provide for definitions; to provide for a short title; to provide for related
matters; to repeal conflicting laws; and for other purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
This Act shall be known and may be cited as the "Georgia Small Business Set-Aside Act."
SECTION 2.
Part 3 of Article 3 of Chapter 5 of Title 50 of the Official Code of Georgia Annotated,
relating to small business assistance relative to state purchasing, is amended by revising Code
Section 50-5-120, which is reserved, as follows:
"50-5-120.
(a) As used in this part, the term:
(1) 'Department' means the Department of Administrative Services.
(2) 'Set-aside program' means a procurement process in which the department makes
reasonable efforts to ensure a specified percentage of contracts or procurement
opportunities are reserved exclusively for small businesses.
(3) '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.
(4) 'State agency' means any department, agency, commission, board, or other entity of
the state that engages in the procurement of goods, services, or construction.
(b) The department shall establish a set-aside program under which each state agency shall
make reasonable efforts to set aside at least 20 percent of its annual procurement contracts
exclusively for small businesses. The department shall identify eligible contracts and
publish set-aside program opportunities on its official procurement website.
(c) To qualify for the set-aside program, a business shall be certified by the department as
a small business. Certification criteria shall include business size, revenue, and operational
capacity. The department shall establish an application process for certification and
maintain a directory of certified small businesses.
(d) Each state agency shall submit an annual report to the department detailing the total
value of contracts awarded to small businesses under the set-aside program. The
department shall submit an annual report to the Governor and General Assembly
documenting the total value of contracts awarded by state agencies to small businesses
under the set-aside program. State agencies failing to set aside at least 20 percent of their
annual procurement contracts for small businesses, as provided for under subsection (b) of
this Code section, shall submit a corrective action plan to the department.
(e) The department shall develop rules and regulations necessary to implement and enforce
the provisions of this Code section. The department is authorized to conduct training
sessions and provide resources to assist small businesses in navigating state procurement
opportunities under the set-aside program. Reserved."
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 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.
### Plain-language summary
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 it 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.
## Status
- Status: Introduced (2025-03-25)
- Last action: House Committee Favorably Reported By Substitute (2026-02-26)
- Sponsors: Teddy Reese, Karen Mathiak, Michael Smith, Jason Ridley, Bryce Berry
- Official page: https://www.legis.ga.gov/legislation/71665
> The history, votes, and amendments (199 characters) are at https://georgiacommons.org/bills/2025-2026/hb863.md?full=1