--- title: SB 138. Incorporation of Municipal Corporations; transition of certain services related to newly incorporated municipalities in certain counties; provide collection: bills id: 2025-2026/sb138 cite_as: SB 138, 2025-2026 Regular Session (Ga.) canonical_url: https://georgiacommons.org/bills/2025-2026/sb138 md_url: https://georgiacommons.org/bills/2025-2026/sb138.md text_url: https://georgiacommons.org/bills/2025-2026/sb138/text source_url: https://www.legis.ga.gov/legislation/70097 date: 2025-05-14 status: passed corpus_version: bills-2026-08-28 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. up: https://georgiacommons.org/bills/2025-2026.md previous: https://georgiacommons.org/bills/2025-2026/sb137.md next: https://georgiacommons.org/bills/2025-2026/sb139.md index: https://georgiacommons.org/bills/index.md omitted: votes and history omitted_chars: 1260 omitted_url: https://georgiacommons.org/bills/2025-2026/sb138.md?full=1 bill_number: SB 138 session: 2025-2026 Regular Session session_slug: 2025-2026 chamber: Senate bill_type: bill status_date: 2025-05-14 last_action: Effective Date 2025-05-14 sponsors: - Clint Dixon - Shawn Still - Bill Cowsert - Ed Setzler - Jason Anavitarte - Chuck Efstration text_version: Enrolled has_text: true legiscan_url: https://legiscan.com/GA/bill/SB138/2025 upstream_id: 1964543 summaries_model: claude-sonnet-5 topic_tags: - municipal incorporation - local government services - police services funding - property and insurance taxes - Fulton County cities --- # SB 138. Incorporation of Municipal Corporations; transition of certain services related to newly incorporated municipalities in certain counties; provide ## Text 25 SB 138/AP Senate Bill 138 By: Senators Dixon of the 45th, Still of the 48th, Cowsert of the 46th, Setzler of the 37th and Anavitarte of the 31st AS PASSED A BILL TO BE ENTITLED AN ACT To amend Chapter 31 of Title 36 of the Official Code of Georgia Annotated, relating to1 incorporation of municipal corporations, so as to provide for the transition of certain services2 related to newly incorporated municipalities in certain countie s; to provide definitions; to3 provide for the provision and cost allocation of police and law enforcement services for such4 municipalities; to provide for the ownership, control, and maintenance of road rights of ways5 and certain storm-water drainage infrastructure in such municip alities; to provide for the6 transfer of certain fees and taxes collected by such county to such municipalities; to exempt7 such counties from having to renegotiate service delivery strategy agreements and address8 the provision of services to such municipalities in lieu of such renegotiations; to provide that9 such municipalities shall not be obligated to pay certain elect ion costs; to provide that a10 county shall cover the legal expenses of such a newly incorporated municipality in the event11 of legal challenges relating to or arising from the transition of such services; to provide for12 a limited waiver of sovereign immunity; to amend Chapter 8 of Title 33 of the Official Code13 of Georgia Annotated, relating to fees and taxes related to ins urance, so as to revise14 provisions related to population data related to newly incorpor ated municipalities and15 municipal taxes on life insurance and other insurance companies; to revise provisions related16 to when newly incorporated municipalities may be allocated taxes on life insurance and other17 S. B. 138 - 1 - 25 SB 138/AP insurance companies; to provide for related matters; to provide an effective date; to repeal18 conflicting laws; and for other purposes.19 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:20 SECTION 1.21 Chapter 31 of Title 36 of the Official Code of Georgia Annotated, relating to incorporation22 of municipal corporations, is amended by adding a new Code section to read as follows:23 "36-31-11.2.24 (a) As used in this Code section, the term:25 (1) 'County' means a county with more than 15 municipalities wholly or partially located26 within its boundaries.27 (2) 'Qualified municipality' means any new municipality create d by local Act which28 becomes law on or after January 1, 2024.29 (3) 'Transition period' means the period for the transition of governmental services from30 a county to a qualified municipality as provided for by this ch apter or the local Act31 incorporating such qualified municipality.32 (b) Notwithstanding any provision of law to the contrary:33 (1)(A) When a qualified municipality is created within a count y which has a special34 district consisting of both the unincorporated area and certain incorporated areas of the35 county for the provision of police or law enforcement services, the territory within the36 new qualified municipality shall remain in such special distric t until the qualified37 municipality notifies the county of its intention to leave such special district and assume38 full responsibility for the provision of police and law enforcement services. In no event39 shall a qualified municipality be required to provide more than one year's notice prior40 to exercising the option provided for in this paragraph to leave such special district if41 S. B. 138 - 2 - 25 SB 138/AP the county police department is staffed at less than 95 percent of its authorized number42 of certified peace officers.43 (B)(i) During the period that a qualified municipality remains within a police or law44 enforcement special district as provided for in subparagraph (A) of this paragraph, the45 county shall continue to provide police and law enforcement ser vices within the46 boundaries of the qualified municipality in the same manner as other parts of the47 special district.48 (ii) In the event that, at the end of a fiscal year for the sp ecial district, the actual49 special district ad valorem taxes collected within the boundari es of the qualified50 municipality are greater than the actual costs incurred by the county in providing51 police or law enforcement services within the boundaries of the qualified52 municipality, within 60 days of the final day of such fiscal ye ar, the county shall53 deliver such excess funds to the qualified municipality.54 (iii) For the purpose of complying with division (ii) of this subparagraph, the actual55 costs of providing police or law enforcement services within th e qualified56 municipality shall be calculated based upon the actual time cou nty police or law57 enforcement officers spend providing police or law enforcement services within the58 boundaries of the qualified municipality. The costs of such po lice and law59 enforcement services shall include the costs of county police o r law enforcement60 officers:61 (I) Patrolling and responding to dispatches or calls for service within the qualified62 municipality; and63 (II) Investigating crimes originating within the qualified municipality regardless of64 the physical location where such investigative activities occur.65 (iv) The fiscal authority for a special district for the provi sion of police or law66 enforcement services shall have the duty of tracking all information and making all67 calculations necessary to comply with the provisions of this paragraph.68 S. B. 138 - 3 - 25 SB 138/AP (v) Nothing in the paragraph shall affect or be affected by th e provision of law69 enforcement services by a county sheriff.70 (2) A qualified municipality during the transition period shal l assume ownership or71 control over any road rights of way located within the area incorporated and shall have72 the full power and authority to regulate the use of such rights of ways, including but not73 limited to the granting of franchises and collection of franchise fees related to the use of74 such rights of way. At the sole discretion of the qualified municipality, during any such75 transition period, the county shall continue to perform maintenance and care for such road76 rights of way in the same manner that the county maintains and cares for road rights of77 way owned and controlled by the county in the unincorporated parts of the county.78 (3) A qualified municipality shall not take control of, mainta in, be responsible for, or79 hold title to any infrastructure designed to temporarily retain 1,000 gallons or more of80 storm water or any dams or detention ponds located within the b oundaries of such81 municipality that, prior to the creation of such municipality, were controlled, maintained,82 or the responsibility of the county unless such municipality explicitly agrees otherwise.83 Regardless of any transition period, the county shall continue to control, maintain, and84 be responsible for such infrastructure in the same manner and degree as it did prior to the85 incorporation of the qualified municipality until the qualified municipality and the county86 agree otherwise.87 (4)(A) In the event that:88 (i) A qualified municipality succeeds to the control of local government services89 pursuant to Article IX, Section II, Paragraph III(a) of the Constitution, this chapter,90 or the local Act incorporating the qualified municipality durin g the middle of a91 county's fiscal year;92 (ii) The county, immediately prior to the qualified municipali ty succeed to the93 provision of such service, levied or collected any tax, fee, or other charge within94 S. B. 138 - 4 - 25 SB 138/AP territory that is then or subsequently within the boundaries of the qualified95 municipality; and96 (iii) Such tax, fee, or charge is directly related to the provision of such service,97 the county shall remit to the qualified municipality funds equal to a pro rata share of98 such collections based upon the amount of time during such fiscal year that the county99 verses the qualified municipality provide the service related t o such tax, fee, or100 collection.101 (B) This paragraph shall apply, but not be limited, to alcoholic beverage fees and taxes,102 business license fees, and occupation taxes collected within the qualified municipality,103 and shall not affect the validity of any permits or licences issued by the county upon the104 collection of such taxes, fees, or charges.105 (5)(A) For the purposes of this paragraph, the term 'permit or other official approval106 of activity' mean any permitting or application process related to licenses or permits107 related, but not limited to, alcoholic beverages, building, community development, land108 use and zoning, and regulated businesses or industries.109 (B) In the event that a county, prior to a qualified municipal ity succeeding to the110 control of a local government services pursuant to Article IX, Section II,111 Paragraph III(a) of the Constitution, this chapter, or the loca l Act incorporating the112 qualified municipality, accepts any application and fee related to the issuance of a113 permit or other official approval of activity relating to a governmental service assumed114 by the qualified municipality, a nd the related permitting or re gulatory process is not115 fully completed by the county by the time the qualified municip ality succeeds to the116 provision of such service, and such fees are not fully refunded to the applicant, the117 county shall transfer and remit to the qualified municipality the following percentage118 of such fees collected by the county:119 (i) Ninety-five percent if no action beyond mere acceptance has been taken upon the120 application;121 S. B. 138 - 5 - 25 SB 138/AP (ii) Seventy-five percent if the application has been processe d but no required122 inspections have occurred; or123 (iii) Fifty percent if the application or regulatory process has been completed but final124 approval or permits have not be issued.125 (C) The county shall transfer all required funds to the qualified municipality within 30126 days of being obligated to remit fees as required by subparagraph (B) of this paragraph.127 (6) The incorporation of a qualified municipality shall not re quire the county or any128 municipalities located within such county to renegotiate any se rvice delivery strategy129 agreement enacted pursuant to Chapter 72 of this title that is in place on the date that the130 qualified municipality is incorporated. In lieu of such agreem ent being renegotiated131 during any transition period, the qualified municipality may el ect to have the county132 provide within the boundaries of the qualified municipality any service or services that133 the county is providing to either another municipality or the unincorporated areas of the134 county pursuant to the then-current service delivery strategy agreement. The county shall135 provide any such elected services to the qualified municipality under the same conditions136 and in the same manner as it provides to the other municipality or the unincorporated area137 of the county. Such elections shall occur within six months of either the effective date138 of this Code section or the date of incorporation, whichever is later.139 (7) A qualified municipality shall have no obligation to repay the costs of any special140 election conducted either to:141 (A) Present a question to the voters on the incorporation of such municipality; or142 (B) Elect the initial governing authority of such municipality.143 (c)(1) In the event that:144 (A) A county fails to comply with the transition provisions provided for in this Code145 section, a qualified municipality is forced to seek judicial remedies for such failure to146 comply, and the qualified municipality is ultimately successful in such legal action; or147 S. B. 138 - 6 - 25 SB 138/AP (B) A qualified municipality is subject to a legal action init iated by a third party148 seeking to enforce its rights as a result of the qualified municipality's failure to meet a149 duty or obligation provided by law, and the qualified municipality's failure to meet such150 duty or obligation was the direct result of actions taken by a county relating to the151 transition of services between the county and qualified municipality,152 then the county shall be responsible for reimbursing the qualif ied municipality for all153 legal expenses incurred by such qualified municipality in prosecuting or defending such154 action as well as any damages paid by the qualified municipalit y to such injured third155 party. The sovereign immunity of the county is waived to the e xtent necessary to156 effectuate this paragraph.157 (2) In the event that a county is found by a court of competen t jurisdiction to have158 violated any duty or obligation arising from this chapter, the sovereign immunity of such159 county and the governmental immunity of all local officials of such local governing body160 is waived in all matters arising during a period of one year from the date of such judicial161 finding."162 SECTION 2.163 Chapter 8 of Title 33 of the Official Code of Georgia Annotated, relating to fees and taxes164 related to insurance, is amended by revising subsection (h) of Code Section 33-8-8.1, relating165 to county and municipal corporation taxes on life insurance companies, and by adding a new166 subsection to read as follows:167 "(h) For purposes of this Code section, population shall be measured by the United States168 decennial census of 1990 or any future such census plus any cor rections or revisions169 contained in official statements by the United States Bureau of the Census made prior to170 the first day of September immediately preceding the distribution of the proceeds of such171 taxes by the Commissioner and any additional official census da ta received by the172 Commissioner from the United States Bureau of the Census or its successor agency173 S. B. 138 - 7 - 25 SB 138/AP pertaining to any newly incorporated municipality. Any such official census data relating174 to any newly incorporated municipality shall be backdated to the initial filing provided for175 in subsection (e) of this Code section; provided, however, in the event that such census data176 is insufficient, the Commissioner shall use the census tract da ta from the charter of the177 newly incorporated municipality in lieu of the official census data. Such corrections,178 revisions, or additional data shall be certified to the Commiss ioner by the Office of179 Planning and Budget on or before August 31 of each year.180 (i) Notwithstanding any other provisions of this Code section to the contrary, in the event181 a new municipality is incorporated in a given year by the approval of a referendum of the182 electors of such municipality, and within 18 months of such referendum taking place such183 municipality has completed all steps necessary to impose a tax as provided for in this Code184 section, and the proceeds of such tax have not already been allocated by the Commissioner,185 such municipality shall be entitled to be considered a municipa lity pursuant to186 paragraph (2) of subsection (d) of this Code section and shall be allocated taxes collected187 pursuant to this Code section for the year such referendum took place."188 SECTION 3.189 Said chapter is further amended by revising subsection (c) and adding a new subsection to190 Code Section 33-8-8.2, relating to county and municipal corporation taxes on other than life191 insurance companies, as follows:192 "(b.1) Notwithstanding any other provisions of this Code sectio n to the contrary, in the193 event a new municipality is incorporated in a given year by the approval of a referendum194 of the electors of such municipality, and within 18 months of such referendum taking place195 such municipality has completed all steps necessary to impose a tax as provided for in this196 Code section, and the proceeds of such tax have not already bee n allocated by the197 Commissioner, such municipality shall be entitled to be considered a municipality pursuant198 S. B. 138 - 8 - 25 SB 138/AP to this Code section to be allocated taxes collected pursuant t o this Code section for the199 year such referendum took place.200 (c) For purposes of this Code section, population shall be measured by the United States201 decennial census of 1990 or any future such census plus any cor rections or revisions202 contained in official statements by the United States Bureau of the Census made prior to203 the first day of September immediately preceding the distribution of the proceeds of such204 taxes by the Commissioner and any additional official census da ta received by the205 Commissioner from the United States Bureau of the Census or its successor agency206 pertaining to any newly incorporated municipality. Any such official census data relating207 to any newly incorporated municipality shall be backdated to the initial filing provided for208 in paragraph (1) of subsection (b) of this Code section; provided, however, in the event that209 such census data is insufficient, the Commissioner shall use the census tract data from the210 charter of the newly incorporated municipality in lieu of the o fficial census data. Such211 corrections, revisions, or additional data shall be certified t o the Commissioner by the212 Office of Planning and Budget on or before August 31 of each year."213 SECTION 4.214 This Act shall become effective upon its approval by the Governor or upon its becoming law215 without such approval.216 SECTION 5.217 All laws and parts of laws in conflict with this Act are repealed.218 S. B. 138 - 9 - ## 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 Georgia Senate bill sets rules for how large counties (those with more than 15 municipalities) hand off police, road, and infrastructure services to brand-new cities, and how tax and fee money is split during the transition. ### Plain-language summary When a new city incorporates in Georgia, it takes over local services once handled by the county, but current law leaves many transition details unclear, including who pays for police coverage, who maintains roads, and how collected fees get divided. This bill adds a new Code section applying to counties with more than 15 municipalities, covering any newly created city formed by a local law taking effect on or after January 1, 2024. It spells out how police special districts wind down, how road rights of way and storm-water infrastructure are handled, and how the county must transfer a share of taxes, fees, and permit money tied to services the new city is taking over. It also excuses these counties from renegotiating existing service delivery agreements, frees new cities from paying for their own incorporation elections, and makes counties responsible for legal costs if disputes arise from the transition, waiving sovereign immunity in those cases. Separate sections adjust how the state allocates insurance tax proceeds to newly formed cities. The law would take effect once the Governor signs it or it becomes law without a signature. ### What it does - Adds a new Code section (O.C.G.A. § 36-31-11.2) governing how newly incorporated cities in counties with more than 15 municipalities take over county services. - Lets a new city stay inside a county police special taxing district temporarily, then requires the county to return excess tax collections and eventually let the city leave the district. - Gives new cities control over road rights of way within their borders while keeping storm-water infrastructure like large retention ponds under county responsibility unless the city agrees otherwise. - Requires counties to transfer a pro rata share of taxes, fees, and pending permit fees tied to services a new city has assumed, with specific refund percentages set by how far permit processing had progressed. - Exempts these counties from having to renegotiate service delivery strategy agreements and frees new cities from repaying costs of their incorporation or first election. - Makes a county responsible for a new city's legal costs and damages if disputes arise from the transition, waiving the county's sovereign immunity to that extent. ### Who it affects Large Georgia counties with more than 15 municipalities (a description that fits counties like Fulton County), any city newly incorporated there since January 1, 2024, county police departments, county governments handling road and storm-water infrastructure, and the state insurance commissioner's office that allocates insurance tax proceeds. ### Why it matters Georgia has seen a wave of new city incorporations in recent years, often creating disputes over who pays for police coverage, road upkeep, and shared tax revenue during the handover from county to city government. This bill sets clearer default rules and timelines for that handoff and shifts certain legal and financial risks onto counties. ### Key provisions - Section 1 defines 'county' as one with more than 15 municipalities and 'qualified municipality' as a new city created by local law effective on or after January 1, 2024. - Under subsection (b)(1), a new city can stay in a county police special district but may leave with as little as one year's notice if the county force is understaffed, and the county must refund excess collected police taxes. - Subsection (b)(2) gives new cities control over road rights of way, while subsection (b)(3) keeps large storm-water infrastructure under county control unless the city agrees otherwise. - Subsection (b)(4) and (b)(5) require counties to remit a pro rata share of taxes, fees, and pending permit money tied to services the new city takes over, with refund percentages of 95%, 75%, or 50% depending on how far a permit application had progressed. - Subsection (b)(6) exempts counties from renegotiating service delivery strategy agreements, letting a new city instead elect to receive services under existing terms. - Subsection (b)(7) says new cities owe nothing toward the cost of their incorporation referendum or first election. - Subsection (c) makes counties pay a new city's legal expenses and damages if the county's failure to meet transition duties leads to a lawsuit, waiving sovereign immunity for that purpose. - Sections 2 and 3 revise O.C.G.A. §§ 33-8-8.1 and 33-8-8.2 so a newly incorporated city that sets up its own insurance premium tax within 18 months of its incorporation referendum can receive that year's tax allocation. ## Status - Status: Passed (2025-05-14) - Last action: Effective Date 2025-05-14 (2025-05-14) - Sponsors: Clint Dixon, Shawn Still, Bill Cowsert, Ed Setzler, Jason Anavitarte, Chuck Efstration - Official page: https://www.legis.ga.gov/legislation/70097 > The history, votes, and amendments (1,260 characters) are at https://georgiacommons.org/bills/2025-2026/sb138.md?full=1