HB1129: HB1129 Local government; designation of enterprise zones; provisions

Georgia law lets local governments designate 'enterprise zones' to encourage development, including a special category for urban redevelopment areas built around massive redevelopment projects (at least $400 million in investment in an area certified as chronically underdeveloped for 20 years or more). Previously, businesses in these zones could get exemptions from both local and state sales and use taxes. House Bill 1129 changes that. It removes the automatic state sales and use tax exemption, so a project's local tax exemption stays but the state tax break now requires approval from the Governor or the Governor's designee. It also lets local governments charge retailers in these zones annual 'infrastructure fees' (capped at the amount of tax they were exempted from) to help pay for revenue bonds used for development, but those bond proceeds cannot be used to reimburse the project's own capital investment. The bill also limits any single county to four of these zones and excludes casino gambling projects. The changes take effect July 1, 2026, and apply to zones designated on or after that date.

• Removes the automatic state sales and use tax exemption for qualifying urban redevelopment enterprise zone projects, requiring Governor approval instead.
• Keeps in place the existing local sales and use tax exemption for these large redevelopment projects.
• Allows local governments to charge annual 'enterprise zone infrastructure fees' on retailers in these zones, capped at the amount of tax they were exempted from.
• Permits those infrastructure fees to be pledged as security for revenue bonds funding development or infrastructure in the zone.
• Bars using the principal of those revenue bonds to reimburse or guarantee a return on the project's required capital investment.
• Limits any single county to four enterprise zones of this type and excludes projects tied to casino gambling.

Local governments (cities and counties) that create or manage urban redevelopment enterprise zones, large-scale developers behind qualifying $400 million-plus redevelopment projects, retailers operating within those zones, the Governor's office, and the state Department of Community Affairs, which oversees zone designations.

Developers and local governments planning these large redevelopment projects will no longer automatically get a break on state sales taxes, only local ones, unless the Governor signs off. Local governments gain a new fee tool to help finance infrastructure, but counties are capped at four such zones.

• Section 1 revises O.C.G.A. § 36-88-6(g)(2) so qualifying redevelopment projects keep the local sales and use tax exemption but lose the automatic state sales and use tax exemption unless the Governor or designee approves it.
• Section 1 adds a new provision letting local governing bodies assess and collect annual 'enterprise zone infrastructure fees' from retailers, capped at the amount of sales and use tax they were exempted from.
• Section 1 allows those fees to be pledged as security for revenue bonds funding development or infrastructure within the zone.
• Section 1 bars using revenue bond principal to satisfy obligations on or provide a return of the project's required capital investment.
• Section 1 limits designation of new enterprise zones under this subsection to counties with fewer than four existing such zones.
• Section 1 excludes projects involving or related to casino gambling from this enterprise zone category.
• Section 2 sets the effective date as July 1, 2026, applying only to enterprise zones designated on or after that date.

1. 2026-05-11Effective Date 2026-07-01
2. 2026-05-11Act 459
3. 2026-05-11House Date Signed by Governor (House)
4. 2026-04-10House Sent to Governor (House)
5. 2026-04-02House Agreed Senate Amend or Sub (House)
6. 2026-03-31Senate Passed/Adopted By Substitute (Senate)
7. 2026-03-31Senate Third Read (Senate)
8. 2026-03-31Senate Engrossed (Senate)

• Devan Seabaugh (R, HD-034)Primary sponsor
• Matthew Gambill (R, HD-015)
• Will Wade (R, HD-009)
• Chuck Efstration (R, HD-104)
• Soo Hong (R, HD-103)
• Shaw Blackmon (R, HD-146)
• Bo Hatchett (R, SD-050)

1. PassedHouse voteMarch 4, 2026

   160 yea, 1 nay (4 not voting, 12 absent)

   Passage: House Vote #637

2. PassedSenate voteMarch 31, 2026

   33 yea, 15 nay (2 not voting, 4 absent)

   Motion To Engross: Hb 52, Hb 248, Hb 963, Hb 964, Hb 1001, Hb 1077, Hb 1116, Hb 1129, Hb 1132, Hb 1209: Senate Vote #876

3. PassedSenate voteMarch 31, 2026

   45 yea, 2 nay (2 not voting, 5 absent)

   Passage By Substitute: Senate Vote #889

4. PassedHouse voteApril 2, 2026

   170 yea, 1 nay (3 not voting, 2 absent)

   Agree To Senate Substitute: House Vote #868

• enterprise zones
• sales tax exemptions
• local government finance
• urban redevelopment
• economic development