HB1240: HB1240 Local government; total ad valorem tax digest limitation upon creating new tax allocation districts shall also apply to the renewal of existing tax allocation districts; provide

Georgia law lets cities and counties create tax allocation districts (special zones used for tax increment financing to fund redevelopment) but caps how much taxable property value can be tied up in them. Currently, the law says a political subdivision cannot create a new district if the combined taxable value of the new district and all existing districts would exceed 10 percent of the total taxable property value in that jurisdiction. This bill rewrites O.C.G.A. § 36-44-17 so that this same 10 percent cap applies not only when creating a brand new district but also when renewing an existing one. In other words, local governments would have to check the same 10 percent limit before extending or renewing a tax allocation district's life, not just when first establishing one. The bill does not change the 10 percent figure itself, only when the test applies.

• Extends the existing 10 percent taxable value cap on tax allocation districts so it applies to renewals of existing districts, not just new ones.
• Rewrites O.C.G.A. § 36-44-17 to add the word 'renew' alongside 'create' when describing when the cap applies.
• Requires local governments to recalculate whether renewing a district would push combined district value over 10 percent of total taxable property in the jurisdiction.
• Repeals any conflicting state laws, a standard provision clearing away inconsistent prior statutes.

Cities, counties, and other political subdivisions in Georgia that use tax allocation districts for redevelopment financing, along with local governments planning to renew existing districts and taxpayers whose property values factor into the digest calculation.

Local governments that want to renew an aging tax allocation district would now have to pass the same 10 percent value test used for creating new ones, which could block or complicate renewals in jurisdictions where districts already occupy a large share of the tax digest.

• Section 1 revises O.C.G.A. § 36-44-17 to state that no political subdivision may 'create or renew' a tax allocation district if the combined taxable value test is exceeded.
• The 10 percent threshold itself is unchanged: it compares the value in the proposed or renewed district plus all existing districts against total taxable property value in the jurisdiction.
• Section 2 repeals any conflicting laws, a routine clause with no substantive effect beyond clearing inconsistent statutes.

1. 2026-02-26House Committee Favorably Reported (House)
2. 2026-02-10House Second Readers (House)
3. 2026-02-09House First Readers (House)
4. 2026-02-06House Hopper (House)

• Charles Martin (R, HD-049)Primary sponsor
• Brent Cox (R, HD-028)
• Trey Kelley (R, HD-016)
• Scott Hilton (R, HD-048)
• Charles Cannon (R, HD-172)
• Jan Jones (R, HD-047)

• property taxes
• local government finance
• tax allocation districts
• redevelopment financing