HB1371: HB1371 Georgia Secure Tomorrow Act of 2026; enact

26 LC 59 0237 House Bill 1371 By: Representatives Ridley of the 22nd, Carpenter of the 4th, Horner of the 3rd, Kelley of the 16th, and Scoggins of the 14th A BILL TO BE ENTITLED AN ACT To amend Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to1 income taxes, so as to create income tax credits for businesses enterprises that meet certain2 job and investment requirements; to provide for an application and review process for3 certification of qualified projects; to provide for wage, capit al enhancement, and location4 based incentives for income tax credits; to provide for reporting requirements; to provide for5 limitations in the amount of credits issued; to provide for refundability of credits; to provide6 for carry-forward limits; to provide for recapture provisions; to provide for forms, rules, and7 regulations; to create the Secure Tomorrow Task Force; to provide for members and officers;8 to provide for meetings and compensation; to provide for purpose and duties; to provide for9 definitions; to provide for related matters; to provide a short title; to provide for an effective10 date and applicability; to repeal conflicting laws; and for other purposes.11 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:12 SECTION 1.13 This Act shall be known and may be cited as the "Georgia Secure Tomorrow Act of 2026."14 H. B. 1371 - 1 - 26 LC 59 0237 SECTION 2.15 Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to income taxes,16 is amended by adding a new Code section to read as follows:17 "48-7-40.38.18 (a) As used in this Code section, the term:19 (1) 'Business enterprise' means any business or the headquarte rs of any such business20 which is engaged in Secure Tomorrow activities.21 (2) 'Drone, unmanned aerial system, and counter-drone activiti es' means activities22 materially supporting the manufacture, assembly, integration, repair, and sustainment of23 unmanned aerial system hardware and counter-unmanned aerial sys tem hardware,24 including air vehicles and airframes, propulsion hardware, payl oad hardware, ground25 control station hardware, communications hardware, and counter-unmanned aerial system26 detection, tracking, identification, and defeat devices.27 (3) 'Eligible postsecondary institution' shall have the same meaning as set forth in Code28 Section 20-3-519.29 (4) 'Emergency response, disaster relief, and homeland securit y activities' means30 activities materially supporting preparedness, response, recovery, and mitigation missions31 performed by federal, state, and local emergency management and public safety agencies.32 (5) 'FEMA and GEMA qualified equipment or services' means equi pment or services33 that are:34 (A) Eligible for reimbursement or procurement under Federal Emergency Management35 Agency disaster programs; or36 (B) Procured, approved, or deployed by the Georgia Emergency M anagement and37 Homeland Security Agency or a local emergency management agency for disaster38 response, recovery, or preparedness missions, as evidenced by c ontracts, purchase39 orders, or written qualification criteria adopted by such agencies.40 (6) 'Force majeure' shall have the same meaning as set forth in Code Section 48-7-40.24.41 H. B. 1371 - 2 - 26 LC 59 0237 (7) 'Full-time employee' means an individual holding a full-time employee job.42 (8) 'Full-time employee job' and 'full-time job' mean employment of an individual which:43 (A)(i) With respect to a qualified project, is located in this state at the facility44 resulting from such qualified project; and45 (ii) With respect to a project certified pursuant to paragraph (2) of subsection (b) of46 this Code section on or after July 1, 2026, is located in this state and results from such47 project;48 (B) Primarily involves the performance of duties that directly support Secure49 Tomorrow activities;50 (C) Involves a regular work week of 35 hours or more;51 (D) Has no predetermined end date; and52 (E) Pays at least 135 percent of the county average wage, as d etermined by the53 commissioner.54 For purposes of this paragraph, leased employees will be consid ered employees of the55 business enterprise using such employees' services, and such persons may be counted in56 determining the credits of the business enterprise under this C ode section if their57 employment otherwise meets the definition of full-time job contained herein. In addition,58 an individual's employment shall not be deemed to have a predetermined end date solely59 by virtue of a mandatory retirement age set forth in the policy of a business enterprise of60 general application. The employment of any individual in a bon a fide executive,61 administrative, or professional capacity, within the meaning of Section 13 of the federal62 Fair Labor Standards Act of 1938, as amended, 29 U.S.C. Section 213(a)(1), as such act63 existed on January 1, 2002, shall not be deemed to have a predetermined end date solely64 by virtue of the fact that such employment is pursuant to a fixed-term contract, provided65 that such contract is for a term of not less than one year.66 (9) 'Investment requirement' means the construction of a new facility engaged in Secure67 Tomorrow activities involving a minimum capital investment of $ 3 million or the68 H. B. 1371 - 3 - 26 LC 59 0237 expansion of an existing facility engaged in Secure Tomorrow ac tivities involving a69 minimum investment of $1.5 million.70 (10) 'Job maintenance requirement' means the requirement that the number of full-time71 employees employed by the business enterprise during the first 36 months of the72 recapture period shall equal or exceed 90 percent of the job requirement.73 (11) 'Job requirement' means the requirement that the aggregat e number of full-time74 employee jobs created and full-time employees retained shall equal or exceed 20.75 (12) 'National security space activities' means activities tha t materially support the76 manufacture, assembly, integration, testing, repair, or sustainment of space systems used77 for national security or civil emergency communications, includ ing satellites and78 components, launch systems and support equipment, ground station hardware, mission79 operations equipment, and space domain awareness sensors and as sociated processing80 and communications hardware.81 (13) 'Qualified investment property' means all real and personal property purchased or82 acquired by a business enterprise for use in a qualified project, including, but not limited83 to, amounts expended on land acquisition, improvements, buildin gs, building84 improvements, and machinery and equipment to be used in the facility.85 (14) 'Qualified project' means the construction or expansion o f a facility engaged in86 Secure Tomorrow activities. As used in this paragraph, the term 'facility' means a single87 facility, including contiguous parcels of land, improvements to such land, buildings,88 building improvements, and any machinery or equipment that is used to support Secure89 Tomorrow activities.90 (15) 'Recapture period' means the period of ten consecutive taxable years that commences91 after the taxable year in which the business enterprise has met both the investment92 requirement and the job requirement.93 H. B. 1371 - 4 - 26 LC 59 0237 (16) 'Secure Tomorrow activities' means the research, development, testing, production,94 integration, maintenance, and transportation of products or ser vices that materially95 support:96 (A) The United States Department of Defense, its prime contractors, and the national97 defense industrial base, including supporting industries;98 (B) National security air systems and national security space activities, including, but99 not limited to, satellites, ground stations, launch services, s pace domain awareness100 manufacturing systems, and drones;101 (C) Emergency response, disaster relief, and homeland security activities of federal,102 state, and local agencies, including, but not limited to, the F ederal Emergency103 Management Agency, the Department of Homeland Security, the Georgia Emergency104 Management Agency, wildland firefighting, hurricane and flood response, and critical105 infrastructure protection; and106 (D) Dual-use technologies incorporated into activities and eff orts listed in this107 paragraph, including, but not limited to, unmanned aerial syste ms configured for108 defense or disaster response, counter-drone systems, satellite communication terminals,109 portable power generation, water purification systems, advanced medical110 countermeasures, cyber-response tools, armored first responder vehicles, and structural111 fire and rescue equipment.112 (17) 'Space domain awareness manufacturing' means the manufacture or integration of113 sensors and associated processing and communications hardware t hat supports the114 detection, tracking, identification, characterization, and cataloguing of space objects or115 space events.116 (18) 'Task force' means the Secure Tomorrow Task Force.117 (19) 'Veteran' means a person who served in the armed forces i n naval, air, or space118 service, and who was discharged or released therefrom under con ditions other than119 H. B. 1371 - 5 - 26 LC 59 0237 dishonorable, or a person who has separated from active duty, the National Guard, or a120 reserve component of the armed forces.121 (b) A business enterprise that is planning a qualified project shall be allowed to take the122 job tax credit provided by this Code section under the following circumstances:123 (1) An application is filed with the commissioner that:124 (A) Describes the qualified project to be undertaken by the bu siness enterprise,125 including when such project will commence;126 (B) Certifies that such project will meet the investment requi rement and the job127 requirement prescribed by this Code section and states when the business enterprise128 expects to meet such requirements;129 (C) Certifies that, during the recapture period applicable to such project, the business130 enterprise will meet the job maintenance requirement prescribed by this Code section;131 and132 (2) The commissioner refers the application to the Georgia Sec ure Tomorrow Task133 Force. The task force shall review the application, determine whether the new facility134 will have a significant beneficial economic effect on the region for which it is planned,135 and certify it accordingly. The task force shall make its determination within 30 days136 after receipt from the commissioner of the business enterprise' s application and any137 necessary supporting documentation.138 (c) Subject to the conditions and limitations set forth in thi s Code section, a business139 enterprise whose application is approved shall be allowed credits against the tax imposed140 under this article for up to 15 consecutive taxable years in the following amounts for each141 taxable year:142 (1) Seven percent of the cost of annual compensation paid to each full-time employee;143 (2) An additional 2 percent of the cost of annual compensation paid to each full-time144 employee who is a veteran;145 H. B. 1371 - 6 - 26 LC 59 0237 (3) An additional 1.5 percent of the cost of annual compensation paid to each full-time146 employee whose work supports drone, unmanned aerial system, and counter-drone147 activities.148 (4) An additional 1.5 percent of the cost of annual compensation paid to each full-time149 employee who works in space domain awareness manufacturing; and150 (5) An additional 1.5 percent of the cost of annual compensation paid to each full-time151 employee involved in the manufacture or provision of FEMA and G EMA qualified152 equipment or services;153 (d) In addition to the credits a business enterprise whose application is approved shall be154 allowed under subsection (c) of this Code section, such business enterprise shall be allowed155 an enhanced capital investment credit against the tax imposed u nder this article in the156 following amount for each taxable year:157 (1) Ten percent of such business enterprise's total capital in vestment in the qualified158 project; or159 (2) Fourteen percent of such business enterprise's total capital investment in the qualified160 project if such capital investment exceeds $25 million, or the aggregate number of161 full-time employee jobs created and full-time employees retained exceeds 150.162 (e) In addition to the credits a business enterprise whose application is approved shall be163 allowed under subsections (c) and (d) of this Code section, such business enterprise shall164 be allowed either a credit against the tax imposed under this article in an amount equal to:165 (1) Three percent of such business enterprise's total capital investment in the qualified166 project where such qualified project is located within 60 miles of Robins Air Force Base,167 Fort Eisenhower, Dobbins Air Reserve Base, Moody Air Force Base, Kings Bay Base,168 Hunter Army Airfield, the Port of Savannah, the Port of Brunswick, Hartsfield-Jackson169 Atlanta International Airport, or any major Georgia Emergency Management Agency and170 Homeland Security Agency Regional Response Centers, as designat ed by the171 commissioner of economic development; or172 H. B. 1371 - 7 - 26 LC 59 0237 (2) Five thousand dollars for each new full-time employee job created at a qualified173 project located within 60 miles of an eligible postsecondary institution with a program174 of study in engineering for up to ten consecutive taxable years , subject to continued175 employment and compliance with all other provisions of this Code section.176 (f) Where the amount of credits received exceeds a business enterprise's liability for such177 taxes in a taxable year, the excess may be taken as a credit ag ainst such business178 enterprise's quarterly or monthly payment under Code Section 48-7-103. Such tax credits179 allowed in excess of a business enterprise's income tax liability shall be refundable to such180 business enterprise.181 (g) The credits granted under subsections (c), (d), and (e) of this Code section shall be182 subject to the following conditions and limitations:183 (1) In order to qualify as a basis for the credits, the investment in a qualified project shall184 occur no sooner than the date of application by the business enterprise for the qualified185 project pursuant to paragraph (1) of subsection (b) of this Code section. The credit may186 be taken beginning with the taxable year in which the task force has certified the business187 enterprise has met both the investment requirement and the job requirement, and for such188 first year the credit may include capital investments in the qualified project made in prior189 years but after the date of application by the business enterprise for the qualified project190 pursuant to paragraph (1) of subsection (b) of this Code section. For each year in which191 a business enterprise claims the credit, the business enterprise shall attach a schedule to192 the business enterprise's Georgia income tax return which will set forth the following193 information, at a minimum:194 (A) A description of the qualified project;195 (B) The amount of qualified investment property acquired during the taxable year;196 (C) The amount of tax credit claimed under this Code section for the taxable year;197 (D) The amount of qualified investment property acquired in prior taxable years;198 H. B. 1371 - 8 - 26 LC 59 0237 (E) Any tax credit previously taken by the business enterprise against Georgia income199 tax liabilities or the quarterly or monthly payments of the bus iness enterprise under200 Code Section 48-7-103;201 (F) The amount of tax credit carried over from prior years;202 (G) The amount of tax credit utilized by the business enterprise in the current taxable203 year;204 (H) The amount of tax credit to be carried over to subsequent tax years; and205 (I) The number of full-time employee jobs created and full-tim e employees retained206 during the taxable year;207 (2) Any credit claimed under this Code section but not fully u sed in the manner208 prescribed in subsection (d) of this Code section may be carrie d forward for 15 years209 from the close of the later of:210 (A) The taxable year in which the qualified investment property was acquired; or211 (B) The taxable year in which both the job requirement and investment requirement are212 satisfied.213 The sale, merger, acquisition, or bankruptcy of any business enterprise shall not create214 new eligibility in any succeeding business entity, but any unused investment tax credit215 may be transferred and continued by any transferee of the business enterprise;216 (3) In the initial year in which the business enterprise claim s the credit granted in217 subsection (d) of this Code section, the business enterprise shall include in the description218 of the project required by subparagraph (A) of paragraph (1) of this subsection219 information which demonstrates that the business enterprise has met both the investment220 requirement and the job requirement during such year; and221 (4) The utilization of the credit granted in subsection (d) of this Code section shall have222 no effect on the business enterprise's ability to claim depreciation for tax purposes on the223 assets acquired by the business enterprise, nor shall the credi t have any effect on the224 business enterprise's basis in such assets for the purpose of depreciation.225 H. B. 1371 - 9 - 26 LC 59 0237 (h)(1) In no event shall credits exceeding $15 million in the aggregate be claimed under226 this Code section with respect to any one project.227 (2) In no event shall the aggregate amount of credits awarded under this Code section in228 any taxable year exceed $75 million.229 (i) A business enterprise that is entitled to and takes credits provided by this Code section230 with respect to a qualified project may also take the credits a uthorized by Code Section231 48-7-40, 48-7-40.1, 48-7-40.2, 48-7-40.3, 48-7-40.4, 48-7-40.6, 48-7-40.7, 48-7-40.8,232 48-7-40.9, 48-7-40.10, 48-7-40.15, 48-7-40.17, 48-7-40.18, 48-7-40.24, or 48-7-40.25 with233 respect to jobs or investments arising from, related to, or con nected in any way with the234 same project. Such business enterprise may take any credit aut horized by Code Section235 48-7-40.5 for the cost of retraining an employee located at the site of such project or236 facility resulting therefrom, but only with respect to costs in curred more than five years237 after the date the facility first becomes operational.238 (j)(1) With respect to each qualified project, the business en terprise shall file a report239 every two taxable years, using such form and providing such inf ormation as the240 commissioner may reasonably require, stating whether it met the job maintenance241 requirement, minimum capital investment requirement, and contin ued to pay full-time242 employees 135 percent of the county average wage. If the busin ess enterprise fails to243 meet such requirements, such business enterprise shall forfeit its right to all credits244 provided by this Code section for such project.245 (2) A business enterprise that forfeits its right as provided in paragraph (1) of this246 subsection is liable for all past taxes imposed by this article and all past payments under247 Code Section 48-7-103 that were forgone by the state as a result of the credits provided248 by this Code section, plus interest at the rate established by Code Section 48-2-40249 computed from the date such taxes or payments would have been due if the credits had250 not been taken. No later than 90 days after notification by th e commissioner that the251 business enterprise has failed to meet requirements set forth i n paragraph (1) of this252 H. B. 1371 - 10 - 26 LC 59 0237 subsection, the business enterprise shall file amended income t ax and withholding tax253 returns for all affected periods that recalculate those liabili ties without regard to the254 forfeited credits and shall pay any additional amounts shown on such returns, with255 interest as provided herein.256 (k) A business enterprise who fails to meet the requirements set forth in paragraph (1) of257 subsection (j) of this Code section because of force majeure may petition the commissioner258 for relief from such requirement. Such a petition shall be made with and at the same time259 as the report required by subsection (j) of this Code section. If the commissioner260 determines that force majeure materially affected the business enterprise's ability to meet261 the requirements set forth in paragraph (1) of subsection (j) o f this Code section, the262 commissioner may, in his or her discretion, extend the applicable credits for an additional263 year, at which time the business enterprise shall be required to file a new report.264 (l) If the facility resulting from a qualified project is aban doned at any time during the265 recapture period, the business enterprise will forfeit the right to all credits provided by this266 Code section for such project. A business enterprise that forfeits such right is liable for all267 past taxes imposed by this article and all past payments under Code Section 48-7-103 that268 were forgone by the state as a result of the credits provided b y this Code section, plus269 interest at the rate established by Code Section 48-2-40 computed from the date such taxes270 or payments would have been due if the credits had not been taken. For purposes of this271 subsection, a facility will be considered abandoned if there is , for any reason other than272 force majeure, a complete cessation of manufacturing operations f o r a p e r i o d o f 1 2273 consecutive months or more during the recapture period. Not more than 60 days after the274 close of the recapture period, the business enterprise shall file a report, using such form and275 providing such information as the commissioner may require, concerning whether such an276 abandonment occurred. No later than 90 days after notification by the commissioner that277 an abandonment occurred, the business enterprise shall file ame nded income tax and278 withholding tax returns for all affected periods that recalcula te those liabilities without279 H. B. 1371 - 11 - 26 LC 59 0237 regard to the forfeited credits and shall pay any additional amounts shown on such returns,280 with interest as provided herein.281 (m) Unless more time is allowed therefor by Code Section 48-7- 82 or 48-2-49, the282 commissioner may make any assessment attributable to the forfei ture of credits claimed283 under this Code section for the periods covered by any amended returns filed by a business284 enterprise pursuant to subsections (j) and (l) of this Code section within one year from the285 date such returns are filed. If the business enterprise fails t o f i l e t h e r e p o r t s o r a n y286 amended return required by subsections (j) and (l) of this Code section, the commissioner287 may assess additional tax or other amounts attributable to the forfeiture of credits claimed288 under this Code section at any time.289 (n) The commissioner shall promulgate any forms, rules, and re gulations necessary to290 implement and administer this Code section.291 (o)(1) There is created the Georgia Secure Tomorrow Task Force for the purpose of292 reviewing applications for qualified projects and making certification determinations as293 authorized under paragraph (2) of subsection (b) of this Code s ection. The task force294 shall be composed of fifteen members as follows:295 (A) The Speaker of the House of Representatives shall appoint one member of the296 House of Representatives;297 (B) The President of the Senate shall appoint one member of the Senate; 298 (C) The commissioner of economic development or his or her designee;299 (D) The commissioner of the Technical College System of Georgi a or his or her300 designee;301 (E) The director of the Georgia Emergency Management and Homel and Security302 Agency or his or her designee;303 (F) The chairperson of the Georgia Ports Authority or his or her designee; 304 (G) Two members of the Georgia National Guard to be appointed by the adjutant305 general of the Georgia National Guard; and306 H. B. 1371 - 12 - 26 LC 59 0237 (H) The Governor shall appoint seven nonlegislative members of the task force from307 a list of nominees prepared by the commissioner of economic dev elopment provided308 in paragraph (3) of this subsection as follows:309 (i) Three members involved in defense operations;310 (ii) Two members involved in emergency response manufacturing; and311 (iii) Two members involved in air and space operations.312 (2) The Governor shall also designate a legislative member of the task force as313 chairperson of the task force.314 (3) The Governor's appointees to the task force shall be selected from a list of nominees315 submitted for his or her consideration by the commissioner of e conomic development. 316 In preparation for creating such list, the commissioner of econ omic development shall317 openly solicit applications to serve on the task force and shall only consider the inclusion318 of applicants who are corporate executives with demonstrated ex perience in defense,319 aerospace, space, emergency response manufacturing, or defense supply chains with320 significant operations or binding commitments to establish or expand operations in this321 state. The commissioner is authorized to request any information of an applicant that will322 reasonably facilitate his or her determination to include such applicant on the list of323 nominees. Applicants shall be required to disclose any actual or potential conflicts of324 interest that could foreseeably arise from their service on the task force.325 (p) Legislative members of the task force shall serve for terms of three years.326 (q) The Governor's first seven appointees to the task force shall be appointed as follows:327 three such members shall be appointed for terms of one year, two such members shall be328 appointed for terms of two years, and two such members shall be appointed for terms of329 three years. Thereafter, the successors shall be appointed by the Governor upon the330 expiration of the respective terms of office for terms of three years.331 (r) Vacancies in office shall be filled by appointment by the respective appointing332 authority in the same manner as the appointment to the position on the task force. An333 H. B. 1371 - 13 - 26 LC 59 0237 appointment to fill a vacancy other than by expiration of a term of office shall be for the334 balance of the unexpired term. If a vacancy remains unfilled for six months, the task force335 shall be authorized to fill the vacancy in accordance with the process described in this Code336 section. Each appointed member of the task force shall be eligible to succeed himself or337 herself; provided, however, that no member shall serve more than two consecutive terms 338 on the task force.339 (s) The task force may conduct meetings at such places and times as it deems necessary340 or convenient to enable it to fully and effectively exercise its powers, perform its duties,341 and accomplish the objectives and purposes of this article. Th e task force shall hold342 meetings at the call of the chairperson.343 (t) A quorum for transacting business shall be determined by t he members of the task344 force.345 (u) Members of the task force shall serve without compensation but shall be allowed actual346 and necessary expenses in the performance of their duties. Any legislative members of the347 task force shall receive the allowances provided for in Code Se ction 28-1-8. Any348 nonlegislative members of the task force shall receive a daily expense allowance in the349 amount specified in subsection (b) of Code Section 45-7-21, as well as the mileage or350 transportation allowance authorized for state employees. The f unds necessary for the351 reimbursement of expenses and allowances of any member of the t ask force shall come352 from funds appropriated to or otherwise available to the task force."353 SECTION 3.354 This Act shall become effective on January 1, 2027, and shall b e applicable to all taxable355 years beginning on or after January 1, 2027.356 SECTION 4.357 All laws and parts of laws in conflict with this Act are repealed.358 H. B. 1371 - 14 -