SB 138: Incorporation of Municipal Corporations; transition of certain services related to newly incorporated municipalities in certain counties; provide

When Georgia voters create a new city inside an existing county, questions arise about who keeps providing police protection, who owns the roads, who maintains storm-water ponds, and who gets tax and fee money collected before the city existed. This bill answers those questions specifically for counties that already contain more than 15 municipalities, and for any 'qualified municipality' incorporated by local law on or after January 1, 2024. The bill lets a new city stay inside a county's police special taxing district until it chooses to leave, requires the county to hand over any surplus police tax money collected in the new city, gives the new city control of its road rights of way while letting the county keep maintaining storm-water infrastructure unless the city agrees otherwise, and requires the county to transfer a pro-rated share of certain fees and taxes. It also excuses new cities from repaying incorporation election costs, requires counties to cover legal costs if a transition dispute goes to court, and waives a limited amount of county sovereign immunity to enforce these rules. Separate sections adjust how the state allocates insurance premium taxes to newly incorporated cities. The law would take effect once the Governor signs it.

• Lets a newly incorporated city ('qualified municipality') stay inside a county's police special tax district until it gives notice to leave, with a shorter notice window if the county police force is understaffed.
• Requires a county to return excess police tax collections gathered inside the new city's boundaries if those collections exceed the actual cost of policing that area.
• Gives the new city control over its road rights of way (including franchise fees) while keeping county responsibility for storm-water infrastructure like dams and detention ponds unless the city agrees otherwise.
• Requires counties to transfer a pro-rated share of fees and taxes, such as alcohol permit and business license fees, tied to services the new city takes over mid-fiscal-year.
• Exempts new cities from repaying the cost of the incorporation referendum or first elected officials, and requires counties to cover the new city's legal costs and damages if a transition dispute ends up in court, waiving limited sovereign immunity to enforce this.
• Changes how the state allocates insurance premium tax revenue to newly incorporated cities, letting a city that completes tax steps within 18 months of its incorporation vote still receive that year's allocation.

New cities incorporated in Georgia counties that already contain more than 15 municipalities (a description that currently fits Fulton County), the counties themselves, county police departments, county taxpayers, and residents of newly created cities who rely on police, roads, storm-water systems, and tax-funded services during the transition.

Newly incorporated Georgia cities often face uncertainty over who provides police protection, maintains roads and drainage, and collects fees during their first months. This bill spells out those responsibilities and funding transfers, which affects how quickly a new city can start functioning and how much financial and legal risk falls on the county during the handoff.

• New Code Section 36-31-11.2(a) defines 'county' as one with more than 15 municipalities and 'qualified municipality' as a new city created by local Act on or after January 1, 2024.
• Subsection (b)(1) governs police special districts, requiring counties to refund excess collected police taxes within 60 days of the fiscal year's end and tracking actual time officers spend serving the new city.
• Subsection (b)(2) transfers control of road rights of way to the new city while leaving day-to-day maintenance with the county at the city's discretion.
• Subsection (b)(3) keeps counties responsible for storm-water infrastructure like dams and detention ponds unless the new city agrees to take it over.
• Subsection (b)(4) requires pro-rated transfer of fees and taxes tied to services the new city assumes mid-fiscal-year, including alcohol, business license, and occupation taxes.
• Subsection (b)(5) sets percentage-based fee transfers (50% to 95%) for pending permit applications depending on how far processing had progressed before incorporation.
• Subsection (b)(6) exempts new cities from renegotiating existing service delivery strategy agreements, letting them instead opt into services counties already provide elsewhere.
• Subsection (c) requires counties to cover a new city's legal expenses and damages from transition-related lawsuits and waives limited sovereign immunity to enforce county compliance.

1. 2025-05-14Effective Date 2025-05-14
2. 2025-05-14Act 289
3. 2025-05-14Senate Date Signed by Governor (Senado)
4. 2025-04-07Senate Sent to Governor (Senado)
5. 2025-03-13House Passed/Adopted (Cámara de Representantes)
6. 2025-03-13House Third Readers (Cámara de Representantes)
7. 2025-02-26House Committee Favorably Reported (Cámara de Representantes)
8. 2025-02-24House Second Readers (Cámara de Representantes)

• Clint Dixon (R, SD-045)Patrocinador principal
• Shawn Still (R, SD-048)
• Bill Cowsert (R, SD-046)
• Ed Setzler (R, SD-037)
• Jason Anavitarte (R, SD-031)
• Chuck Efstration (R, HD-104)

1. RechazadaVotación: Senado20 de febrero de 2025

   21 a favor, 32 en contra (1 sin votar, 2 ausentes)

   Adoption Of Amendment #1 By The Senator From The 9th: Senate Vote #72

2. AprobadaVotación: Senado20 de febrero de 2025

   32 a favor, 22 en contra (0 sin votar, 2 ausentes)

   Passage By Substitute: Senate Vote #73

3. AprobadaVotación: Cámara de Representantes13 de marzo de 2025

   96 a favor, 69 en contra (5 sin votar, 10 ausentes)

   Passage: House Vote #276

• municipal incorporation
• police services
• local government funding
• storm-water infrastructure
• insurance taxes