A few new Georgia laws have already gone into effect or will go into effect on July 1 that impact the development and tax-exempt bond activities of counties, municipalities, development authorities/agencies and school districts. Below is a brief summary of such laws.

HB 406: New Project Reporting Requirements for Joint Development Authorities

HB 406 (effective May 7, 2019) imposed new reporting requirements on joint development authorities, by amending O.C.G.A. Section 48-5-274 to require a joint development authority with established tax revenue sharing agreements between the authority and participating local governments to file by May 15, 2019, and then by February 15 each year thereafter with the state revenue commissioner and the state auditor:

  • A statement that identifies and separately states all real and personal property and all property interests that are owned, in part or in full, by the joint authority together with the nature of any encumbrances, liens, or covenants on such property;

  • A complete copy of all current agreements or contracts related to the joint development authority between one or more counties, municipalities, joint authorities, or private parties that reference matters related to payments in lieu of taxes (“PILOT” payments), tax abatements, leasehold interests or estates, leaseback agreements, or the sharing of revenue, funds, fees, taxes, assessments, fines, or any other income; and

  • Any additional information determined by the state revenue commissioner or state auditor as necessary to determine the net taxable digest of each county or municipality participating in the joint development authority and any affected school district.

The information will be used by the state auditor to determine any equalized adjusted property tax digest. A report will be given to the tax commissioner of each affected county and to each affected county, municipality, local board of education, the joint development authority and to the Georgia Board of Education that sets out the net impact of the total activities of the joint development authority on the tax digest of each affected taxing jurisdiction.

HB 379: Special Purpose Local Option Sales Tax (SPLOST) Reporting Requirements

Previously under the county SPLOST law (O.C.G.A. Section 48-8-110 et seq.), the county and each municipality receiving any proceeds from the SPLOST must annually publish in the newspaper a simple report showing, for each project or purpose identified in the resolution or ordinance that called for imposition of the SPLOST, certain collections and expenditures information by December 31 of each year. HB 379, which went into effect on May 7, 2019, amended this reporting deadline in Section 48-8-122 to require that such report is published no later than 180 days following the close of each fiscal year, syncing up with the timing of governmental audits.

The information required to be reported remains substantively the same but reflects this timing change. For each SPLOST project or purpose, the local government must show:

  • The original estimated cost;

  • The current estimated cost if different;

  • Amounts expended in prior fiscal years;

  • Amounts expended in the most recently completed fiscal year;

  • Any excess proceeds which have not been expended for a project or purpose;

  • Estimated completion date; and

  • The actual completion cost of a project completed during the most recently completed fiscal year.

In the case of road, street and bridge purposes, such information shall be in the form of a consolidated schedule of the total information and not a separate enumeration with respect to each individual road, street or bridge project. The report must also include a statement of what corrective action the local government intends to implement with respect to each project that is underfunded or behind schedule.

HB 349: Expansion of County Powers for Tax Allocation Districts (TADs)

Georgia’s Redevelopment Powers Law (O.C.G.A. Section 36-44-1 et seq.) permits counties, municipalities and consolidated governments to create tax allocation districts (TADs) and issue tax allocation bonds to encourage new investment in economically and socially depressed areas. Currently, a county generally can only create TADs in unincorporated areas of the county. HB 349 amends the definition of “area of operation” to include within a county’s area of operation incorporated areas of the county, if authorized by resolution of the applicable city. This is a modest expansion of county powers.

Tax Allocation Districts (TADs) are a form of tax increment financing (TIF) used to provide monies for specific public or private infrastructure projects. Under the Redevelopment Powers Law, counties, municipalities and consolidated governments can sell bonds to finance infrastructure and other redevelopment within a designated TAD.  The increased property tax revenues generated from the new investment in the area are allocated to paying the principal and interest on the bonds. Successful TADs tend to also result in an increase in sales tax revenue and further development – sometimes referred to as the “halo effect.”

The local government must designate the TAD boundaries after making certain findings and approve a TAD Redevelopment Plan, subject to public hearings.  The Redevelopment Powers Law limits communities to a maximum of 10% of the community’s tax digest allocated to all TADs created by a community.