GeorgiaHB 3282025-2026 Regular SessionHouseWALLET

Revenue and taxation; increase annual aggregate limit for tax credits available for certain contributions to student scholarship organizations

Sponsored By: Kasey Carpenter (Republican), John Carson (Republican), Houston Gaines (Republican), Scott Hilton (Republican), Martin Momtahan (Republican), Jason Ridley (Republican)

Signed by Governor

Ways & MeansRulesGeneral Bill

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Bill Overview

Analyzed Economic Effects

9 provisions identified: 4 benefits, 1 costs, 4 mixed.

More students qualify for private-school scholarships

Beginning July 1, 2026, more Georgia students qualify for scholarships without the usual public-school enrollment and six-week attendance requirements. This includes children whose active-duty parent was stationed in Georgia during the previous year. It also covers students with an Individualized Education Program, a Section 504 Plan, or a qualifying disability diagnosis. Other covered groups include students assigned to low-performing schools, students facing officially documented school violence or verbal threats of physical harm, and students in an approved home study program for at least one year before receiving a scholarship. Students who qualify through the six-week attendance rule remain eligible until graduation, age 20, or return to public school.

Scholarship caps exempt students with disabilities

Beginning July 1, 2026, most annual scholarships are capped at Georgia's average state and local spending per public-school student. The cap does not apply to students with an Individualized Education Program or a Section 504 Plan. Exempt diagnoses include dyslexia, autism spectrum disorder, speech-language delay and disorder, hearing loss, and other designated intellectual and developmental disabilities. Georgia's Department of Education publishes the spending-based cap and designated disabilities each year, with the cap published by January 1. The law takes effect July 1, 2026, and applies to taxable years beginning January 1, 2027, or later.

Higher statewide scholarship donation credit cap

For taxable years beginning January 1, 2027, or later, Georgia raises the annual scholarship donation tax-credit cap to $150 million. The credits cover qualifying contributions to student scholarship organizations. This is the statewide limit across contributors, not a guaranteed credit for any donor or scholarship for any student.

Cross-district virtual schooling faces tighter rules

Beginning July 1, 2026, new rules cover students attending a district-run virtual school outside their home school system. When these students exceed 5% of virtual enrollment, at least 90% of funds earned for them must support their virtual instruction; excess money returns to the state. Under that enrollment trigger, cross-district virtual instruction is barred when the system or virtual school's average performance score was below 65 over the previous two school years. These students must appear in school performance reporting and on district lists dated October 1 and March 1, but cannot count toward equalization funds. The rules exclude Georgia Virtual School, the Clearinghouse, and state charter schools.

Scholarship funds gain stricter payment safeguards

Beginning July 1, 2026, parents must endorse scholarship awards specifically to the private school or authorize electronic deposits under Revenue Department rules. Parents can use an electronic signature, but cannot appoint school employees or related entities to endorse awards for them; violations forfeit the scholarship. Scholarship organizations must devote at least 92% of the first $1.5 million in donated revenue to awards, 94% of the portion from $1.5 million to $10 million, 95% from $10 million to $20 million, and 96% above $20 million. Organizations must assign committed funds to specific recipients by year-end; multiyear school commitments are allowed, but unused funds must return for reassignment when a recipient becomes ineligible or payments stop. The law generally applies to taxable years beginning January 1, 2027, or later; the endorsement rule starts July 1, 2026.

Higher scholarship credits for insurance-tax businesses

For taxable years beginning January 1, 2027, or later, businesses' scholarship credits against insurance premium taxes have a percentage-based limit. Their combined credits are capped at 6% of the statewide scholarship credit allowance, replacing the fixed $6 million cap. With the $150 million statewide allowance, this allocation reaches $9 million. This is a combined business limit, not an individual business's credit.

More tax credits for public-school donations

For taxable years beginning January 1, 2027, or later, Georgia raises the public-school donation credit cap from $15 million to $25 million. Qualifying donations must go to nonprofit groups that award grants to public schools. The $25 million ceiling applies statewide per calendar year, not to each donor.

Lawmakers face scholarship organization income bans

Beginning July 1, 2026, Georgia lawmakers and their spouses cannot receive income from certain student scholarship organizations. The ban applies during a taxable year when the organization receives a contribution with an approved scholarship donation tax credit. The law generally applies to taxable years beginning January 1, 2027, or later. It places no payment or reporting duty on scholarship families.

Broader transit-tax uses but tighter limits

Beginning July 1, 2026, eligible transit sales-tax uses expand to roads, bridges, public transit, rail, airports, buses, and seaports. Related infrastructure and services, qualifying capital projects, and repayment of earlier general obligation debt for these purposes are also eligible. These tax funds cannot pay for free or reduced public transit fares. In areas that fail federal air-quality standards, counties must wait eight years after voters reject the tax before resubmitting it. Counties must also follow the law's other ballot requirements; this law does not itself impose the tax or set fares.

Sponsors & Cosponsors

Cosponsors

Shawn Still
Republican • Senate

Roll Call Votes

All Roll Calls

Yes: 319 • No: 225

Senate vote • 4/2/2026

AGREE TO HOUSE AMENDMENT TO SENATE SUBSTITUTE

Yes: 30 • No: 22 • Other: 2

Senate vote • 4/2/2026

SHALL THE RULING OF THE CHAIR BE SUSTAINED

Yes: 30 • No: 22 • Other: 2

House vote • 3/31/2026

Agree to Senate Sub as Am

Yes: 99 • No: 67 • Other: 6

Senate vote • 3/25/2026

MOTION TO ENGROSS: HB 328, HB 369, HB 519, HB 1112

Yes: 32 • No: 19 • Other: 4

Senate vote • 3/25/2026

PASSAGE BY SUBSTITUTE

Yes: 30 • No: 20 • Other: 4

House vote • 3/6/2025

PASSAGE

Yes: 98 • No: 75 • Other: 1

Actions Timeline

Effective Date
7/1/2026
House Date Signed by Governor
5/11/2026House
Act 463
5/11/2026
House Sent to Governor
4/10/2026House
Senate Agreed House Amend or Sub
4/2/2026Senate
House Agreed Senate Amend or Sub As Amended
3/31/2026House
Senate Engrossed
3/25/2026Senate
Senate Third Read
3/25/2026Senate
Senate Passed/Adopted By Substitute
3/25/2026Senate
Senate Committee Favorably Reported By Substitute
3/23/2026Senate
Senate Recommitted
3/20/2026Senate
Senate Read Second Time
3/19/2026Senate
Senate Committee Favorably Reported By Substitute
3/18/2026Senate
Senate Read and Referred
3/10/2025Senate
House Third Readers
3/6/2025House
House Passed/Adopted By Substitute
3/6/2025House
House Committee Favorably Reported By Substitute
3/3/2025House
House Second Readers
2/11/2025House
House First Readers
2/10/2025House
House Hopper
2/6/2025House

Bill Text

HB 328/AP* (v14)
PDF

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