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Bill would let landowners form districts to finance infrastructure; supporters tout new supply, Sierra Club warns of private financing risks
Summary
Legislation discussed in a House subcommittee would allow landowners in a defined area to form improvement districts that issue private financing to build government-owned infrastructure such as roads, water and schools.
A proposed long bill (roughly described as LC966 in the hearing) would create a mechanism for landowners to form locally approved improvement districts that issue private bonds to finance public infrastructure — roads, water, sewer, schools and parks — within a defined area.
“Only the landowners in this ... district would tax themselves, if you will,” the bill presenter said during the hearing, describing the measure as a private financing mechanism for government-owned infrastructure that would be placed on deeds in large print to notify future buyers.
The nut graf: proponents, including county commissioners and development interests, said the mechanism would speed delivery of large-scale infrastructure and expand housing supply by funding utilities and public facilities up front; opponents warned the model could create a new local government with taxing power and expose residents to private bond-market costs and higher long-term fees.
Clint Mueller with the County Commissioners Association told the committee the measure addresses supply-side housing shortages: “This gets that infrastructure built on the front end. And it gets the people that are buying into that development to pay for that.” He said the structure protects existing taxpayers because the local government would not be liable for the bonds and agreements would be negotiated in advance.
Neil Herring, a lobbyist for the Georgia chapter of the Sierra Club, said the measure resembles Florida’s development-district law and criticized its record there. “This requires the constitutional amendment because we're creating a new local government. This new local government has the power to tax,” Herring said, and urged use of existing state revolving funds and finance authorities instead.
Committee members asked whether bonds would be tax-exempt and whether the local government would assume obligations; witnesses said bonds are intended to be tax-exempt and that obligations would rest with the bondholders, not the state or general-purpose local taxing authorities. Several committee members also asked whether the financing would affect annexation, service delivery, or existing water and sewer capital funds; witnesses said local agreements would address maintenance, annexation and provider opportunities.
Ending: The subcommittee held the bill for future hearings and invited additional stakeholder discussion; proponents urged more meetings to examine financing mechanics and consumer protections before further action.
