H*4470(Rat #0385, Act #0357 of 2008)  General Bill, By Harrell, Leach, Cato, 
Hagood, Hamilton, Harrison, Limehouse, Merrill, Scarborough, W.D. Smith, 
Stavrinakis, Walker, Young, Gambrell, Haley, Bedingfield, Mahaffey, Cotty, 
McLeod, Owens, Rice, Bowen, Viers and Shoopman
 AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION
 58-5-390 SO AS TO PROVIDE THAT A PUBLIC OR PRIVATE UTILITY MAY NOT IMPOSE A
 TAP FEE, RECURRING MAINTENANCE FEE, OR OTHER FEE, HOWEVER DESCRIBED FOR THE
 INSTALLATION AND MAINTENANCE OF A FIRE SPRINKLER SYSTEM THAT EXCEEDS THE
 ACTUAL COSTS ASSOCIATED WITH THE WATER LINE TO THE SYSTEM AND TO DEFINE ACTUAL
 COSTS; BY ADDING SECTION 12-6-3622 SO AS TO ALLOW A PROPERTY TAX CREDIT, AT
 THE OPTION OF THE PROPERTY-TAXING ENTITY FOR TWENTY-FIVE PERCENT OF THE COSTS
 OF INSTALLING A FIRE SPRINKLER SYSTEM IN A COMMERCIAL OR RESIDENTIAL STRUCTURE
 WHEN SUCH INSTALLATION IS NOT REQUIRED BY LAW, TO ALLOW AN INCOME TAX CREDIT
 IN THE AMOUNT OF THE PROPERTY TAX CREDIT, TO PROVIDE THE MANNER IN WHICH THESE
 CREDITS ARE USED WHEN EARNED BY PASS-THROUGH ENTITIES, AND TO MAKE UNUSED
 CREDITS TRANSFERABLE BY THE STRUCTURE'S OWNER TO A TENANT; TO AMEND SECTION
 12-37-3130, AS AMENDED, RELATING TO DEFINITIONS FOR PURPOSES OF THE SOUTH
 CAROLINA REAL PROPERTY VALUATION REFORM ACT, SO AS TO PROVIDE THAT THE
 INSTALLATION OF A FIRE SPRINKLER SYSTEM IN A COMMERCIAL OR RESIDENTIAL
 STRUCTURE WHEN THE INSTALLATION IS NOT REQUIRED BY LAW IS NOT AN ADDITION OR
 IMPROVEMENT; BY ADDING SECTION 10-1-80 SO AS TO PROHIBIT ENFORCEMENT OF THAT
 PORTION OF THE INTERNATIONAL FIRE CODE OR NATIONALLY RECOGNIZED FIRE CODE THAT
 PROHIBITS THE USE OF NATURAL CUT TREES IN CELEBRATIONS IN HOUSES OF WORSHIP;
 AND TO AMEND SECTION 12-37-220, AS AMENDED, RELATING TO PROPERTY TAX
 EXEMPTIONS, SO AS TO EXEMPT THE VALUE OF FIRE SPRINKLER SYSTEM EQUIPMENT
 INSTALLED IN A COMMERCIAL OR RESIDENTIAL STRUCTURE WHEN THE INSTALLATION IS
 NOT REQUIRED BY LAW AND TO PROVIDE THAT THIS EXEMPTION APPLIES UNTIL THE
 PROPERTY UNDERGOES AN ASSESSABLE TRANSFER OF INTEREST. - ratified title

   01/15/08  House  Introduced and read first time HJ-11
   01/15/08  House  Referred to Committee on Ways and Means HJ-11
   01/16/08  House  Member(s) request name added as sponsor: Gambrell
   01/22/08  House  Member(s) request name added as sponsor: Haley,
                     Bedingfield, Mahaffey, Cotty, McLeod
   01/23/08  House  Member(s) request name added as sponsor: Owens,
                     Rice, Bowen
   02/12/08  House  Member(s) request name added as sponsor: Viers
   02/12/08  House  Committee report: Favorable with amendment Ways
                     and Means HJ-2
   02/14/08  House  Member(s) request name added as sponsor: Shoopman
   02/14/08  House  Amended HJ-16
   02/14/08  House  Read second time HJ-19
   02/14/08  House  Unanimous consent for third reading on next
                     legislative day HJ-19
   02/15/08  House  Read third time and sent to Senate HJ-1
   02/15/08         Scrivener's error corrected
   02/19/08  Senate Introduced and read first time SJ-5
   02/19/08  Senate Referred to Committee on Finance SJ-5
   05/28/08  Senate Committee report: Favorable with amendment
                     Finance SJ-15
   05/29/08  Senate Committee Amendment Amended and Adopted SJ-186
   05/29/08  Senate Amended SJ-186
   05/29/08  Senate Read second time SJ-186
   05/29/08  Senate Unanimous consent for third reading on next
                     legislative day SJ-186
   05/30/08         Scrivener's error corrected
   05/30/08  Senate Read third time and returned to House with
                     amendments SJ-1
   06/03/08  House  Concurred in Senate amendment and enrolled HJ-14
   06/05/08         Ratified R 385
   06/11/08         Vetoed by Governor
   06/25/08  House  Veto overridden by originating body Yeas-109  Nays-0
   06/25/08  Senate Veto overridden Yeas-43  Nays-0
   07/10/08         Copies available
   07/10/08         Effective date See Act for Effective Date
   07/14/08         Act No. 357

(A357, R385, H4470)

AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 58-5-390 SO AS TO PROVIDE THAT A PUBLIC OR PRIVATE UTILITY MAY NOT IMPOSE A TAP FEE, RECURRING MAINTENANCE FEE, OR OTHER FEE, HOWEVER DESCRIBED FOR THE INSTALLATION AND MAINTENANCE OF A FIRE SPRINKLER SYSTEM THAT EXCEEDS THE ACTUAL COSTS ASSOCIATED WITH THE WATER LINE TO THE SYSTEM AND TO DEFINE ACTUAL COSTS; BY ADDING SECTION 12-6-3622 SO AS TO ALLOW A PROPERTY TAX CREDIT, AT THE OPTION OF THE PROPERTY-TAXING ENTITY FOR TWENTY-FIVE PERCENT OF THE COSTS OF INSTALLING A FIRE SPRINKLER SYSTEM IN A COMMERCIAL OR RESIDENTIAL STRUCTURE WHEN SUCH INSTALLATION IS NOT REQUIRED BY LAW, TO ALLOW AN INCOME TAX CREDIT IN THE AMOUNT OF THE PROPERTY TAX CREDIT, TO PROVIDE THE MANNER IN WHICH THESE CREDITS ARE USED WHEN EARNED BY PASS-THROUGH ENTITIES, AND TO MAKE UNUSED CREDITS TRANSFERABLE BY THE STRUCTURE'S OWNER TO A TENANT; TO AMEND SECTION 12-37-3130, AS AMENDED, RELATING TO DEFINITIONS FOR PURPOSES OF THE SOUTH CAROLINA REAL PROPERTY VALUATION REFORM ACT, SO AS TO PROVIDE THAT THE INSTALLATION OF A FIRE SPRINKLER SYSTEM IN A COMMERCIAL OR RESIDENTIAL STRUCTURE WHEN THE INSTALLATION IS NOT REQUIRED BY LAW IS NOT AN ADDITION OR IMPROVEMENT; BY ADDING SECTION 10-1-80 SO AS TO PROHIBIT ENFORCEMENT OF THAT PORTION OF THE INTERNATIONAL FIRE CODE OR NATIONALLY RECOGNIZED FIRE CODE THAT PROHIBITS THE USE OF NATURAL CUT TREES IN CELEBRATIONS IN HOUSES OF WORSHIP; AND TO AMEND SECTION 12-37-220, AS AMENDED, RELATING TO PROPERTY TAX EXEMPTIONS, SO AS TO EXEMPT THE VALUE OF FIRE SPRINKLER SYSTEM EQUIPMENT INSTALLED IN A COMMERCIAL OR RESIDENTIAL STRUCTURE WHEN THE INSTALLATION IS NOT REQUIRED BY LAW AND TO PROVIDE THAT THIS EXEMPTION APPLIES UNTIL THE PROPERTY UNDERGOES AN ASSESSABLE TRANSFER OF INTEREST.

Whereas, when fire sprinklers are present, the chances of a person dying in a fire are reduced by one-half to three-fourths; and

Whereas, when fire sprinklers are present, the average property loss per fire is cut by one-half to two-thirds, compared to fires where fire sprinklers are not present; and

Whereas, the National Fire Protection Association has no record of a fire killing more than two people in a completely sprinklered public assembly, educational, institutional, or residential building where the system was working properly; and

Whereas, fire caused 10,672,000,000 dollars in direct property damage in the United States in 2005; and

Whereas, fire sprinklers are highly reliable, and when present in the fire area, operate in all but seven percent of fires large enough to activate the system. Human error was a factor in most of the failures, and the system was shut off in approximately two-thirds of the failures; and

Whereas, it is the purpose of this act to create meaningful incentives for the installation of fire sprinkler systems. Now, therefore,

Be it enacted by the General Assembly of the State of South Carolina:

Tap fees limited

SECTION    1.    Chapter 5, Title 58 of the 1976 Code is amended by adding:

"Section 58-5-390.    A publicly or privately owned utility may not impose a tap fee, other fee, or a recurring maintenance fee of any nature or however described for the installation and maintenance of a fire sprinkler system that exceeds the actual costs associated with the water line to the system.

For purposes of this section, actual costs include direct labor, direct material, the necessity of increased capacity, and other direct charges associated with the separate fire sprinkler line. The direct costs must be documented by either an invoice or work order that specifically assigns the costs to the separate fire sprinkler line. Nothing in this section may be construed as requiring a utility to provide service to support a private fire protection system."

Tax credits

SECTION    2.    A.    Article 25, Chapter 6, Title 12 of the 1976 Code is amended by adding:

"Section 12-6-3622.    (A)(1)    Subject to the terms and conditions of this section, a taxpayer who installs a fire sprinkler system in a commercial or residential structure, whether the structure or fire sprinkler is new or existing, when such installation is not required by law, regulation, or code is eligible for a credit against real property taxes levied by a local taxing entity equal to twenty-five percent of the direct expenses, not including any type of fee charged by the publicly or privately owned utility, incurred by the taxpayer if the local taxing entity has consented to the tax credit.

(2)    In any year in which the local taxing entity consents to a tax credit, the taxpayer also may claim an income tax credit equal to the amount of the credit against real property taxes.

(3)    The credit earned pursuant to this subsection by an 'S' corporation owing corporate level income tax must be used first at the entity level. Any remaining credit passes through to each shareholder in a percentage equal to each shareholder's percentage of stock ownership.

(4)    The credit earned pursuant to this subsection by a general partnership, limited partnership, limited liability company, or any other entity taxed as a partnership must be passed through to its partners and may be allocated among any of its partners, including without limitation, an allocation of the entire credit to one partner, in a manner agreed by the partners that is consistent with Subchapter K of the Internal Revenue Code. As used in this subsection, the term 'partner' means a partner, member, or owner of an interest in the pass-through entity, as applicable.

(B)    The Department of Revenue shall develop a form on which a taxpayer may claim the credit against real property taxes. The taxpayer may claim the credit against real property taxes by submitting the form with the payment of real property taxes to the local taxing entity. The taxpayer may claim the credit against income taxes by submitting the form with the taxpayer's return.

(C)    The owner of the structure may transfer, devise, or distribute any unused credit to the tenant of the eligible site. To be effectual, the local taxing entity must receive written notification.

(D)    For purposes of this section, fire sprinkler system has the same meaning as in Section 40-10-20."

B.    This section takes effect upon approval of this act by the Governor and applies for taxable years beginning after 2007.

Fire sprinkler systems not an improvement

SECTION    3.    A.    Section 12-37-3130(1) of the 1976 Code is amended to read:

"(1)    'Additions' or 'improvements' mean an increase in the value of an existing parcel of real property because of:

(a)    new construction;

(b)    reconstruction;

(c)    major additions to the boundaries of the property or a structure on the property;

(d)    remodeling; or

(e)    renovation and rehabilitation, including installation.

Additions or improvements do not include minor construction or ongoing maintenance and repair of existing structures. The repair or reconstruction of a structure damaged or destroyed by a disaster, to include, but not limited to, construction defects, defective materials, fire, wind, hail, flood, and acts of God, is not an addition or improvement to the extent that the structure as repaired or reconstructed is similar in size, utility, and function of the structure damaged or destroyed, and the rebuilding or reconstruction is begun within eight years after determination of the damage or destruction. Construction of facilities in a home that make the home handicap accessible is not an addition or improvement if the utility and function of the structure remains unchanged. The installation of a fire sprinkler system in a commercial or residential structure when the installation is not required by law, regulation, or code is not an addition or improvement if the utility and function of the structure remains unchanged."

B.    This section takes effect upon approval of this act by the Governor and applies for taxable years beginning after 2007.

Fire Code enforcement

SECTION    4.    Chapter 1, Title 10 of the 1976 Code is amended by adding:

"Section 10-1-80.    (A)    For purposes of this section, 'places of worship' mean new or existing buildings that are included within the Group A occupancies as contained in either the International Fire Code or the most recently adopted nationally recognized fire code.

(B)    The General Assembly finds that the tradition of bringing natural cut trees is an important symbol in celebrations occurring in places of worship.

(C)    Neither the Fire Marshal nor a governing body of a county or municipality shall enforce that portion of either the International Fire Code or a nationally recognized fire code that prohibits natural cut trees from being located in places of worship which do not fall within the exceptions provided for structures that have approved automatic sprinkler systems installed in accordance with the International Fire Code or a nationally recognized fire code.

(D)    This section does not affect the authority of the Fire Marshal or a governing body of a county or a municipality to enforce the other provisions of the International Fire Code or a nationally recognized fire code that pertain to decorative vegetation in new and existing buildings."

Property tax exemption for fire sprinkler systems - duration

SECTION    5.    A.    Section 12-37-220(B) of the 1976 Code is amended by adding an appropriately numbered item at the end to read:

"( )    All fire sprinkler system equipment and the value attached thereto that is installed on a commercial or residential structure when the installation is not required by law, regulation, or code until there is an assessable transfer of interest as determined by Section 12-37-3150."

B.    This section takes effect upon approval of this act by the Governor and applies for taxable years beginning after 2007.

Time effective

SECTION    6.    Except as otherwise provided, this act takes effect upon approval by the Governor.

Ratified the 5th day of June, 2008.

Vetoed by the Governor -- 6/11/08.

Veto overridden by House -- 6/25/08.

Veto overridden by Senate -- 6/25/08.