S 0249 General Bill, By J.M. Waddell
 A Bill to amend the Code of Laws of South Carolina, 1976, by adding Section
 12-43-232 so as to provide that real property does not qualify as agricultural
 real property unless the tract is five acres or more in the case of Timberland
 and ten acres or more for other than Timberland, to provide that the ten acre
 requirement does not apply if there is at least one thousand dollars of gross
 farm income for at least three of the five taxable years preceding the
 application for agricultural use, to make new owners of less than ten acres
 eligible for agricultural use subject to the rollback tax if they fail to meet
 the same income requirements in the first five years of operation, to
 authorize the assessor to obtain tax information and the agriculture
 stabilization and conservation service farm identification number to verify
 applications, to provide that land idle under land retirement programs
 qualifies for agricultural use if otherwise eligible, to provide that in the
 case of lease operations, the lessor or lessee shall meet the requirements,
 and to require applicants for agricultural use or the special assessment ratio
 for certain agriculture operations to certify that the property meets the
 applicable requirements; to amend the 1976 Code by adding Section 12-43-340 so
 as to make it unlawful to make a false statement on an application for
 agricultural use and the special assessment ratio for certain agriculture
 operations and provide a penalty; and to exempt from the rollback tax
 landowners made ineligible for agricultural use by the provisions of this Act.

   10/22/90  Senate Prefiled
   10/22/90  Senate Referred to Committee on Finance
   01/08/91  Senate Introduced and read first time SJ-91
   01/08/91  Senate Referred to Committee on Finance SJ-91
   02/05/91  Senate Committee report: Majority favorable with amend.,
                     minority unfavorable Finance SJ-20
   02/13/91  Senate  Carried over until after Tues. Feb 19 SJ-22
   03/19/91  Senate Special order SJ-13
   03/04/92  Senate Debate interrupted SJ-32
   03/10/92  Senate Debate interrupted SJ-23
   03/25/92  Senate Debate interrupted SJ-25
   04/21/92  Senate Debate interrupted SJ-24
   04/28/92  Senate Continued SJ-76

COMMITTEE REPORT

February 5, 1991

S. 249

S. Printed 2/6/91--S.

Read the first time January 8, 1991.

To whom was referred a Bill (S. 249), to amend the Code of Laws of South Carolina, 1976, by adding Section 12-43-232 so as to provide that real property does not qualify as agricultural real property, etc., respectfully

That they have duly and carefully considered the same, and recommend that the same do pass with amendment:

Amend the bill, as and if amended, by striking Section 3, and inserting:

/Section 3. Real property classified as agricultural real property and made ineligible for that classification by the provisions of Section 12-43-232 of the 1976 Code, as added by this act, is not subject to rollback tax until the real property is conveyed, at which time the rollback tax applies based on the last five tax years the property was classified as agricultural real property./

Renumber sections to conform.

Amend title to conform.

Majority favorable. Minority unfavorable.

JAMES M. WADDELL, JR. RYAN C. SHEALY

For Majority. For Minority.

Senate Bill 249 adds Section 12-43-232, so as to provide that real property does not qualify as agricultural real property unless the tract is five acres or more in the case of timberland, and ten acres or more for other than timberland, to provide that the ten acre requirement does not apply if there is at least one thousand dollars of gross farm income for at least three of the five taxable years preceding the application for agricultural use, to make new owners of less than ten acres eligible for agricultural use subject to the rollback tax if they fail to meet the same income requirements in the first five years of operation, etc., and to add Section 12-43-340, so as to make it unlawful to make a false statement on an application for agricultural use and the special assessment ratio for certain agriculture operations and to provide a penalty; and to exempt from the rollback tax landowners made ineligible for agricultural use by the provisions of this act.

This bill would have no effect on state revenue, however, it could cause an increase in local revenue of approximately $4,000,000.

Approved By:

S. Hunter Howard, Jr.

S.C. Tax Commission

A BILL

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-43-232 SO AS TO PROVIDE THAT REAL PROPERTY DOES NOT QUALIFY AS AGRICULTURAL REAL PROPERTY UNLESS THE TRACT IS FIVE ACRES OR MORE IN THE CASE OF TIMBERLAND AND TEN ACRES OR MORE FOR OTHER THAN TIMBERLAND, TO PROVIDE THAT THE TEN ACRE REQUIREMENT DOES NOT APPLY IF THERE IS AT LEAST ONE THOUSAND DOLLARS OF GROSS FARM INCOME FOR AT LEAST THREE OF THE FIVE TAXABLE YEARS PRECEDING THE APPLICATION FOR AGRICULTURAL USE, TO MAKE NEW OWNERS OF LESS THAN TEN ACRES ELIGIBLE FOR AGRICULTURAL USE SUBJECT TO THE ROLLBACK TAX IF THEY FAIL TO MEET THE SAME INCOME REQUIREMENTS IN THE FIRST FIVE YEARS OF OPERATION, TO AUTHORIZE THE ASSESSOR TO OBTAIN TAX INFORMATION AND THE AGRICULTURE STABILIZATION AND CONSERVATION SERVICE FARM IDENTIFICATION NUMBER TO VERIFY APPLICATIONS, TO PROVIDE THAT LAND IDLE UNDER LAND RETIREMENT PROGRAMS QUALIFIES FOR AGRICULTURAL USE IF OTHERWISE ELIGIBLE, TO PROVIDE THAT IN THE CASE OF LEASE OPERATIONS, THE LESSOR OR LESSEE SHALL MEET THE REQUIREMENTS, AND TO REQUIRE APPLICANTS FOR AGRICULTURAL USE OR THE SPECIAL ASSESSMENT RATIO FOR CERTAIN AGRICULTURE OPERATIONS TO CERTIFY THAT THE PROPERTY MEETS THE APPLICABLE REQUIREMENTS; TO AMEND THE 1976 CODE BY ADDING SECTION 12-43-340 SO AS TO MAKE IT UNLAWFUL TO MAKE A FALSE STATEMENT ON AN APPLICATION FOR AGRICULTURAL USE AND THE SPECIAL ASSESSMENT RATIO FOR CERTAIN AGRICULTURE OPERATIONS AND PROVIDE A PENALTY; AND TO EXEMPT FROM THE ROLLBACK TAX LANDOWNERS MADE INELIGIBLE FOR AGRICULTURAL USE BY THE PROVISIONS OF THIS ACT.

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

SECTION 1. Article 3, Chapter 43, Title 12 of the 1976 Code is amended by adding:

"Section 12-43-232. In addition to all other requirements for real property to be classified as agricultural real property, the property must meet the following requirements:

(1) If the tract is used to grow timber, the tract must be five acres or more. Tracts of timberland of less than five acres which are contiguous to or are under the same management system as a tract of timberland which meets the minimum acreage requirement are treated as part of the qualifying tract. Tracts of timberland of less than five acres are eligible to be agricultural real property when they are owned in combination with other tracts of nontimberland agricultural real property that qualify as agricultural real property. For the purposes of this item, tracts of timberland must be devoted actively to growing trees for commercial use.

(2) For tracts not used to grow timber as provided in item (1) of this section, the tract must be ten acres or more. Nontimberland tracts of less than ten acres which are contiguous to other such tracts which, when added together, meet the minimum acreage requirement, are treated as a qualifying tract. For purposes of this item (2) only, contiguous tracts include tracts with identical owners of record separated by a dedicated highway, street, or road or separated by any other public way.

(3) (a) Nontimberland tracts not meeting the acreage requirement of item (2) qualify as agricultural real property if the person making the application required pursuant to Section 12-43-220(d)(3) reported at least one thousand dollars of gross farm income on his federal income tax return Schedule E or F for at least three of the five taxable years preceding the year of the application. The assessor may require the applicant (i) to give written authorization consistent with privacy laws allowing the assessor to verify farm income from the South Carolina Tax Commission or the Internal Revenue Service and (ii) to provide the Agriculture Stabilization and Conservation Service (ASCS) farm identification number of the tract and allow verification with the ASCS office.

(b) A new owner making the application required pursuant to Section 12-43-220(d)(3) for a nontimberland tract of less than ten acres may claim the property as agricultural real property for each year for the first five years of operation if he files federal income tax returns reporting at least one thousand dollars of gross farm income on Schedule E or F in at least three of the first five years. The assessor may require the new owner (i) to give written authorization consistent with privacy laws allowing the assessor to verify farm income from the South Carolina Tax Commission or the Internal Revenue Service and (ii) to provide the Agriculture Stabilization and Conservation Service (ASCS) farm identification number of the tract and allow verification with the ASCS office.

If the new owner fails to meet the income requirements in the five-year period, the tract is not considered agricultural real property and is subject to the rollback tax.

(c) Real property idle under a federal or state land retirement program or property idle pursuant to accepted agricultural practices is agricultural real property if the property otherwise would have qualified as such property subject to satisfactory proof to the assessor.

(3) In the case of rented or leased agricultural real property, either the lessor or the lessee shall meet the requirements of this section.

(4) On the application required pursuant to Section 12-43-220(d)(3), the owner or his agent shall certify substantially as follows: 'Subject to the penalty provided in Section 12-43-340, either:

(a) "I certify that the property which is the subject of this application meets the requirements to qualify as agricultural real property as of January first of the current tax year"; or

(b) "I certify that the property which is the subject of this application meets the requirements to qualify as agricultural real property and for the special assessment ratio for certain agricultural real property as of January first of the current tax year".'"

SECTION 2. Article 3, Chapter 43, Title 12 of the 1976 Code is amended by adding:

"Section 12-43-340. It is unlawful for a person knowingly and wilfully to make a false statement on the application required pursuant to Section 12-43-220(d)(3) to a county assessor for the classification of property as agricultural real property or for the special assessment ratio for certain agricultural real property. A person violating the provisions of this section is guilty of a misdemeanor and, upon conviction, must be fined not more than two hundred dollars."

SECTION 3. Real property initially classified as agricultural real property and made ineligible for that classification by the provisions of Section 12-43-232 of the 1976 Code, as added by this act, is not subject to rollback tax.

SECTION 4. This act is effective for taxable years beginning after 1990.