H 4847 Session 112 (1997-1998)
H 4847 General Bill, By House Ways and Means
Similar(S 940, H 4661)
A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION
12-37-460 SO AS TO PROVIDE FOR A PHASED-IN EXEMPTION FOR THE PROPERTY TAX ON
PERSONAL PROPERTY BEGINNING WITH THE MILLAGE IMPOSED ON MOTOR VEHICLES FOR
SCHOOL OPERATING PURPOSES EXTENDING OVER TIME TO ALL PROPERTY TAXES ON ALL
PERSONAL PROPERTY, TO ESTABLISH THE MOTOR VEHICLE AND PERSONAL PROPERTY TAX
RELIEF TRUST FUND AND REQUIRE A CUMULATIVE FIFTEEN PERCENT OF RECURRING
GENERAL FUND REVENUE GROWTH TO BE CREDITED TO THE FUND TO REIMBURSE LOCAL
TAXING ENTITIES FOR PERSONAL PROPERTY TAXES NOT COLLECTED BECAUSE OF THE
EXEMPTION PROVIDED BY THIS SECTION, TO REQUIRE LOCAL TAXING ENTITIES TO ADJUST
MILLAGE IMPOSED ON PERSONAL PROPERTY ANNUALLY SO THAT THE AMOUNT RAISED BY THE
MILLAGE AND THE REIMBURSEMENT IN TOTAL DO NOT EXCEED 1998 TAX YEAR PERSONAL
PROPERTY TAX REVENUES, TO PRESCRIBE THE ORDER OF THE VARIOUS TAX LIABILITIES
TO WHICH THE EXEMPTION APPLIES, TO PROVIDE FOR REIMBURSEMENTS TO LOCAL TAXING
ENTITIES WHEN ALL PERSONAL PROPERTY IS WHOLLY EXEMPT FROM PROPERTY TAX, TO
PROVIDE THAT PROPERTY EXEMPTED FROM PROPERTY TAX BY THIS SECTION NEVERTHELESS
IS CONSIDERED TAXABLE PROPERTY AT ITS 1998 ASSESSED VALUE FOR PURPOSES OF
BONDED INDEBTEDNESS AND THE INDEX OF TAXPAYING ABILITY, AND TO PROVIDE
APPROPRIATE DEFINITIONS.
03/19/98 House Introduced, read first time, placed on calendar
without reference HJ-55
03/25/98 House Requests for debate-Rep(s). H. Brown, Cromer,
Neilson, Allison, Spearman, Young-Brickell,
Bailey, Chellis, Hinson, Law, Cave, Neal, J.
Smith, Riser, J. Hines, Loftis, Leach, Kelley,
Vaughn, Davenport, R. Smith & Kinon HJ-40
03/31/98 House Debate adjourned until Wednesday, April 1, 1998 HJ-38
04/01/98 House Amended HJ-61
04/01/98 House Read second time HJ-89
04/01/98 House Roll call Yeas-101 Nays-9 HJ-89
04/02/98 House Read third time and sent to Senate HJ-26
04/07/98 Senate Introduced and read first time SJ-7
04/07/98 Senate Referred to Committee on Finance SJ-7
AMENDED
April 1, 1998
H. 4847
Introduced by Ways and Means Committee
S. Printed 4/1/98--H.
Read the first time March 19, 1998.
STATEMENT OF ESTIMATED FISCAL
IMPACT
The bill requires that fifteen percent of the BEA's projected
year-to-year general fund revenue growth be remitted to the Motor
Vehicle and Personal Property Tax Relief Trust Fund. Because the
Constitutional amendment could be ratified as early as January 1999,
it could have an impact on FY1998-99 revenues. In FY1998-99 this
transfer would amount to an estimated $18.1 million. In FY1999-00
this transfer would amount to an estimated $34.7 million.
This proposal will set up a fund to reimburse local taxing entities
for personal property taxes up to a maximum of the amount collected
for tax year 1998. That amount is estimated at $1.3 billion. This
revenue would be reimbursed to local governments from the growth
in state revenues. Each year fifteen percent new general fund revenue
will be allocated to the fund. The Constitutional amendment requires
local governments to annually adjust the millage rate applied to these
properties to collect only $1.3 billion as collected in FY1998-99. The
BEA estimates that the general fund will collect $241 million in new
money in FY1998-99. Since one-half of FY1998-99 is in tax year
1999, $18.1 million in FY1998-99 would be the obligation to the
Motor Vehicle and Personal Property Tax Relief Trust Fund. The
BEA estimates that the general fund will collect $231 million in new
money in FY1999-00. Fifteen percent, or $34.7 million, of the
expected new collection would be set aside in the Motor Vehicle and
Personal Property Tax Relief Trust Fund in FY1999-00.
Approved By:
William C. Gillespie
Board of Economic Advisors
STATEMENT OF ESTIMATED FISCAL
IMPACT
This bill would save local taxpayers $18.1 million in FY 1998-99
and $52.8 million in FY 1999-00. This bill would have no negative
impact on local government revenues. This bill has a potential to
cause a shift in tax incidence pursuant to Section 6-1-85(b).
This proposal will set up a fund to reimburse local taxing entities
for personal property taxes up to a maximum of the amount collected
for tax year 1998. That amount is estimated at $1.3 billion. This tax
revenue would be reimbursed to local governments from the growth
in state revenues. Each year fifteen percent of new general fund
revenue will be allocated to the fund. The Board of Economic
Advisors (BEA) estimates that the general fund will collect $241
million in new money in FY 1998-99. Since one-half of FY 1998-99
is in tax year 1999, $18.1 million would be allocated to the fund in
FY 1998-99. The BEA estimates that the general fund will collect
$231 million in new money in FY 1999-00. Fifteen percent of the
new revenue collected, or $34.7 million, would be allocated to the
fund in FY 1999-00.
Approved By:
William C. Gillespie
Division of Budget and Analysis
STATEMENT OF ESTIMATED FISCAL
IMPACT
This bill would change the incidence of local property taxes among
classes of property. Those changes from the levels that would occur
in the absence of this bill are as follows:
Category ($ Million) FY 1998 FY 1999 FY 2000 FY 2001FY 2002
Personal Property (Vehicles) 0 -18 -87 -163-245
Business Personal0 0 -2 -4 -5
Manufacturing (personal) 0 0 -13 -27-41
Utility (personal)0 0 -7 -15-22
Commercial/Rental (personal) 0 0 -5 -9-14
Owner Occupied (real) 0 0 29 6196
Manufacturing (real) 0 0 6 129
Utility (real) 0 0 1 3 4
Commercial/Rental (real) 0 0 23 4670
Agriculture Private (real) 0 0 1 12
Agriculture Corporate (real) 0 0 0 11
Motor Vehicle and Personal
Property Tax Relief Trust Fund 0 18 53 93136
The analysis projects the local revenue requirements from current
property taxes at its historical rate of 5.2% per year. A baseline
projection in the absence of this bill for taxes in each category shown
above was made according to its historical rate of growth. It is
anticipated that local taxing entities would not enact other taxes to
compensate for any shortfall. A projection was made fixing personal
property taxes at 1.3 billion dollars in FY 99 and adjusting millage to
meet local revenue requirements from the property tax. The amount
of the property tax relief fund in each year was subtracted from the
local revenue requirement in computing the level of millage imposed
on real property. The changes to the baseline are shown above.
Details underlying these estimates may be obtained from the Office
of Economic Research upon request.
Approved By:
William C. Gillespie
Division of Budget and Analysis
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA,
1976, BY ADDING SECTION 12-37-460 SO AS TO PROVIDE
FOR A PHASED-IN EXEMPTION FOR THE PROPERTY TAX
ON PERSONAL PROPERTY BEGINNING WITH THE MILLAGE
IMPOSED ON MOTOR VEHICLES FOR SCHOOL OPERATING
PURPOSES EXTENDING OVER TIME TO ALL PROPERTY
TAXES ON ALL PERSONAL PROPERTY, TO ESTABLISH THE
MOTOR VEHICLE AND PERSONAL PROPERTY TAX RELIEF
TRUST FUND AND REQUIRE A CUMULATIVE FIFTEEN
PERCENT OF RECURRING GENERAL FUND REVENUE
GROWTH TO BE CREDITED TO THE FUND TO REIMBURSE
LOCAL TAXING ENTITIES FOR PERSONAL PROPERTY
TAXES NOT COLLECTED BECAUSE OF THE EXEMPTION
PROVIDED BY THIS SECTION, TO REQUIRE LOCAL TAXING
ENTITIES TO ADJUST MILLAGE IMPOSED ON PERSONAL
PROPERTY ANNUALLY SO THAT THE AMOUNT RAISED BY
THE MILLAGE AND THE REIMBURSEMENT IN TOTAL DO
NOT EXCEED 1998 TAX YEAR PERSONAL PROPERTY TAX
REVENUES, TO PRESCRIBE THE ORDER OF THE VARIOUS
TAX LIABILITIES TO WHICH THE EXEMPTION APPLIES, TO
PROVIDE FOR REIMBURSEMENTS TO LOCAL TAXING
ENTITIES WHEN ALL PERSONAL PROPERTY IS WHOLLY
EXEMPT FROM PROPERTY TAX, TO PROVIDE THAT
PROPERTY EXEMPTED FROM PROPERTY TAX BY THIS
SECTION NEVERTHELESS IS CONSIDERED TAXABLE
PROPERTY AT ITS 1998 ASSESSED VALUE FOR PURPOSES
OF BONDED INDEBTEDNESS AND THE INDEX OF
TAXPAYING ABILITY, AND TO PROVIDE APPROPRIATE
DEFINITIONS.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Article 3, Chapter 37, Title 12 of the 1976 Code is
amended by adding:
"Section 12-37-460. (A) As used in this section:
(1) 'Local personal property base payment' means an amount
equal to the revenues actually collected in calendar year 1998 by a
taxing entity from property tax on all personal property. It also
includes amounts allowed as a credit against personal property tax
pursuant to Article 1, Chapter 10 of Title 4 in calendar year 1998.
(2) 'Motor vehicle' means every vehicle which is self-propelled,
including a motorcycle, which is required to be registered and
licensed pursuant to Chapter 3 of Title 56 and which is assessed for
property tax pursuant to Section 1(8), Article X of the Constitution
of this State and Section 12-43-220(f).
(3) 'Personal property' means that property subject to the
assessment provided pursuant to Section 1, Article X of the
Constitution of this State including motor vehicles as defined in item
(2) of this subsection.
(4) 'Taxing entity' means a county, municipality, school district,
or special purpose or public service district.
(5) 'Total personal property base payment' means an amount
equal to the total revenues actually collected in calendar year 1998 by
all taxing entities in this State from property tax on personal property.
It also includes amounts allowed as a credit against personal property
tax pursuant to Article 1, Chapter 10 of Title 4 in calendar year 1998.
(6) 'Trust fund' means the Motor Vehicle and Personal Property
Tax Relief Trust Fund established pursuant to subsection (B) of this
section.
(7) 'State Personal Property Tax Reimbursement' means the
reimbursement allocated monthly to a county for its taxing entities to
reimburse for the exemptions allowed by this section. The allocation
to a county is determined by the Director of the Department of
Revenue for each fiscal year by multiplying trust fund revenues by
the proportion that the local personal property base payment of all
county taxing entities is of the total personal property base payment.
(B) There is established in the State Treasury the Motor Vehicle
and Personal Property Tax Relief Trust Fund, separate and distinct
from all other funds, to which must be credited amounts provided in
subsection (C) of this section. Revenues in this Trust Fund must be
used to provide taxing entities the reimbursement required pursuant
to this section for property tax not collected because of the exemption
allowed by this section. The Trust Fund is administered by the
Comptroller General. Earnings on the trust fund must be credited to
the general fund of the State.
(C) Annually, the Board of Economic Advisors shall remove from
its estimated revenue projection for the succeeding fiscal year an
amount equal to fifteen percent of projected year-to-year recurring
general fund growth plus the total of all amounts previously credited
to the Trust Fund, but not more than the total personal property base
payment. This amount is automatically credited to the Trust Fund for
the applicable fiscal year, is not available for appropriation, and is not
considered part of the general fund of the State except for the purpose
of calculating amounts which annually must be credited to the Trust
Fund. Amounts credited must be earmarked from state income tax
revenues.
(D) From revenue credited to the Trust Fund for a fiscal year, each
county must be allocated monthly its state personal property tax
reimbursement.
(E)(1) During the phase-in of the exemption allowed by this
section:
(a) the county auditor shall adjust the millage imposed by
county taxing entities on personal property to a uniform millage,
which when added to the taxing entity's reimbursement under this
section, does not exceed the taxing entity's local personal property
base payment.
(b) Based on the State Personal Property Tax Reimbursement,
the county auditor shall calculate and prescribe a percentage
reduction on each personal property tax bill falling due in the
applicable fiscal year, reducing liabilities in the following order:
(i) school operating millage on motor vehicles;
(ii) school bonded indebtedness and lease purchase
payments for school construction and renovation millage on motor
vehicles;
(iii) all other millage on motor vehicles;
(iv) millage on all personal property other than motor
vehicles.
Liability in each category must be eliminated before reductions are
applied to the remaining categories.
(2) From the State Personal Property Tax Reimbursement, each
taxing entity in the county must be reimbursed monthly for revenues
not collected by it because of the percentage reduction on the
personal property tax it otherwise would receive.
(3) When all personal property is wholly exempt, each taxing
entity shall receive a monthly reimbursement equal to one-twelfth of
its local personal property base payment.
(F) Notwithstanding any other provision of law, property
exempted from property tax as provided in this section is considered
taxable property for purposes of bonded indebtedness pursuant to
Sections 14 and 15, Article X of the Constitution of this State and for
purposes of computing the 'index of taxpaying ability' pursuant to
Section 59-20-20(3). However, only that assessed value applicable
for such property for the 1998 property tax year may be so
considered."
SECTION 2. Except where otherwise provided, this act takes
effect upon ratification of an amendment to the Constitution of this
State providing for the separate assessment of property taxes on all
personal property pursuant to Section 1A, Article X of the
Constitution of this State and which fixes the millage imposed on
such property to no more than the millage rate imposed on it for
property tax years beginning in 1998. Upon such ratification, the
exemption allowed pursuant to Section 12-37-460 of the 1976 Code,
as added by this act, first applies for motor vehicle tax years
beginning after June, 1999. Regardless of the effective date of this
act, no refund is allowed for the exemption allowed by this act as a
result of an effective date occurring after June, 1999.
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