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(F) Effective July 1, 1997, the governing body of each municipality is prohibited from charging any fee or tax on the transfer of real property."

SECTION 4. Section 4-29-67 of the 1976 Code, as last amended by Act 32 of 1995, is further amended by adding an appropriately lettered subsection at the end to read:

"( ) The provisions of Sections 4-9-142 and 5-21-70 do not apply with respect to calculating the fee in lieu of taxes allowed pursuant to this section and Chapter 12 of this title."

SECTION 5. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding may not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

SECTION 6. Upon approval by the Governor, this PART takes effect July 1, 1997, or as otherwise provided, but the provisions of this PART apply only in counties or municipalities in which the entity authorized to hold elections has certified a majority "yes" vote in the referendum provided by SECTION 1 of this PART.

Senator MARTIN spoke on Part II of the amendment.

Senator BRYAN spoke on Part II of the amendment.

Senator LANDER proposed the following Amendment No. 38-P1 (3901R104.JAL), which was adopted:

Amend the amendment bearing DOC. NO. 3901r099.tlm, as and if amended, page 10, by adding after subsection (3) and before subsection (4) a new subsection to read:

/(4) to site, establish, or operate a local regional correctional facility, under the provisions of Chapter 3 of Title 24 of the 1976 Code, as amended;/

Renumber subsections to conform.

Amend title to conform.

The amendment was adopted.

Senator GREG SMITH proposed the following Amendment No. 38-P2 (3901R105.GS), which was tabled:

Amend the amendment, as and if amended, beginning on page 8, by striking the second paragraph of SECTION 1. B. and inserting in lieu thereof the following:

/Do you favor:

(1) limiting Act 283 of 1975 known as the Home Rule Act in order to prohibit
(Municipality or County) from imposing any new taxes or fees unless:

(a) enacted before December 31, 1995; or

(b) expressly authorized by the General Assembly and imposed upon approval of two-thirds of the local governing body; and

(2) limiting an increase in tax, fee, and millage rates to the Consumer Price Index:

(a) unless there is a declared emergency; or

(b) unless declared necessary to pay for:

(i) a judicially-mandated expenditure; or

(ii) bonded indebtedness; or

(c) unless necessary to offset a prior year's deficit; and

(3) authorizing a tax, fee, or millage rate increase above the Consumer Price Index if approved by two-thirds vote of the local governing body; and

(4) allowing (Municipality or County), by majority vote of the local governing body, to impose a cumulative fee or tax of three percent on accommodations furnished to transients and one percent on sales of food and beverages sold in or by establishments licensed for on-premises consumption of alcoholic beverages, beer, or wine?

Those voting in favor of the question shall deposit a ballot with a check or cross mark in the square after the word `Yes', and those voting against the question shall deposit a ballot with a check or cross mark in the square after the word `No'." /

Amend title to conform.

Senator MOORE spoke on the amendment.

Senator MOORE moved to lay the amendment on the table.

The amendment was laid on the table.

Senator LEATHERMAN asked unanimous consent to take up for immediate consideration Amendment No. 38-P2A.

There was no objection.

Senator LEATHERMAN proposed the following Amendment No. 38-P2A (3901R110.HKL), which was adopted:

Amend the amendment bearing Doc. No. 3901r108.gfm., as and if amended, in PART III, SECTION 1, by adding a new subitem after Section 6-1-82(B)(2):

/ (3) A county fee or tax based on the gross proceeds derived from the rental or charges for accommodations furnished to transients or based on sales of food and beverages sold in or by establishments licensed for on-premises consumption of alcoholic beverages, beer, or wine may not be imposed in any incorporated areas of the county without the consent of the affected municipality. /

Renumber other subsections to conform.

Amend title to conform.

On motion of Senator LEATHERMAN, the amendment was adopted.

Senator CORK proposed the following Amendment No. 38-P3 (3901R110.HAC), which was carried over:

Amend the amendment bearing DOC. NO. 3901r099.tlm, as and if amended, page 15, between SECTION 4 and SECTION 5, by adding a new SECTION to read:

/SECTION 5. A. Section 132B, Part II of Act 497 of 1994 is amended to read:

"132B. The provisions of Section 6-1-70 of the 1976 Code do not apply in the case of any county or municipal real estate transfer tax or fee imposed on or before October 15, 1993.

B. Notwithstanding any other effective date provided in this act, this section takes effect upon approval by the Governor./

/The provisions of this subsection to not apply in the case of any county or municipal real estate transfer tax or fee imposed on or before October 15, 1993./

Amend the amendment further, as and if amended, page 15, subsection (F), by adding a sentence at the end to read:

/The provisions of this subsection do not apply in the case of any county or municipal real estate transfer tax or fee imposed on or before October 15, 1993./

Renumber sections to conform.

Amend title to conform.

Senator CORK explained the amendment.

On motion of Senator CORK, the amendment was carried over.

Senator MOORE moved that Part II of Amendment No. 38 be carried over.

Part II of Amendment No. 38 was carried over.

The question then was the adoption of Part I of Amendment No. 38.

Amend the bill, as and if amended, page 1, line 22 by striking PART I in its entirety and inserting in lieu thereof the following:

/

SECTION 1.A. The State Election Commission shall conduct a statewide referendum on November 5, 1996, on the question of raising the sales tax in order to provide property tax relief. The state election laws apply to this referendum, mutatis mutandis. The commission shall canvass the results of the referendum and certify the results to the director of the Department of Revenue and Taxation and the Code Commissioner. The referendum question must read substantially as follows:

"Do you favor raising the statewide sales, use, and casual excise tax rate from five to six percent and to set aside the proceeds of the additional one percent to provide for five specific tax relief programs which are: (1) providing for a maximum refundable individual income tax credit of seventy-five dollars per return with each state return filed; (2) granting owner-occupied residential property an exemption from all property taxes

Those voting in favor of the question shall deposit a ballot with a check or cross mark in the square after the word `Yes', and those voting against the question shall deposit a ballot with a check or cross mark in the square after the word `No'."

B. This SECTION takes effect upon approval by the Governor.

SECTION 2. Article 5, Chapter 6, Title 12 of the 1976 Code is amended by adding:

"Section 12-6-525. On each individual tax return filed, there is allowed a refundable credit against the tax imposed pursuant to Section 12-6-510 in an amount equal to seventy-five dollars. This credit is reduced by five dollars for each one thousand dollars of taxable income in excess of one thousand dollars on the taxpayer's South Carolina individual income tax return."

SECTION 3. Article 9, Chapter 6, Title 12 of the 1976 Code is amended by adding:

"Section 12-6-1165. Beginning with the taxable year in which a resident individual attains the age of sixty-five, his taxable income is exempt from the tax imposed pursuant to Section 12-6-510 as follows:

(1) for taxable years beginning in 1997, twenty percent of taxable income is exempt;

(2) for taxable years beginning in 1998, forty percent of taxable income is exempt;

(3) for taxable years beginning in 1999, sixty percent of taxable income is exempt;

(4) for taxable years beginning in 2000, eighty percent of taxable income is exempt;

(5) for taxable years beginning after 2001, one hundred percent of taxable income is exempt.

The taxable income of a married individual eligible for this exemption who files a joint federal income tax return with a spouse who is not eligible for the exemption must be allocated between the spouses and only

SECTION 4. A. Section 12-6-1140 of the 1976 Code, as last amended by Act 76 of 1995, is further amended by adding at the end:

"(8) Twenty-eight and one-half percent of amounts otherwise subject to tax under Section 12-6-510 received by or attributed to a taxpayer as a result of the taxpayer's status as a:

(1) shareholder of a subchapter `S' corporation;

(2) partner in a partnership; or

(3) member of a limited liability company.

No deduction is allowed under this item for a guaranteed payment to a partner for personal services rendered by the partner for the partnership."

B. This section applies to taxable years beginning after 1996.

SECTION 5. Section 12-36-940 of the 1976 Code is amended to read:

"Section 12-36-940. Every retailer may add to the sales price:

(1) no amount on sales of ten cents or less;

(2) one cent on sales of eleven cents and over, but not in excess of twenty cents;

(3) two cents on sales of twenty-one cents and over, but not in excess of forty cents;

(4) three cents on sales of forty-one cents and over, but not in excess of sixty cents;

(5) four cents on sales of sixty-one cents and over, but not in excess of eighty cents;

(6) five cents on sales of eighty-one cents and over, but not in excess of one dollar;

(7) one cent additional for each twenty cents or major fraction thereon in excess of one dollar.

The inability, impracticability, refusal, or failure to add these amounts to the sales price and collect from the purchaser does not relieve the taxpayer from the tax levied by this article.

A retailer may add the amount of the tax to the sales price and the department shall prescribe tables providing the amount to be added to the sales price consistent with the total rate of the tax."

SECTION 6. Chapter 36, Title 12 of the 1976 Code is amended by adding:

SECTION 7. A. The gross proceeds of sales of tangible personal property delivered after June 30, 1997, in this State, either under the terms of a construction contract executed before July 1, 1997, or a written bid submitted before July 1, 1997, culminating in a construction contract entered into before or after July 1, 1997, are exempt from the tax provided in Section 12-36-1110 of the 1976 Code if a verified copy of the contract is filed with the South Carolina Department of Revenue and Taxation before January 1, 1998.

B. Notwithstanding the date of general imposition of the tax imposed pursuant to Section 12-36-1110 of the 1976 Code, with respect to services that are regularly billed on a monthly basis, the tax is imposed beginning on the first day of the billing period beginning on or after July 1, 1997.

SECTION 8. A. In each county in which is imposed the local option sales tax, a county governing body, by majority vote, may cause the referendum provided in Section 4-10-35 of the 1976 Code to be held at the time of the general election in 1996 and at the time of the general election every two years thereafter. If the question is approved, the tax is rescinded in the county in the manner provided by law.

The authority of the governing body provided in this section is in addition to the authority granted for a referendum question initiated by petition.

B. This SECTION takes effect upon approval by the Governor.

SECTION 9. Section 12-37-251 of the 1976 Code, as added by Act 145 of 1995, is amended to read:

"Section 12-37-251. (A) Property classified pursuant to Section 12-43-220(c) is exempt from property taxes levied for other than bonded indebtedness and payments pursuant to lease-purchase agreements for capital construction. The exemption applies against millage imposed for school operations and the amount of fair market value of the homestead that is exempt from such millage must be set by the Director of the Department of Revenue and Taxation based on the amount available in the State Property Tax Relief Fund. In addition to any other homestead exemption allowed by law, one hundred percent of the fair market value of every homestead qualifying for the assessment ratio provided pursuant to Section 12-43-220(c) is exempt from all ad valorem taxes except ad valorem taxes levied as follows:

(4) ad valorem taxes levied pursuant to a referendum in which a majority of the qualified electors of the jurisdiction voting in the referendum voted in favor of levying the taxes.

(B) Taxing entities must be reimbursed, in the manner provided in Section 12-37-270 for the revenue lost as a result of the homestead exemption provided in this section except that ninety percent of the reimbursement must be paid in the last quarter of the calendar year.

(C) Notwithstanding any other provision of law, property exempted from property taxation in the manner provided in this section is considered taxable property for purposes of bonded indebtedness pursuant to Sections 14 and 15 of 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).
(E) In the year of reassessment the millage rate for all real and personal property must not exceed the rollback millage, except that the rollback millage may be increased by the percentage increase in the consumer price index for the year immediately preceding the year of reassessment.

(D) The exemption allowed by this section is conditional on full funding of the Education Finance Act and on an appropriation by the General Assembly each year reimbursing school districts an amount equal to the Department of Revenue and Taxation's estimate of total school tax revenue loss resulting from the exemption in the next fiscal year."

B. This SECTION is effective for property tax years beginning after 1996.

SECTION 10. A. The penultimate paragraph of Section 12-37-930 of the 1976 Code, as last amended by Act 32 of 1995, is further amended to read:

"(A) In no event may the original cost be reduced more than eighty ninety percent, except this limit is ninety percent for custom molds and dies used in the conduct of manufacturing electronic interconnection component assembly devices for computers and computer peripherals. In the year of acquisition, depreciation is allowed as if the property were owned for the full year. The term `original cost' means gross capitalized cost, including property on which the taxpayer made the election allowed pursuant to Section 179 of the Internal Revenue Code of 1986, as shown by the taxpayer's records for income tax purposes. For purposes of this

B. This SECTION takes effect January 1, 1997.

SECTION 11. Upon approval by the Governor, this PART takes effect July 1, 1997, or as otherwise provided, but only upon the certification of the State Election Commission to the Code Commissioner and the Department of Revenue and Taxation of a majority "yes" vote in the referendum provided by SECTION 1 of this PART.

Senator HAYES argued contra to the adoption of Part I of Amendment No. 38.

Senator PASSAILAIGUE argued in favor of the adoption of Part I of Amendment No. 38.

The "ayes" and "nays" were demanded and taken, resulting as follows:

Boan                Courson             Drummond
Ford                Giese               Glover
Gregory             *Holland            Land
Lander              Leatherman          McConnell
McGill              Mescher             Moore
O'Dell              Passailaigue        Patterson
Rankin              Reese               *Richter
*Rose               Russell             Setzler

Short               Smith, J.V.         Waldrep
Washington          Wilson

Alexander            Bryan                Cork
Courtney             Fair                 Hayes
Martin               Peeler               Ryberg
Smith, G.            

*These Senators were not present in the Chamber at the time the vote was taken and the votes were recorded by the leave of the Senate, with unanimous consent.

Part I of Amendment No. 38 was adopted.

On motion of Senator MOORE, with unanimous consent, Amendment No. 38-P3A was taken up for immediate consideration and substituted for Amendment No. 38-P3A, which was previously carried over.

Senators CORK and WASHINGTON proposed the following Amendment No. 38-P3A (3901R111.HAC), which was not adopted:

Amend the amendment bearing DOC. NO. 3901r099.tlm, as and if amended, page 15, between SECTION 4 and SECTION 5, by adding a new SECTION to read:

/SECTION 5. A. Section 132B, Part II of Act 497 of 1994 is amended to read:

"132B. The provisions of Section 6-1-70 of the 1976 Code do not apply in the case of any county or municipal real estate transfer tax or fee imposed on or before August 1, 1993.

B. Notwithstanding any other effective date provided in this act, this section takes effect upon approval by the Governor./

Amend the amendment further, as and if amended, page 12, subsection (F), by adding a sentence at the end to read:

/The provisions of this subsection to not apply in the case of any county or municipal real estate transfer tax or fee imposed on or before August 1, 1993./

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