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COMMITTEE REPORT
February 1, 2006
H. 4449
Introduced by Reps. Cotty, Harrell, Merrill, Walker, Ballentine, Limehouse, E.H. Pitts, Haley, Clark, Townsend, Altman, Anthony, Bailey, Bingham, Bowers, Cato, Ceips, Chellis, Clyburn, Coleman, Cooper, Dantzler, Davenport, Delleney, Duncan, Edge, Frye, Hagood, Harrison, Haskins, Herbkersman, Hinson, Leach, Littlejohn, Loftis, Mahaffey, Martin, Phillips, Pinson, M.A. Pitts, Rhoad, Sandifer, Scarborough, F.N. Smith, G.M. Smith, J.R. Smith, Thompson, Toole, Tripp, Umphlett, Vaughn, White, Whitmire, Young, Bales, Lucas, Kirsh, Huggins, Brady, Hamilton, McGee and Stewart
S. Printed 2/1/06--H.
Read the first time January 17, 2006.
To whom was referred a Bill (H. 4449) to amend the Code of Laws of South Carolina, 1976, by adding Sections 12-36-1110, 12-36-1120, and 12-36-1130 so as to, 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, in Section 12-36-1110 of the 1976 Code, as contained in SECTION 1, Part I, by striking /July/ on line 19, page 4, and inserting /June/. When amended Section 12-36-1110 shall read:
"Section 12-36-1110. Beginning on the first day of June of the year in which this section takes effect, an additional sales, use, and casual excise tax equal to two percent is imposed on amounts taxable pursuant to this chapter, except that this additional two percent tax does not apply to amounts taxed pursuant to Section 12-36-920, the tax on accommodations for transients, nor does this additional tax apply to items subject to a maximum sales and use tax pursuant to Section 12-36-2110."
Amend the bill further, as and if amended, in subsection B., SECTION 1, Part I, by striking /June thirtieth / on line 43, page 4, and inserting / May thirty-first / and by striking / July / on line 4, page 5, and inserting / June /. When amended subsection B. shall read:
"B. Section 12-36-2120 of the 1976 Code, as last amended by Act 164 of 2005, is further amended by adding an appropriately numbered item at the end to read:
"( ) unprepared food which lawfully may be purchased with United States Department of Agriculture food coupons, but this exemption does not apply to any local sales and use tax imposed or enacted before May thirty-first of the year in which this item takes effect that is administered by the Department of Revenue which does not contain a specific exemption with respect to food items but does apply to any local sales and use tax imposed or enacted on or after June first of the year in which this item takes effect."
Amend further, as and if amended, in subsection (B), SECTION 2, Part II, by striking /July/ on line 37, page 10, and inserting /June /. When amended, subsection (B) shall read:
"(B) Beginning June 1, 2007, funds derived from a one percent local sales tax or local option sales tax imposed in a jurisdiction pursuant to state or local law which are used to reduce ad valorem property taxes imposed on owner-occupied residential property, must be thereafter applied on a pro-rata basis to reduce ad valorem property taxes on all other classes of property."
Amend the bill further , as and if amended, by striking item (1) of Section 11-11-155 of the 1976 Code, as contained in SECTION 2, Part I, which begins on line 14, page 5, and inserting:
/ (1) For each fiscal year in which and after which this section takes effect, the revenue from the tax imposed pursuant to Section 12-36-1110, and an amount equal to the total of reimbursements paid pursuant to the provisions of Sections 12-37-251 and 12-37-270 in fiscal year 2005-2006 is automatically credited to a fund separate and distinct from the state general fund known as the 'Homestead Exemption Fund'. The Board of Economic Advisors shall account for the Homestead Exemption Fund revenue separately from general fund revenues, and the board shall make an annual estimate of the receipts by the Homestead Exemption Fund by February fifteenth of each year. This estimate shall be transmitted to the State Treasurer, Comptroller General, and the Chairmen of the House Ways and Means Committee and the Senate Finance Committee. No portion of these revenues may be credited to the Education Improvement Act (EIA) Fund. /
Amend the bill further, as and if amended, in subsection E. of SECTION 5, beginning on line 4, page 9, by adding /12-37-251,/ immediately before /12-37-270/. When amended subsection E. shall read:
"E. Sections 12-37-251, 12-37-270, 12-43-217, 12-43-250, 12-43-260, and 12-43-295, all of the 1976 Code, are repealed."
Amend the bill further, as and if amended, by striking SECTION 6, Part I, which begins on line 9, page 9, and inserting
/SECTION 6. Assessors and other staff responsible for the assessment of property for ad valorem taxation purposes are required to receive nine hours of instruction each year in the laws applicable to assessment for ad valorem taxation, methods of valuating property, administration of the assessor's office and records of the assessor's office, and other functions related to the assessor's office. This instruction must be received from the Department of Revenue or other providers or courses approved by the Department of Revenue./
Striking SECTION 1, Part II, which begins on line 24, page 9, and inserting:
/SECTION 1. (A)(1) For the period January through December 2007, property taxing entities of the State other than school districts must be reimbursed from the Homestead Exemption Fund for the taxes not collected because of the property tax exemption allowed pursuant to the new item added to Section 12-37-220(B) of the 1976 Code in Part I of this act during that period dollar for dollar. The Comptroller General shall pay these reimbursements on or after January 1, 2008, upon application of the property taxing entity.
(2) Beginning January 1, 2008, property taxing entities of the State other than school districts must be reimbursed from the Homestead Exemption Fund for the taxes not collected because of the exemption allowed in the new item added to Section 12-37-220(B) of the 1976 Code in Part I of this act in the manner provided in this item. The Comptroller General shall pay these reimbursements upon application of the property taxing entity and the reimbursement shall be equal to the amount distributed in the previous year plus the reimbursement increases provided for in subsection (C). The reimbursement increase of a property taxing entity other than a school district as provided in subsection (C) for any year stated as a percentage shall be multiplied by the entity's reimbursement amount for the previous year to determine the total distribution to the entity for the year. No such property taxing entity shall receive less in reimbursements beginning in 2008 than it received in 2007.
(B)(1) For the period January through December 2007, school districts of this State must be reimbursed from the Homestead Exemption Fund for the taxes not collected because of the property tax exemption allowed pursuant to the new item added to Section 12-37-220(B) of the 1976 Code in Part I of this act during that period dollar for dollar. The Comptroller General shall pay these reimbursements on or after January 1, 2008, upon application of the school district.
(2) Beginning January 1, 2008, school districts of this State must be reimbursed from the Homestead Exemption Fund for the taxes not collected because of the property tax exemption allowed in the new item added to Section 12-37-220(B) of the 1976 Code in Part I of this act in the manner provided in this item. The Comptroller General shall pay these reimbursements upon application of the school district and the reimbursement shall be equal to the amount distributed in the previous year plus the reimbursement increases provided for in subsection (C). The reimbursement increases of the several school districts as provided in subsection (C) for any year shall be aggregated and the reimbursement increase a particular school district shall receive for that year shall be equal to an amount that is the school district's proportionate share of such funds based on the district's weighted pupil units as a percentage of statewide weighted pupil units as determined annually pursuant to the Education Finance Act. No school district shall receive less in reimbursements beginning in 2008 than it received in 2007.
(C) Beginning with the 2008 reimbursements to all property taxing entities of this State, these reimbursements must be increased on an annual basis by an inflation factor equal to the percentage increase in the previous year of the Consumer Price Index, Southeast Region, as published by the United States Department of Labor, Bureau of Labor Statistics plus the percentage increase in the previous year in the population of the entity as determined by the Office of Research and Statistics of the Budget and Control Board. Distribution of these reimbursement increases shall be as provided in subsections (A) and (B) of this section.
(D) The percentage of population growth in any year for any property taxing entity entitled to reimbursements from the Homestead Exemption Fund shall be based on estimates for such growth in the county wherein the property taxing entity is located as determined by the Office of Research and Statistics of the Budget and Control. Where the property taxing entity encompasses areas in more than one county, the population growth in that entity shall be the average of the growth in each county weighted to reflect the existing population of the property taxing entity in that county as compared to the existing population of the property taxing entity as a whole. /
Amend the bill further, as and if amended, by striking subsection (A), SECTION 2, Part II, which begins on line 28, page 10, in its entirety.
Striking subsection (B) of Section 4-9-56 of the 1976 Code, as contained in SECTION 4, which begins on line 22, page 11, and inserting:
/ (B) Beginning with the year 2007, a property taxing entity of this State including a school district may increase ad valorem property tax millage on all classes of real and personal property for general operating purposes, except owner-occupied residential property, above that levied for the previous year by an inflation factor equal to the percentage increase in the previous year of the Consumer Price Index, Southeast Region, as published by the United States Department of Labor, Bureau of Labor Statistics plus the percentage increase in the previous year in the population of the entity as determined by the Office of Research and Statistics of the Budget and Control Board. Any millage increase above this limitation requires a supermajority vote of the governing body of the entity entitled to levy property taxes defined as an affirmative vote by seventy-five percent of the total membership of the governing body of the entity. Seventy-five percent of the total membership of the governing body of the entity must be determined without rounding a fractional number into a whole number for the purpose of computing the required vote total. /
Renumber sections and subsections to conform.
Amend title to conform.
Majority favorable. Minority unfavorable.
DANIEL T. COOPER KENNETH KENNEDY
For Majority. GILDA COBB-HUNTER
For Minority.
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTIONS 12-36-1110, 12-36-1120, AND 12-36-1130 SO AS TO IMPOSE AN ADDITIONAL TWO PERCENT SALES AND USE TAX; TO AMEND SECTION 12-36-2120, AS AMENDED, RELATING TO SALES TAX EXEMPTIONS, SO AS TO EXEMPT THE SALE OF UNPREPARED FOOD; TO ADD SECTION 11-11-155 SO AS TO CREATE THE HOMESTEAD EXEMPTION FUND AND RESERVE FUND; TO AMEND SECTION 12-37-220, AS AMENDED, RELATING TO PROPERTY TAX EXEMPTIONS, SO AS TO PROVIDE AN ADDITIONAL EXEMPTION EQUAL TO ONE HUNDRED PERCENT OF THE FAIR MARKET VALUE OF OWNER-OCCUPIED RESIDENTIAL PROPERTY FROM THE PROPERTY TAX, AND TO PROVIDE THAT THIS EXEMPTION WITH CERTAIN EXCEPTIONS DOES NOT APPLY WITH RESPECT TO PROPERTY TAX IMPOSED FOR PAYMENT OF GENERAL OBLIGATION DEBT; TO ADD SECTION 12-37-932 SO AS TO PROVIDE THAT THE FAIR MARKET VALUE OF REAL PROPERTY FOR PURPOSES OF THE PROPERTY TAX IS ITS FAIR MARKET VALUE AS APPRAISED IN THE MANNER PROVIDED BY LAW WHEN OWNERSHIP OF THE REAL PROPERTY LAST WAS TRANSFERRED, INCREASED BY THE FAIR MARKET VALUE OF IMPROVEMENTS MADE TO THE REAL PROPERTY SINCE OWNERSHIP OF THE REAL PROPERTY LAST WAS TRANSFERRED, TO PROVIDE THAT ON THE FIRST DAY OF JANUARY IMMEDIATELY FOLLOWING THE EFFECTIVE DATE OF THIS PROVISION THE DUTIES, POWERS, AND FUNCTIONS OF LOCAL COUNTY PROPERTY TAX ASSESSORS ARE TRANSFERRED TO AND DEVOLVED UPON THE PROPERTY TAX DIVISION OF THE STATE DEPARTMENT OF REVENUE, TO PROVIDE THAT THE SALES TAX EXEMPTIONS IN SECTION 12-36-2120 SHALL BE REVIEWED BY THE GENERAL ASSEMBLY EVERY TEN YEARS BEGINNING IN 2010; TO AMEND SECTIONS 11-11-150, 12-43-210, AND 12-43-220, ALL AS AMENDED, RELATING TO THE TRUST FUND FOR TAX RELIEF, REASSESSMENT AND THE VALUATION AND CLASSIFICATION OF PROPERTY FOR PURPOSES OF THE PROPERTY TAX, SO AS TO MAKE CONFORMING AMENDMENTS AND OTHER CHANGES TO REFLECT THESE PROVISIONS; TO AMEND ACT 406 OF 2000, RELATING TO, AMONG OTHER THINGS, THE HOMESTEAD EXEMPTION, SO AS TO DELETE AN OBSOLETE PROVISION; TO REPEAL SECTIONS 12-37-223A, 12-37-270, 12-43-217, 12-43-250, 12-43-260, AND 12-43-295, ALL RELATING TO PROPERTY TAX; TO PROVIDE FOR THE MANNER, AMOUNT, AND CONDITIONS UNDER WHICH REVENUES IN THE HOMESTEAD EXEMPTION FUND SHALL BE DISBURSED TO PROPERTY TAXING ENTITIES OF THIS STATE INCLUDING SCHOOL DISTRICTS TO REIMBURSE THEM FOR THE REVENUE LOST AS A RESULT OF THE PROPERTY TAX EXEMPTIONS; TO PROVIDE THAT LOCAL SALES TAX AND LOCAL OPTION SALES TAX REVENUES PROVIDING PROPERTY TAX RELIEF TO OWNER-OCCUPIED RESIDENTIAL PROPERTY SHALL BE APPLIED FOR PROPERTY TAX RELIEF TO OTHER CLASSES OF PROPERTY; TO ADD SECTION 4-9-56 SO AS TO LIMIT THE MILLAGE PROPERTY TAXING ENTITIES OF THIS STATE MAY IMPOSE ON PROPERTY OTHER THAN OWNER-OCCUPIED RESIDENTIAL PROPERTY, AND TO PROVIDE FOR A SUPERMAJORITY VOTE OF THE GOVERNING BODY OF THE ENTITY TO EXCEED THIS LIMITATION; TO PROVIDE THAT ALL OF THE ABOVE PROVISIONS ARE CONTINGENT UPON RATIFICATION OF CERTAIN CONSTITUTIONAL AMENDMENTS TO ARTICLE X OF THE STATE CONSTITUTION PROVIDING FOR AN ADDITIONAL HOMESTEAD PROPERTY TAX EXEMPTION, DETERMINATION OF FAIR MARKET VALUE OF PROPERTY, AND RELATED MATTERS; TO AMEND SECTIONS 11-27-30, 11-27-40, AND 11-27-50, ALL AS AMENDED, RELATING TO THE EFFECT OF ARTICLE X OF THE SOUTH CAROLINA CONSTITUTION ON BONDS OF THE STATE, POLITICAL SUBDIVISIONS OF THE STATE, AND SCHOOL DISTRICTS, RESPECTIVELY, SO AS TO DEEM AFTER JULY 1, 2006, A COMPLETE OR PARTIAL SUCCESSOR-IN-INTEREST TO, OR OTHER TRANSFEREE OF, OR OTHER ASSOCIATE OF THE STATE, A POLITICAL SUBDIVISION, OR A SCHOOL DISTRICT TO BE THE STATE, POLITICAL SUBDIVISION, OR SCHOOL DISTRICT FOR BONDING PURPOSES WHEN THE SUCCESSOR, TRANSFEREE, OR ASSOCIATE UNDERTAKES ALL OR A PORTION OF THE OPERATION OR ASSUMES ALL OR A PORTION OF A DUTY OF THE STATE, POLITICAL SUBDIVISION, OR SCHOOL DISTRICT; TO AMEND SECTION 12-37-670, RELATING TO LISTING AND ASSESSMENT OF NEW STRUCTURES FOR PROPERTY TAX PURPOSES, SO AS TO AUTHORIZE A COUNTY GOVERNING BODY BY ORDINANCE TO REQUIRE THAT A NEW STRUCTURE BE LISTED BY THE FIRST DAY OF THE MONTH AFTER THE CERTIFICATE OF OCCUPANCY IS ISSUED FOR THE STRUCTURE AND TO PROVIDE FOR THE TIMING OF PAYMENT OF TAXES DUE; TO REPEAL SECTION 12-37-680 RELATING TO A LOCAL COUNTY ORDINANCE ADOPTING THE SAME RULE; TO AMEND SECTION 12-43-215, RELATING TO OWNER-OCCUPIED RESIDENTIAL PROPERTY IN CONNECTION WITH AD VALOREM PROPERTY TAXATION, SO AS TO REQUIRE EACH COUNTY TO SUBMIT AN ANNUAL REPORT TO THE DEPARTMENT OF REVENUE LISTING THE NAMES AND ADDRESSES OF ALL PROPERTY CLASSIFIED AS "OWNER-OCCUPIED"; TO ADD SECTION 59-20-21 SO AS TO PROVIDE THAT BEGINNING WITH THE YEAR 2006, THE STATE BOARD OF EDUCATION, IN DETERMINING THE MINIMUM EDUCATION PROGRAM DESIGNED TO MEET STUDENTS NEEDS, MAY ONLY CONSIDER FACTORS REQUIRED BY STATUTORY LAW OR WHICH DIRECTLY AFFECT CLASSROOM LEARNING, AND THE LOCAL MAINTENANCE OF EFFORT REQUIRED OF A SCHOOL DISTRICT MUST BE BASED ON THESE DETERMINATIONS; TO ADD SECTION 59-20-22 SO AS TO PROVIDE THAT NOTWITHSTANDING A SCHOOL DISTRICT'S INDEX OF TAXPAYING ABILITY, THE MINIMUM STATE FUNDS A SCHOOL DISTRICT SHALL RECEIVE IN ANY YEAR IS FORTY PERCENT OF THE APPLICABLE YEAR'S BASE STUDENT COST, AND TO PROVIDE FOR THE MANNER IN WHICH ALL OF THESE PROVISIONS SHALL TAKE EFFECT OR BE REPEALED.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. A. Chapter 36, Title 12 of the 1976 Code is amended by adding:
Section 12-36-1110. Beginning on the first day of July of the year in which this section takes effect, an additional sales, use, and casual excise tax equal to two percent is imposed on amounts taxable pursuant to this chapter, except that this additional two percent tax does not apply to amounts taxed pursuant to Section 12-36-920, the tax on accommodations for transients, nor does this additional tax apply to items subject to a maximum sales and use tax pursuant to Section 12-36-2110.
Section 12-36-1120. The revenue of the tax imposed by this article must be credited to the Homestead Exemption Fund established pursuant to Section 11-11-155.
Section 12-36-1130. The Department of Revenue may prescribe amounts that may be added to the sales price to reflect the additional tax imposed pursuant to this article."
B. Section 12-36-2120 of the 1976 Code, as last amended by Act 164 of 2005, is further amended by adding an appropriately numbered item at the end to read:
"( ) unprepared food which lawfully may be purchased with United States Department of Agriculture food coupons, but this exemption does not apply to any local sales and use tax imposed or enacted before June thirtieth of the year in which this item takes effect that is administered by the Department of Revenue which does not contain a specific exemption with respect to food items but does apply to any local sales and use tax imposed or enacted on or after July first of the year in which this item takes effect."
C. The provisions of Section 4-10-350(F) and (G) of the 1976 Code apply mutatis mutandis with respect to the tax imposed pursuant to Article 11, Chapter 36, Title 12 of the 1976 Code as added by this section.
SECTION 2. Chapter 11, Title 11 of the 1976 Code is amended by adding:
"Section 11-11-155. (1) For each fiscal year in which and after which this section takes effect, the revenue from the tax imposed pursuant to Section 12-36-1110, and an amount equal to the total of reimbursements paid pursuant to the provisions of Sections 12-37-251 and 12-37-270 in fiscal year 2005-2006 is automatically credited to a fund separate and distinct from the state general fund known as the 'Homestead Exemption Fund' (Homestead). The Board of Economic Advisors shall account for the Homestead Exemption Fund revenue separately from general fund revenues in reports to the Governor and the General Assembly. No portion of these revenues are credited to the Education Improvement Act (EIA) Fund.
(2) There is established in the State Treasury the Homestead Exemption Fund Reserve (Reserve) as a fund separate and distinct from the Homestead Exemption Fund, the general fund of the State, and all other funds. Any revenue received from the imposition of the two percent additional sales and use tax imposed pursuant to Section 12-36-1110 for a fiscal year above what the Board of Economic Advisors estimated for that fiscal year must be transferred into the Reserve. Establishing this Reserve in the required amount is the second priority use of Homestead Exemption Fund revenues in a fiscal year. Balances in the Reserve at the end of a fiscal year remain in this Reserve. If revenues in the Homestead Exemption Fund available for reimbursements in a fiscal year are less than that amount as estimated by the Board of Economic Advisors for the fiscal year, the State Budget and Control Board must first apply so much of the Reserve as is necessary or available to offset the deficit before the balance may be paid from the state general fund. Secondly, to the extent monies are available in the Reserve after any transfers to the Homestead Exemption Fund to offset a deficit, these monies shall then be transferred by the Budget and Control Board to the state general fund to reimburse it for any distributions made to supplement reimbursements required to be made from the Homestead Exemption Fund.
(3) An unexpended balance in the Homestead Exemption Fund or Reserve Fund at the end of a fiscal year must remain in the Homestead Exemption Fund or Reserve Fund.
(4) Earnings on the Homestead Exemption Fund or Reserve Fund must be credited to the Homestead Exemption Fund or Reserve Fund.
(5) Nothing in this section prohibits appropriations by the General Assembly of additional revenues to the Homestead Exemption Fund."
SECTION 3. Section 12-37-220(B) of the 1976 Code, as amended by Act 161 of 2005, is further amended by adding a new item at the end appropriately numbered to read:
"( )(a) Beginning with the year in which this item takes effect and to the extent not already exempt pursuant to Section 12-37-250, one hundred percent of the fair market value of owner-occupied residential property eligible for and receiving the special assessment ratio allowed owner-occupied residential property pursuant to Section 12-43-220(c) is exempt from all property taxes imposed for other than the repayment of general obligation debt.
(b) Notwithstanding any other provision of law, property exempted from property tax in the manner provided in this item is considered taxable property for purposes of bonded indebtedness pursuant to Sections 14 and 15 of Article X of the Constitution of this State."
SECTION 4. Article 5, Chapter 37, Title 12 of the 1976 Code is amended by adding:
"Section 12-37-932. (A) For determining assessed value of property for purposes of the property tax and notwithstanding any other provision of law, beginning with the year in which this section takes effect the fair market value of real property for purposes of the property tax is its fair market value as appraised in the manner provided by law when ownership of the real property last was transferred, increased by the fair market value, as appraised in the manner provided by law, of improvements made to the real property since ownership of the real property last was transferred.
(B)(1) For purposes of this section, ownership of real property is not considered to have been transferred if transferred in fee simple in a transfer not subject to federal income tax in the following circumstances:
(a) 102, limited to transfer to a spouse or surviving spouse, (Gifts and Inheritances),
(b) 1033 (Conversions--Fire and Insurance Proceeds to Rebuild),
(c) 1041 (Transfers of Property Between Spouses or Incident to Divorce),
(d) 351 (Transfer to a Corporation Controlled by Transferor),
(e) 355 (Distribution by a Controlled Corporation),
(f) 368 (Corporate Reorganizations), and
(g) 721 (Nonrecognition of Gain or Loss on a Contribution to a Partnership).
Number references in the above subitems are to sections of the Internal Revenue Code of 1986, as defined in Section 12-6-40.
(2) In the case of real property classified pursuant to Section 12-43-220(c), ownership is not considered to have been transferred:
(a) if the transferor returns a life estate in the real property and the transferor continues to occupy the real property as his legal residence; and
(b) real property which has been transferred to a trust if the transferor and settler is a life beneficiary of the trust and continues to occupy the real property as his legal residence.
(C) For purposes of determining a 'base year' fair market value pursuant to this section, the fair market value of real property is its appraised value applicable for property tax year 2006 increased by the fair market value of subsequent improvements, or if ownership of the real property has been transferred after 2005, applying the provisions relating to ownership transfer contained in this section, when ownership last was transferred."
SECTION 5. A. Section 12-43-220 of the 1976 Code, as last amended by Act 145 of 2005, is further amended by adding a new undesignated paragraph at the end of the section to read:
"As used in this section, fair market value with reference to real property means fair market value determined in the manner provided pursuant to Section 1A, Article X of the constitution of this State and Section 12-37-932."
B. Section 12-43-210 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"Section 12-43-210. (A) All property must be assessed uniformly and equitably throughout the State. The South Carolina Department of Revenue may promulgate regulations to ensure equalization which must be adhered to by all assessing officials in the State.
(B) No reassessment program may be implemented in a county unless all real property in the county, including real property classified as manufacturing property, is reassessed in the same year."
C. Section 1B of Act 406 of 2000 is amended to read:
"(B) The exemption amount of the homestead exemption allowed pursuant to Section 12-37-250 of the 1976 Code is raised from twenty to fifty thousand dollars for property tax year 2000 and thereafter, to be funded as provided herein. The amount appropriated to the Trust Fund for Tax Relief must be used to reimburse counties, municipalities, school districts, and special purpose districts, as applicable, for this increased exemption amount in the manner provided in Section 12-37-270 of the 1976 Code. For tax years after 2000, an amount sufficient to fund the exemption provided herein must be appropriated from the Tobacco Settlement Fund, before any reductions or withdrawals as may be provided by law, to the Trust Fund for Tax Relief and must be used to reimburse counties, municipalities, school districts, and special purpose districts, as applicable, for this increased exemption amount in the manner provided in Section 12-37-270 of the 1976 Code. Reserved."
D. Items (1) and (2) of Section 11-11-150(A) of the 1976 Code, as added by Act 419 of 1998, are amended to read:
"(1) Section 12-37-251 for the residential property tax exemption Reserved;
(2) Section 12-37-270 for the homestead exemption for persons over age sixty-five or disabled Reserved;"
E. Sections 12-37-270, 12-43-217, 12-43-250, 12-43-260, and 12-43-295, all of the 1976 Code, are repealed.
F. Section 12-37-223A of the 1976 Code is repealed.
SECTION 6. Notwithstanding any other provision of law, on the first day of January immediately following the effective date of this provision, the duties, powers, and functions of local county property tax assessors are transferred to and devolved upon the Property Tax Division of the South Carolina Department of Revenue.
SECTION 7. The sales tax exemptions in Section 12-36-2120 of the 1976 Code shall be reviewed by the General Assembly at its 2010 session and at its sessions every ten years thereafter.
SECTION 1. (A)(1) For the period January through December 2007, property taxing entities of the State other than school districts must be reimbursed from the Homestead Exemption Fund for the taxes not collected because the property tax exemption allowed pursuant to the new item added to Section 12-37-220(B) of the 1976 Code in Part I of this act during that period. The Comptroller General shall pay these reimbursements quarterly, upon application of the property taxing entity.
(2) Beginning January 1, 2008, property taxing entities of the State other than school districts must be reimbursed from the Homestead Exemption Fund for the taxes not collected because of the exemption allowed in the new item added to Section 12-37-220(B) of the 1976 Code in Part I of this act. The Comptroller General shall pay these reimbursements quarterly upon application of the property taxing entity and the reimbursements must be made on a per capita basis. No such property taxing entity shall receive less in reimbursements beginning in 2008 than it received in 2007. In addition, the reimbursement increases provided for in subsection (C) apply.
(B)(1) For the period January through December 2007, school districts of this State must be reimbursed from the Homestead Exemption Fund for the taxes not collected because of the exemption allowed pursuant to the new item added to Section 12-37-220(B) of the 1976 Code in Part I of this act during that period.
(2) Beginning January 1, 2008, the total amount of monies in the Homestead Exemption Fund available for reimbursements to school districts shall be the taxes not collected by the several school districts because of the property tax exemption allowed in the new item added to Section 12-37-220(B) of the 1976 Code in Part I of this act. The reimbursements must be distributed to school districts in the same manner Education Finance Act funds are distributed to school districts at that time. No school district shall receive less in reimbursements beginning in 2008 than it received in 2007. In addition, the reimbursement increases provided for in subsection (C) apply.
(C) Beginning with the 2008 reimbursements to all property taxing entities of this State, these reimbursements must be increased on an annual basis by the lessor of (i) an inflation factor equal to the percentage increase in the previous year of the Consumer Price Index, Southeast Region, as published by the United States Department of Labor, Bureau of Labor Statistics plus the percentage increase in the previous year in the population of the entity as determined by the Office of Research and Statistics of the Budget and Control Board, or (ii) six percent.
SECTION 2. (A) For purposes of determining reimbursements to property taxing entities including school districts for taxes not collected because of the property tax exemption allowed in the new item added to Section 12-37-220(B) of the 1976 Code in Part I of this act, ad valorem property tax revenue of a property taxing entity not collected as a result of a one percent local option sales tax or local sales tax imposed in the entity pursuant to state or local law shall nevertheless be considered collected for purposes of determining reimbursements under Part II of this act.
(B) Beginning July 1, 2007, funds derived from a one percent local sales tax or local option sales tax imposed in a jurisdiction pursuant to state or local law which are used to reduce ad valorem property taxes imposed on owner-occupied residential property, must be thereafter applied on a pro-rata basis to reduce ad valorem property taxes on all other classes of property.
SECTION 3. To the extent revenues in the Homestead Exemption Fund are insufficient to pay all reimbursements required by law, the difference must be paid from the state general fund.
SECTION 4. Chapter 9, Title 4 of the 1976 Code is amended by adding:
"Section 4-9-56. (A) Beginning with the year 2007, a property taxing entity in this State including a school district may not levy any ad valorem taxation on owner-occupied residential property to which the exemption provided in the new item added to Section 12-37-220(B) of the 1976 Code in Part I of this act apply, with the exception of any levy for general obligation bonded debt purposes. A property taxing entity including school districts which violates this provision must have its aid-to-subdivisions allocations in future general appropriations acts reduced until the violation is cured. The millage levied by a property taxing entity for the year 2006 shall be the millage used to determine the property tax revenue lost as a result of the exemptions provided in the new item added to Section 12-37-220(B) of the 1976 Code in Part I of this act.
(B) Beginning with the year 2007, a property taxing entity of this State including a school district may increase ad valorem property tax millage on all classes of real and personal property for general operating purposes, except owner-occupied residential property, above that levied for the previous year by the lesser of (i) an inflation factor equal to the percentage increase in the previous year of the Consumer Price Index, Southeast Region, as published by the United States Department of Labor, Bureau of Labor Statistics plus the percentage increase in the previous year in the population of the entity as determined by the Office of Research and Statistics of the Budget and Control Board, or (ii) six percent. Any millage increase above this limitation requires a supermajority vote of the governing body of the entity entitled to levy property taxes defined as an affirmative vote by two-thirds of the total membership of the governing body of the entity."
SECTION 1. A. Section 11-27-30 of the 1976 Code, as last amended by Act 27 of 2001, is further amended by adding an item at the end to read:
"9. For purposes of this section, a complete or partial successor-in-interest to, or other transferee of, the State or other associate of any kind of the State is deemed to be the State when the successor, transferee, or associate undertakes all or a portion of the operation or assumes all or a portion of a duty of the State."
B. Section 11-27-40 of the 1976 Code, as last amended by Act 113 of 1999, is further amended by adding an item at the end to read:
"10. For purposes of this section, a complete or partial successor-in-interest to, or other transferee of, the political subdivision of the State or other associate of any kind of the political subdivision of the State is deemed to be the political subdivision of the State when the successor, transferee, or associate undertakes all or a portion of the operation or assumes all or a portion of a duty of the political subdivision of the State."
C. Section 11-27-50 of the 1976 Code, as last amended by Act 113 of 1999, is further amended by adding an item at the end to read:
"8. For purposes of this section, a complete or partial successor-in-interest to, or other transferee of, the school district or other associate of any kind of the school district is deemed to be the school district when the successor, transferee, or associate undertakes all or a portion of the operation or assumes all or a portion of a duty of the school district."
D. The provisions of subsections A., B., and C. of this section apply with regard to all transfers made after July 1, 2006, to which these subsections apply.
SECTION 2. A. Section 12-37-670 of the 1976 Code is amended to read:
"Section 12-37-670. (A) Each owner of land on which any new structures have been erected which shall not have been appraised for taxation shall list them for taxation with the county auditor of the county in which they may be situate on or before the first day of March next after they shall become subject to taxation. No new structure shall be listed or assessed until it is completed and fit for the use for which it is intended.
(B)(1) Notwithstanding the provisions of subsection (A), a county governing body may by ordinance provide that an owner of land on which a new structure has been erected and which has not been appraised for taxation shall list the new structure for taxation with the county auditor of the county in which it is located by the first day of the next month after a certificate of occupancy is issued for the structure. A new structure must not be listed or assessed until it is completed and fit for the use for which it is intended, as evidenced by the issuance of the certificate of occupancy.
(2) Additional property tax attributable to improvements listed with the county auditor on or before June thirtieth is due for the period from July first to December thirty-first for that property year, and payable when taxes are due on the property for that property tax year. Additional property tax attributable to improvements listed with the county auditor after June thirtieth of the property tax year is due and payable when taxes are due on the property for the next property tax year.
(3) If a county governing body elects by ordinance to impose the provisions of this subsection, this election is also binding on all municipalities within the county imposing ad valorem property taxes."
B. Section 12-37-680 of the 1976 Code is repealed.
SECTION 3. Section 12-43-215 of the 1976 Code is amended to read:
"Section 12-43-215. (A) When owner-occupied residential property assessed pursuant to Section 12-43-220(c) is valued for purposes of ad valorem taxation, the value of the land must be determined on the basis that its highest and best use is for residential purposes.
(B) Each county must submit to the Department of Revenue an annual report, in a form to be determined by the department, listing the names and addresses of all residential property in the county which is classified as 'owner-occupied'."
SECTION 4. Chapter 20, Title 59 of the 1976 Code is amended by adding:
"Section 59-20-21. Beginning with the year 2007, the State Board of Education, in determining the minimum education program designed to meet students needs, may only consider factors required by statutory law or which directly affect classroom learning, and the local maintenance of effort required of a school district must be based on these determinations."
SECTION 5. Chapter 20, Title 59 of the 1976 Code is amended by adding:
"Section 59-20-22. Notwithstanding a school district's index of taxpaying ability, the minimum state funds a district shall receive in any year is forty percent of the applicable year's base student cost."
SECTION 1. This act, except as otherwise provided herein and except for Parts III and IV, takes effect upon ratification of amendments to Article X of the Constitution of this State proposed at the general election of 2006 defining fair market value of real property as its fair market value when it's ownership last was transferred, increased by the value of improvements, and providing for an additional exemption from the property tax of one hundred percent of the fair market value of owner-occupied residential property. Parts III and IV of this act take effect upon approval by the Governor.
This web page was last updated on Tuesday, June 23, 2009 at 2:37 P.M.