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AMENDED
February 8, 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 2/8/06--H. [SEC 2/10/06 10:51 AM]
Read the first time January 17, 2006.
REVENUE IMPACT 1/
The additional sales tax revenue, not applied to accommodations and exempting food, is expected to generate $786,791,700 in Fiscal Year 2007-08. Exempting owner-occupied homes from all property taxes except for debt service is expected to cost $784,910,287 in Fiscal Year 2007-08. Requiring all school districts to receive forty percent of the applicable year's base student cost from State funds would require an estimated additional $20,600,000 in Fiscal Year 2007-08. Sales tax collections will start in June 2007 and reimbursements for the property tax exemption will not begin until at least January 2008. The attached table details the sales tax collections and reimbursement payments projecting the Comptroller General will reimburse the local property taxing entities as soon as there is money in the trust fund to distribute. For purposes of projecting future reimbursements, we used an annual inflation factor of 6.0% statewide.
Explanation
The following sections of the bill have an impact on State or local revenue.
Section 12-36-1110
This bill would add Section 12-36-1110 imposing an additional sales and use tax equal to two percent on all taxable items pursuant to Chapter 36; however, the additional sales tax does not apply to the statewide accommodations tax. The additional sales tax is not expected to be implemented until after May 2007 because it becomes effective after ratification of the referendum when the General Assembly returns in early 2007. The additional two cents of sales and use tax is expected to raise an estimated $1,302,000,000 in FY2007-08. Excluding the accommodations tax from the additional sales tax would amount to an estimated reduction of $42,570,700 in FY2007-08. The net effect would be an estimated increase of $1,259,429,300 in FY2007-08.
Section 12-36-2120
This bill would add an appropriately numbered item at the end of Section 12-36-2120 to exempt unprepared food which lawfully may be purchased with United States Department of Agriculture food coupons. This exemption would not apply to any local sales and use tax imposed or enacted before May 31 of the year this item takes effect. Exempting the sales tax currently collected on food would cost $337,598,300 in Fiscal Year 2007-08. Exempting food from the additional two percent sales tax imposed in Section 12-36-110 would cost an additional $135,039,300 in Fiscal Year 2007-08.
SECTION 3 Section 12-37-220(B)
This Section, beginning with the tax year in which this item takes effect, exempts one hundred percent of the fair market value of owner-occupied residential property from all property taxes imposed for everything except for property taxes imposed for the repayment of general obligation debt. We estimate this will exempt $784,910,287 of property taxes that would have been paid on owner-occupied homes at the end of Tax Year 2007 which corresponds to Fiscal Year 2007-08. This property is considered taxable property for purposes of bonded indebtedness.
Section 12-37-932
This Section of the bill would change the way property is assessed in this State from the five year reassessment cycle to modifying the fair market value of real property only when transferred, sold or improved with some exceptions. The 'base year' for establishing fair market value is defined as the value for property tax year 2006. According to the Department of Revenue's County Reassessment Schedule, Chester, Lancaster and McCormick are the only counties scheduled to implement reassessment programs in Tax Year 2006. This is not expected to have any significant impact on local property tax revenue in the first year. Over time, this change in the way property is assessed could change the incidence of taxation that would occur under current law by shifting property taxes within and among all the classes of property.
Part II Section 1
(A) (1) For the period January through December 2007, property taxing entities other than school districts will be reimbursed dollar for dollar for the exempt owner-occupied property. These reimbursements will be made by the Comptroller General on or after January 1, 2008 upon application of the property taxing entity. These applications for reimbursement are expected to total $372,910,488 in Fiscal Year 2007-08.
(2) Beginning January 1, 2008 property taxing entities other than school districts will be reimbursed the amount they received in the previous year plus the annual reimbursement increase. Each entity will receive from the reimbursement increase their percentage of total dollars they received from the previous year.
(B)(1) For the period January through December 2007, school districts will be reimbursed dollar for dollar for the exempt owner-occupied property. These reimbursements will be made by the Comptroller General on or after January 1, 2008 upon application of the school districts. These applications for reimbursement are expected to total $498,595,679 in Fiscal Year 2007-08.
(2) Beginning January 1, 2008 school districts will be reimbursed the amount they received in the previous year plus the annual reimbursement increase. Each entity will receive from the reimbursement increase their percentage of weighted pupil units applied to the reimbursement increase.
(C) Beginning with the 2008 reimbursements, all property taxing entities reimbursements must be increased on an annual basis by an inflation factor. This inflation factor will be defined as the increase in the Southeast Region Consumer Price Index plus the increase in population. Overall, the Southeastern CPI increased by 3.6% from Calendar year 2004 to Calendar year 2005. The average population growth statewide has been 1.4% per year.
Section 3
If revenues in the Homestead Exemption Fund are insufficient to pay all reimbursements required by law, the difference must be paid by the state general fund.
Section 4-9-56
This section, beginning in 2007, allows a property taxing entity to increase millage for general operating purposes by a factor equal to the percentage increase in the previous year of the Consumer Price Index, Southeast Region, plus the percentage increase in population. Any millage above this would require a supermajority vote of seventy-five percent of the total membership of the governing body of the entity. Overall, the Southeastern CPI increased by 3.6% from Calendar year 2004 to Calendar year 2005. The average population growth statewide has been 1.4% per year.
Part III Section 2 Section 12-37-670
This section allows a county by ordinance to require an owner of land on which a new structure has been erected and which has not been appraised for taxation to list the new structure for taxation with the county auditor by the first day on the next month after a certificate of occupancy is issued for the structure. Additional property tax attributable to improvements listed on or before June 30th is due for July to December 31 for that property tax year. This bill would change the schedule of how property taxes are paid and could generate a $19 million one-time windfall of property taxes in the first year if all counties adopted an ordinance allowed pursuant to this section.
Section 5 Section 59-20-22
This section would require all school districts to receive forty percent of the applicable year's base student cost from state funds. Bringing all school districts to forty percent will require an additional $20,600,000 in Fiscal Year 2007-08.
Approved By:
William C. Gillespie
Board of Economic Advisors
1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact by the BEA, or Section 2-7-76 for a local revenue impact or Section 6-1-85(B) for an estimate of the shift in local property tax incidence by the Office of Economic Research.
Projected Owner-Occupied Projected Applications
County and Other for Reimbursements
Operations Property by County and Other
Tax Collections for the Exempted
Under Taxes on Operations
Current Law for Homes
FY 2007 Dollar for Dollar
FY 2008
ABBEVILLE 1,468,628 1,630,655
AIKEN 11,222,563 12,460,701
ALLENDALE 245,443 272,521
ANDERSON 11,462,439 12,727,042
BAMBERG 635,562 705,681
BARNWELL 863,671 958,956
BEAUFORT 17,438,669 19,362,605
BERKELEY 6,527,782 7,247,965
CALHOUN 645,192 716,373
CHARLESTON 40,334,259 44,784,169
CHEROKEE 3,832,025 4,254,797
CHESTER 1,364,101 1,514,597
CHESTERFIELD 1,299,737 1,443,131
CLARENDON 1,620,658 1,799,459
COLLETON 997,507 1,107,558
DARLINGTON 2,046,500 2,272,282
DILLON 760,545 844,453
DORCHESTER. 9,272,569 10,295,573
EDGEFIELD 1,385,955 1,538,862
FAIRFIELD 1,265,893 1,405,553
FLORENCE 6,416,508 7,124,414
GEORGETOWN 5,238,545 5,816,492
GREENVILLE 41,336,266 45,896,724
GREENWOOD 4,063,903 4,512,256
HAMPTON 718,601 797,882
HORRY 16,108,004 17,885,133
JASPER 1,333,501 1,480,620
KERSHAW 3,596,398 3,993,174
LANCASTER 3,448,303 3,828,740
LAURENS 2,617,201 2,905,946
LEE 921,410 1,023,065
LEXINGTON 32,375,049 35,946,854
MCCORMICK 294,275 326,741
MARION 1,598,579 1,774,943
MARLBORO 1,131,690 1,256,544
NEWBERRY 2,253,295 2,501,892
OCONEE 5,212,543 5,787,621
ORANGEBURG 4,236,300 4,703,673
PICKENS 5,786,316 6,424,696
RICH LAND 34,222,608 37,998,245
SALUDA 928,271 1,030,684
SPARTANBURG 20,388,696 22,638,096
SUMTER 6,336,144 7,035,184
UNION 1,085,420 1,205,170
WILLIAMSBURG 503,185 558,699
YORK 19,016,099 21,114,066
TOTAL 335,856,807 372,910,488
Projected Owner-Occupied Projected Applications
School for Reimbursements
Operations Property by School Districts
Tax Collections for the Exempted
Under Taxes on Operations
Current Law for Homes
FY 2007 Dollar for Dollar
FY 2008
ABBEVILLE 60 1,853,336 2,057,806
AIKEN 01 15,042,200 16,701,743
ALLENDALE 01 311,589 345,966
ANDERSON 01 4,708,706 5,228,198
ANDERSON 02 2,563,282 2,846,078
ANDERSON 03 1,079,261 1,198,331
ANDERSON 04 3,042,733 3,378,425
ANDERSON 05 8,545,147 9,487,897
BAMBERG 01 397,638 441,508
BAMBERG 02 337,791 375,058
BARNWELL 19 339,100 376,512
BARNWELL 29 103,739 115,185
BARNWELL 45 563,608 625,788
BEAUFORT 01 21,277,784 23,625,274
BERKELEY 01 13,852,585 15,380,883
CALHOUN 01 492,158 546,456
CHARLESTON 01 53,188,457 59,056,518
CHEROKEE 01 5,926,098 6,579,899
CHESTER 01 1,812,320 2,012,265
CHESTERFIELD 01 2,299,593 2,553,298
CLARENDON 01 577,689 641,423
CLARENDON 02 1,210,081 1,343,584
CLARENDON 03 530,798 589,359
COLLETON 01 502,084 557,477
DARLINGTON 01 2,864,428 3,180,449
DILLON 01 177,874 197,498
DILLON 02 446,826 496,122
DILLON 03 250,340 277,959
DORCHESTER 02 9,878,625 10,968,493
DORCHESTER 04 692,922 769,369
EDGEFIELD 01 2,025,405 2,248,860
FAIRFIELD 01 1,135,506 1,260,782
FLORENCE 01 10,444,737 11,597,061
FLORENCE 02 323,903 359,638
FLORENCE 03 320,513 355,874
FLORENCE 04 180,910 200,869
FLORENCE 05 254,631 282,723
GEORGETOWN 01 6,585,692 7,312,264
GREENVILLE 01 45,575,443 50,603,592
GREENWOOD 50 4,545,280 5,046,742
GREENWOOD 51 560,131 621,928
GREENWOOD 52 360,836 400,645
HAMPTON 01 503,545 559,099
Projected Owner-Occupied Projected Applications
School for Reimbursements
Operations Property by School Districts
Tax Collections for the Exempted
Under Taxes on Operations
Current Law for Homes
FY 2007 Dollar for Dollar
FY 2008
HAMPTON 02 200,234 222,325
HORRY 01 17,080,307 18,964,707
JASPER 01 1,231,133 1,366,959
KERSHAW 01 4,782,527 5,310,164
LANCASTER 01 4,407,039 4,893,249
LAURENS 55 2,474,180 2,747,146
LAURENS 56 1,107,844 1,230,067
LEE 01 597,233 663,124
LEXINGTON 01 22,319,133 24,781,510
LEXINGTON 02 1,913,726 2,124,859
LEXINGTON 03 1,330,189 1,476,943
LEXINGTON 04 1,469,015 1,631,085
LEXINGTON 05 23,965,898 26,609,955
MCCORMICK 01 981,530 1,089,818
MARION 01 97,246 107,973
MARION 02 113,315 125,816
MARION 07 321,199 356,636
MARLBORO 01 686,707 762,469
NEWBERRY 01 2,157,917 2,395,991
OCONEE 01 6,030,652 6,695,988
ORANGEBURG 03 1,539,851 1,709,736
ORANGEBURG 04 922,498 1,024,273
ORANGEBURG 05 2,543,103 2,823,673
PICKENS 01 6,409,656 7,116,806
RICHLAND 01 23,728,004 26,345,816
RICHLAND 02 26,104,392 28,984,381
SALUDA 01 937,522 1,040,955
SPARTANBURG 01 4,327,701 4,805,158
SPARTANBURG 02 5,743,320 6,376,956
SPARTANBURG 03 1,025,667 1,138,824
SPARTANBURG 04 1,179,785 1,309,945
SPARTAN BURG 05 4,453,399 4,944,723
SPARTAN BURG 06 6,104,755 6,778,267
SPARTANBURG 07 6,388,242 7,093,030
SUMTER 02 3,263,086 3,623,089
SUMTER 17 3,042,355 3,378,005
UNION 01 510,920 567,288
WILLIAMSBURG 01 100,375 111,449
YORK 01 3,383,319 3,756,587
YORK 02 4,459,282 4,951,256
YORK 03 12,897,395 14,320,311
YORK 04 9,036,506 10,033,466
STATE TOTAL 449,053,481 498,595,679
| Additional Sales Tax | Property Taxes Paid for Operations Only on Owner-Occupied Homes | Reimburse for Owner-Occupied | Unpaid Obligation at end of Fiscal Year | Revenue Needed to get State Funds to 40% of Base Student Cost | Cumulative Total in Fund | ||
| FY 2007-08 | 786,791,700 | ||||||
| FY 2008-09 | 825,503,200 | ||||||
| FY 2009-10 | 866,119,372 | ||||||
| 12-36-1110 | 12-37-220(B) | Part II Section 1 | 59-20-22 | ||||
| January-07 | |||||||
| February-07 | |||||||
| March-07 | |||||||
| April-07 | |||||||
| May-07 | |||||||
| June-07 | |||||||
| FY 2007-08 | July-07 | 65,565,975 | 65,565,975 | ||||
| FY 2007-08 | August-07 | 65,565,975 | 131,131,950 | ||||
| FY 2007-08 | September-07 | 65,565,975 | 196,697,925 | ||||
| FY 2007-08 | October-07 | 65,565,975 | 262,263,900 | ||||
| FY 2007-08 | November-07 | 65,565,975 | 327,829,875 | ||||
| FY 2007-08 | December-07 | 65,565,975 | 784,910,287 | 98,090,204 | 393,395,850 | ||
| FY 2007-08 | January-08 | 65,565,975 | 458,961,825 | 0 | |||
| FY 2007-08 | February-08 | 65,565,975 | 65,565,975 | 0 | |||
| FY 2007-08 | March-08 | 65,565,975 | 65,565,975 | 0 | |||
| FY 2007-08 | April-08 | 65,565,975 | 65,565,975 | 0 | |||
| FY 2007-08 | May-08 | 65,565,975 | 65,565,975 | 0 | |||
| FY 2007-08 | June-08 | 65,565,975 | 44,965,975 | 20,600,000 | 0 | ||
| FY 2008-09 | July-08 | 68,791,933 | 116,808,791 | 50,073,346 | |||
| FY 2008-09 | August-08 | 68,791,933 | 118,865,280 | ||||
| FY 2008-09 | September-08 | 68,791,933 | 187,657,213 | ||||
| FY 2008-09 | October-08 | 68,791,933 | 256,446,146 | ||||
| FY 2008-09 | November-08 | 68,791,933 | 325,241,080 | ||||
| FY 2008-09 | December-08 | 68,791,933 | 832,004,904 | 394,033,013 | |||
| FY 2008-09 | January-09 | 68,791,933 | 462,824,946 | 0 | |||
| FY 2008-09 | February-09 | 68,791,933 | 68,791,934 | 0 | |||
| FY 2008-09 | March-09 | 68,791,933 | 68,791,933 | 0 | |||
| FY 2008-09 | April-09 | 68,791,933 | 68,791,933 | 0 | |||
| FY 2008-09 | May-09 | 68,791,933 | 68,791,934 | 0 | |||
| FY 2008-09 | June-09 | 68,791,933 | 47,573,933 | 21,218,000 | 0 | ||
| FY 2009-10 | July-09 | 72,176,614 | 144,528,495 | 25,738,323 | |||
| FY 2009-10 | August-09 | 72,176,614 | 97,914,938 | ||||
| FY 2009-10 | September-09 | 72,176,614 | 170,091,552 | ||||
| FY 2009-10 | October-09 | 72,176,614 | 242,268,166 | ||||
| FY 2009-10 | November-09 | 72,176,614 | 314,444,781 | ||||
| FY 2009-10 | December-09 | 72,176,614 | 881,925,198 | 386,621,395 | |||
| FY 2009-10 | January-10 | 72,176,614 | 458,798,009 | 0 | |||
| FY 2009-10 | February-10 | 72,176,614 | 72,176,615 | 0 | |||
| FY 2009-10 | March-10 | 72,176,614 | 72,176,614 | 0 | |||
| FY 2009-10 | April-10 | 72,176,614 | 72,176,614 | 0 | |||
| FY 2009-10 | May-10 | 72,176,614 | 72,176,615 | 0 | |||
| FY 2009-10 | June-10 | 72,176,614 | 50,322,074 | 182,188,861 | 21,854,540 | 0 | |
| FY 2007-08 Sales Tax Revenue | 786,791,700 | ||||||
| FY 2007-08 Payouts | 786,791,700 | ||||||
| Unpaid obligation at end of FY 2007-08 | 116,808,791 | ||||||
| FY 2008-09 Sales Tax Revenue | 825,503,200 | ||||||
| FY 2008-09 Payouts | 825,503,200 | ||||||
| Unpaid obligation at end of FY 2008-09 | 144,528,495 | ||||||
| FY 2009-10 Sales Tax Revenue | 866,119,372 | ||||||
| FY 2009-10 Payouts | 866,119,372 | ||||||
| Unpaid obligation at end of FY 2009-10 | 182,188,861 |
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.
Amend Title To Conform
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 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.
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 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."
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'. 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.
(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.
(D)    Nothing in this section diminishes the right of a taxpayer aggrieved by the fair market value of the taxpayer's real property determined in the manner provided in this section or as otherwise determined by law to appeal that value pursuant to Section 12-60-2110 or 12-60-2510(A)(4) and have a value as determined on appeal substituted for that value."
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, 12-43-260, and 12-43-295, all of the 1976 Code, are repealed.
F. Section 12-37-223A of the 1976 Code is repealed.
SECTION 6. 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.
SECTION 7. (A) 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.
(B)(1) There is established the Joint Sales Tax Exemptions Review Committee composed of seven members; three of whom must be members of the Senate appointed by the Chairman of the Senate Finance Committee, one of whom must be a member of the minority party; three of whom must be members of the House of Representatives appointed by the Chairman of the House Ways and Means Committee, one of whom must be a member of the minority party; and one of whom must be the Governor or the Governor's appointee who shall serve at the Governor's pleasure. The committee shall elect a chairman and vice chairman from among its members. All legislative members shall serve ex officio. The committee shall assist the General Assembly in performing its duties under the provisions of subsection (A) in addition to its duties required by this subsection.
(2) In carrying out its responsibilities under this act, the committee shall:
(a) make a detailed and careful study of the State's sales tax exemptions, comparing South Carolina laws to other states;
(b) publish a comparison of the State's sales tax exemptions to other states' laws;
(c) recommend changes, and recommend introduction of legislation when appropriate;
(d) submit reports and recommendations annually to the Governor and the General Assembly regarding sales tax exemptions.
(3) In carrying out its responsibilities under this act, the committee may:
(a) hold public hearings;
(b) receive testimony of any employee of the State or any other witness who may assist the committee in its duties;
(c) call for assistance in the performance of its duties from any employee or agency of the State.
(4) The committee may adopt by majority vote rules not inconsistent with this act that it considers proper with respect to matters relating to the discharge of its duties under this section. Professional and clerical services for the committee must be made available from the staffs of the General Assembly, the Budget and Control Board, and the Department of Revenue. The members of the committee may not receive mileage, per diem, subsistence, or any form of compensation for their service on the committee.
SECTION 8. A. 1. Section 4-12-30(D)(2)(a)(i) and (ii) is amended to read:
"(i) for real property, using the original income tax basis for South Carolina income tax purposes without regard to depreciation, if real property is constructed for the fee or is purchased in an arm's length transaction; otherwise, the property must be reported at its fair market value for ad valorem property tax purposes as determined by appraisal. The fair market value estimate established for the first year of the fee remains the fair market value of the real property for the life of the fee; and
(ii) for personal property, using the original tax basis for South Carolina income tax purposes less depreciation allowable for property tax purposes, except that the sponsor is not entitled to any extraordinary obsolescence."
2. Section 4-12-30(E) of the 1976 Code is amended to read:
"(E) Calculations pursuant to subsection (D)(2) must be made on the basis that the property, if taxable, is allowed all applicable property tax exemptions except the exemption allowed under Section 3(g) of Article X of the Constitution of this State and the exemption allowed pursuant to Section 12-37-220(B)(32) and (34)."
B. Items (1) and (2) of Section 12-44-50(A) of the 1976 Code are amended to read:
"(1) During the exemption period, the sponsor shall pay, or be responsible for payment, to the county the annual fee payment in connection with the economic development property which has been placed in service, in an amount not less than the property taxes that would be due on the economic development property if it were taxable but using:
(a) an assessment ratio of not less than six percent, or four percent for those projects qualifying under the enhanced investment definition;
(b) a millage rate that is, either:
(i) fixed for the life of the fee; or
(ii) is allowed to increase or decrease every fifth year in step with the average cumulative actual millage rate applicable to the project based upon the preceding five-year period; and
(c) a fair market value for the economic development property:
(i) if real property is constructed for the fee or is purchased in an arm's length transaction, the fair market value of real property is determined by using the original income tax basis for South Carolina income tax purposes without regard to depreciation, otherwise the property must be reported at its fair market value for ad valorem property taxes as determined by appraisal. The fair market value estimate established for the first year of the fee remains the fair market value of the real property for the life of the fee;
(ii) fair market value for personal property is determined by using the original tax basis for South Carolina income tax purposes less depreciation allowable for property tax purposes, except that the sponsor is not entitled to extraordinary obsolescence; and
(d) to establish the millage rate for purposes of subsection (A)(1)(b)(i) or the first five years millage under (A)(1)(b)(ii), the millage rate must be no lower than the cumulative property tax millage rate levied by, or on behalf of, all taxing entities within which the project is located on either:
(i) June thirtieth of the year preceding the calendar year in which the fee agreement is executed; or
(ii) the millage rate in effect on June thirtieth of the calendar year in which the fee agreement is executed.
(2)    The fee calculation must be made so that the property, if taxable, is allowed all applicable property tax exemptions except the exemption allowed under Section 3(g) of Article X of the Constitution of this State and the exemption allowed pursuant to Section 12-37-220(B)(32) and (34)."
SECTION 1. (A)(1) For the year 2007, property taxing entities of this State other than school districts must be reimbursed from the Homestead Exemption Fund dollar for dollar for the property taxes collected by them from owner-occupied residential property for the year 2006 for all purposes other than payment of general obligation debt. 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 year 2007, school districts of this State must be reimbursed from the Homestead Exemption Fund dollar for dollar for the property taxes collected by them from owner-occupied residential property for the year 2006 for all purposes other than payment of general obligation debt. 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. For purposes of the reimbursement increases school districts receive under this item based on weighted pupil units determined pursuant to the Education Finance Act, an additional add-on weighting for students in poverty of 0.20 shall be included in the weightings provided in Section 59-20-40(1)(c) of the 1976 Code. The weighting for poverty shall provide additional revenues for students in kindergarten through grade twelve who qualify for Medicaid or who qualify for reduced or free lunches, or both. Revenues generated by this weighting must be used by districts and schools to provide services and research-based strategies for addressing academic or health needs of these students to ensure their future academic success, to provide summer school, reduced class size, after school programs, extended day, instructional materials, or any other research-based educational strategy to improve student academic performance. All amounts received by a district pursuant to the Education Finance Act must be expended only for classroom instruction and costs and expenses directly associated with classroom instruction.
(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 Board. 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.
(E) Upon the beginning of reimbursements to property taxing entities including school districts as provided in this Part, reimbursements for a particular year must be paid to the property taxing entities by August thirty-first of that year.
(F) Notwithstanding any other provision of this section, the reimbursements provided pursuant to this section apply for real property located in redevelopment project areas pursuant to the Tax Increment Financing Law and the Tax Increment Financing Act for counties and for real property subject to a redevelopment plan adopted before the effective date of this act, the reimbursements provided pursuant to this section must not be less than dollar for dollar for the duration of the plan.
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 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.
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 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.
If a property taxing entity does not increase millage by the maximum millage increase allowed pursuant to this subsection without a supermajority vote, the difference between the millage rate actually imposed and the maximum millage that could have been imposed for that year without a supermajority vote is deemed 'unused' millage.
In calculating the maximum annual millage increase that may be imposed without a supermajority vote, there must be added to the otherwise applicable total any unused millage from the preceding two tax years."
SECTION 1. Article 5, Chapter 11, Title 11 of the 1976 Code is amended by adding:
"Section 11-11-415. (A) Except when a lower spending limit applies pursuant to Section 11-11-410, State appropriations for a fiscal year may not exceed appropriations authorized by the spending limitation prescribed in this section. State appropriations subject to the spending limitation are those appropriations authorized annually in the annual general appropriations act and any supplemental appropriations acts or joint resolutions for that fiscal year which fund general purposes. A statement of total 'General Revenues' must be included in the annual general appropriations act. As used in this section the appropriations limited as defined in this subsection must be those funded by 'General Revenues' as defined in the general appropriations act for fiscal year 2007-2008. All additional nonfederal and nonuser fee revenue items must be included in that category as they may be created by act of the General Assembly.
(B)(1) The limitation on State appropriations for a fiscal year as provided in subsection (A) is the greater of:
(a) base-year appropriations increased by a percentage equal to the annual percentage increase in state personal income for the most recently completed calendar year for which this figure is available; or
(b) base-year appropriations increased by a percentage equal to the state's growth in population applied ratably over the period of the decennial United States census assuming a rate of increase equal to the rate in the most recently completed United States census for which population figures are available over the next preceding census and a percentage equal to the increase, if any, in the consumer price index in the most recently ended calendar year, as determined by the Bureau of Labor Statistics of the United States Department of Labor.
(2) As used in this subsection:
(a) 'base-year appropriations' means general fund appropriations for the current fiscal year as of February fifteenth, including both recurring and nonrecurring revenues from whatever source derived and regardless of the time the appropriations are effective except that appropriations for the Capital Reserve Fund are not included in base-year appropriations. This general fund total must be adjusted to reflect any mid-year appropriations reductions, however imposed, made, or scheduled as of February fifteenth; and
(b) 'state personal income' means total personal income for a calendar year as determined by the Office of State Budget of the State Budget and Control Board based on the most recent data provided by the United States Department of Commerce.
(3) The Office of Research and Statistics of the State Budget and Control Board, upon approval by the State Economist and in consultation with the director of the board's Office of State Budget, shall calculate and provide the appropriate percentages for population, consumer price index, and state personal income growth to the Ways and Means Committee of the House of Representatives and the Senate Finance Committee no later than February fifteenth of each year.
(C) The Comptroller General shall notify the Governor, the Speaker of the House, and the President Pro Tempore of the Senate if the spending limit as contained in this section is exceeded. The General Assembly shall then take corrective action immediately upon meeting in the next regular session or a special session called for that purpose. This subsection does not apply to funds transferred from the general reserve fund to the general fund.
(D) Notwithstanding the provisions of subsection (A) of this section, the General Assembly may suspend the spending limitation for a fiscal year for a specific amount by a special vote as provided in this subsection by enactment of legislation.
The special vote referred to in this subsection means an affirmative recorded roll-call vote in each branch of the General Assembly by at least two-thirds of the total membership in each branch."
SECTION 2. Article 3, Chapter 1, Title 6 of the 1976 Code is amended by adding:
"Section 6-1-335. (A) The spending limit imposed on a local governing body pursuant to this section is in addition to and not in lieu of any other limit on spending or on the taxing power of a local governing body. Where a limit on spending by or on the taxing power of a local governing body imposed by the Constitution of this State or by general or local laws of this State imposes any limit resulting in a more restrictive spending limit than the limit imposed pursuant to this section, the more restrictive limit applies.
(B) The limit on all appropriations for a fiscal year by a local governing body, except for appropriations to service general obligation debt or for the purposes provided in Section 6-1-320(B) is the greater of:
(1) base-year appropriations increased by a percentage equal to the annual percentage increase in state personal income for the most recently completed calendar year for which this figure is available; or
(2) base-year appropriations increased by a percentage equal to the jurisdiction's growth in population applied ratably over the period of the decennial United States census assuming a rate of increase equal to the rate in the most recently completed United States census for which population figures are available over the next preceding census and a percentage equal to the increase, if any, in the consumer price index in the most recently ended calendar year, as determined by the Bureau of Labor Statistics of the United States Department of Labor. For a school district, the population increase portion of this calculation is replaced by the actual annual increase in the student enrollment for the most recent year for which that figure is available for the district.
(C) As used in this section:
(1) 'base-year appropriations' means appropriations for the current fiscal year as of February fifteenth, including both recurring and nonrecurring revenues from whatever source derived and regardless of the time the appropriations are effective except for appropriations for the purposes exempt from the limit pursuant to subsection (B) of this section. This total must be adjusted to reflect any mid-year appropriations reductions, however imposed, made, or scheduled as of February fifteenth; and
(2) 'state personal income' means total personal income for a calendar year as determined by the Office of State Budget of the State Budget and Control Board based on the most recent data provided by the United States Department of Commerce.
(D) The Office of Research and Statistics of the State Budget and Control Board, upon approval by the State Economist and in consultation with the director of the board's Office of State Budget, shall calculate and provide the appropriate percentages for population, consumer price index, and state personal income growth to the local governing body no later than February fifteenth of each year."
SECTION    3.    The provisions of this Part take effect as provided in Part IV of this act and first apply for appropriations for fiscal years beginning after June 30, 2009.
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.
SECTION 2. Notwithstanding any other provision of law, a county governing body is authorized to conduct a referendum at the same time as the 2006 general election as to whether or not a local option sales tax presently imposed in that jurisdiction should be repealed. If the qualified electors of the county vote in favor of repealing the local option sales tax, the tax shall be repealed as of January 1, 2007.
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