Indicates Matter Stricken
Indicates New Matter
The Senate assembled at 2:00 P.M., the hour to which it stood adjourned, and was called to order by the PRESIDENT.
A quorum being present, the proceedings were opened with a devotion by Senator McGILL as follows:
Beloved, hear the words of St. Peter (I Peter 2:16):
"Live as free men... but live as servants of God."
Let us pray.
Lord God, Whose existence is beyond the limits of our finite comprehension, You have made us not only akin to all mankind, but also You have made us to be temples in whom the Holy Spirit dwells.
May we realize that there is nothing so useless as an instrument that fails in its purpose... like a clock that cannot keep time... or a car that will not run...or a man or woman without a purpose in life. Help us to function as servants of God!
Amen!
By prior motion of Senator GREGORY, with unanimous consent, the members of the Fish, Game and Forestry Committee were granted leave to attend a committee meeting and, on motion of Senator SHEHEEN, with unanimous consent, those members were granted leave to be counted in any quorum calls.
At 10:05 A.M., Senator MARTIN made the point that a quorum was not present. It was ascertained that a quorum was not present.
Senator MARTIN moved that a Call of the Senate be made. The following Senators answered the Call:
Alexander Anderson Bryant Campsen Cleary Courson Cromer Drummond Elliott Fair Ford Gregory Grooms Hawkins Hayes Hutto Knotts Land Leventis Lourie Malloy Martin Matthews McConnell McGill Mescher O'Dell Patterson Peeler Pinckney Rankin Reese Richardson Ritchie Ryberg Scott Setzler Sheheen Short Thomas Verdin Williams
A quorum being present, the Senate resumed.
At 10:12 A.M., on motion of Senator SETZLER, the Senate receded from business not to exceed five minutes.
At 10:23 A.M., the Senate resumed.
The PRESIDENT called for Petitions, Memorials, Presentments of Grand Juries and such like papers.
Senator WILLIAMS introduced Dr. Coleman Floyd of Florence, S.C., Doctor of the Day.
On motion of Senator CLEARY, the leave of absence, which was granted to him for today, was rescinded.
On motion of Senator HAYES, at 10:00 A.M., Senator LEATHERMAN was granted a leave of absence for today.
The following appointments were transmitted by the Honorable Mark C. Sanford:
Reappointment, Abbeville County Magistrate, with term to commence April 30, 2006, and to expire April 30, 2010
Susan G. Gladden, 438 Highway 20, Abbeville, S.C. 29620
Initial Appointment, Calhoun County Magistrate, with term to commence April 30, 2002, and to expire April 30, 2006
Don Rickenbaker, P. O. Box 232, St. Matthews, S.C. 29135 VICE Helen Geiger
Reappointment, Calhoun County Magistrate, with term to commence April 30, 2006, and to expire April 30, 2010
Don Rickenbaker, P. O. Box 232, St. Matthews, S.C. 29135
On motion of Senator RITCHIE, with unanimous consent, Senators CLEARY, FORD and RITCHIE were granted leave to vote from the balcony today.
S. 1351 (Word version) -- Senator Sheheen: A BILL TO AMEND SECTION 16-23-20, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE UNLAWFUL CARRYING OF A HANDGUN, SO AS TO INCLUDE IN THE EXCEPTIONS TO THE OFFENSE RESERVE POLICE OFFICERS OF A STATE AGENCY; AND TO AMEND SECTION 23-28-30, AS AMENDED, RELATING TO TRAINING COURSE REQUIREMENTS FOR RESERVE UNITS, SO AS TO PROVIDE THAT ADDITIONAL TRAINING MAY BE PRESCRIBED BY THE ENTITY HAVING A RESERVE UNIT UNDER CERTAIN CIRCUMSTANCES.
On motion of Senator FORD, with unanimous consent, the name of Senator FORD was added as a co-sponsor of S. 1351.
S. 1312 (Word version) -- Senator Matthews: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTIONS 59-29-440 THROUGH 59-29-570 SO AS TO ENACT THE "SOUTH CAROLINA FINANCIAL LITERACY TRUST ACT", WHICH IS AN INITIATIVE FOR IMPROVING FINANCIAL LITERACY BY PROVIDING GRANTS TO SCHOOL DISTRICTS TO PROVIDE FINANCIAL LITERACY INSTRUCTION FOR STUDENTS IN KINDERGARTEN THROUGH TWELFTH GRADE; TO ESTABLISH GOALS FOR THIS INITIATIVE; TO ESTABLISH THE SOUTH CAROLINA FINANCIAL LITERACY BOARD OF TRUSTEES, TO PROVIDE THAT IT SHALL OVERSEE THE FINANCIAL LITERACY TRUST, AND TO ESTABLISH THE PURPOSES OF THE BOARD AND ITS COMPOSITION, FUNCTIONS, AND DUTIES; TO PROVIDE FOR TWO SEPARATE FUNDS TO ACCEPT PUBLIC AND PRIVATE MONIES AND MONIES APPROPRIATED BY THE GENERAL ASSEMBLY; TO PROVIDE FOR THE FUNCTIONS AND DUTIES OF THE OFFICE IMPLEMENTING AND OPERATING THE INITIATIVE; AND TO PROVIDE THE PROCEDURE FOR APPLYING FOR A GRANT, ESTABLISH FISCAL GUIDELINES, AND EVALUATION REQUIREMENTS; TO AMEND SECTION 12-6-5060, AS AMENDED, RELATING TO DESIGNATING CONTRIBUTIONS TO CERTAIN CHARITABLE FUNDS THROUGH INDIVIDUAL INCOME TAX RETURNS, SO AS TO AUTHORIZE CONTRIBUTIONS TO THE FINANCIAL LITERACY TRUST; AND TO REPEAL SECTIONS 59-29-420 AND 59-29-425, BOTH RELATING TO A FINANCIAL LITERACY FUND.
On motion of Senator RANKIN, with unanimous consent, the name of Senator RANKIN was added as a co-sponsor of S. 1312.
Senator GROOMS wished the Journal to reflect that the Senate recognized Ms. Mary Pearson, Executive Committeeman for Dorchester County and the S. C. Federation of Republican Women and Woman of the Year for her many years of devoted service when she attended the Senate proceedings today.
S. 1264 (Word version) -- Senator Leventis: A BILL TO AMEND ACT 470 OF 1971, AS AMENDED, RELATING TO THE VOCATIONAL EDUCATION SCHOOL FOR SUMTER COUNTY AND THE BOARD OF TRUSTEES OF THE CAREER CENTER BOARD, SO AS TO PROVIDE THAT EFFECTIVE JULY 1, 2006, THE BOARD OF TRUSTEES OF THE CAREER CENTER SHALL BECOME AN ADVISORY BOARD TO THE BOARDS OF TRUSTEES OF SUMTER SCHOOL DISTRICTS 2 AND 17 AND THE DUTIES, POWERS, AND FUNCTIONS OF THE BOARD OF TRUSTEES OF THE CAREER CENTER ARE DEVOLVED JOINTLY UPON THE BOARD OF TRUSTEES OF SUMTER SCHOOL DISTRICTS 2 AND 17 ON JULY 1, 2006, AND TO PROVIDE THAT BEGINNING JULY 1, 2006, THE SUPERINTENDENTS OF SUMTER SCHOOL DISTRICTS 2 AND 17 SHALL TOGETHER EMPLOY A DIRECTOR OF THE CENTER WHO SHALL SERVE AS SUPERVISOR AND FISCAL AGENT OF THE SCHOOL UNDER THE DIRECTION OF THE SUPERINTENDENTS.
Senator LEVENTIS asked unanimous consent to make a motion to recall the Bill from the Legislative Council.
There was no objection.
The Bill was recalled from the Legislative Council.
The Legislative Council returned the Bill to the Senate for consideration.
H. 4858 (Word version) -- Agriculture, Natural Resources and Environmental Affairs Committee: A JOINT RESOLUTION TO APPROVE REGULATIONS OF THE DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL, RELATING TO CLASSIFIED WATERS, DESIGNATED AS REGULATION DOCUMENT NUMBER 3025, PURSUANT TO THE PROVISIONS OF ARTICLE 1, CHAPTER 23, TITLE 1 OF THE 1976 CODE.
Senator PEELER asked unanimous consent to make a motion to recall the Joint Resolution from the Committee on Medical Affairs.
There was no objection.
The Resolution was recalled from the Committee on Medical Affairs.
Senator PEELER asked unanimous consent to commit the Joint Resolution to the Committee on Agriculture and Natural Resources.
There was no objection.
The Joint Resolution was committed to the Committee on Agriculture and Natural Resources.
The following were introduced:
S. 1359 (Word version) -- Senator Reese: A CONCURRENT RESOLUTION TO REQUEST THAT THE DEPARTMENT OF TRANSPORTATION NAME THE PORTION OF PINE STREET IN THE CITY OF SPARTANBURG FROM ITS INTERSECTION WITH CHURCH STREET TO ITS INTERSECTION WITH DANIEL MORGAN AVENUE THE "VIC BAILEY HIGHWAY" AND ERECT APPROPRIATE MARKERS OR SIGNS ALONG THIS PORTION OF HIGHWAY THAT CONTAIN THE WORDS "VIC BAILEY HIGHWAY".
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The Concurrent Resolution was introduced and referred to the Committee on Transportation.
S. 1360 (Word version) -- Senators Rankin, Elliott, Reese, Williams, Ford, Hayes, Short, Land and Cleary: A BILL TO AMEND SECTION 14-7-1370, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO COMPENSATION OF JURORS IN CIRCUIT COURTS, SO AS TO INCREASE THE MILEAGE REIMBURSEMENT TO THE RATE PROVIDED BY LAW FOR MEMBERS OF STATE BOARDS, COMMISSIONS, AND COMMITTEES.
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Read the first time and referred to the Committee on Finance.
THE SENATE PROCEEDED TO A CALL OF THE UNCONTESTED LOCAL AND STATEWIDE CALENDAR.
The following Bills were read the third time and ordered sent to the House of Representatives:
S. 1128 (Word version) -- Senator Land: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 40-59-35 SO AS TO PROHIBIT A PERSON FROM ENGAGING IN THE BUSINESS OF RESIDENTIAL HEATING AND AIR CONDITIONING CONTRACTING UNLESS LICENSED AS A RESIDENTIAL SPECIALTY CONTRACTOR; TO PROHIBIT PROVIDING A POTENTIAL BUYER A PROPOSAL FOR SALE OR INSTALLATION OF RESIDENTIAL HEATING AND AIR CONDITIONING, OTHER THAN A WRITTEN ESTIMATE, BEFORE THE SPECIFICATIONS FOR THE SYSTEM HAVE BEEN REVIEWED AND APPROVED BY A LICENSED EMPLOYEE OF THE RETAIL SELLER, OR THE RETAIL SELLER; TO FURTHER SPECIFY CONTRACT REQUIREMENTS FOR THE SALE AND INSTALLATION OF A HEATING AND AIR CONDITIONING SYSTEM; AND TO AUTHORIZE THE DEPARTMENT OF LABOR, LICENSING AND REGULATION TO PROMULGATE REGULATIONS ESTABLISHING A CIVIL PENALTY FOR VIOLATIONS.
By prior motion of Senator SETZLER with unanimous consent
S. 967 (Word version) -- Senators Martin, Ford and O'Dell: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 7 TO CHAPTER 69, TITLE 38, SO AS TO ENACT THE "ANNUITY INVESTMENTS BY SENIORS ACT" TO PROVIDE STANDARDS AND PROCEDURES FOR RECOMMENDATIONS TO SENIOR CONSUMERS TO ENSURE THAT ANNUITY PRODUCTS FOR THESE SENIOR CONSUMERS ADDRESS THEIR INSURANCE AND FINANCIAL NEEDS.
The following Bill and Joint Resolution, having been read the second time, were ordered placed on the Third Reading Calendar:
S. 1333 (Word version) -- Senator McConnell: A JOINT RESOLUTION TO APPROVE REGULATIONS OF THE STATE COMMISSION FOR MINORITY AFFAIRS RELATING TO STATE RECOGNITION OF NATIVE AMERICAN INDIANS, DESIGNATED AS REGULATION DOCUMENT NUMBER 3043, PURSUANT TO THE PROVISIONS OF ARTICLE 1, CHAPTER 23, TITLE 1 OF THE 1976 CODE.
H. 4940 (Word version) -- Rep. Walker: A BILL TO AMEND SECTION 7-7-490, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE DESIGNATION OF VOTING PRECINCTS IN SPARTANBURG COUNTY, SO AS TO REVISE AND RENAME CERTAIN VOTING PRECINCTS IN SPARTANBURG COUNTY AND REDESIGNATE A MAP NUMBER FOR THE MAP ON WHICH LINES OF THESE PRECINCTS ARE DELINEATED AND MAINTAINED BY THE OFFICE OF RESEARCH AND STATISTICS OF THE STATE BUDGET AND CONTROL BOARD.
H. 4622 (Word version) -- Reps. Walker, Cato, Harrell, Bingham, Leach, Loftis, Tripp, Cooper, White, Townsend, Bales, Battle and Dantzler: A BILL TO AMEND SECTION 38-77-350, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE FORM TO BE USED WHEN OPTIONAL AUTOMOBILE INSURANCE COVERAGES ARE OFFERED TO AN INSURED, SO AS TO PROVIDE THAT THE FORM MUST NOT NECESSARILY BE COMPLETED BY THE INSURED, BUT MUST BE SIGNED BY THE INSURED TO BE USED AS EVIDENCE OF INFORMED SELECTION.
The Senate proceeded to a consideration of the Bill, the question being the adoption of the amendment proposed by the Committee on Banking and Insurance.
The Committee on Banking and Insurance proposed the following amendment (4622SBI), which was adopted:
Amend the bill, as and if amended, page 2, by striking lines 3-9 and inserting:
/ (B) If this form is properly completed and executed signed by the named insured, after it has been completed by an insurance producer or a representative of the insurer, it is conclusively presumed that there was an informed, knowing selection of coverage and neither the insurance company nor any an insurance agent has any liability is liable to the named insured or any other another insured under the policy for the insured's failure to purchase any optional coverage or higher limits." /
Amend the bill further, by adding an appropriately numbered section to read:
/ SECTION . Section 38-55-75 of the 1976 Code is amended to read:
"Section 38-55-75. The Department of Insurance may receive and shall maintain as confidential any documents or information furnished to the department by the National Association of Insurance Commissioners or insurance departments of other states regulatory officials of any state, federal agency, or foreign countries which is classified as confidential by that association or state. The Department of Insurance may share documents or information, including confidential documents or information, with the National Association of Insurance Commissioners or insurance departments of other states regulatory officials of any state, federal agency, or foreign countries if the association, state, federal agency, or foreign country or other state agrees to maintain the same level of confidentiality as is provided under South Carolina law. Documents or information received or exchanged pursuant to this section are not subject to subpoena or subpoena duces tecum in any civil, criminal, or administrative proceeding." /
Renumber sections to conform.
Amend title to conform.
Senator THOMAS explained the committee amendment.
The committee amendment was adopted.
On motion of Senator HUTTO, the Bill was carried over, as amended.
THE CALL OF THE UNCONTESTED CALENDAR HAVING BEEN COMPLETED, THE SENATE PROCEEDED TO THE MOTION PERIOD.
On motion of Senator MARTIN, the Senate agreed to dispense with the Motion Period.
THE SENATE PROCEEDED TO THE INTERRUPTED DEBATE.
H. 4449 (Word version) -- 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: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, TO IMPOSE AN ADDITIONAL TWO PERCENT SALES AND USE TAX, TO EXEMPT THE SALE OF UNPREPARED FOOD, TO PROVIDE AN ADDITIONAL EXEMPTION EQUAL TO ONE HUNDRED PERCENT OF THE FAIR MARKET VALUE OF OWNER-OCCUPIED RESIDENTIAL PROPERTY FROM THE 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, 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, 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.
(ABBREVIATED TITLE)
The Senate proceeded to a consideration of the Bill, the question being the adoption of Amendment No. 4A (JUD4449.025) proposed by Senators KNOTTS, THOMAS and HAWKINS on Thursday, April 18, 2006.
Senator MARTIN was recognized to speak on the amendment.
On motion of Senator THOMAS, with unanimous consent, the members of the Banking and Insurance Committee were granted leave to attend a committee meeting and be counted in any quorum calls.
Senator MARTIN was recognized to speak on the amendment.
Senator HAYES argued contra to the adoption of the amendment.
I rise today to speak in opposition to what I will call the House of Representatives plan which is a two cents sales tax increase with the proceeds used to remove all owner occupied property taxes while also taking the sales tax off food. Let me begin by saying that the goal of this plan is commendable, to give property tax relief to homeowners. I served on the Property Tax Study Committee that went all over the State listening to taxpayers, and the complaints I heard centered around two areas. First, we heard from people who live in areas, such as along the coast, that are experiencing rapid increases in property values, that the reassessment every five years is working a very real hardship which has forced some to have to move because they can't afford the property taxes. Second, we heard from those who dislike the property tax, which they perceive as a type of rent to the government that keeps them from truly owning their homes, and these people would prefer to pay an increased sales tax in order to get relief on property taxes, particularly if the relief can be permanent unlike the relief given in the mid '90's. In my opinion, this Senate addressed the first area of concern earlier this year when we capped the increase after reassessments to 15% of every five years unless the property is sold or improved. In my opinion, we can address the second concern by moving in a more conservative manner than the House by passing a half cent sales tax increase which will enable us to reduce owner occupied property taxes for county operations and build in a circuit breaker to insure that no one loses their home because of property taxes. We can make this permanent by passing some form of millage cap and by insuring that the half cent sales tax goes into a separate fund that can only be used for property tax relief.
I have five reasons for opposing the House plan. First, we have been told by tax experts that South Carolina has a good tax base upon which to fund state and local government, with approximately a third coming from income tax, a third from sales tax and a third from property tax. We have also been told that it would not be good policy for the State to become more dependent on the sales tax, which is subject to changes in the economy, to fund local government, particularly our schools which tend to have fixed personnel costs that make up the bulk of their spending. In other words, the House plan would make local government dependent on the sales tax, and if the economy slows down, local government could be facing a shortfall with no place to turn to make up the difference.
Second, I oppose the House plan because it hurts fast growing areas. My home county of York is a good example. Currently, we are the second fastest growing county in the State, right behind Dorchester. We cannot build schools fast enough for the new children coming into our county. Currently, our schools compare very favorably to North Carolina and that is helping to fuel this growth. Imagine what it will be like if we take off the owner occupied property taxes. It will be like putting a sign at the border saying, "come on over -- we have better schools and, by the way, we have no property taxes." Add to that scenario the fact that most of the new folks in York County work and shop in North Carolina, thus paying no taxes other than property taxes in South Carolina, and you can see that doing away with these taxes puts our local governments in a virtually impossible position. Now consider how the House plan distributes the money to school districts -- on a weighted pupil basis rather than on a per capita basis. I have a handout that shows you the winners and losers on these two distribution methods. If you are from a fast growing area, under the House plan, your districts will be facing considerable shortfalls.
My third reason for opposing the House plan is that it greatly diminishes this legislature's and future legislatures' ability to deal with problems that face this State. If we raise our sales tax to seven cents statewide, we will be at the top nationally and, realistically, we will not be able to go back to that source for future needs; our income tax at seven percent is already one of the highest nationally; and, although our property tax is relatively low, it is the most disliked form of taxation and not a likely source of new revenue. We could look to a cigarette or gasoline tax increase for new revenue, but these should be directed to specific needs such as health care or our roads, and besides the amount of revenue that can be generated from these sources is relatively minor. We are currently facing serious problems in South Carolina, including equity issues in our public schools; early childhood education; tuition increases in higher education; and the cost of MEDICAID, to name only a few. We have also been told that in a few years, the State will be faced with another budget deficit, not because of a downturn in the economy, but because our normal spending will outgrow our tax base. If you add to that a possible downturn in the economy, where will the State turn to provide basis services. It does not seem wise or prudent to take the only realistic source of revenue to deal with these problems -- the sales tax -- and use it up entirely for property tax relief.
My first three reasons for opposing the House plan are important, and any one of which would be a reasonable basis for opposing this plan. Yet, my final two reasons are in my mind the most important. My fourth reason for opposing this plan is that it hurts business in South Carolina. Our subcommittee of the Senate Finance Committee heard testimony from Burnie Maybank that was an eye-opener on this subject. Currently, our property tax on owner occupied houses is relatively low, even considering the relative wealth of our State; our property tax on commercial property is relatively high; and our tax on industry is the highest in the nation, even considering the fee in lieu of taxes that many of our new industries enjoy. Thus, our property tax system in South Carolina already puts us at a disadvantage in recruiting industry. The House plan would dramatically worsen this situation. There is nothing in the House plan for business other than a substantial tax increase. In fact, this plan is a tax shift, putting a greater part of the total tax burden on the back of business. Under the House plan, in South Carolina 47 percent of the total tax burden will be borne by business, while businesses in North Carolina and Georgia bear less than forty percent. Those involved with economic development tell us that this will cripple our efforts to bring new jobs into this State. The House plan might be popular now, but when our citizens can't find jobs, it won't be so popular. And, who will be to blame? We will -- the legislature because we forgot that it is primarily business that provides jobs for our citizens and these jobs in turn provide the means to pay all taxes.
Fifth and finally, I oppose the House plan because it undermines Home Rule. I realize that the concept of Home Rule is not popular in Columbia these days. I've even heard it said by several individuals that our constituents have about all the Home Rule they can afford. However, what is the alternative? The alternative to Home Rule is big government in Columbia. The House plan takes much of the property tax that is raised and spent locally and shifts it to a sales tax that is raised in Columbia and then doled out to local government on a formula basis. That means that if one of your school districts or cities or counties want to do something outside of the formula, they must come with hat in hand to big government here in Columbia to compete with Greenville and Charleston, and others for the needed revenue. The House plan might be popular now, but when people find out that they can no longer deal with local problems locally, it won't be so popular. And, who will be to blame? We will -- the legislature that forgot that the same voters who had the good sense to elect us also have the good sense to elect good local officials and to replace those local officials who overtax them.
I have been in the legislature long enough to recognize when the "train is on the track" and that on this issue public sentiment favors, in fact demands, action on our part. I would urge you to support the half cent increase that I discussed earlier. Under this plan, along with the current property tax exemption passed in 1995, two-thirds of all homeowners will have virtually all of their school and county property taxes eliminated, and there will be a circuit breaker to insure no one will lose their home to property taxes. The proceeds from the sales tax increase will be put in a separate account and should grow at five percent which should insure that this relief is ongoing, particularly if we pass a millage cap. The business community supports the half cent plan because, although it is a shift, it is not an undue burden on business and will not put us in such a weak position in competing with North Carolina and Georgia. Local government supports the plan because it does not make them so dependent on sales tax nor do they have to deal with a formula distribution. Whatever relief we grant, we will be hard pressed to ever take it away, and thus, I would urge a cautious approach. Public sentiment may be for it now, but if you represent a fast growing area that will face a deficit because of the formula, public sentiment will change. If you represent districts that have an equity issue, all the House plan does is lock in the current inequity with no real hope of change, public sentiment will change for you as well. If you represent a district with high unemployment and you can't compete for new jobs, public sentiment will change.
Let me end on a note that I am sure will be near to the heart of our PRESIDENT Pro Tempore -- when has it ever been in the peoples' best interest for the Senate to adopt a House plan?
On motion of Senator LAND, with unanimous consent, the remarks of Senator HAYES were ordered printed in the Journal.
Senator KNOTTS argued in favor of the adoption of the amendment.
On motion of Senator McCONNELL, with unanimous consent, debate was interrupted by recess, with Senator KNOTTS retaining the floor.
At 12:30 P.M., on motion of Senator McCONNELL, the Senate receded from business until 2:00 P.M.
The Senate reassembled at 2:15 P.M. and was called to order by the PRESIDENT.
H. 4449 (Word version) -- 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: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, TO IMPOSE AN ADDITIONAL TWO PERCENT SALES AND USE TAX, TO EXEMPT THE SALE OF UNPREPARED FOOD, TO PROVIDE AN ADDITIONAL EXEMPTION EQUAL TO ONE HUNDRED PERCENT OF THE FAIR MARKET VALUE OF OWNER-OCCUPIED RESIDENTIAL PROPERTY FROM THE 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, 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, 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.
(ABBREVIATED TITLE)
The Senate resumed consideration of the Bill, the question being the adoption of Amendment No. 4A (JUD4449.025) proposed by Senators KNOTTS, THOMAS and HAWKINS on Thursday, April 18, 2006. Amendment No. 4A was subsequently tabled.
Senator KNOTTS resumed arguing in favor of the adoption of the amendment.
On motion of Senator HAYES, with unanimous consent, Senators SETZLER, RICHARDSON and HAYES were granted leave to attend a meeting on H. 3010, be counted in any quorum calls and be granted leave to vote from the balcony.
Senator KNOTTS resumed arguing in favor of the adoption of the amendment.
Senator PINCKNEY argued contra to the adoption of the amendment.
Senator LEVENTIS argued contra to the adoption of the amendment.
On motion of Senator HAYES, with unanimous consent, Senators RICHARDSON, FAIR, SHORT, MATTHEWS, RANKIN, PATTERSON and HAYES were granted leave to attend a subcommittee meeting, be counted in any quorum calls and be granted leave to vote from the balcony.
Senator LEVENTIS argued contra to the adoption of the amendment.
Senator LEVENTIS moved to lay the amendment on the table.
The "ayes" and "nays" were demanded and taken, resulting as follows:
Alexander Drummond Elliott Ford Gregory Hayes Hutto Jackson Land Leatherman * Leventis Malloy Martin Matthews McGill Mescher O'Dell Patterson Pinckney Rankin Richardson Ritchie Sheheen Williams
Anderson Bryant Campsen Cleary Courson Cromer Fair Grooms Hawkins Knotts Lourie McConnell Moore Peeler Reese Ryberg Scott Setzler Short Thomas Verdin
*This Senator was not present in the Chamber at the time the vote was taken and the vote was recorded by leave of the Senate, with unanimous consent.
The amendment was laid on the table.
Senators CAMPSEN, McCONNELL, THOMAS, GROOMS and SCOTT proposed the following Amendment No. P-4B (JUD4449.007), which was subsequently withdrawn and substituted with Amendment No. P-4C:
Amend the COMMITTEE AMENDMENT, as and if amended, page [4449-8], before SECTION 5, by adding appropriately numbered PARTS and SECTIONS to read:
SECTION ___. Chapter 10, Title 4 of the 1976 Code is amended by adding:
Local Option Sales and Use Tax
for Local Property Tax Exemption
Section 4-10-710. This article provides the only method in which the governing body of a county by an ordinance imposing the tax authorized pursuant to this article thereby exempts homesteads from property taxes imposed in the county for school operations as provided in Section 3, Article X of the Constitution of this State.
Section 4-10-720. As used in this article:
(1) 'County' has the meaning provided for in 'county area' as defined in Section 4-10-10(1);
(2) 'Homestead' means residential real property eligible for the four percent assessment ratio allowed pursuant to Section 12-43-220(c).
Section 4-10-730. (A) Subject to the requirements of this article, the governing body of the county by a county council ordinance or by an initiated ordinance submitted to the governing body of the county by a petition signed by qualified electors of the county, equal in number to at least fifteen percent of the qualified electors of the county, may impose a sales and use tax in increments of one-tenth of one percent, subject to referendum approval. The rate of the tax must be set at an amount expressed in tenths of one percent estimated to be sufficient to produce revenues that do not exceed those necessary to replace property tax revenue in the county for school operations on homesteads in the most recently completed fiscal year and must take into account payments to school districts pursuant to the exemption allowed pursuant to Sections 12-37-250 and 12-37-251. The governing body of the county shall obtain from the Board of Economic Advisors the board's certified estimate of the rate of sales and use tax necessary in the county to equal school operating property tax revenues derived from homesteads. This certified rate is the rate of tax that must appear in the referendum question.
(B) If the sales and use tax authorized pursuant to this article is imposed in a county, then to the extent not already exempt, one hundred percent of the fair market value of a homestead in the county is exempt from all property taxes imposed for school operations.
Section 4-10-740. (A) Upon receipt of the ordinance, the county election commission shall conduct a referendum on the question of imposing the sales and use tax. A referendum for this purpose must be held at the time of the general election. Two weeks before the referendum the election commission shall publish in a newspaper of general circulation the question that is to appear on the ballot. This notice is in lieu of any other notice otherwise required by law.
(B) The referendum question to be on the ballot must read substantially as follows:
'Must a (rate) sales and use tax be imposed in (county) to replace property tax revenues not collected because of a one hundred percent property tax exemption for owner-occupied residential property from property taxes imposed for school operations?
(C) All qualified electors desiring to vote in favor of imposing the tax shall vote 'Yes' and all qualified electors opposed to imposing the tax shall vote 'No'. If a majority of the votes cast are in favor of imposing the tax, the tax is imposed as provided in this article, and beginning after the year in which the referendum is held, all homesteads otherwise taxable in the county are exempt from property taxes imposed in the county for school operations. The election commission shall conduct the referendum under the election laws of this State, mutatis mutandis, and shall certify the results no later than December thirty-first to the county governing body and to the Department of Revenue.
(D) Upon receipt of the returns of the referendum, the county council, by resolution, shall declare the results thereof. The results of the referendum may not be questioned except by a suit or proceeding instituted within thirty days from the date the resolution is adopted.
Section 4-10-750. (A) If the sales and use tax is approved in the referendum, the tax must be imposed by ordinance on the first of July following the date of the referendum. If the certification is not timely made to the Department of Revenue, the imposition and property tax exemption is postponed for twelve months.
(B) If the sales and use tax is not approved in the referendum, the county governing body by ordinance, or fifteen percent of the qualified electors of the county, by an initiated ordinance submitted to the governing body of the county, may provide for a subsequent referendum held in the manner provided pursuant to Section 4-10-740, but such a referendum may be held only at the time of the general election.
Section 4-10-760. (A) Upon petition of at least fifteen percent of the qualified electors of a county presented to the county council of the county which has implemented the sales and use tax authorized by this article requesting that this tax be rescinded, the council shall direct the county election commission to conduct a referendum on the question of rescinding the sales and use tax. A referendum for this purpose must be held on the Tuesday following the first Monday in November following verification of the petition. Two weeks before the referendum the election commission shall publish in a newspaper of general circulation the question that is to appear on the ballot. This notice is in lieu of any other notice otherwise required by law.
(B) The referendum question to be on the ballot must read substantially as follows:
'Must the (rate) sales and use tax imposed in (county) be rescinded with the revenue not collected replaced by extending the property tax for school operations to owner-occupied residential property previously not subject to property tax in this county?
(C)(1) All qualified electors desiring to vote in favor of rescinding the tax shall vote 'Yes' and all qualified electors opposed to rescinding the tax shall vote 'No'. If a majority of the votes cast are in favor of rescinding the tax, the tax is rescinded effective July first following the referendum and property taxes for school operations apply to not otherwise exempt homesteads beginning after the year in which the referendum is held. The election commission shall conduct the referendum under the election laws of this State, mutatis mutandis, and shall certify the result no later than December thirty-first to the county council. If a majority 'Yes' vote is certified, it must be certified to the Department of Revenue by the same date.
(2) Upon receipt of the return of the referendum, the county council shall declare the results thereof by resolution. The results of the referendum may not be questioned except by a suit or proceeding instituted within thirty days from the date the resolution is adopted.
(D) A referendum for rescission of this tax may not be held earlier than two years after the tax has been imposed in the county. If a majority of the qualified electors voting in the rescission referendum vote against rescinding the tax, no further rescission referendums may be held for a period of two years. If a majority of the qualified electors vote in favor of rescinding the tax, the tax may not be reimposed in the county for a period of two years. The petition requesting rescission must be presented to the county governing body at least one hundred twenty days before the Tuesday following the first Monday of November of that year or the referendum must be held on the Tuesday following the first Monday of November of the following year.
Section 4-10-770. (A) The tax levied pursuant to this article must be administered and collected by the Department of Revenue in the same manner that other sales and use taxes are collected. The department may prescribe amounts that may be added to the sales price because of the tax.
(B) The tax authorized by this article is in addition to all other local sales and use taxes and applies to the gross proceeds of sales in the applicable area that is subject to the tax imposed by Chapter 36 of Title 12 and the enforcement provisions of Chapter 54 of Title 12. The gross proceeds of the sale of items subject to a maximum tax in Chapter 36 of Title 12 are exempt from the tax imposed by this article. The tax imposed by this article also applies to tangible personal property subject to the use tax in Article 13, Chapter 36 of Title 12.
(C) Taxpayers required to remit taxes under Article 13, Chapter 36 of Title 12 shall identify the county in which the personal property purchased at retail is stored, used, or consumed in this State.
(D) Utilities shall report sales in the county in which the consumption of the tangible personal property occurs.
(E) A taxpayer subject to the tax imposed by Section 12-36-920, who owns or manages rental units in more than one county, shall report separately in his sales tax return the total gross proceeds from business done in each county.
(F) The gross proceeds of sales of tangible personal property delivered after the imposition date of the tax levied under this article in a county, either under the terms of a construction contract executed before the imposition date, or a written bid submitted before the imposition date, culminating in a construction contract entered into before or after the imposition date, are exempt from the sales and use tax provided for in this article if a verified copy of the contract is filed with the Department of Revenue within six months after the imposition date of the sales and use tax provided for in this article.
(G) Notwithstanding the imposition date of the sales and use tax authorized pursuant to this chapter, with respect to services that are billed regularly on a monthly basis, the sales and use tax authorized pursuant to this article is imposed beginning on the first day of the billing period beginning on or after the imposition date.
Section 4-10-780. (A) The revenues of the tax collected under this article must be remitted to the Department of Revenue and placed on deposit with the State Treasurer and credited to a fund separate and distinct from the general fund of the State. After deducting the amount of any refunds made and costs to the Department of Revenue of administering the tax, not to exceed one percent of the revenues, the State Treasurer shall distribute the revenues quarterly to the county treasurer of the county in which the tax is imposed. The State Treasurer may correct misallocations by adjusting subsequent distributions, but these adjustments must be made in the same fiscal year as the misallocations.
(B) Revenues of the tax must be distributed by the county treasurer to the school districts located in the county. For counties in which there is more than one school district, the county treasurer shall distribute the revenues of the tax either: (1) in direct proportion to the one hundred thirty-five day average daily membership of each of the school districts for the fiscal year immediately preceding that in which a distribution is made, as certified by the State Treasurer, upon advice of the State Department of Education; (2) pursuant to a distribution plan unanimously agreed upon by all school districts within the county; or (3) pursuant to a distribution plan authorized by local legislation. For school districts that are composed of more than one county, the county treasurer shall distribute the revenues of the tax either: (1) to the portion of the school district that resides in the county that has adopted the provisions of this article in proportion to its one hundred thirty-five average daily membership to the remainder of the school district; or (2) pursuant to a distribution plan authorized by agreement of the multiple counties comprising the school district through local legislation. For purposes of this section, the one hundred thirty-five daily membership excludes any student not residing in the county.
Section 4-10-790. The Board of Economic Advisors shall furnish data to the State Treasurer and to the school districts receiving revenues for the purpose of calculating distributions and estimating revenues. The information that must be supplied to school districts upon request includes, but is not limited to, gross receipts, net taxable sales, and tax liability by taxpayers. Information about a specific taxpayer is considered confidential and is governed by the provisions of Section 12-54-240. A person violating this section is subject to the penalties provided in Section 12-54-240.
Section 4-10-800. A school district receiving revenues of the tax authorized pursuant to this article may not impose an annual increase in property tax millage for school operations of more than the average of the percentage increases in the total personal income growth in the State and the school district population growth for each of the three previously completed calendar years for which figures are available from the United States Department of Commerce."
Local Option Capital Projects Taxes
SECTION __. Chapter 10, Title 4 of the 1976 Code is amended by adding:
Local Option Taxes - Bonded Indebtedness Credit
Section 4-10-910. Subject to the referendum approval requirements provided pursuant to Section 4-10-920, the governing body of a county by ordinance shall implement this article by establishing the funds, imposing the taxes, and providing for the use of fund revenues in the manner provided pursuant to this article.
Section 4-10-920. (A) The governing body of the county by ordinance may provide for the implementation in the county of the provisions of this article. Upon receipt of the ordinance, the county election commission shall conduct a referendum at the time of the general election in an even-numbered year on the question of allowing the governing body of the county to implement the provisions of this article. The state election laws apply to the referendum mutatis mutandis. The county election commission shall publish the results of the referendum and certify them to the county council. The taxes, funds, and uses thereof authorized by this article may not be imposed in the county area, unless a majority of the qualified electors voting in the referendum approve the question.
(B) The ballot question must read substantially as follows:
'Do you favor imposing in _______ County a capital projects tax when ownership of residential property is transferred, when a building permit is obtained for new residential property, and when rollback tax is paid on real property changed from agricultural, and allow a credit against this tax when imposed on residential property transfers and residential construction building permits equal to a portion of real property taxes paid by the tax payer in this State in the preceding ten years, and providing that the revenues of these taxes must be used to provide a credit against property taxes imposed to pay bonded indebtedness and for transportation infrastructure in the county?
(C) If the question is not approved at the referendum, the county council may call for another referendum on the question. However, a subsequent referendum for this purpose may be held only at the time of the general election in even-numbered years.
(D) Two weeks before the referendum the county council shall publish in a newspaper of general circulation within the jurisdiction an explanation of the taxes, the credits against the taxes, and the method that the bonded indebtedness property tax credit will apply.
(E) If a favorable vote is certified, the ordinance implementing the funds and taxes may take effect no sooner than January first after certification. If a favorable vote is certified, any implementing ordinance must include both of the funds and all of the taxes provided in this article and the revenues of these taxes may be used only for the purposes provided in this article.
(F) Upon petition of fifteen percent of the qualified electors of a county presented to the governing body of that county requesting the implementation of this article in the county, the county governing body shall cause to be conducted a referendum on the Tuesday following the first Monday in November next following on the question of implementation. State election law, applies to this referendum mutatis mutandis. The question on the ballot must be as provided in subsection (B) of this section. If a favorable vote is certified, the implementation ordinance must include both of the funds and all of the taxes provided in this article and the revenues of the taxes may be used only for the purposes provided in this article. The implementation ordinance may take effect no sooner than January first after certification. If an unfavorable vote is certified, no further implementation referendum, however commenced, may be held for at least two years. The petition requesting implementation must be presented to the county governing body at least one hundred eighty days before the Tuesday after the first Monday of November of that year or the referendum must be held on the Thursday following the first Monday of November of the following year. The provisions of subsection (D) of this section apply with respect to a referendum conducted pursuant to this subsection.
Section 4-10-930. (A) The governing body of the county by ordinance may rescind the taxes allowed pursuant to this article, but this rescission must apply to all taxes imposed pursuant to this article.
(B) Upon petition of fifteen percent of the qualified electors of a county presented to the governing body of that county which has implemented the funds and taxes allowed pursuant to this article, requesting that this implementation be rescinded, the county governing body shall cause to be conducted a referendum on the Tuesday following the first Monday in November next following on the question of rescinding implementation. The state election laws apply to the referendum mutatis mutandis. The county election commission shall publish the results of the referendum and certify them to the county council. The implementation of the provisions of this article must be rescinded in the county area upon the certification of the results if a majority of the qualified electors voting in the referendum vote in favor of rescinding implementation.
(C) The ballot question must read substantially as follows:
'Do you favor rescinding in ________ County the implementation of capital projects taxes and the elimination of the bonded indebtedness property tax credits allowed using the revenue of these taxes?
(D) A referendum for rescission of this tax may not be held earlier than two years after the implementation in the county. If a majority of the qualified electors voting in the rescission referendum vote against rescinding implementation, no further rescission referendums may be held for a period of two years. If a majority of the qualified electors vote in favor of rescinding implementation, implementation may not be reimposed in the county for a period of two years. The petition requesting rescission must be presented to the county governing body at least one hundred twenty days before the Tuesday following the first Monday of November of that year or the referendum must be held on the Tuesday following the first Monday of November of the following year. If a favorable vote is certified, the implementation ceases after December thirty-first following certification.
Section 4-10-940. (A) The governing body of the county by ordinance shall establish in the county treasury a separate trust fund styled the 'Capital Projects Property Tax Credit Trust Fund' to which must be credited those tax revenues as authorized pursuant to this article. Interest earned on this fund must be credited to it and used as other revenues of the fund are used. All of the revenues of this fund for a fiscal year must be used to provide a tax credit against the property tax imposed by the county and all other property-taxing entities in the county for the payment of bonded indebtedness. The credit applies pro rata and the credit is allowed only for property taxes due and payable after the end of the fiscal year in which the fund revenues accumulated.
(B) The governing body of the county by ordinance shall establish in the county treasury a separate trust fund styled the 'Transportation Infrastructure Trust Fund', to which must be credited those tax revenues authorized pursuant to this article. Interest earned on this fund must be credited to it and distributed and used as other revenues credited to the fund are used. The revenues of this fund must be credited to the county in the proportion that the population of the unincorporated area of the county is of the total population of the county and to municipalities in the county in the proportion that the population of the municipality is of the total population of the county. Counties and municipalities must use these revenues for transportation infrastructure needs but to the extent not so used, these revenues must be used to provide an additional tax credit against the property tax imposed by the county or municipality for the payment of bonded indebtedness. The credit applies pro rata and the credit is allowed only for property taxes due and payable after the end of the fiscal year in which the fund revenues accumulated.
(C)(1) For purposes of this subsection:
(a) 'Closing agent' means the attorney or any third party, however qualified, representing the transferee at a real estate closing. When there is no separate closing agent, the transferee is deemed the closing agent.
(b) 'Residential real property' means real property improved by residential structures including, but not limited to, single family and multifamily houses, condominium units, apartments, and units of manufactured housing taxed as real property, whether or not occupied, and regardless of ownership. Incidental residential accommodations on otherwise nonresidential real property do not constitute residential real property.
(2) The governing body of the county by ordinance shall impose on the transferee a capital projects tax when ownership of residential real property is transferred by deed the recording of which is subject to the deed recording tax imposed pursuant to Chapter 24 of Title 12. This capital projects tax must be set by ordinance as a percentage of the consideration for the transaction referred to as the transaction amount, but not more than three-fourths of one percent of that amount. The transaction amount is the amount required to be used in calculating the deed recording tax as determined pursuant to Section 12-24-30. The tax must be collected by the closing agent at the time of the closing and remitted to the county treasurer on a schedule determined by the county treasurer. The county treasurer may delegate the collection of the tax to the officer authorized by law to record deeds in the county. If the residential real property when acquired and occupied by the transferee will qualify for the property tax classification allowed pursuant to Section 12-43-220(c), there is allowed as a credit against the tax otherwise due ad valorem taxes paid by the transferee in the preceding ten years on real property in this State classified for property tax purposes pursuant to Section 12-43-220(c) at the rate of one dollar of credit for each four dollars of property tax paid. A credit is not allowed unless the transferee makes an affidavit, under penalty of perjury, that the property tax paid and used as a credit against the tax has not been used to claim a credit against the tax imposed pursuant to this subsection in another transfer or a tax imposed pursuant to subsection (D) of this section. The tax, less any applicable credit, must be calculated by and collected by the closing agent at the closing. The treasurer shall furnish the closing agent the documentation necessary pursuant to item (4) of this subsection for recording the deed. In a county where collection of the tax has been delegated to the deed recording officer, the tax must be paid at the time the deed is filed for recording. If within twelve months of the date the deed is recorded, real property on which the tax has been paid is no longer residential real property, the transferee may apply for and the county treasurer shall refund the tax, together with interest at the rate provided pursuant to Section 12-54-25.
(3) Of the tax revenues received pursuant to this subsection, the county treasurer shall credit:
(a) seventy-five percent to the Bonded Indebtedness Property Tax Relief Fund established pursuant to subsection (A) of this section; and
(b) twenty-five percent to the Transportation Infrastructure Trust Fund established pursuant to subsection (B) of this section.
(4)(a) Before a deed subject to the recording tax imposed pursuant to Chapter 24 of Title 12 may be recorded, there must be submitted to the recording officer:
(i) the certificate of the county treasurer that the capital projects tax imposed pursuant to subsection (C) of this section has been paid or that a tax is not due by virtue of the credits allowed against the tax; or
(ii) an affidavit made under penalty of perjury by the transferee on the deed to be recorded that the capital projects tax imposed pursuant to subsection (C) of this section does not apply to the transfer made by the deed.
(b) In a county in which the county treasurer has delegated to the recording officer the authority to collect the taxes imposed pursuant to subsection (C) of this section, the recording officer may proceed to record the deed as provided by law upon payment of any tax due or receipt of the affidavit required pursuant to subsubitem (ii) of this item.
(D)(1) The governing body of the county by ordinance shall provide that there must be paid a capital projects tax before a building permit may be issued for construction of a new residential structure as described in subsection (C)(1) of this section. This capital projects tax must be set by ordinance as a percentage of the value of the improvement as measured by the value stated in the application for the building permit, but not more than three-fourths of one percent of such value. This tax applies to all building permits issued in a county, including such permits issued by a municipality. The permitting officer shall collect the tax at the time the permit is issued and remit the tax to the county treasurer on a schedule determined by the treasurer. In the case of a permit for the construction of residential real property that when occupied by the permit holder will qualify for the property tax classification allowed pursuant to Section 12-43-220(c), there is allowed as a credit against the tax otherwise due ad valorem taxes on real property paid by the property owner for the permit in the preceding ten years on real property located in this State classified for property tax purposes pursuant to Section 12-43-220(c) at the rate of one dollar of credit for each four dollars of property tax paid. A credit is not allowed unless the property owner makes an affidavit, under penalty of perjury, that the property tax paid and used as a credit against a tax imposed pursuant to this subsection has not been used to claim a credit against another tax imposed pursuant to this subsection or subsection (C) of this section.
(2) Of the tax revenues received pursuant to this subsection, the county treasurer shall credit:
(a) seventy-five percent to the Bonded Indebtedness Property Tax Relief Fund established pursuant to subsection (A) of this section; and
(b) twenty-five percent to the Transportation Infrastructure Trust Fund established pursuant to subsection (B) of this section.
(E)(1) The governing body of the county by ordinance shall impose a capital projects tax equal to the amount of the rollback tax imposed pursuant to Section 12-43-220(d)(4) when agricultural real property is applied to some other use. This tax must be billed on the property tax notice billing the rollback tax and for all purposes of collection and enforcement, this tax is deemed rollback tax.
(2) Of the tax revenue received pursuant to this subsection, an amount equal to:
(a) seventy-five percent must be credited to the Bonded Indebtedness Property Tax Relief Fund established pursuant to subsection (A) of this section; and
(b) twenty-five percent must be credited to the Transportation Infrastructure Trust Fund established pursuant to subsection (B) of this section."
Severability
SECTION __. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
Effective Dates
SECTION ___. The provisions of Article 9, Chapter 10, Title 4 take effect upon approval of the governor. The provisions of Article 7, Chapter 10, Title 4 take effect upon ratification of an amendment to Article X, Section 3 of the Constitution of this State proposed at the time of the general election of 2006, allowing the exemption provided in Section 4-10-730. If ratification occurs after May 31, 2007, any sales and use tax otherwise scheduled to take effect July 1, 2007, is postponed for twelve months and the homestead exemption is similarly postponed one year. /
Renumber sections to conform.
Amend title to conform.
Senator GROOMS spoke on the amendment.
Senator GROOMS asked unanimous consent to make a motion to take up Amendment P-11 for immediate consideration.
Senator RICHARDSON objected.
Senator GROOMS spoke on the amendment.
Senator KNOTTS raised a Point of Order that the speaker was out of order inasmuch as he was not speaking on an amendment that was before the body.
The PRESIDENT directed the speaker to speak on the amendment under consideration.
Senator SHEHEEN asked unanimous consent to make a motion to take up Amendment P-11 proposed by Senators GROOMS and SHEHEEN for immediate consideration.
Senator KNOTTS objected.
Senator GROOMS spoke on the amendment.
On motion of Senator MARTIN, with unanimous consent, Amendment No. P-11 was taken up for immediate consideration.
Senators GROOMS and SHEHEEN proposed the following Amendment No. P-11 (4449R019.LKG), which was tabled:
Amend the committee amendment, as and if amended, by striking the amendment and inserting:
// Amend bill, as and if amended, by striking all after the enacting words and inserting:
/ SECTION 1. Chapter 36, Title 12 of the 1976 Code is amended by adding:
Additional Sales, Use, and Casual Excise Tax
Section 12-36-1110. An additional sales, use, and casual excise tax equal to two percent is imposed on amounts taxable pursuant to this chapter. The revenue collected pursuant this section must be credited to the School Trust Fund established pursuant to Section 11-11-155."
SECTION 2. Section 12-24-10 of the 1976 Code is amended to read:
"Section 12-24-10. (A) In addition to all other recording fees, a recording fee is imposed for the privilege of recording a deed in which any lands and all improvements on the land, tenements, or other realty is transferred to another person. The fee is one-dollar eighty-five cents for each five hundred dollars, or fractional part of five hundred dollars, of the realty's value as determined by Section 12-24-30.
(B) In addition to all other recording fees and in addition to the fee described in subsection (A), there is imposed a recording fee for the privilege of recording a deed in which any lands and all improvements on the land, tenements, or other realty is transferred to another person. The additional fee is one dollar eighty-five cents for each five hundred dollars, or fractional part of five hundred dollars of the realty's value as determined by Section 12-24-30. Notwithstanding another provision of this chapter to the contrary, this additional recording fee imposed in this subsection must be deposited in the School Trust Fund established by Section 11-11-155."
SECTION 3. Article 1, Chapter 37, Title 12 of the 1976 Code is amended by adding:
"Section 12-37-130. (A) In addition to all other property taxes imposed by law, there is imposed on all taxable property for every property tax year, a property tax at the rate of seventy-five mills. The revenue of this additional property tax must be remitted to the State Treasurer on the schedule and in the manner he directs and credited to the School Trust Fund established pursuant to Section 11-11-155. This additional property tax does not apply to residential real property described in Section 12-43-220(c).
(B) To the extent the millage imposed pursuant to subsection (A) of this section exceeds the millage imposed in a school district for school operations for fiscal year 2005-2006, there is allowed as a credit against the tax attributable to this millage an amount equal to the tax attributable to the difference in the millage rates."
SECTION 4. Article 17, Chapter 21, Title 12 of the 1976 Code is amended by adding:
"Section 12-21-2425. In addition to the license tax on admissions imposed pursuant to Section 12-21-2420, there is an additional license tax of two percent imposed upon admissions. The additional license tax imposed by this section must be reported, paid, collected, and enforced in the same manner as the license tax imposed pursuant to Section 12-21-2420. The revenue collected pursuant to this section must be credited to the School Trust Fund established pursuant to Section 11-11-155."
SECTION 5. Section 12-37-450 of the 1976 Code is amended to read:
"Counties and municipalities School districts must be reimbursed for the revenue lost by counties and municipalities as a result of the business inventory tax exemption based on the 1987 tax year millage and 1987 tax year assessed value of inventories in the counties and municipalities. If an amount of reimbursement to a political subdivision within a county is attributable to a separate millage for debt service for any purpose, when that debt is paid, the appropriate reimbursement amount must be redistributed proportionately to the other separate millages levied by the political subdivision within the county for the 1987 tax year. There is credited annually as provided in Section 11-11-150 to the School Trust Fund for Tax Relief ,established pursuant to Section 11-11-155, whatever amount is necessary to reimburse school districts fully all for the revenue lost by counties and municipalities the required amount. The Comptroller General shall make remittances of this reimbursement to school districts as provided in Section 11-11-155 counties and municipalities in four equal payments.
Notwithstanding any other provision of law, business inventory exempted from property taxation in the manner provided in this section is considered taxable property in an amount equal to the 1987 tax year assessed valuation for purposes of bonded indebtedness pursuant to Sections 14 and 15 of Article X of the Constitution of this State and for purposes of computing the "index of taxpaying ability" pursuant to item (3) of Section 59-20-20.
Where a portion of a special purpose district is annexed to a municipality, and its service functions in the annexed area are assumed by the municipality, the total amount remitted to the county and municipality under this section shall not exceed the total amount which would be remitted to the two entities separately. However, the assessed valuation and special purpose district tax levy for tax year 1987 with respect to the annexed portion of the special purpose district must be taken into consideration in determining the proportionate share of the total allocation due to the county and the municipality."
SECTION 6. Section 12-37-935(B) of the 1976 Code is amended to read:
"(B) Annually as provided in Section 11-11-150, there is credited to the School Trust Fund for Tax Relief ,established pursuant to Section 11-11-155, an amount sufficient to reimburse school districts for all local taxing entities the amount of revenue not collected by local taxing entities as a result of the additional depreciation more than eighty percent allowed for manufacturer's machinery and equipment pursuant to this section. No reimbursement is allowed for any depreciation allowed in connection with custom molds and dies used in the conduct of manufacturing electronic interconnection component assembly devices for computers and computer peripherals and equipment used in the manufacture of tires by manufacturers who employ more than five thousand employees in this State and have over one billion dollars in capital investment in this State. Reimbursements must be paid from the fund in the manner provided in Section 11-11-155 12-37-270, mutatis mutandis."
SECTION 7. Section 11-11-150(A) of the 1976 Code is amended to read:
"(A) In calculating estimated state individual and corporate income tax revenues for a fiscal year the Board of Economic Advisors shall deduct amounts sufficient to pay the reimbursement required pursuant to:
(1) Section 12-37-251 for the residential property tax exemption;
(2) Section 12-37-270 for the homestead exemption for persons over age sixty-five or disabled;
(3) Section 12-37-935(B) for manufacturer's additional depreciation;
(4) Section 12-37-450 for the inventory tax exemption; and
(3 5) Section 4-10-540(A) for the reimbursement provided for personal property taxes not collected on private passenger motor vehicles, motorcycles, general aviation aircraft, boats, and boat motors."
SECTION 8. Items (14) and (26) of Section 12-36-2120 of the 1976 Code are amended to read:
"(14) [Reserved]wrapping paper, wrapping twine, paper bags, and containers, used incident to the sale and delivery of tangible personal property;
(26) [Reserved]all supplies, technical equipment, machinery, and electricity sold to radio and television stations, and cable television systems, for use in producing, broadcasting, or distributing programs. For the purpose of this exemption, radio stations, television stations, and cable television systems are deemed to be manufacturers;"
SECTION 9. Chapter 11, Title 11 of the 1976 Code is amended by adding:
"Section 11-11-155. (A) For each fiscal year, the revenue from the tax imposed pursuant to Section 12-36-1110, the revenue derived from the additional deed transfer fee imposed pursuant to Section 12-24-10(B), the revenue of the property tax imposed pursuant to Section 12-37-130, the additional tax on admissions imposed pursuant to Section 12-21-2425, the amount credited pursuant to Sections 12-37-450 and 12-37-935(B), and all estimated additional sales, use, and casual excise tax revenue collected as a result of tax exemptions and tax caps deleted, revised, or repealed effective July 1, 2006, as determined by the Board of Economic Advisors, are automatically credited to a fund separate and distinct from the state general fund known as the 'School Tax Millage Exemption Trust Fund' (the School Trust Fund). Notwithstanding the provisions of Section 59-21-1010(A), the amount that would be credited to the general fund must be credited to the School Trust Fund. Notwithstanding the provisions of Section 59-21-1010(B), the amount that would be credited to the Education Improvement Act Fund must be credited to the School Trust Fund. The Board of Economic Advisors shall account for the School Trust 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.
(B) An unexpended balance in the School Trust Fund at the end of a fiscal year must remain in the School Trust Fund.
(C) Earnings on the School Trust Fund must be credited to the School Trust Fund.
(D) Nothing in this section prohibits appropriations by the General Assembly of additional revenues to the School Trust Fund.
(E) The School Trust Fund must only be used for the purposes provided in Sections 12-6-3335 and 12-37-253."
SECTION 10. Article 25, Chapter 6 of the 1976 Code is amended by adding:
"Section 12-6- 3335. (A) As used in this section:
(1) 'Adjusted gross income' means adjusted gross income for federal income tax purposes reported by a property taxpayer in a taxable year to which must be added such income of other individuals in the household if not included in the federal adjusted gross income of the property taxpayer.
(2) 'Household' means the taxpayer's spouse and any dependent over the age of eighteen residing with the taxpayer in the residence.
(3) 'Residence' means residential real property classified for property tax purposes pursuant to Section 12-43-220(c).
(B) There is allowed as a credit against the tax imposed pursuant to Section 12-6-510 on a resident individual taxpayer a sum equal to the amount by which property tax paid during the taxable year by the taxpayer on the taxpayer's residence exceeds five percent of the taxpayer's adjusted gross income as defined in subsection (A)(1) of this section. After all other applicable credits have been applied, if the credit allowed pursuant to this section exceeds the state individual income tax liability of the claimant, the difference must be refunded to the claimant.
(C) A copy of the treasurer's receipt for the property tax paid must accompany the claim for the credit allowed pursuant to this section, together with other information the department may require for the proper administration of this credit.
(D) If a resident individual taxpayer or member of that taxpayer's household is not required to file a federal and South Carolina individual income tax return, the department shall prescribe abbreviated forms for the calculation of adjusted gross income which may be used by the claimant to claim the credit allowed by this section, and these separate forms are considered state individual income tax returns for all purposes.
(E) Regardless of the amount of property taxes paid or number of residences occupied by a claimant during the applicable taxable year, the credit allowed pursuant to this section only extends to property taxes paid on one residence.
(F) The credit allowed by this section must be funded by the School Trust Fund established pursuant to Section 11-11-155."
SECTION 11. Section 12-36-910 of the 1976 Code is amended by adding a new subsection at the end to read:
"(D) Notwithstanding the rate of the tax imposed pursuant to subsection (A) of this section or the rate of any other sales tax imposed pursuant to this chapter and the rate of any use tax imposed pursuant to this chapter, the sales and use tax on the gross proceeds of sales or sales price of unprepared food, which lawfully can be purchased with United States Department of Agriculture food coupons, is five percent."
SECTION 12. Chapter 37 of Title 12 of the 1976 Code is amended by adding:
"Section 12-37-253. (A) The fair market value of all property classified pursuant to Section 12-43-220 is exempt from taxes imposed for school operating purposes. In the case of real property classified pursuant to Section 12-43-220(c), any remaining fair market value, after the exemption allowed pursuant to Section 12-37-250 and Section 12-37-251 is applied, otherwise subject to tax is exempt from all taxes imposed for school operating purposes. This section does not exempt the fair market value of property classified pursuant to Section 12-43-220 for taxes imposed for:
(1) bonded indebtedness for capital construction;
(2) to make payments pursuant to a lease purchase agreement or other financing instrument for capital construction; and
(3) county and municipal operations.
(B) School districts must be reimbursed monthly from revenues credited to the School Trust Fund established pursuant to Section 11-11-155 for a fiscal year for revenue not received because of the exemptions allowed by this section. Reimbursements must be remitted to each school district based on the district's portion of the total weighted per pupil population for all districts based on the following weights:
(1) Kindergarten 1.30
(2) Primary 1.24
(3) Elementary 1.00
(4) High school 1.25
(5) Trainable Mentally Handicapped 2.04
(6) Speech Handicapped 1.90
(7) Homebound 2.10
(8) Emotionally Handicapped 2.04
(9) Educable Mentally Handicapped 1.74
(10) Learning Disabilities 1.74
(11) Hearing Handicapped 2.57
(12) Visually Handicapped 2.57
(13) Orthopedically Handicapped 2.04
(14) Vocational (Grades 9-12) 1.29
(15) Autism 2.57
(16) Qualify for Free or Reduced Lunch or Medicaid 1.30
The weighted per pupil population for each district must be determined by multiplying the average daily membership for each classification by the weight assigned to that classification and adding the totals for each classification.
(C) Notwithstanding any other provision of law, property exempted from property taxation in the manner provided in this section is considered taxable property for purposes of bonded indebtedness pursuant to Sections 14 and 15 of Article X of the Constitution of this State and for purposes of computing the 'index of taxpaying ability' pursuant to Section 59-20-20(3).
(D) The exemption provided by this section applies for property taxes imposed by any property taxing entity if the revenues of taxes imposed by the entity are used directly or indirectly for school operations. Except, a property taxing entity may levy property taxes for school operations to compensate for the difference for any year that the property taxing entity would receive less revenue for school operations pursuant to this section than the property taxing entity collected in property tax year 2006 adjusted annually by a factor equal to the growth in the amount of annual revenue over the prior year credited to the School Trust Fund as determined by the Board of Economic Advisors. Any property tax levied pursuant to this subsection must not be levied against residential real property described in Section 12-43-220(c).
(E) In a county area in which is imposed the local option sales tax (LOST) pursuant to Article 1, Chapter 10 of Title 4 on or after July 1, 2005, where the credits allowed pursuant to that article exceed the property tax to which the credit applies, then the excess credit is deemed a distribution from the LOST County/Municipal Revenue Fund."
SECTION 13. This act takes effect January 1, 2007. For purposes of the tax exemption allowed and property tax imposed pursuant to Sections 12-37-253 and 12-37-130 of the 1976 Code as added by this act, apply for property tax years beginning after 2006 and motor vehicle tax years beginning after June 30, 2007. The income tax credit provided by Section 12-6-3335 applies beginning with tax year 2006./ //
Renumber sections to conform.
Amend title to conform.
Senator GROOMS explained the amendment.
On motion of Senator McCONNELL, with unanimous consent, Senators KNOTTS and FORD were granted leave to attend a meeting and be granted sufficient time in which to respond to any roll call votes.
Senator GROOMS explained the amendment.
Senator MARTIN spoke on the amendment.
Senator MARTIN moved to lay the amendment on the table.
The "ayes" and "nays" were demanded and taken, resulting as follows:
Alexander Courson Drummond Elliott Gregory Hayes Knotts Leatherman * Leventis Lourie Martin Mescher Patterson Peeler Rankin Ritchie Setzler Thomas
Anderson Bryant Campsen Cleary Cromer Fair Ford Grooms Hawkins Hutto Jackson Land Malloy Matthews McConnell McGill Moore O'Dell Reese Richardson Ryberg Scott Sheheen Short Verdin Williams
*This Senator was not present in the Chamber at the time the vote was taken and the vote was recorded by leave of the Senate, with unanimous consent.
The Senate refused to table the amendment. The question then was the adoption of the amendment.
Senator MARTIN spoke on the amendment.
At 4:49 P.M., Senator McCONNELL assumed the Chair.
Senator MARTIN spoke on the amendment.
Senator MARTIN moved to lay the amendment on the table.
The "ayes" and "nays" were demanded and taken, resulting as follows:
Alexander Anderson Courson Cromer Drummond Elliott Ford Gregory Hawkins Hayes Jackson Knotts Leatherman * Leventis Lourie Martin McGill Mescher O'Dell Patterson Peeler Rankin Richardson Ritchie Setzler Thomas
Bryant Campsen Cleary Fair Grooms Hutto Land Malloy Matthews McConnell Moore Pinckney Reese Ryberg Scott Sheheen Short Verdin Williams
*This Senator was not present in the Chamber at the time the vote was taken and the vote was recorded by leave of the Senate, with unanimous consent.
The amendment was laid on the table.
I voted against the GROOMS amendment for three reasons.
First, the amendment imposed a statewide property tax on business and industry. In the future, it would be the South Carolina Legislature that would be lobbied to increase that millage to bring in more money for school operations. We would have created a statewide school district whose funding source for future increases, above increases in the sales tax, would fall on the shoulders of a part of the business community.
Second, the GROOMS amendment takes all of the EFA (four cents of sales tax), all of the EIA (one cent of sales tax), the two new cents of sales tax plus, and other sources of revenue (statewide tax on property belonging to business and industry), totaling over five billion dollars, and transfers it to local school districts in place of the current operating system funded by ad valorem tax. I did not have enough information to know the effect of a shut down of the statewide EFA and EIA and the transfer to local school districts of that new responsibility. Local school districts might very well say that their "new" funding source is not enough to cover the new obligations to fund the functions of the EIA and the EFA.
Third, I voted to table because the amendment also relied on a property transfer fee. The fee increase would be built into mortgages and the end result would be substantially more money being paid by property buyers.
Senator MARTIN asked unanimous consent to make a motion to substitute Amendment P-4C for Amendment P-4B.
There was no objection and Amendment No. P-4C was taken up for immediate consideration.
Senators CAMPSEN, RITCHIE, McCONNELL, THOMAS, GROOMS, SCOTT, BRYANT, RYBERG, RICHARDSON, GREGORY, FORD, CLEARY, CROMER, PEELER, COURSON, MARTIN, LAND, WILLIAMS, ALEXANDER, FAIR, MESCHER, HAWKINS, KNOTTS, RANKIN, JACKSON and O'DELL proposed the following Amendment No. P-4C (JUD4449.031):
Amend the FINANCE COMMITTEE REPORT/AMENDMENT, as and if amended, page [4449-8], by adding appropriately numbered PARTS and SECTIONS to read:
SECTION ___. Chapter 10, Title 4 of the 1976 Code is amended by adding:
LOCAL OPTION SALES AND USE TAX
FOR LOCAL PROPERTY TAX EXEMPTION
Section 4-10-710. Notwithstanding any other provision of law, this article provides the only method in which the governing body of a county by an ordinance imposing the tax authorized pursuant to this article thereby exempts homesteads, business personal property, and other personal property from property taxes imposed in the county for school operations.
Section 4-10-720. As used in this article:
(1) 'Business personal property' and 'other personal property' means all other personal property taxed pursuant to Section 12-43-220(f), not including vehicles assessed for property tax pursuant to Article X, Section 1(8)(B) of the Constitution of this State.
(2) 'County' has the meaning provided for in 'county area' as defined in Section 4-10-10(1).
(3) 'Homestead' means residential real property eligible for the four percent assessment ratio allowed pursuant to Section 12-43-220(c).
Section 4-10-730. (A) Subject to the requirements of this article, the governing body of the county by a county council ordinance or by an initiated ordinance submitted to the governing body of the county by a petition signed by qualified electors of the county, equal in number to at least seven percent of the qualified electors of the county, may impose a sales and use tax in increments of one-tenth of one percent, subject to referendum approval. The ordinance or the petition initiating an ordinance must be presented to the county governing body at least one hundred twenty days before the Tuesday following the first Monday of November of that year. The rate of the tax must be set at an amount expressed in tenths of one percent estimated to be sufficient to produce revenues that do not exceed those necessary to replace property tax revenue in the county for school operations on homesteads, business personal property, and other personal property in the most recently completed fiscal year and must take into account payments to school districts pursuant to the exemption allowed pursuant to Sections 12-37-250 and 12-37-251. The governing body of the county shall obtain from the Board of Economic Advisors the board's certified estimate of the rate of sales and use tax necessary in the county to equal school operating property tax revenues derived from homesteads, business personal property, and other personal property. This certified rate is the rate of tax that must appear in the referendum question.
(B) If the sales and use tax authorized pursuant to this article is imposed in a county, then to the extent not already exempt, one hundred percent of the assessed value of a homestead, business personal property, and other personal property in the county is exempt from all property taxes imposed for school operations.
Section 4-10-740. (A) Upon receipt of the ordinance, the county election commission shall conduct a referendum on the question of imposing the sales and use tax. A referendum for this purpose must be held at the time of the general election. Two weeks before the referendum, the election commission shall publish in a newspaper of general circulation the question that is to appear on the ballot. This notice is in lieu of any other notice otherwise required by law.
(B) The referendum question to be on the ballot must read substantially as follows:
'Must a (rate) sales and use tax be imposed in (county) to replace property tax revenues not collected because of a one hundred percent property tax exemption for owner-occupied residential property, business personal property, and other personal property from property taxes imposed for school operations?
(C) All qualified electors desiring to vote in favor of imposing the tax shall vote 'Yes' and all qualified electors opposed to imposing the tax shall vote 'No'. If a majority of the votes cast are in favor of imposing the tax, the tax is imposed as provided in this article, and beginning after the fiscal year in which the referendum is held, all homesteads, business personal property, and other personal property otherwise taxable in the county are exempt from property taxes imposed in the county for school operations. The election commission shall conduct the referendum under the election laws of this State, mutatis mutandis, and shall certify the results no later than December thirty-first to the county governing body and to the Department of Revenue.
(D) Upon receipt of the returns of the referendum, the county council, by resolution, shall declare the results thereof. The results of the referendum may not be questioned except by a suit or proceeding instituted within thirty days from the date the resolution is adopted.
Section 4-10-750. (A) If the sales and use tax is approved in the referendum, the tax must be imposed by ordinance on the first of July following the date of the referendum. If the certification is not timely made to the Department of Revenue, the imposition and property tax exemption is postponed for twelve months.
(B) If the sales and use tax is not approved in the referendum, the county governing body by ordinance, or seven percent of the qualified electors of the county, by an initiated ordinance submitted to the governing body of the county, may provide for a subsequent referendum held in the manner provided pursuant to Section 4-10-740, but such a referendum may be held only at the time of the general election.
Section 4-10-760. (A) Upon petition of at least seven percent of the qualified electors of a county presented to the county council of the county which has implemented the sales and use tax authorized by this article requesting that this tax be rescinded, the council shall direct the county election commission to conduct a referendum on the question of rescinding the sales and use tax. A referendum for this purpose must be held on the Tuesday following the first Monday in November following verification of the petition. Two weeks before the referendum, the election commission shall publish in a newspaper of general circulation the question that is to appear on the ballot. This notice is in lieu of any other notice otherwise required by law.
(B) The referendum question to be on the ballot must read substantially as follows:
'Must the (rate) sales and use tax imposed in (county) be rescinded with the revenue not collected replaced by extending the property tax for school operations to owner-occupied residential property, business personal property, and other personal property previously not subject to property tax in this county?
(C)(1) All qualified electors desiring to vote in favor of rescinding the tax shall vote 'Yes' and all qualified electors opposed to rescinding the tax shall vote 'No'. If a majority of the votes cast are in favor of rescinding the tax, the tax is rescinded effective July first following the referendum and property taxes for school operations apply to not otherwise exempt homesteads, business personal property, and other personal property beginning after the year in which the referendum is held. The election commission shall conduct the referendum under the election laws of this State, mutatis mutandis, and shall certify the result no later than December thirty-first to the county council. If a majority 'Yes' vote is certified, it must be certified to the Department of Revenue by the same date.
(2) Upon receipt of the return of the referendum, the county council shall declare the results thereof by resolution. The results of the referendum may not be questioned except by a suit or proceeding instituted within thirty days from the date the resolution is adopted.
(D) A referendum for rescission of this tax may not be held earlier than two years after the tax has been imposed in the county. If a majority of the qualified electors voting in the rescission referendum vote against rescinding the tax, no further rescission referendums may be held for a period of two years. If a majority of the qualified electors vote in favor of rescinding the tax, the tax may not be reimposed in the county for a period of two years. The petition requesting rescission must be presented to the county governing body at least one hundred twenty days before the Tuesday following the first Monday of November of that year or the referendum must be held on the Tuesday following the first Monday of November of the following year.
Section 4-10-770. (A) The tax levied pursuant to this article must be administered and collected by the Department of Revenue in the same manner that other sales and use taxes are collected. The department may prescribe amounts that may be added to the sales price because of the tax.
(B) The tax authorized by this article is in addition to all other local sales and use taxes and applies to the gross proceeds of sales in the applicable area that is subject to the tax imposed by Chapter 36 of Title 12 and the enforcement provisions of Chapter 54 of Title 12. The gross proceeds of the sale of items subject to a maximum tax in Chapter 36 of Title 12 are exempt from the tax imposed by this article. The tax imposed by this article also applies to tangible personal property subject to the use tax in Article 13, Chapter 36 of Title 12.
(C) Taxpayers required to remit taxes under Article 13, Chapter 36 of Title 12 shall identify the county in which the personal property purchased at retail is stored, used, or consumed in this State.
(D) Utilities shall report sales in the county in which the consumption of the tangible personal property occurs.
(E) A taxpayer subject to the tax imposed by Section 12-36-920, who owns or manages rental units in more than one county, shall report separately in his sales tax return the total gross proceeds from business done in each county.
(F) The gross proceeds of sales of tangible personal property delivered after the imposition date of the tax levied under this article in a county, either under the terms of a construction contract executed before the imposition date, or a written bid submitted before the imposition date, culminating in a construction contract entered into before or after the imposition date, are exempt from the sales and use tax provided for in this article if a verified copy of the contract is filed with the Department of Revenue within six months after the imposition date of the sales and use tax provided for in this article.
(G) Notwithstanding the imposition date of the sales and use tax authorized pursuant to this chapter, with respect to services that are billed regularly on a monthly basis, the sales and use tax authorized pursuant to this article is imposed beginning on the first day of the billing period beginning on or after the imposition date.
Section 4-10-780. (A) The revenues of the tax collected under this article must be remitted to the Department of Revenue and placed on deposit with the State Treasurer and credited to a fund separate and distinct from the general fund of the State. After deducting the amount of any refunds made and costs to the Department of Revenue of administering the tax, not to exceed one percent of the revenues, the State Treasurer shall distribute the revenues quarterly to the county treasurer of the county in which the tax is imposed. The State Treasurer may correct misallocations by adjusting subsequent distributions, but these adjustments must be made in the same fiscal year as the misallocations.
(B) Revenues of the tax collected and deposited pursuant to subsection (A) of this section must be distributed by the county treasurer to the school districts located in the county. For counties in which there is more than one school district, the county treasurer shall distribute the revenues of the tax either: (1) in direct proportion to the one hundred thirty-five day average daily membership as referenced in Section 59-20-40(1)(a) for each of the school districts for the fiscal year immediately preceding that in which a distribution is made, as certified by the State Treasurer, upon advice of the State Department of Education; (2) pursuant to a distribution plan unanimously agreed upon by all school districts within the county; or (3) pursuant to a distribution plan authorized by local legislation. For school districts that are composed of more than one county, the county treasurer shall distribute the revenues of the tax either: (1) to the portion of the school district that resides in the county that has adopted the provisions of this article in proportion to its one hundred thirty-five average daily membership as referenced in Section 59-20-40(1)(a) to the remainder of the school district; or (2) pursuant to a distribution plan authorized by agreement of the multiple counties comprising the school district through local legislation. For purposes of this section, the one hundred thirty-five average daily membership as referenced in Section 59-20-40(1)(a) excludes any student not residing in the county.
Section 4-10-790. The Board of Economic Advisors shall furnish data to the State Treasurer and to the school districts receiving revenues for the purpose of calculating distributions and estimating revenues. The information that must be supplied to school districts upon request includes, but is not limited to, gross receipts, net taxable sales, and tax liability by taxpayers. Information about a specific taxpayer is considered confidential and is governed by the provisions of Section 12-54-240. A person violating this section is subject to the penalties provided in Section 12-54-240.
Section 4-10-800. Notwithstanding any other provision of law, a school district receiving revenues of the tax authorized pursuant to this article must not impose an annual increase in property tax millage for school operations in an amount of more than the percentage increase of the average daily membership of a school district as referenced in Section 59-20-40(1)(a) from the preceding year, plus an amount equal to the percentage increase of the Southeastern Consumer Price Index, All Urban Consumers, as published by the Department of Labor, Bureau of Labor Statistics, from the previous fiscal year. Violations of this provision must result in the State Treasurer withholding the funding provided by the Education Finance Act during the fiscal year in which such violation occurs, in an amount not to exceed one hundred fifty percent of the amount of excess revenues collected due to the violation.
Section 4-10-810 The gross proceeds of the sales and use tax collected pursuant to Article 7, Chapter 10, Title 4 shall be considered, pursuant to the requirements of Section 59-21-1030, one of the local revenues used in computation of the required Education Improvement Act maintenance of local effort.
Section 4-10-820. (1) There is established in the county treasury the School District Property Tax Relief Fund Reserve (reserve) as a fund separate and distinct from all other funds. In each school district's fiscal year, the revenues generated by a sales and use tax pursuant to Article 7, Chapter 10, Title 4 above the amount required for school operations for the school district's fiscal year must be credited to the reserve. Balances in the reserve at the end of a fiscal year remain in this reserve. If actual revenues of the sales and use tax imposed pursuant to Article 7, Chapter 10, Title 4 in a fiscal year are less than the amount required for school operations for the school district's fiscal year, then the county treasurer must apply so much of the reserve as is necessary or available to offset the deficit, with any balance paid from the reserve.
(2) In the event that the monies in a school district's reserve fund equal or exceed fifty percent of the amount of sales and use tax required for school operations for a school district's fiscal year, the county treasurer is authorized to distribute to the school district the excess accumulated over the fifty percent amount whether or not a deficit has occurred or whether or not this exceeds the millage limitations.
(3) Earnings on the school district's reserve must be credited to the reserve."
SECTION ___. A. Chapter 36, Title 12 of the 1976 Code is amended by adding:
ADDITIONAL SALES, USE, AND CASUAL EXCISE TAX
Section 12-36-1110. A. Beginning June 1, 2006, an additional sales, use, and casual excise tax equal to one-quarter of one percent is imposed on amounts taxable pursuant to this chapter, except that this additional one-quarter of one percent tax does not apply to:
(1) amounts taxed pursuant to Section 12-36-920, the tax on accommodations for transients;
(2) items subject to a maximum sales and use tax pursuant to Section 12-36-2110; and
(3) unprepared food which lawfully may be purchased with United States Department of Agriculture food coupons.
Section 12-36-1120. Notwithstanding any other provision of law providing for the crediting and use of sales and use tax revenue, the revenue of the tax imposed by this article must be credited to the State Property Tax Relief 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. 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 __. Chapter 11, Title 11 of the 1976 Code is amended by adding:
"Section 11-11-155. (A) Except as provided pursuant to subsection (B) of this section, the revenue from the tax imposed pursuant to Section 12-36-1110 and an annual amount equal to the actual amount credited to the Trust Fund for Tax Relief in Fiscal Year 2005-2006 pursuant to the provisions of Section 12-37-251 (the residential exemption amount) is automatically credited to a fund separate and distinct from the general fund of the State and all other funds known as the 'State Property Tax Credit Fund'. The residential exemption amount must be deducted from the annual estimate of the Board of Economic Advisors of state individual and corporate tax revenues for the fiscal year. The Board of Economic Advisors shall account for the State Property Tax Credit Fund revenue separately from general fund revenues, and the board shall include estimates of the receipts in its November estimate and subsequent estimates through the board's February estimate and these estimates must be transmitted to the State Treasurer, the Comptroller General, the Chairmen of the House Ways and Means Committee and the Senate Finance Committee.
(B) Of the revenue estimated to be credited to the State Property Tax Credit Fund in a fiscal year, all of the revenue of the tax imposed pursuant to Section 12-36-1110 must be used to reimburse the general fund of the State for the income tax credits allowed pursuant to Section 12-6-3335 and Section 12-6-3337."
SECTION ___. Article 25, Chapter 6, Title 12 of the 1976 Code is amended by adding:
"Section 12-6- 3335. (A) As used in this section:
(1) 'Adjusted gross income' means adjusted gross income for federal income tax purposes reported by a property taxpayer in a taxable year to which must be added such income of other individuals in the household if not included in the federal adjusted gross income of the property taxpayer.
(2) 'Household' means the taxpayer's spouse and any other individual residing with the taxpayer in the residence, not including an individual claimed or eligible to be claimed as a dependant on the taxpayer's federal income tax return.
(3) 'Median household income' means South Carolina median household income as calculated by the Board of Economic Advisors for the most recent calendar year for which this datum is available for the normal preparation cycle of tax returns forms by the Department of Revenue as certified by the board to the Department of Revenue.
(4) 'Residence' means residential real property classified for property tax purposes pursuant to Section 12-43-220(c).
(B)(1) There is allowed as a credit against the tax imposed pursuant to Section 12-6-510 on a resident individual taxpayer a sum equal to the amount by which property tax paid during the taxable year by the taxpayer on the taxpayer's residence exceeds five percent of the taxpayer's adjusted gross income as defined in subsection (A)(1) of this section subject to the limitation provided in item (2) of this subsection. After all other applicable credits have been applied, if the credit allowed pursuant to this section exceeds the state individual income tax liability of the claimant, the difference must be refunded to the claimant.
(2) If adjusted gross income exceeds median household income, an amount equal to the percentage of the credit attributable to the excess is multiplied by fifty percent and that product is subtracted from the credit otherwise allowed.
(C) A copy of the treasurer's receipt for the property tax paid must accompany the claim for the credit allowed pursuant to this section, together with other information the department may require for the proper administration of this credit.
(D) If a resident individual taxpayer or member of that taxpayer's household is not required to file a federal and South Carolina individual income tax return, the department shall prescribe abbreviated forms for the calculation of adjusted gross income which may be used by the claimant to claim the credit allowed by this section, and these separate forms are considered state individual income tax returns for all purposes.
(E) Regardless of the amount of property taxes paid or number of residences occupied by a claimant during the applicable taxable year, the credit allowed pursuant to this section only extends to property taxes paid on one residence."
SECTION ____. A. Article 25, Chapter 6, Title 12 of the 1976 Code is amended by adding:
"Section 12-6-3337. (A) There is allowed as a credit against the tax imposed pursuant to this chapter on a taxpayer an amount equal to four percent of the property tax paid during the taxable year by the taxpayer on real property in this State assessed for property tax purposes pursuant to Section 12-43-220(e). Unused credit may be carried forward to the five succeeding taxable years.
(B) A copy of the treasurer's receipt for the property tax paid must accompany the claim for the credit allowed pursuant to this section, together with other information the department may require for the proper administration of this credit."
B. Section 12-6-3337 of the 1976 Code, as added by this section, applies for property tax years beginning after 2005.
SECTION ______. 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 that 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 ___. A. Section 12-45-75 of the 1976 Code is amended to read:
"Section 12-45-75. (A)(1) The governing body of a county may by ordinance must allow a each taxpayer owning a parcel of taxable real property within the county the option to elect to pay property taxes in installments as provided in this section. pay all ad valorem taxes on real property located in the county in quarterly or monthly installments. An installment election is not allowed for taxes paid through an escrow account.
(2) The ordinance must specify the installment due dates and it may provide for installments due and payable before January fifteenth, but the final installment due date must be January fifteenth. The ordinance may provide for a service charge of not more than two dollars on installment payments. For purposes of payment and collection, these service charges are deemed property taxes. The ordinance may not provide penalties for late installments. A taxpayer electing to pay ad valorem taxes in installments or electing to opt out of paying in installments, must notify the county treasurer in writing no later than January fifteenth of the tax year for which the installment payments are applicable, and no earlier than December first of the preceding tax year. If the treasurer does not receive written notification from December first to January fifteenth, the taxpayer must pay ad valorem taxes in the same manner as the previous taxable year.
(3) The treasurer must notify the county auditor and county assessor of each taxpayer electing the installment payment option or electing to opt out of paying in installments. If the county assessor determines the property has diminished in value, an estimated property tax obligation must be adjusted to reflect the reduced value. Upon being notified of an adjustment for reduced value from the assessor, the county treasurer must notify the property owner of the adjusted estimated property tax obligation.
(B) The governing body of a county may by ordinance provide a discount in all ad valorem taxes on real property located in the county paid in advance of the January fifteenth due date. The ordinance may provide a range of discounts that vary according to the length of the prepayment period. An installment payment is based on the total property tax due for the previous property tax year, after applying all applicable credits and adjustments reflecting reduced value as determined by the county assessor. An amount equal to sixteen and two-thirds percent of the estimated property tax obligation must be paid to the county treasurer in each of five installments according to the following schedule:
In the case of the following estimates, the due date is on or before:
First February 15
Second April 15
Third June 15
Fourth August 15
Fifth October 15
The remaining balance is due on or before January fifteenth of the following taxable year in accordance with Section 12-45-70. The treasurer must notify the county auditor of the amount of a property owner's payments received no earlier than October fifteenth and no later than November fifteenth. A notice of the remaining tax due and other authorized charges and information must then be prepared and mailed to the property owner.
(C) If a taxpayer electing to pay in installments does not timely make each payment pursuant to the schedule in subsection (B), the county may refuse to accept all other installment payments. If the county refuses to accept other installment payments, the remaining balance is due in accordance with Section 12-45-70.
(D) Estimated property taxes paid in installments during a property tax year are a credit against the total property tax due on the real property for the property tax year. The estimated property taxes paid in installments during a property tax year must be deposited by the county treasurer in an interest bearing account. The interest is to be retained by the treasurer to offset the administrative expenses of installment payments. Once final payment is made, and no later than January fifteenth of the following taxable year, the installment payments must be credited to the accounts of property taxing entities in the county in the same proportion that millage was imposed by such entities in the previous tax year with the necessary adjustments made to reflect current tax year millage impositions when property taxes for the current year are paid.
(E) If the credit allowed for estimated property tax paid during the property tax year results in an overpayment of property tax, the overpayment must be refunded to the taxpayer together with the actual interest earned by the county treasurer, running from the later of the due date of the installment resulting in the overpayment, without regard to additional amounts paid, or the actual date the overpayment was received by the county treasurer, to the date the refund is issued. Except that if the overpayment is issued to the taxpayer within forty-five days of the installment payment that resulted in the overpayment, the treasurer may retain the interest earned.
(F) Every tax notice for real property, for which the installment payment option has been elected, must contain a calculation of any estimated property tax due and a payment schedule and return envelopes for these payments.
(G) The payment of estimated property tax as provided in this section and the credit allowed arising from these payments in no way alters the due date, penalty schedule, and enforced collection of property taxes as provided by law."
B. Each county treasurer shall report to the General Assembly on the impact and implementation of this act no later than sixty days after January 15, 2009. The report shall include, but is not limited to, the costs incurred, the interest retained, and the number of individuals electing to pay ad valorem taxes in installments.
Severability
SECTION ____. If any section, subsection, item, subitem, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, item, subitem, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, items, subitems, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
Effective Dates
SECTION ___. The provisions of Article 9, Chapter 10, Title 4 take effect upon approval of the Governor. The provisions of Article 7, Chapter 10, Title 4 take effect upon ratification of an amendment to Article X, Section 3 of the Constitution of this State proposed at the time of the general election of 2006, allowing the exemption provided in Section 4-10-730. If ratification occurs after May 31, 2007, any sales and use tax otherwise scheduled to take effect July 1, 2007, is postponed for twelve months and the homestead exemption is similarly postponed one year. The provisions of Section 12-45-75 take effect upon approval by the Governor and apply for real property tax years beginning after 2006. All other provisions take effect upon approval by the Governor. /
Renumber sections to conform.
Amend title to conform.
Senator CAMPSEN explained the amendment.
On motion of Senator PEELER, with unanimous consent, debate was interrupted by adjournment, with Senator CAMPSEN retaining the floor.
Having received a favorable report from the Abbeville County Delegation, the following appointment was confirmed in open session:
Reappointment, Abbeville County Magistrate, with term to commence April 30, 2006, and to expire April 30, 2010
Susan G. Gladden, 438 Highway 20, Abbeville, S.C. 29620
Having received a favorable report from the Calhoun County Delegation, the following appointments were confirmed in open session:
Initial Appointment, Calhoun County Magistrate, with term to commence April 30, 2002, and to expire April 30, 2006
Don Rickenbaker, P. O. Box 232, St. Matthews, S.C. 29135 VICE Helen Geiger
Reappointment, Calhoun County Magistrate, with term to commence April 30, 2006, and to expire April 30, 2010
Don Rickenbaker, P. O. Box 232, St. Matthews, S.C. 29135
On motion of Senator MALLOY, with unanimous consent, the Senate stood adjourned out of respect to the memory of Mr. John Henry Newsome, Sr. of Hartsville, S.C., founder of the Newsome Car Dealerships.
At 5:40 P.M., on motion of Senator PEELER, the Senate adjourned to meet tomorrow at 11:00 A.M.
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