Indicates Matter Stricken
Indicates New Matter

The Senate assembled at 11:00 A.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 the Chaplain as follows:

Beloved, in 1864, Samuel Longfellow prayed:

"Holy Spirit, truth divine

Dawn upon this soul of mine;

Word of God, and inward Light,

Wake my spirit, clear my sight."

Let us pray.

Father, Your Providence has covered us from generation to generation to generation. Help us to triumph over "the strain of toil, the fret of care" as we share the burden of building the Kingdom whose maker and ruler is God!
Amen!

The PRESIDENT called for Petitions, Memorials, Presentments of Grand Juries and such like papers.

The following appointments were transmitted by the Honorable Mark C. Sanford:

Reappointment, Pickens County Magistrate, with term to commence April 30, 2006, and to expire April 30, 2010

Phillip A. Snow, 117 Scenic Dr., Pickens, S.C. 29671-9495

Reappointment, Pickens County Magistrate, with term to commence April 30, 2006, and to expire April 30, 2010

Dale F. Dalton, P. O. Box 65, Liberty, S.C. 29657

Reappointment, Pickens County Magistrate, with term to commence April 30, 2006, and to expire April 30, 2010

Ernest David Forrest, Sr., 202 Wellington Road, Easley, S.C. 29642

Initial Appointment, Pickens County Magistrate, with term to commence April 30, 2002, and to expire April 30, 2006

Hon. Bruce E. Anders, 114 Furman Road, Pickens, S.C. 29671 VICE James King

Reappointment, Pickens County Magistrate, with term to commence April 30, 2006, and to expire April 30, 2010

Hon. Bruce E. Anders, 114 Furman Road, Pickens, S.C. 29671

Senator WILLIAMS introduced Dr. John Nobles of Bennettsville, S.C., Doctor of the Day.

On motion of Senator MARTIN, at 11:05 A.M., Senator LEATHERMAN was granted a leave of absence for today.

At 11:05 A.M., Senator WILLIAMS requested a leave of absence beginning at 2:30 P.M., for the balance of the day.

At 1:58 P.M., Senator RYBERG requested a leave of absence from 7:15 - 9:00 P.M. this evening.

Senator PEELER, with unanimous consent, was recognized to give a report regarding the status of the General Appropriation Bill.

Senator McCONNELL asked unanimous consent to make a motion that, when the Senate adjourns today, it meet on Friday, April 21, 2006, under the provisions of Rule 1 for the purpose of taking up local matters and uncontested matters which have previously received unanimous consent to be taken up; and, further, that, when the Senate adjourns on Friday, April 21, 2006, it stand adjourned to meet at 10:00 A.M. on Tuesday, April 25, 2006, in Statewide Session; and, further, that insofar as it pertains to H. 4810, the General Appropriation Bill, the provisions of Rule 39 would be waived.

There was no objection and the motion was adopted.

The following were introduced:

S. 1361 (Word version) -- Senator Grooms: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 29-15-25 SO AS TO PROVIDE THAT A TOWING COMPANY UNDER CERTAIN CIRCUMSTANCES MAY PLACE A LIEN ON A MOTOR VEHICLE THAT IT HAS STORED.
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Read the first time and referred to the Committee on Judiciary.

S. 1362 (Word version) -- Senators Fair, Thomas, Verdin, Grooms and Anderson: A JOINT RESOLUTION TO ESTABLISH THE R. H. PATTERSON STUDY COMMITTEE TO MAKE A STUDY OF THE LAWS AND REGULATIONS GOVERNING THE SALE OF BEER AND WINE AND THE ALCOHOLIC BEVERAGE CONTROL ACT, TO PROVIDE FOR THE MEMBERSHIP OF THE COMMITTEE, AND TO REQUIRE THE COMMITTEE TO MAKE A REPORT OF ITS FINDINGS WITH RECOMMENDATIONS FOR STATUTORY AND ADMINISTRATIVE CHANGES BEFORE NOVEMBER 1, 2006, AFTER WHICH THE COMMITTEE TERMINATES.
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Read the first time and, on motion of Senator FAIR, with unanimous consent, S. 1362 was ordered placed on the Calendar without reference.

S. 1363 (Word version) -- Senator Martin: A BILL TO AMEND SECTION 35-1-405 OF THE 1976 CODE, RELATING TO THE S.C. UNIFORM SECURITIES ACT OF 2005, FEDERAL COVERED INVESTMENT ADVISER NOTICE FILING REQUIREMENTS, SO AS TO PROVIDE THE CORRECT CITATION; AND TO AMEND SECTION 35-1-702, RELATING TO FEES, SO AS TO PROVIDE THAT THE CORRECT FEE FOR A BROKER-DEALER RENEWAL IS ONE HUNDRED TEN DOLLARS.
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Senator MARTIN spoke on the Bill.

Read the first time and, on motion of Senator MARTIN, with unanimous consent, S. 1363 was ordered placed on the Calendar without reference.

S. 1364 (Word version) -- Senator Knotts: A CONCURRENT RESOLUTION TO RECOGNIZE AND CONGRATULATE BISHOP WENDELL HENDRIX, PASTOR OF THE CHURCH OF GOD ON FISH HATCHERY ROAD IN GASTON, FOR HIS DEVOTED AND FAITHFUL THIRTY-YEAR CAREER AS AN ORDAINED MINISTER, AND TO DECLARE SUNDAY, MAY 21, 2006, AS "BISHOP WENDELL HENDRIX DAY" IN LEXINGTON COUNTY.
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The Concurrent Resolution was adopted, ordered sent to the House.

S. 1365 (Word version) -- Senator Ryberg: A BILL TO AMEND CHAPTER 5, TITLE 57 OF THE 1976 CODE BY ADDING SECTION 57-5-1626, TO PROVIDE THAT THE DEPARTMENT OF TRANSPORTATION MAY AWARD HIGHWAY CONSTRUCTION CONTRACTS USING A DESIGN-BUILD PROCEDURE, TO PROVIDE FOR CONTRACT SELECTION CRITERIA, AND TO REPEAL SECTION 57-5-1625.
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Read the first time and referred to the Committee on Transportation.

S. 1366 (Word version) -- Senator Malloy: A SENATE RESOLUTION TO RECOGNIZE AND HONOR THE FIRST BAPTIST CHURCH, DARLINGTON, ITS PASTOR, DR. KENNETH SANDIFER, AND FAITHFUL CONGREGATION ON THE OCCASION OF THE 175TH ANNIVERSARY OF THE CHURCH ON APRIL 23, 2006.
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The Senate Resolution was adopted.

S. 1367 (Word version) -- Senator Knotts: A CONCURRENT RESOLUTION TO EXPRESS THE DEEPEST SYMPATHY OF THE MEMBERS OF THE GENERAL ASSEMBLY TO THE FAMILY AND FRIENDS OF JOHN WOODROW "JAKE" JOHNSON OF LEXINGTON COUNTY, A COMBAT VETERAN OF WORLD WAR II, UPON HIS DEATH.
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The Concurrent Resolution was adopted, ordered sent to the House.

H. 4773 (Word version) -- Reps. Sinclair, Rivers, Harrison, G. M. Smith, Davenport, Mitchell, McLeod, Allen, Delleney, Mahaffey, McGee, W. D. Smith, Talley and White: A BILL TO AMEND SECTION 62-5-504, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEFINITIONS IN CONNECTION WITH A HEALTH CARE POWER OF ATTORNEY, SO AS TO CONFORM THE SOUTH CAROLINA STATUTORY FORM FOR THE HEALTH CARE POWER OF ATTORNEY TO PROVIDE FURTHER FOR A SUCCESSOR AGENT, TO INCLUDE A HIPAA (HEALTH INFORMATION PORTABILITY AND ACCOUNTABILITY ACT OF 1996) AUTHORIZATION, TO CLARIFY DESIGNATION CHOICES IN CONNECTION WITH TUBE FEEDING, AND TO PROVIDE FOR AN OPTIONAL ACKNOWLEDGEMENT BY A NOTARY PUBLIC.

Read the first time and referred to the Committee on Judiciary.

H. 4927 (Word version) -- Reps. McGee and Coates: A CONCURRENT RESOLUTION TO REQUEST THE DEPARTMENT OF TRANSPORTATION TO NAME THE INTERSECTION OF TWIN CHURCH ROAD AND ALLIGATOR ROAD IN FLORENCE COUNTY AS "HICKS CROSSROADS" AND TO ERECT APPROPRIATE MARKERS OR SIGNS AT THIS INTERSECTION THAT CONTAIN THE WORDS "HICKS CROSSROADS".

On motion of Senator McGILL, with unanimous consent, the Concurrent Resolution was adopted and returned to the House.

H. 4962 (Word version) -- Judiciary Committee: A JOINT RESOLUTION TO APPROVE REGULATIONS OF THE OFFICE OF THE ATTORNEY GENERAL, RELATING TO SECURITIES, DESIGNATED AS REGULATION DOCUMENT NUMBER 3045, PURSUANT TO THE PROVISIONS OF ARTICLE 1, CHAPTER 23, TITLE 1 OF THE 1976 CODE.

Read the first time and referred to the Committee on Judiciary.

Senator PEELER from the Committee on Medical Affairs submitted a favorable with amendment report on:

S. 910 (Word version) -- Senators Knotts and Peeler: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 40-33-39 SO AS TO REQUIRE NURSES TO WEAR AN IDENTIFICATION BADGE; TO AMEND SECTION 40-33-32, RELATING TO NURSING LICENSURE REQUIREMENTS, SO AS TO REVISE THE TYPE OF DOCUMENT THAT MUST BE SUBMITTED FOR PROOF OF IDENTITY AND AGE; TO AMEND SECTION 40-33-34, RELATING TO THE SCOPE OF PRACTICE AUTHORIZED FOR VARIOUS LEVELS OF NURSING AND REQUIREMENTS FOR CERTAIN SPECIFIED ACTS OF NURSING, SO AS TO CLARIFY INFORMATION THAT MUST BE PROVIDED BY NURSES WITH PRESCRIPTIVE AUTHORITY WHEN WRITING PRESCRIPTIONS; TO AMEND SECTION 40-33-35, RELATING TO LICENSURE REQUIREMENTS FOR OUT-OF-STATE NURSES, SO AS TO REVISE THE TYPE OF DOCUMENT THAT MUST BE SUBMITTED FOR PROOF OF IDENTITY AND AGE; TO AMEND SECTION 40-33-36, RELATING TO THE ISSUANCE OF NURSING LICENSES, INCLUDING REQUIREMENTS FOR TEMPORARY AND LIMITED LICENSES, SO AS TO ALSO APPLY THESE REQUIREMENTS TO TEMPORARY AND LIMITED LICENSES OF ADVANCED PRACTICE REGISTERED NURSES; TO AMEND SECTION 44-33-40, AS AMENDED, RELATING TO REQUIREMENTS FOR DEMONSTRATING COMPETENCY FOR INITIAL AND RENEWAL LICENSURE, SO AS TO CLARIFY CERTAIN REQUIREMENTS AND TO APPLY CERTAIN OF THESE REQUIREMENTS TO INDIVIDUALS SEEKING REINSTATEMENT OF A LAPSED OR INACTIVE STATUS OR LICENSURE OF A PERSON WHO IS AUTHORIZED TO PRACTICE OUT-OF-STATE; AND TO AMEND SECTION 40-33-190, RELATING TO THE CONFIDENTIALITY OF COMPLAINTS, HEARINGS, AND OTHER MATTERS RELATING TO ALLEGED VIOLATIONS CONCERNING THE LICENSURE AND REGULATION OF NURSES, SO AS TO FURTHER CLARIFY THE CONFIDENTIALITY OF THESE MATTERS.

Ordered for consideration tomorrow.

Senator PEELER from the Committee on Medical Affairs submitted a favorable report on:

S. 1032 (Word version) -- Senator Lourie: A BILL TO AMEND SECTION 44-63-100, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DELAYED BIRTH CERTIFICATES, SO AS TO FURTHER SPECIFY THE PROCEDURES FOR OBTAINING A COURT-ORDERED BIRTH CERTIFICATE, INCLUDING REQUIRING ATTACHMENT OF A CERTIFICATION TO THE PETITION FROM THE STATE REGISTRAR OF VITAL STATISTICS STATING THAT NO BIRTH RECORD HAS BEEN LOCATED AND ADDITIONAL INFORMATION REQUIRED TO BE INCLUDED IN THE ORDER ESTABLISHING THE RECORD OF BIRTH.

Ordered for consideration tomorrow.

Senator PEELER from the Committee on Medical Affairs submitted a favorable report on:

S. 1046 (Word version) -- Senator O'Dell: A BILL TO AMEND SECTION 44-29-40, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE AUTHORITY OF THE DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL TO DIRECT AND SUPERVISE VACCINATION, SCREENING, AND IMMUNIZATION, SO AS TO AUTHORIZE THE DEPARTMENT TO ESTABLISH AN IMMUNIZATION REGISTRY.

Ordered for consideration tomorrow.

Senator PEELER from the Committee on Medical Affairs submitted a favorable report on:

S. 1318 (Word version) -- Senator Anderson: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 20 TO CHAPTER 7, TITLE 44 SO AS TO ENACT THE "HOSPITAL INFECTIONS DISCLOSURE ACT" AND TO REQUIRE HOSPITALS AND AMBULATORY SURGICAL FACILITIES TO COLLECT DATA AND SUBMIT REPORTS TO THE DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL CONCERNING HOSPITAL ACQUIRED INFECTIONS, TO PROVIDE FOR AN ADVISORY COMMITTEE TO ASSIST THE DEPARTMENT IN DEVELOPING THE METHODOLOGY FOR DATA COLLECTION AND ANALYSIS, TO PROVIDE SANCTIONS FOR FAILURE TO COMPLY, TO PROVIDE FOR PATIENT PRIVACY, AND TO PROVIDE FOR PUBLICATION AND AVAILABILITY OF THESE REPORTS TO THE PUBLIC.

Ordered for consideration tomorrow.

Senator LEATHERMAN from the Committee on Finance submitted a favorable with amendment report on:

Ordered for consideration tomorrow.

Senator LEATHERMAN from the Committee on Finance submitted a favorable with amendment report on:

H. 4812 (Word version) -- Ways and Means Committee: A JOINT RESOLUTION TO APPROPRIATE MONIES FROM THE CAPITAL RESERVE FUND FOR FISCAL YEAR 2005-2006.

Ordered for consideration tomorrow.

S. 1309 (Word version) -- Senators Sheheen, Martin, Lourie, Setzler, Alexander, Short and Hawkins: A CONCURRENT RESOLUTION TO REQUEST THE UNITED STATES DEPARTMENT OF THE TREASURY TO ADOPT A VIGOROUS AND STRONG TRADE POLICY REGARDING CURRENCY MANIPULATION AND TO TAKE SWIFT AND RESPONSIVE ACTIONS IN THE WORLD TRADE ORGANIZATION TO HALT CURRENCY MANIPULATION AND OTHER UNLAWFUL BARRIERS TO FAIR AND FREE TRADE.

Returned with concurrence.

Received as information.

THE SENATE PROCEEDED TO A CALL OF THE UNCONTESTED LOCAL AND STATEWIDE CALENDAR.

The following Bill was read the third time and, having received three readings in both Houses, it was ordered that the title be changed to that of an Act and enrolled for Ratification:

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.

The following Joint Resolution was read the third time and ordered sent to the House of Representatives:

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.

The following Bill, having been read the second time, was ordered placed on the Third Reading Calendar:

S. 148 (Word version) -- Senators Campsen and Fair: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 59-39-112 ENACTING THE "SOUTH CAROLINA RELEASED TIME CREDIT ACT", SO AS TO PROVIDE THAT A SCHOOL DISTRICT BOARD OF TRUSTEES MAY AWARD HIGH SCHOOL STUDENTS ELECTIVE CARNEGIE UNITS FOR THE COMPLETION OF RELEASED TIME CLASSES IN RELIGIOUS INSTRUCTION AND TO PROVIDE THAT THE RELEASED TIME CLASSES MUST BE EVALUATED ON THE BASIS OF PURELY SECULAR CRITERIA.

H. 3922 (Word version) -- Reps. Witherspoon, Ott, Umphlett, Barfield, Cato, Bailey, Hagood, Bowers, Hardwick and Neilson: A BILL TO AMEND TITLE 44, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO HEALTH, BY ADDING CHAPTER 18 SO AS TO ENACT THE "MERCURY SWITCH REMOVAL ACT OF 2005" IN ORDER TO ACHIEVE REDUCTIONS OF MERCURY IN THE ENVIRONMENT THROUGH REMOVAL AND COLLECTION OF MERCURY SWITCHES FROM MOTOR VEHICLES WEIGHING LESS THAN TWELVE THOUSAND POUNDS; TO PROVIDE THAT EVERY MANUFACTURER OF MOTOR VEHICLES SOLD IN THIS STATE TO WHICH THIS CHAPTER APPLIES SHALL DEVELOP A MERCURY MINIMIZATION PLAN TO BE FILED WITH THE DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL; TO PROVIDE FOR CERTAIN COSTS WITH REGARD TO THE COLLECTION AND RECOVERY OF MERCURY SWITCHES TO BE PAID BY THE VEHICLE MANUFACTURER; TO PROVIDE FOR OTHER RELATED PROVISIONS PERTAINING TO THE RECYCLING, STORAGE, AND DISPOSAL OF MERCURY SWITCHES, INCLUDING DESIGNATING MERCURY SWITCHES AS UNIVERSAL WASTE AND REQUIRING THE DEPARTMENT TO PROMULGATE REGULATIONS FOR THE MANAGEMENT OF THESE SWITCHES; AND TO PROVIDE PENALTIES FOR VIOLATIONS.

The Senate proceeded to a consideration of the Bill, the question being the second reading of the Bill.

Senator HUTTO proposed the following amendment (3922R001.CBH), which was adopted:

Amend the bill, as and if amended, page 3, by striking lines 27 through 36 and inserting:

/   (E)   Nothing in this section affects or modifies in any way the obligations or liability of a person under any other provision of state or federal law, including common law, for injury or damage resulting from the release of hazardous substances.       /

Renumber sections to conform.

Amend title to conform.

Senator HUTTO explained the amendment.

The amendment was adopted.

There being no further amendments, the Bill was read the second time, passed and ordered to a third reading.

S. 1059 (Word version) -- Senators Hutto, Gregory, Hawkins, Campsen, Cleary, Lourie, Alexander, Martin and Short: A BILL TO AMEND CHAPTER 1, TITLE 19, CODE OF LAWS OF SOUTH CAROLINA, BY ADDING SECTION 19-1-190, RELATING TO AN EXPRESSION OF APOLOGY BETWEEN AND AMONG PARTIES OR POTENTIAL PARTIES TO A CIVIL ACTION, SO AS TO ENCOURAGE A STATEMENT OF APOLOGY BETWEEN A HEALTH CARE PROVIDER, HEALTH CARE INSTITUTION, AND PATIENTS EXPERIENCING AN UNANTICIPATED OUTCOME RESULTING FROM THEIR MEDICAL CARE.

On motion of Senator SETZLER, the Bill was carried over.

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.

HAVING DISPENSED WITH THE MOTION PERIOD, THE SENATE PROCEEDED TO A CONSIDERATION OF REPORTS OF COMMITTEES OF CONFERENCE AND FREE CONFERENCE.

Columbia, S.C., April 20, 2006

Mr. President and Senators:

The House respectfully informs your Honorable Body that it insists upon the amendments proposed by the House to:

H. 3402 (Word version) -- Reps. M.A. Pitts, Taylor, Owens, Duncan, Vick, Hardwick, Hagood, Ott, Ceips, Haley, Hiott, Limehouse, E.H. Pitts, G.R. Smith, Toole, Umphlett, Witherspoon, Chellis, Stewart, Mahaffey, Barfield, Huggins, Loftis, White, Clemmons, Walker, Littlejohn and Sinclair: A BILL TO AMEND SECTION 2-17-10 AND 8-13-1300, BOTH AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEFINITION OF TERMS IN MATTERS RELATING TO CAMPAIGN PRACTICES AND IN MATTERS RELATING TO LOBBYISTS AND LOBBYING, RESPECTIVELY, INCLUDING THE DEFINITION OF LEGISLATIVE CAUCUS COMMITTEE, SO AS TO PROVIDE THAT SUCH A CAUCUS MAY BE CREATED BASED UPON A SPECIAL LEGISLATIVE INTEREST.
asks for a Committee of Conference, and has appointed Reps. M. A. Pitts, Witherspoon and Agnew to the committee on the part of the House.
Very respectfully,
Speaker of the House

Received as information.

H. 3402 (Word version) -- Reps. M.A. Pitts, Taylor, Owens, Duncan, Vick, Hardwick, Hagood, Ott, Ceips, Haley, Hiott, Limehouse, E.H. Pitts, G.R. Smith, Toole, Umphlett, Witherspoon, Chellis, Stewart, Mahaffey, Barfield, Huggins, Loftis, White, Clemmons, Walker, Littlejohn and Sinclair: A BILL TO AMEND SECTION 2-17-10 AND 8-13-1300, BOTH AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEFINITION OF TERMS IN MATTERS RELATING TO CAMPAIGN PRACTICES AND IN MATTERS RELATING TO LOBBYISTS AND LOBBYING, RESPECTIVELY, INCLUDING THE DEFINITION OF LEGISLATIVE CAUCUS COMMITTEE, SO AS TO PROVIDE THAT SUCH A CAUCUS MAY BE CREATED BASED UPON A SPECIAL LEGISLATIVE INTEREST.

Whereupon, Senators MOORE, HAYES and VERDIN were appointed to the Committee of Conference on the part of the Senate and a message was sent to the House accordingly.

H. 3010 (Word version) -- Reps. W.D. Smith, Wilkins, G.R. Smith, Vaughn, Harrison, Davenport, Sandifer, Coates, Young, Leach, Viers, Littlejohn, Rice, Hinson, Clark, Walker, Mahaffey, Duncan, Hagood and Clemmons: A BILL TO AMEND CHAPTER 40, TITLE 59, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO CHARTER SCHOOLS, SO AS TO PROVIDE FOR THE CREATION OF A CAROLINA PUBLIC CHARTER SCHOOL DISTRICT, ITS GOVERNANCE, AND ITS POWERS AND DUTIES; AND TO PROVIDE FOR THE MANNER IN WHICH A CHARTER SCHOOL SPONSORED BY THE CAROLINA PUBLIC CHARTER SCHOOL DISTRICT MUST BE FORMED, FUNDED, REGULATED, AND GOVERNED.

On motion of Senator HAYES, with unanimous consent, the Report of the Committee of Conference was taken up for immediate consideration.

Senator HAYES spoke on the report.

On motion of Senator HAYES, with unanimous consent, Free Conference Powers were granted.

Whereupon, Senators HAYES, SETZLER, and RICHARDSON were appointed to the Committee of Free Conference on the part of the Senate and a message was sent to the House accordingly.

On motion of Senator HAYES, the Report of the Committee of Conference to H. 3010 was adopted as follows:

The Committee of Free Conference, to whom was referred:

H. 3010 (Word version) -- Reps. W.D. Smith, Wilkins, G.R. Smith, Vaughn, Harrison, Davenport, Sandifer, Coates, Young, Leach, Viers, Littlejohn, Rice, Hinson, Clark, Walker, Mahaffey, Duncan, Hagood and Clemmons: A BILL TO AMEND CHAPTER 40, TITLE 59, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO CHARTER SCHOOLS, SO AS TO PROVIDE FOR THE CREATION OF A CAROLINA PUBLIC CHARTER SCHOOL DISTRICT, ITS GOVERNANCE, AND ITS POWERS AND DUTIES; AND TO PROVIDE FOR THE MANNER IN WHICH A CHARTER SCHOOL SPONSORED BY THE CAROLINA PUBLIC CHARTER SCHOOL DISTRICT MUST BE FORMED, FUNDED, REGULATED, AND GOVERNED

Beg leave to report that they have duly and carefully considered the same and recommend:

That the same do pass with the following amendments: (Reference is to Printer's Version 02/09/06.)

Amend the bill, as and if amended, by striking all after the enacting words and inserting:

/   SECTION   1.   Chapter 40, Title 59 of the 1976 Code is amended to read:

Section 59-40-10.   This chapter may be cited as the 'South Carolina Charter Schools Act of 1996'.

Section 59-40-20.   This chapter is enacted to:

(1)   improve student learning;

(2)   increase learning opportunities for students;

(3)   encourage the use of a variety of productive teaching methods;

(4)   establish new forms of accountability for schools;

(5)   create new professional opportunities for teachers, including the opportunity to be responsible for the learning program at the school site; and

(6)   assist South Carolina in reaching academic excellence.

Section 59-40-30.   (A)   In authorizing charter schools, it is the intent of the General Assembly to create a legitimate avenue for parents, teachers, and community members to take responsible risks and create new, innovative, and more flexible ways of educating all children within the public school system. The General Assembly seeks to create an atmosphere in South Carolina's public school systems where research and development in producing different learning opportunities is actively pursued and where classroom teachers are given the flexibility to innovate and the responsibility to be accountable. As such, the provisions of this chapter should be interpreted liberally to support the findings and goals of this chapter and to advance a renewed commitment by the State of South Carolina to the mission, goals, and diversity of public education.

(B)   It is the intent of the General Assembly that creation of this chapter encourages cultural diversity, educational improvement, and academic excellence. Further, it is not the intent of the General Assembly to create a segregated school system but to continue to promote educational improvement and excellence in South Carolina.

Section 59-40-40.   As used in this chapter:

(1)   A 'charter school' means a public, nonsectarian, nonreligious, nonhome-based, nonprofit corporation forming a school which that operates within a public school district or the South Carolina Public Charter School District, but is accountable to the local school board of trustees of that district, which grants its charter. Nothing in this chapter prohibits charter schools from offering virtual services pursuant to State law and subsequent regulations defining virtual schools.

(2)   A charter school:

(a)   is considered a public school and part of the South Carolina Public Charter School District or local school district in which it is located for the purposes of state law and the state constitution;

(b)   is subject to all federal and state laws and constitutional provisions prohibiting discrimination on the basis of disability, race, creed, color, gender, national origin, religion, ancestry, or need for special education services;

(c)   must be administered and governed by a governing body in a manner agreed to by the charter school applicant and the sponsor, the governing body to be selected, as provided in Section 59-40-50(B)(9);

(d)   shall may not charge tuition or other charges of any kind pursuant to Section 59-19-90(8) except as may be allowed by the sponsor and is comparable to the charges of the local school district in which the charter school is located.

(3)   'Applicant' means the person who or nonprofit corporate entity that desires to form a charter school and files the necessary application with the South Carolina Public Charter School District Board of Trustees or the local school board of trustees in which the charter school is to be located. The applicant also must be the person who applies to the Secretary of State to organize the charter school as a nonprofit corporation.

(4)   'Sponsor' means the South Carolina Public Charter School District Board of Trustees or the local school board of trustees in which the charter school is to be located established, as provided by law, from which the charter school applicant requested its charter and which granted approval for the charter school's existence.

(5)   'Certified teacher' means a person currently certified by the State of South Carolina to teach in a public elementary or secondary school or who currently meets the qualification qualifications outlined in Sections 59-27-10 and 59-25-115.

(6)   'Noncertified teacher' means an individual considered appropriately qualified for the subject matter taught and who has completed at least one year of study at an accredited college or university and meets the qualifications outlined in Section 59-25-115.

(7)   'Charter committee' means the governing body of a charter school formed by the applicant to govern through the application process and until the election of a board of directors is held. After the election, the board of directors of the corporation must be organized as the governing body and the charter committee is dissolved.

(8)   'Local school district' means any school district in the State except the South Carolina Public Charter School District and does not include special school districts.

Section 59-40-50.   (A)   Except as otherwise provided in this chapter, a charter school is exempt from all provisions of law and regulations applicable to a public school, a school board, or a district, although a charter school may elect to comply with one or more of these provisions of law or regulations.

(B)   A charter school must:

(1)   adhere to the same health, safety, civil rights, and disability rights requirements as are applied to public schools operating in the same school district or, in the case of the South Carolina Public Charter School District, the local school district in which the charter school is located;

(2)   meet, but may exceed, the same minimum student attendance requirements as are applied to public schools operating in the same district;

(3)   adhere to the same financial audits, audit procedures, and audit requirements as are applied to public schools operating in the same school district;

(4)   be considered a school district for purposes of tort liability under South Carolina law, except that the tort immunity does not include acts of intentional or wilful racial discrimination by the governing body or employees of the charter school. Employees of charter schools must be relieved of personal liability for any tort or contract related to their school to the same extent that employees of traditional public schools in their school district or, in the case of the South Carolina Public Charter School District, the local school district in which the charter school is located are relieved;

(5)   in its discretion hire noncertified teachers in a ratio of up to twenty-five percent of its entire teacher staff; however, if it is a converted charter school, it shall hire in its discretion noncertified teachers in a ratio of up to ten percent of its entire teacher staff. However, in either a new or converted charter school, a teacher teaching in the core academic areas of English/language arts, mathematics, science, or social studies as defined by the federal No Child Left Behind law must be certified in those areas or possess a baccalaureate or graduate degree in the subject he or she is hired to teach. Part-time noncertified teachers are considered pro rata in calculating this percentage based on the hours which they are expected to teach;

(6)   hire in its discretion administrative staff to oversee the daily operation of the school. At least one of the administrative staff must be certified or experienced in the field of school administration;

(7)   admit all children eligible to attend public school in a school district to a charter school operating in that school district, subject to space limitations. However, it is required that the racial composition of the charter school enrollment reflect that of the local school district in which the charter school is located or that of the targeted student population which of the local school district that the charter school proposes to serve, to be defined for the purposes of this chapter as differing by no more than twenty percent from that population. This requirement is also subject to the provisions of Section 59-40-70(D). If the number of applications exceeds the capacity of a program, class, grade level, or building, students must be accepted by lot, and there is no appeal to the sponsor;

(8)   not limit or deny admission or show preference in admission decisions to any individual or group of individuals; provided, however, that a charter school may give enrollment priority to a sibling of a pupil already enrolled, children of a charter school employee, and children of the charter committee, provided their enrollment does not constitute more than twenty percent of the enrollment of the charter school;

(9)   elect its board of directors annually. All employees of the charter school and all parents or guardians of students enrolled in the charter school are eligible to participate in the election. Parents or guardians of a student shall have one vote for each student enrolled in the charter school. A person who has been convicted of a felony must not be elected to a board of directors;

(10)   be subject to the Freedom of Information Act, including the charter school and its governing body.

(C)(1)   If a charter school denies admission to a student, the student may appeal the denial to the school board of trustees sponsor. The decision is binding on the student and the charter school.

(2)   If a charter school suspends or expels a student, other charter schools or the local school district in which the charter school is located has the authority but not the obligation to refuse admission to the student.

(3)   The sponsor has no obligation to provide extracurricular activities or access to facilities of the school district for students enrolled in the charter school; however, the charter contract may include participation in agreed upon interscholastic activities at a designated school within the sponsor district. Notwithstanding another provision of law, the local school district has no obligation to provide charter schools, sponsored by the South Carolina Public Charter School District, extracurricular activities or access to facilities of the school district for students enrolled in charter schools unless the school district, by contract, has agreed to provide activities or access. Students participating under this agreement shall must be considered eligible to participate in league events if all other eligibility requirements are met.

(D)   The State is not responsible for student transportation to a charter school unless the charter school is designated by the local school district as the only school selected within the local school district's attendance area.

(E)   The South Carolina Public Charter School District Board of Trustees may not use program funding for transportation.

Section 59-40-60.   (A)   An approved charter application constitutes an agreement, and the terms must be the terms of a contract between the charter school and the sponsor.

(B)   The contract between the charter school and the sponsor shall reflect all agreements regarding the release of the charter school from local school district policies.

(C)   A material revision of the terms of the contract between the charter school and the approving board may be made only with the approval of both parties.

(D)   Except as provided in subsection (F), an applicant who wishes to form a charter school shall:

(1)   organize the charter school as a nonprofit corporation pursuant to the laws of this State;

(2)   form a charter committee for the charter school which includes one or more teachers;

(3)   submit a written charter school application to the local charter school advisory committee and the school board of trustees for the school district in which the charter school is to be located from which the committee is seeking sponsorship.

(E)   A charter committee is responsible for and has the power to:

(1)   submit an application to operate as a charter school, sign a charter school contract, and ensure compliance with all of the requirements for charter schools provided by law;

(2)   employ and contract with teachers and nonteaching employees, contract for other services, and develop pay scales, performance criteria, and discharge policies for its employees. All teachers whether certified or noncertified must undergo the background checks and other investigations required for certified teachers, as provided by law, before they may teach in the charter school; and

(3)   decide all other matters related to the operation of the charter school, including budgeting, curriculum, and operating procedures.

(F)   The charter school application shall be a proposed contract and must include:

(1)   the mission statement of the charter school, which must be consistent with the principles of the General Assembly's purposes pursuant to Section 59-40-20;

(2)   the goals, objectives, and pupil achievement standards to be achieved by the charter school, and a description of the charter school's admission policies and procedures;

(3)   evidence that an adequate number of parents, teachers, pupils, or any combination of them support the formation of a charter school;

(4)   a description of the charter school's educational program, pupil achievement standards, and curriculum which must meet or exceed any content standards adopted by the school district in which the charter school is located State Board of Education and the chartering district must be designed to enable each pupil to achieve these standards;

(5)   a description of the charter school's plan for evaluating pupil achievement and progress toward accomplishment of the school's achievement standards in addition to state assessments, the timeline for meeting these standards, and the procedures for taking corrective action if that pupil achievement falls below the standards;

(6)   evidence that the plan for the charter school is economically sound, a proposed budget for the term of the charter, a description of the manner in which an annual audit of the financial and administrative operations of the charter school, including any services provided by the school district, is to be conducted;

(7)   a description of the governance and operation of the charter school, including the nature and extent of parental, professional educator, and community involvement in the governance and operation of the charter school;

(8)   a description of how the charter school plans to ensure that the enrollment of the school is similar to the racial composition of the local school district in which the charter school is to be located or the targeted student population of the local school district that the charter school proposes to serve and provide assurance that the school does not conflict with any school district desegregation plan or order in effect for the school district in which the charter school is to be located;

(9)   a description of how the charter school plans to meet the transportation needs of its pupils;

(10)   a description of the building, facilities, and equipment and how they shall be obtained;

(11)   an explanation of the relationship that shall exist between the proposed charter school and its employees, including descriptions of evaluation procedures and evidence that the terms and conditions of employment have been addressed with affected employees;

(12)   a description of a reasonable grievance and termination procedure, as required by this chapter, including notice and a hearing before the governing body of the charter school. The application must state whether or not the provisions of Article 5, Chapter 25 of Title 59 apply to the employment and dismissal of teachers at the charter school;

(13)   a description of student rights and responsibilities, including behavior and discipline standards, and a reasonable hearing procedure, including notice and a hearing before the board of directors of the charter school before expulsion;

(14)   an assumption of liability by the charter school for the activities of the charter school and an agreement that the charter school must indemnify and hold harmless the school district, its servants, agents, and employees, from any and all liability, damage, expense, causes of action, suits, claims, or judgments arising from injury to persons or property or otherwise which arises out of the act, failure to act, or negligence of the charter school, its agents and employees, in connection with or arising out of the activity of the charter school; and

(15)   a description of the types and amounts of insurance coverage to be obtained by the charter school.

(G)   Nothing in this section shall require a charter school applicant to provide a list of prospective or tentatively enrolled students or prospective employees with the application.

Section 59-40-70.   (A)   The Charter School Advisory Committee shall must be established by the State Board of Education to review charter school applications for compliance with established standards that reflect the requirements and intent of this chapter. Members shall must be appointed by the State Board of Education unless otherwise indicated.

(1)   The advisory committee shall consist of eleven members as follows:

(a)   South Carolina Association of Public Charter Schools--the president or his designee and one additional representative from the association;

(b)   South Carolina Association of School Administrators--the executive director or his designee;

(c)   South Carolina Chamber of Commerce--the executive director or his designee and one additional representative from the chamber;

(d)   South Carolina Education Oversight Committee--the chair or a business designee;

(e)   South Carolina Commission on Higher Education--the chair or his designee;

(f)   South Carolina School Boards Association--the executive director or his designee;

(g)   South Carolina Alliance of Black Educators--the president or his designee; and

(h)   One teacher and one parent to be appointed by the State Superintendent of Education.

(2)   As an application is reviewed, a representative from the local school board of trustees of the affected school district from which the committee is seeking sponsorship and a representative of the charter committee shall serve on the advisory committee as ex officio nonvoting members. If the applicant indicates a proposed contractual agreement with the local school district in which the charter school is located, a representative from the local school board of trustees of that district shall serve on the advisory committee as an ex officio, nonvoting member.

(3)   Appointing authorities shall give consideration to the appointment of minorities and women as representatives on the committee.

(4)   The committee shall be convened by the State Superintendent of Education on or before July 1, 2002, who shall serve as interim chair. At the first meeting the membership shall elect a chairman and any other officers it deems necessary.

(5)   The committee shall establish by-laws for its operation that shall must include terms of office for its membership.

(6)(5)   An applicant shall submit the application to the advisory committee and a one copy to the affected school district school board of trustees of the district from which it is seeking sponsorship. In the case of the South Carolina Public Charter School District, the applicant shall provide notice of the application to the local school board of trustees in which the charter school will be located for informational purposes only. The advisory committee shall receive input from the school district in which the applicant is seeking sponsorship and shall request clarifying information from the applicant. Within sixty days, An applicant may submit an application to the advisory committee at any time during the fiscal year and the advisory committee, within sixty days, shall determine whether the application is in compliance. An application that is in compliance must be forwarded to the school district from which the applicant is seeking sponsorship with a letter stating the application is in compliance. The letter also shall include a recommendation from the Charter School Advisory Committee to approve or deny the charter. The letter must specify the reasons for its recommendation. This recommendation is nonbinding on the school board of trustees. If the application is in noncompliance, it must be returned to the applicant with deficiencies noted. The applicant may appeal the decision to the State Board of Education.

(B)   The local school board of trustees from which the applicant is seeking sponsorship shall rule on the application for a charter school in a public hearing, upon reasonable public notice, within thirty days after receiving the application. If there is no ruling within thirty days, the application is considered approved. Once the application has been approved by the school board of trustees, the charter school may open at the beginning of the following year. However, before a charter school may open, the State Department of Education shall verify the accuracy of the financial data for the school within forty-five days after approval.

(C)   A local school district board of trustees shall only shall deny an application if the application does not meet the requirements specified in Section 59-40-50 or 59-40-60, fails to meet the spirit and intent of this chapter, or adversely affects, as defined in regulation, the other students in the district in which the charter school is to be located. It shall provide, within ten days, a written explanation of the reasons for denial, citing specific standards related to provisions of Section 59-40-50 or 59-40-60 that the application violates. This written explanation immediately shall must be sent to the charter committee and filed with the State Board of Education and the Charter School Advisory Committee.

(D)   In the event that the racial composition of an applicant's or charter school's enrollment differs from the enrollment of the local school district in which the charter school is to be located or the targeted student population of the local school district by more than twenty percent, despite its best efforts, the local school district board of trustees from which the applicant is seeking sponsorship shall consider the applicant's or the charter school's recruitment efforts and racial composition of the applicant pool in determining whether the applicant or charter school is operating in a nondiscriminatory manner. A finding by the local school district board of trustees that the applicant or charter school is operating in a racially discriminatory manner may justify justifies the denial of a charter school application or the revocation of a charter as provided herein in this section or in Section 59-40-110, as may be applicable. A finding by the local school district board of trustees that the applicant is not operating in a racially discriminatory manner shall justify justifies approval of the charter without regard to the racial percentage requirement if the application is acceptable in all other aspects.

(E)   If the local school district board of trustees from which the applicant is seeking sponsorship denies a charter school application, the charter applicant may appeal the denial to the State Board of Education pursuant to Section 59-40-90.

(F)   If the local school district board of trustees approves the application, it becomes the charter school's sponsor and shall sign the approved application, which constitutes a contract with the charter committee of the charter school. A copy of the charter must be filed with the State Board of Education.

(G)   If a local school board of trustees has information that an approved application by the South Carolina Public Charter School District adversely affects the other students in its district, as defined in regulation, or that the approval of the application fails to meet the spirit and intent of this chapter, the local school board of trustees may appeal the granting of the charter to the State Board of Education. The state board, within forty-five days, may affirm or reverse the application for action by the South Carolina Public Charter School District in accordance with an order of the state board. The State Board of Education shall promulgate regulations outlining procedures for this type of appeal.

Section 59-40-75.   (A)   A member of the South Carolina Public Charter School District or of the governing board or sponsor of the charter school who is indicted in any court for any crime, or has waived the indictment if permitted by law, may be suspended by the Governor, who shall appoint another in his stead until he is acquitted. In case of conviction, the office must be declared vacant by the Governor and the vacancy filled as provided by law.

(B)   A member of the South Carolina Public Charter School District or of the governing board of the charter school who is guilty of malfeasance, misfeasance, incompetency, absenteeism, conflicts of interest, misconduct, persistent neglect of duty in office, or incapacity may be removed from office by the Governor. Before removing the officer, the Governor shall inform him in writing of the specific charges brought against him and give him an opportunity on reasonable notice to be heard.

(C)   Whenever it appears to the satisfaction of the Governor that probable cause exists to charge a member of the South Carolina Public Charter School District or of the governing board of the charter school who has the custody of public or trust funds with embezzlement or the appropriation of public or trust funds to private use, then the Governor shall direct his immediate prosecution by the proper officer.

Section 59-40-80.   A local school board sponsor may conditionally authorize a charter school before the applicant has secured its space, equipment, facilities, and personnel if the applicant indicates such authority is necessary for it to meet the requirements of this chapter. Conditional authorization does not give rise to any equitable or other claims based on reliance, notwithstanding any promise, parole, written, or otherwise, contained in the authorization or acceptance of it, whether preceding or following the conditional authorization.

Section 59-40-90.   (A)   The State Board of Education, upon receipt of a notice of appeal or upon its own motion, shall review a decision of any local school board of trustees concerning charter schools in accordance with the provisions of this section.

(B)   A charter applicant who wishes to appeal an adverse decision shall provide the State Board of Education and the local school board of trustees issuing the decision with a notice of appeal within ten days of the local board's decision.

(C)   If the notice of appeal or the motion to review by the State Board of Education relates to a local board's decision to deny, refuse to renew, or revoke a charter, the appeal and review process must be as contained in this section. Within thirty forty-five days after receipt of the notice of appeal or the making of a motion to review by the State Board of Education and after reasonable public notice, the State Board of Education, at a public hearing which may be held in the district where the proposed charter school is located, shall review the decision of the local school board of trustees and make its findings known. The state board may affirm or reverse the application for action by the local board in accordance with an order of the state board.

(D)   A final decision of the state board may be appealed by any party to the circuit court for the county in which the proposed charter school is or was to have located. The prevailing party in the circuit court appeal is entitled to a judgment against the nonprevailing party for reasonable attorney's fees and other expenses associated with the appeal process set forth in this section.

Section 59-40-100.   (A)   An existing public school may be converted into a charter school if two-thirds of the faculty and instructional staff employed at the school and two-thirds of all voting parents or legal guardians of students enrolled in the school agree to the filing of an application with the local school board of trustees for the conversion and formation of that school into a charter school. All parents Parents or legal guardians of students enrolled in the school must be given the opportunity to vote on the conversion. Parents or guardians of a student shall have one vote for each student enrolled in the school seeking conversion. The application must be submitted pursuant to Section 59-40-70(A)(5) by the principal of that school or his designee who must be considered the applicant. The application must include all information required of other applications pursuant to this chapter. The local school board of trustees shall approve or disapprove this application in the same manner it approves or disapproves other applications. The existence of another charter granting authority must not be grounds for disapproving a school desiring to convert to a charter school.

(B)   A converted charter school shall offer at least the same grades, or nongraded education appropriate for the same ages and education levels of pupils, as offered by the school immediately before conversion, and also may provide additional grades and further educational offerings.

(C)   All students enrolled in the school at the time of conversion must be given priority enrollment.

(D)   Teachers and other All employees of a converted school who desire to teach or work at the converted school may do so but shall remain employees of the local school district or the South Carolina Public Charter School District with the same compensation and benefits including any future increases. The converted charter school quarterly shall reimburse the local school district or the South Carolina Public Charter School District for the compensation and employer contribution benefits paid to or on behalf of these teachers and employees and provide to the school district any reports, forms, or data necessary for maintaining retirement coverage and providing South Carolina Retirement Systems benefits to converted school employees. The provisions of Article 5, Chapter 25 of Title 59 apply to the employment and dismissal of teachers at a converted school.

(E)   The South Carolina Public Charter School District may not sponsor a public school to convert to a charter school. However, the South Carolina Public Charter School District may sponsor a converted charter school renewal if the charter school has not committed a material violation of the provisions specified in subsection (C) of Section 59-40-110 and the local school district board of trustees refuses to renew the charter. In such cases, the charter school shall continue to receive local funding pursuant to Section 59-40-110(A). However, the charter school is not eligible to receive one hundred percent of the base student cost from the State. The charter school only is eligible to receive the percentage of the base student cost previously received as a school in its former district.

Section 59-40-110.   (A)   A charter may must be approved or renewed for a period of five school years; however, the charter only may be revoked or not renewed under the provisions of subsection (C) of this section. The sponsor annually shall evaluate the conditions outlined in subsection (C). The annual evaluation results must be used in making a determination for nonrenewal or revocation.

(B)   A charter renewal application must be submitted to the school's sponsor, and it must contain:

(1)   a report on the progress of the charter school in achieving the goals, objectives, pupil achievement standards, and other terms of the initially approved charter application; and

(2)   a financial statement that discloses the costs of administration, instruction, and other spending categories for the charter school that is understandable to the general public and that allows comparison of these costs to other schools or other comparable organizations, in a format required by the State Board of Education.

(C)   A charter must be revoked or not renewed by the sponsor if it determines that the charter school:

(1)   committed a material violation of the conditions, standards, or procedures provided for in the charter application;

(2)   failed to meet or make reasonable progress, as defined in the charter application, toward pupil achievement standards identified in the charter application;

(3)   failed to meet generally accepted standards of fiscal management; or

(4)   violated any provision of law from which the charter school was not specifically exempted.

(D)   At least sixty days before not renewing or terminating a charter school, the sponsor shall notify in writing the charter school's governing body of the proposed action. The notification shall state the grounds for the proposed action in reasonable detail. Termination must follow the procedure provided for in this section.

(E)   The existence of another charter granting authority must not be grounds for the nonrenewal or revocation of a charter. Grounds for nonrenewal or revocation must be only those specified in subsection (C) of this section.

(F)   The charter school's governing body may request in writing a hearing before the sponsor within fourteen days of receiving notice of nonrenewal or termination of the charter. Failure by the school's governing body to make a written request for a hearing within fourteen days must be treated as acquiescence to the proposed action. Upon receiving a timely written request for a hearing, the sponsor shall give reasonable notice to the school's governing body of the hearing date. The sponsor shall conduct a hearing before taking final action. The sponsor shall take final action to renew or not renew a charter by the last day of classes in the last school year for which the charter school is authorized.

(G)   A charter school seeking renewal may submit a renewal application to another charter granting authority if the charter school has not committed a material violation of the provisions specified in subsection (C) of this section and the local school district board of trustees refuses to renew the charter. In such cases, the charter school shall continue to receive local funding pursuant to Section 59-40-140(A). However, the charter school is not eligible to receive one hundred percent of the base student cost from the State. The charter school only is eligible to receive the percentage of the base student cost previously received as a school in its former district.

(F)(H)   A decision to revoke or not to renew a charter school may be appealed to the state board pursuant to the provisions of Section 59-40-90.

Section 59-40-115.   A charter school may terminate its contract with a sponsor before the five-year term of contract if all parties under contract with the charter school agree to the dissolution. A charter school that terminates its contract with a sponsor directly may seek application for the length of time remaining on its original contract from another sponsor without review from the Charter School Advisory Committee.

Section 59-40-120.   Upon dissolution of a charter school, its assets may not inure to the benefit of any private person. Any assets obtained through restricted agreements with a donor through awards, grants, or gifts must be returned to that entity. All other assets become property of the sponsor.

Section 59-40-125.   (A)   All charter schools, other than converted charter schools whose employees remain employees of the local school district or the South Carolina Public Charter School District pursuant to Section 59-40-100(D), are eligible covered employers in the South Carolina Retirement Systems and may elect to participate in the system by filing the appropriate application with the South Carolina Retirement Systems. If the charter school chooses not to become a covered employer, employees of that charter school are not allowed to participate in the South Carolina Retirement System except as provided in Section 59-40-130.

(B)   The South Carolina Public Charter School District shall be a covered employer in the South Carolina Retirement System.

Section 59-40-130.   (A)   If an employee of a local school district makes a written request for a leave to be employed at a charter school before July 1, 2006, the school district shall grant the leave for up to five years as requested by the employee. The school district may require that the request for leave or extension of leave be made by the date provided for by state law for the return of teachers' contracts. Employees may return to employment with the local school district at its option with the same teaching or administrative contract status as when they left but without assurance as to the school or supplemental position to which they may be assigned.

(B)   During a leave, the employee may continue to accrue benefits and credits in the South Carolina Retirement System by paying the employee contributions based upon the annual salary of the employee, and the charter school shall pay the employer contribution. A charter school employing an individual on leave from a local school district shall participate in the South Carolina Retirement Systems as a covered employer with respect to the employee on leave it hires. The employee on leave from a local school district employed by a charter school shall accrue benefits and credits in the South Carolina Retirement Systems. The charter school shall remit to the retirement systems the employer contributions required by law for participating employers. The employee shall make the employee contributions to the retirement systems required by law and the contributions must be picked up in accordance with Section 9-1-1020. The South Carolina Retirement Systems may impose reasonable requirements to administer this section.

(C)   The provisions of this section do not apply to teachers and other employees of a converted school whose employment relation is governed by Section 59-40-100.

Section 59-40-140.   (A)   A local school board of trustees sponsor shall distribute state, county, and school district funds to a charter school as determined by the following formula: The previous year's audited total general fund expenditures revenues, including capital outlay and maintenance, but not including expenditures from bonded indebtedness or debt repayment must be divided by the previous year's weighted students, then increased by the Education Finance Act inflation factor, pursuant to Section 59-20-40, for the years following the audited expenditures, then multiplied by the weighted students enrolled in the charter school, which will be subject to adjustment for student attendance and state budget allocations based on the same criteria as the local school district. These amounts must be verified by the State Department of Education before the first disbursement of funds. All state and local funding must be distributed by the local school district to the charter school monthly beginning July first following approval of the charter school application and must continue to be disbursed to the charter school for the duration of its charter and for the duration of any subsequent renewals.

(B)   The South Carolina Public Charter School District shall receive and distribute state funds to the charter school as determined by the following formula: the current year's base student cost, as funded by the General Assembly, multiplied by the weighted students enrolled in the charter school, which must be subject to adjustment for student attendance and state budget allocations. These state funds are in addition to other funds to be received and distributed by the South Carolina Public Charter School District pursuant to subsections (C) and (D) of this section and Section 59-40-220(A). However, the South Carolina Public Charter School District may not retain more than two percent of its gross revenue for its internal administrative and operating expenses.

(C)   During the year of the charter school's operation, as received, and to the extent allowed by federal law, a sponsor shall distribute to the charter school federal funds which are allocated to the local school district on the basis of the number of special characteristics of the students attending the charter school. These amounts must be verified by the State Department of Education before the first disbursement of funds.

(C)(D)   Notwithstanding subsection (B) (C), the proportionate share of state and federal resources generated by students with disabilities or staff serving them must be directed to charter schools the school district board of trustees. The proportionate share of funds generated under other federal or state categorical aid programs must be directed to charter schools the school district board of trustees serving students eligible for the aid pursuant to state and federal law.

(D)(E)   All services centrally or otherwise provided by the school district sponsor or local school district, if any, including, but not limited to, food services, custodial services, maintenance, curriculum, media services, libraries, and warehousing are subject to negotiation between a charter school and the school district sponsor or local school district.

(E)(F)   All awards, grants, or gifts collected by a charter school must be retained by the charter school.

(F)(G)   The governing body of a charter school is authorized to accept gifts, donations, or grants of any kind made to the charter school and to expend or use the gifts, donations, or grants in accordance with the conditions prescribed by the donor. No A gift or donation shall must not be required for admission. However, no a gift, donation, or grant may must not be accepted by the governing board if subject to any a condition contrary to law or contrary to the terms of the contract between the charter school and the governing body. All gifts, donations, or grants must be reported to the local school district sponsor in their annual audit report as required in Section 59-40-50(B)(3).

(G)(H)   A charter school shall report to its sponsor and the Department of Education any change to information provided under its application. In addition, a charter school shall report at least annually to its sponsor and the department all information required by the sponsor or the department and including, at a minimum, the number of students enrolled in the charter school, the success of students in achieving the specific educational goals for which the charter school was established, and the identity and certification status of the teaching staff.

(H)(I)   The sponsor shall provide technical assistance to persons and groups preparing or revising charter applications at no expense.

(I)(J)   Charter schools may acquire by gift, devise, purchase, lease, sublease, installment purchase agreement, land contract, option, or by any other means, and hold and own in its own name buildings or other property for school purposes, and interests in it which are necessary or convenient to fulfill its purposes.

(J)(K)   Charter schools are exempt from all state and local taxation, except the sales tax, on their earnings and property. Instruments of conveyance to or from a charter school are exempt from all types of taxation of local or state taxes and transfer fees.

(K)   For those charter schools established on and after July 1, 2003, during the first year of its operation and upon verification by the State Department of Education that the charter school is receiving funding consistent with this chapter, the local school district shall receive through a state reserve fund established by the General Assembly beginning with fiscal year 2003-2004 an amount equivalent to the base student cost times a 1.0 weighted pupil unit for each student enrolled in the charter school who was enrolled in another noncharter public school in the district on the one hundred thirty-fifth day of the previous school year. The reserve fund shall be available only when the charter school is not initiated or operated by the district. Upon the filing of a charter school application, the State Department of Education must verify to the Charter School Advisory Committee and the affected school district that adequate funds are in the state reserve fund to meet this requirement.

Section 59-40-145.   A child who resides in a school district other than the one where a charter school is located may attend a charter school outside his district of residence; however, the receiving charter school shall have authority to grant or deny permission for the student to attend pursuant to Sections 59-40-40(2)(b) and 59-40-50(B)(7) and (8) according to the terms of the charter after in-district children have been given priority in enrollment. However, the out-of-district enrollment shall not exceed twenty percent of the total enrollment of the charter school without the approval of the sponsoring district board of trustees. The district sending children to the charter school under the terms of this section must be notified immediately of the transferring students. Out-of-district students must be considered based on the order in which their applications are received. If the twenty percent out-of-district enrollment is from one school district, then the sending district must concur with any additional students transferring from that district to attend the charter school. The charter school to which the child is transferring shall be eligible for state and federal funding according to the formula defined in Section 59-40-140(A), (B), and (C), as applicable. However, this section does not apply to a charter school sponsored by the South Carolina Public Charter School District Board of Trustees.

Section 59-40-150.   (A)   The Department of Education shall disseminate information to the public, directly and through sponsors, on how to form and operate a charter school and how to utilize the offerings of a charter school.

(B)   At least annually, the department shall provide upon request a directory of all charter schools authorized under this chapter with information concerning the educational goals of each charter school, the success of each charter school in meeting its educational goals, and procedures to apply for admission to each charter school.

(C)   The department shall bear the cost of complying with this section.

Section 59-40-155.   (A)   Within one year of taking office, all persons elected or appointed as members of a charter school board of trustees after July 1, 2006, shall complete successfully an orientation program in the powers, duties, and responsibilities of a board member, including, but not limited to, topics on policy development, personnel, instructional programs, school finance, school law, ethics, and community relations. The orientation must be provided at no charge by the State Department of Education or an association approved by the department.

(B)   Within ninety days of employment, an administrator employed by the charter school, who is not certified, shall complete successfully an orientation program in the powers, duties, and responsibilities of a school administrator, including, but not limited to, topics on personnel, instructional programs, school finance, school law, ethics, and community relations. The orientation must be provided at no charge by the State Department of Education or an association approved by the department.

Section 59-40-160.   (A)   The State Board of Education shall compile evaluations, to include, but not be limited to, school report cards, of charter schools received from local school boards of trustees sponsors. They shall review information regarding the regulations and policies from which charter schools were released to determine if the releases assisted or impeded the charter schools in meeting their stated goals and objectives.

(B)   The State Board of Education shall review the implementation and effectiveness of this chapter, review comprehensive reports issued by local school boards concerning successes or failures of charter schools, report to the Governor and General Assembly interim results by July 1, 1998, and issue a final report and recommendations to the Governor and General Assembly during the fifth year after the effective date of this chapter.

(C)   In preparing the report required by this section, the State Board of Education shall compare the academic performance of charter school pupils with the performance of ethnically and economically comparable groups of pupils in other public schools who are enrolled in academically comparable courses.

(D)   An impact study shall must be conducted by the State Board of Education two years after the implementation of the Charter School Advisory Committee review process to determine the effectiveness of the application process.

Section 59-40-170.   The Department of Education shall make available, upon request, a list of vacant and unused buildings and vacant and unused portions of buildings that are owned by school districts in this State and that may be suitable for the operation of a charter school. The department shall make the list available to applicants for charter schools and to existing charter schools. The list must include the address of each building, a short description of the building, and the name of the owner of the building. Nothing in this section requires the owner of a building on the list to sell or lease the building or a portion of the building to a charter school or to any other school or to any other prospective buyer or tenant. However, if a school district declares a building surplus and chooses to sell or lease the building, a charter school's board of directors or a charter committee operating or applying within the district must be given the first refusal to purchase or lease the building under the same or better terms and conditions as it would be offered to the public.

Section 59-40-180.   The State Board of Education shall promulgate regulations and develop guidelines necessary to implement the provisions of this chapter, including standards which the Charter School Advisory Committee shall use to determine compliance with this chapter and an application process to include a timeline for submission of applications that will allow for final decisions, including state board appeal, by December first of the year preceding the charter school's opening.

Section 59-40-190.   (A)   The governing body of a charter school may sue and be sued. The governing body may not levy taxes or issue bonds.

(B)   A sponsor is not liable for any of the debts of the charter school.

(C)   A sponsor, members of the board of a sponsor, and employees of a sponsor acting in their official capacity are immune from civil or criminal liability with respect to all activities related to a charter school they sponsor. The governing body of a charter school shall obtain at least the amount of and types of insurance required for this purpose.

(D)   A member of a school governing body may not receive pay as an employee in the same school.

Section 59-40-200.   Notwithstanding any other provision of this chapter, charter schools with conditional charters, with applications pending with local school district boards, or with planning-implementation grants supported by the Public Charter Schools Grant Program whose timelines stipulate having charter applications approved prior to December 1, 2003, shall apply directly to the local school district board of trustees without review by the charter school advisory committee. An application already on file with the charter school advisory committee before the effective date of Section 59-40-220 is subject to the timeline in effect at the time the application was filed. An application filed after the effective date of Section 59-40-220 is subject to the new time lines established pursuant to this chapter.

Section 59-40-210.   A school established as a private school, on the effective date of this section, which desires to convert to a charter school shall dissolve and must not be allowed to open as a charter school for a period of twelve months.

Section 59-40-220.   (A)   The South Carolina Public Charter School District is created as a public body. The South Carolina Public Charter School District must be considered a local education agency and is eligible to receive state and federal funds and grants available for public charter and other schools to the same degree as other local education agencies. The South Carolina Public Charter School District may not have a local tax base and may not receive local property taxes.

(B)   The geographical boundaries of the South Carolina Public Charter School District are the same as the boundaries of the State of South Carolina.

(C)   The office of the South Carolina Public Charter School District Board of Trustees must be housed in the State Department of Education.

Section 59-40-230.   (A)   The South Carolina Public Charter School District must be governed by a board of trustees consisting of not more than eleven members:

(1)   two appointed by the Governor;

(2)   one appointed by the Speaker of the House of Representatives;

(3)   one appointed by the President Pro Tempore of the Senate; and

(4)   seven to be appointed by the Governor upon the recommendation of the:

(a)   South Carolina Association of Public Charter Schools and one additional representative from the association;

(b)   South Carolina Association of School Administrators;

(c)   South Carolina Chamber of Commerce;

(d)   South Carolina Education Oversight Committee;

(e)   South Carolina School Boards Association;

(f)   South Carolina Alliance of Black Educators.

The nine members appointed by the Governor pursuant to this subsection are subject to advice and consent of the Senate. Membership of the committee must reflect representatives from each of the entities in item (A)(4) or their designee as reflected in their recommendation.

Each member of the board of trustees shall serve terms of three years, except that, for the initial members, two appointed by the Governor, one by the Speaker of the House, and one by the President Pro Tempore of the Senate, shall serve terms of one year and three appointed by the Governor shall serve terms of two years. A member of the board may be removed after appointment pursuant to Section 1-3-240. In making appointments, every effort must be made to ensure that all geographic areas of the State are represented and that the membership reflects urban and rural areas of the State as well as the ethnic diversity of the State.

(B)   The South Carolina Public Charter School District Board of Trustees has the same powers, rights, and responsibilities with respect to charter schools as other school district boards of trustees of this State including, but not limited to, sponsoring charter schools and applying for federal charter school grants, except that the South Carolina Public Charter School District Board of Trustees may not offer application for a charter school, issue bonds, or levy taxes.

(C)   The South Carolina Public Charter School District Board of Trustees annually shall elect a chairman and other officers as it considers necessary from among its membership.

(D)   Members of the South Carolina Public Charter School District Board of Trustees are not eligible to receive compensation but are eligible for per diem, mileage, and subsistence as provided by law for members of state boards, committees, and commissions.

(E)   The South Carolina Public Charter School District Board of Trustees shall:

(1)   exercise general supervision over public charter schools sponsored by the district;

(2)   grant charter status to qualifying applicants for public charter schools pursuant to this chapter;

(3)   adopt and use an official seal in the authentication of its acts;

(4)   keep a record of its proceedings;

(5)   adopt rules of governance;

(6)   determine the policy of the district and the work undertaken by it;

(7)   prepare a budget for expenditures necessary for the proper maintenance of the board and the accomplishment of its purpose;

(8)   keep financial records in accordance with state and federal accounting codes and procedures;

(9)   comply with and ensure compliance of applicable state and federal regulations;

(10)   procure an outside annual certified financial audit on funds and submit to the State Department of Education as required by the State Department of Education;

(11)   be subject to the Freedom of Information Act;

(12)   have the power to hire and fire the superintendent of the district who may have staff as needed.

(F)   The South Carolina Public Charter School District Board of Trustees may contract, sue, and be sued.

Section 59-40-210 59-40-240.   If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this chapter 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 chapter, the General Assembly hereby declaring that it would have passed this chapter, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words thereof may be declared to be unconstitutional, invalid, or otherwise ineffective."

SECTION   2.   Section 59-18-920 of the 1976 Code as last amended by Act 49 of 2005 is amended to read:

"Section 59-18-920.   A charter school established pursuant to Chapter 40, Title 59 shall receive a performance rating and shall issue a report card report the data requested by the Department of Education necessary to generate a report card. The Department of Education shall utilize this data to issue a report card with performance ratings to parents and the public containing the rating ratings and explaining its significance and providing other information similar to that required of other schools in this section. The performance of students attending charter schools sponsored by the South Carolina Public Charter School District must be included in the overall performance ratings of the South Carolina Public Charter School District. The performance of students attending a charter school authorized by a local school district must be reflected on a separate line on the school district's report card and must not be included in the overall performance ratings of the local school district. An alternative school is included in the requirements of this chapter; however, the purpose of an alternative school must be taken into consideration in determining its performance rating. The Education Oversight Committee, working with the State Board of Education and the School to Work Advisory Council, shall develop a report card for career and technology schools."

SECTION   3.   Section 59-18-900 of the 1976 Code as last amended by Act 88 of 2005, is further amended by adding a subsection at the end to read:

"(G)   The State Board of Education shall promulgate regulations outlining the procedures for data collection, data accuracy, data reporting, and consequences for failure to provide data required in this section."

SECTION   4.   This act takes effect upon approval by the Governor. /

Amend title to conform.

/s/Robert W. Hayes, Jr.           /s/Vida O. Miller
/s/Scott H. Richardson           /s/Ronald P. Townsend
/s/Nikki G. Setzler               /s/Robert E. Walker
On Part of the Senate.                On Part of the House.

, and a message was sent to the House accordingly.

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 resumed consideration of the Bill, the question being the adoption of Amendment No. P-4C (JUD4449.031) proposed by 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, and previously printed in the Journal of Wednesday, April 19, 2006 and was subsequently withdrawn:

Senator CAMPSEN was recognized to speak on the amendment.

With Senator CAMPSEN retaining the floor, Senator COURSON, with unanimous consent, was recognized to speak on the Bill.

Senator MARTIN asked unanimous consent to make a motion to withdraw Amendment No. P-4C and substitute Amendment No. P-4D and take up Amendment No. P-4D for immediate consideration.

There was no objection and Amendment No. P-4D 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 (JUD4449.033), which was tabled:

Amend the Finance Committee Report/Amendment, as and if amended, by striking the Finance Committee Report/Amendment in its entirety and inserting the following:

SECTION   1.   Chapter 10, Title 4 of the 1976 Code is amended by adding:

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   1.     A.   Chapter 36, Title 12 of the 1976 Code is amended by adding:

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   2.   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 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 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   3.   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   4.   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   1.   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   2.   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.

SECTION   1.   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.

SECTION   1.   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.

Senator RITCHIE argued in favor of the adoption of the amendment.

Senator JACKSON spoke on the amendment.

Senator MARTIN spoke on the amendment.

Senator RITCHIE resumed speaking on the amendment.

Senator MARTIN moved to lay the amendment on the table.

The amendment was laid on the table.

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-15 (JUD4449.040), which was withdrawn:

Amend the committee report/amendment, as and if amended, by striking the committee report/amendment in its entirety and inserting the following:

SECTION   1.   Chapter 10, Title 4 of the 1976 Code is amended by adding:

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   1.   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   2.   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.

SECTION   1.   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.

SECTION   1.   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 RITCHIE explained the amendment.

On motion of Senator MARTIN, with unanimous consent, Amendment No. P-15 was withdrawn and Amendment No. P-15A was substituted and 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-15A (JUD4449.041), which was adopted:

Amend the committee report/amendment, as and if amended, by striking the committee report/amendment in its entirety and inserting the following:

SECTION   1.   Chapter 10, Title 4 of the 1976 Code is amended by adding:

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.

(H)   The sales and use tax authorized pursuant to this article shall not apply to unprepared food that lawfully may be purchased with United States Department of Agriculture food coupons.

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   1.   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   2.   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.

SECTION   1.   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.

SECTION   1.   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 RITCHIE explained the amendment.

Senator RITCHIE moved that the amendment be adopted.

The amendment was adopted.

Senator KNOTTS proposed the following Amendment No. P-16 (JUD4449.035):

Amend the committee report, as and if amended, by striking the report in its entirety and adding appropriately numbered PARTS and SECTIONS to read:

SECTION   1.   A.   Chapter 36, Title 12 of the 1976 Code is amended by adding:

Section 12-36-1110.   Beginning June 1, 2006, an additional sales, use, and casual excise tax equal to two percent is imposed on amounts taxable pursuant to this chapter, except that this additional two percent tax does not apply to:

(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 that lawfully may be purchased with United States Department of Agriculture food coupons.

Section 12-36-1120.   The revenue of the tax imposed by this article must be credited to the Homestead Exemption Fund established pursuant to Section 11-11-155.

Section 12-36-1130.   The Department of Revenue may prescribe amounts that may be added to the sales price to reflect the additional tax imposed pursuant to this article."

B.   Section 12-36-2120 of the 1976 Code, as last amended by Act 164 of 2005, is further amended by adding an appropriately numbered item at the end to read:

"The provisions of Section 4-10-350(F) and (G) of the 1976 Code apply mutatis mutandis with respect to the tax imposed pursuant to Article 11, Chapter 36, Title 12 of the 1976 Code as added by this section."

SECTION   2.   Chapter 11, Title 11 of the 1976 Code is amended by adding:

"Section 11-11-155.   (1)   For each fiscal year in which and after which this section takes effect, the revenue from the tax imposed pursuant to Section 12-36-1110, and an amount equal to the total of reimbursements paid pursuant to the provisions of Sections 12-37-251 and 12-37-270 in fiscal year 2005-2006 is automatically credited to a fund separate and distinct from the state general fund known as the 'Homestead Exemption Fund'. The Board of Economic Advisors shall account for the Homestead Exemption Fund revenue separately from general fund revenues, and the board shall make an annual estimate of the receipts by the Homestead Exemption Fund by February fifteenth of each year. This estimate shall be transmitted to the State Treasurer, Comptroller General, and the Chairmen of the House Ways and Means Committee and the Senate Finance Committee. No portion of these revenues may be credited to the Education Improvement Act (EIA) Fund.

(2)   There is established in the State Treasury the Homestead Exemption Fund Reserve (Reserve) as a fund separate and distinct from the Homestead Exemption Fund, the general fund of the State, and all other funds. Any revenue received from the imposition of the two percent additional sales and use tax imposed pursuant to Section 12-36-1110 for a fiscal year above what the Board of Economic Advisors estimated for that fiscal year must be transferred into the Reserve. Establishing this Reserve in the required amount is the second priority use of Homestead Exemption Fund revenues in a fiscal year. Balances in the Reserve at the end of a fiscal year remain in this Reserve. If revenues in the Homestead Exemption Fund available for reimbursements in a fiscal year are less than that amount as estimated by the Board of Economic Advisors for the fiscal year, the State Budget and Control Board must first apply so much of the Reserve as is necessary or available to offset the deficit before the balance may be paid from the state general fund. Secondly, to the extent monies are available in the Reserve after any transfers to the Homestead Exemption Fund to offset a deficit, these monies shall then be transferred by the Budget and Control Board to the state general fund to reimburse it for any distributions made to supplement reimbursements required to be made from the Homestead Exemption Fund.

(3)   An unexpended balance in the Homestead Exemption Fund or Reserve Fund at the end of a fiscal year must remain in the Homestead Exemption Fund or Reserve Fund.

(4)   Earnings on the Homestead Exemption Fund or Reserve Fund must be credited to the Homestead Exemption Fund or Reserve Fund.

(5)   Nothing in this section prohibits appropriations by the General Assembly of additional revenues to the Homestead Exemption Fund."

SECTION   3.   A.   Section 12-37-220(B) of the 1976 Code is amended by adding a new item at the end appropriately numbered to read:

"( )(a)   For property tax years beginning after 2006, one hundred percent of the fair market value of owner-occupied residential property eligible for and receiving the special assessment ratio allowed owner-occupied residential property pursuant to Section 12-43-220(c) is exempt from all property taxes imposed for school operations.

(b)   For motor vehicle property tax years beginning after June 30, 2007, one hundred percent of the fair market value of private passenger motor vehicles as defined pursuant to Section 56-3-630 is exempt from all property taxes imposed for school operations.

(c)   For purposes of this item, 'property tax imposed for school operations' includes all ad valorem tax imposed for schools, not including any taxes imposed to service general obligation debt or other financing instruments used by school districts for capital improvements."

B.   (1)   The first undesignated paragraph of Section 12-43-220(a) of the 1976 Code is amended to read:

"All real and personal property owned by or leased to manufacturers and utilities and used by the manufacturer or utility in the conduct of the business must be taxed on an assessment equal to ten and one-half nine percent of the fair market value of the property. Notwithstanding any other provision of law, for purposes of calculating limits on 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 tax paying ability pursuant to Section 59-20-20(3), the assessment ratio imposed pursuant to this item is deemed to be 10.5 percent of fair market value."

(2)   The change in the assessment ratio of manufacturing and utility property from ten and one-half percent of fair market value to nine percent of fair market value as provided in item (1) of this subsection is made pursuant to the authorization contained in Article X, Section 2 of the Constitution of this State.

C.   Title 12, Chapter 44 of the 1976 Code is amended by adding:

"Section 12-44-180.   There is allowed as a credit against any fee in lieu of tax payment negotiated pursuant to this chapter, Section 4-29-67, or Chapter 12 of Title 4, an amount equal to the fee otherwise due and payable so that the amount of property taxes owed for school operations is reduced by twenty percent."

SECTION   4.   A.   Section 12-43-220 of the 1976 Code, as last amended by Act 145 of 2005, is further amended by adding a new undesignated paragraph at the end of the section to read:

"As used in this section, fair market value with reference to real property means fair market value determined in the manner provided pursuant to Section 1A, Article X of the Constitution of this State and Section 12-37-932."

B.   Section 12-43-210 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:

"Section 12-43-210.   (A)   All property must be assessed uniformly and equitably throughout the State. The South Carolina Department of Revenue may promulgate regulations to ensure equalization which must be adhered to by all assessing officials in the State.

(B)   No reassessment program may be implemented in a county unless all real property in the county, including real property classified as manufacturing property, is reassessed in the same year."

C.   Section 1B of Act 406 of 2000 is amended to read:

"(B)   The exemption amount of the homestead exemption allowed pursuant to Section 12-37-250 of the 1976 Code is raised from twenty to fifty thousand dollars for property tax year 2000 and thereafter, to be funded as provided herein. The amount appropriated to the Trust Fund for Tax Relief must be used to reimburse counties, municipalities, school districts, and special purpose districts, as applicable, for this increased exemption amount in the manner provided in Section 12-37-270 of the 1976 Code. For tax years after 2000, an amount sufficient to fund the exemption provided herein must be appropriated from the Tobacco Settlement Fund, before any reductions or withdrawals as may be provided by law, to the Trust Fund for Tax Relief and must be used to reimburse counties, municipalities, school districts, and special purpose districts, as applicable, for this increased exemption amount in the manner provided in Section 12-37-270 of the 1976 Code. Reserved."

D.     Items (1) and (2) of Section 11-11-150(A) of the 1976 Code, as added by Act 419 of 1998, are amended to read:

"(1)   Section 12-37-251 for the residential property tax exemption Reserved;

(2)   Section 12-37-270 for the homestead exemption for persons over age sixty-five or disabled Reserved;"

E.   Sections 12-37-251, 12-37-270, 12-43-217, 12-43-260, and 12-43-295, all of the 1976 Code, are repealed.

F.   Section 12-37-223A of the 1976 Code is repealed.

SECTION   5.   Assessors and other staff responsible for the assessment of property for ad valorem taxation purposes are required to receive nine hours of instruction each year in the laws applicable to assessment for ad valorem taxation, methods of valuating property, administration of the assessor's office and records of the assessor's office, and other functions related to the assessor's office. This instruction must be received from the Department of Revenue or other providers or courses approved by the Department of Revenue.

SECTION   6.   (A)   The sales tax exemptions in Section 12-36-2120 of the 1976 Code shall be reviewed by the General Assembly at its 2010 session and at its sessions every ten years thereafter.

(B)(1)   There is established the Joint Sales Tax Exemptions Review Committee composed of seven members; three of whom must be members of the Senate appointed by the Chairman of the Senate Finance Committee, one of whom must be a member of the minority party; three of whom must be members of the House of Representatives appointed by the Chairman of the House Ways and Means Committee, one of whom must be a member of the minority party; and one of whom must be the Governor or the Governor's appointee who shall serve at the Governor's pleasure. The committee shall elect a chairman and vice chairman from among its members. All legislative members shall serve ex officio. The committee shall assist the General Assembly in performing its duties under the provisions of subsection (A) in addition to its duties required by this subsection.

(2)   In carrying out its responsibilities under this act, the committee shall:

(a)   make a detailed and careful study of the State's sales tax exemptions, comparing South Carolina laws to other states;

(b)   publish a comparison of the State's sales tax exemptions to other states' laws;

(c)   recommend changes, and recommend introduction of legislation when appropriate;

(d)   submit reports and recommendations annually to the Governor and the General Assembly regarding sales tax exemptions.

(3)   In carrying out its responsibilities under this act, the committee may:

(a)   hold public hearings;

(b)   receive testimony of any employee of the State or any other witness who may assist the committee in its duties;

(c)   call for assistance in the performance of its duties from any employee or agency of the State.

(4)   The committee may adopt by majority vote rules not inconsistent with this act that it considers proper with respect to matters relating to the discharge of its duties under this section. Professional and clerical services for the committee must be made available from the staffs of the General Assembly, the Budget and Control Board, and the Department of Revenue. The members of the committee may not receive mileage, per diem, subsistence, or any form of compensation for their service on the committee.

SECTION   7.   A.   1.   Section 4-12-30(D)(2)(a)(i) and (ii) is amended to read:

"(i)   for real property, using the original income tax basis for South Carolina income tax purposes without regard to depreciation, if real property is constructed for the fee or is purchased in an arm's length transaction; otherwise, the property must be reported at its fair market value for ad valorem property tax purposes as determined by appraisal. The fair market value estimate established for the first year of the fee remains the fair market value of the real property for the life of the fee; and

(ii)   for personal property, using the original tax basis for South Carolina income tax purposes less depreciation allowable for property tax purposes, except that the sponsor is not entitled to any extraordinary obsolescence."

2.   Section 4-12-30(E) of the 1976 Code is amended to read:

"(E)   Calculations pursuant to subsection (D)(2) must be made on the basis that the property, if taxable, is allowed all applicable property tax exemptions except the exemption allowed under Section 3(g) of Article X of the Constitution of this State and the exemption allowed pursuant to Section 12-37-220(B)(32) and (34)."

B.   Items (1) and (2) of Section 12-44-50(A) of the 1976 Code are amended to read:

"(1)   During the exemption period, the sponsor shall pay, or be responsible for payment, to the county the annual fee payment in connection with the economic development property which has been placed in service, in an amount not less than the property taxes that would be due on the economic development property if it were taxable but using:

(a)   an assessment ratio of not less than six percent, or four percent for those projects qualifying under the enhanced investment definition;

(b)   a millage rate that is, either:

(i)     fixed for the life of the fee; or

(ii)   is allowed to increase or decrease every fifth year in step with the average cumulative actual millage rate applicable to the project based upon the preceding five-year period; and

(c)   a fair market value for the economic development property:

(i)     if real property is constructed for the fee or is purchased in an arm's length transaction, the fair market value of real property is determined by using the original income tax basis for South Carolina income tax purposes without regard to depreciation, otherwise the property must be reported at its fair market value for ad valorem property taxes as determined by appraisal. The fair market value estimate established for the first year of the fee remains the fair market value of the real property for the life of the fee;

(ii)   fair market value for personal property is determined by using the original tax basis for South Carolina income tax purposes less depreciation allowable for property tax purposes, except that the sponsor is not entitled to extraordinary obsolescence; and

(d)   to establish the millage rate for purposes of subsection (A)(1)(b)(i) or the first five years millage under (A)(1)(b)(ii), the millage rate must be no lower than the cumulative property tax millage rate levied by, or on behalf of, all taxing entities within which the project is located on either:

(i)     June thirtieth of the year preceding the calendar year in which the fee agreement is executed; or

(ii)   the millage rate in effect on June thirtieth of the calendar year in which the fee agreement is executed.

(2)   The fee calculation must be made so that the property, if taxable, is allowed all applicable property tax exemptions except the exemption allowed under Section 3(g) of Article X of the Constitution of this State and the exemption allowed pursuant to Section 12-37-220(B)(32) and (34)."

SECTION   1.   (A)(1)   For the year 2007, property taxing entities of this State other than school districts must be reimbursed from the Homestead Exemption Fund dollar for dollar for the property taxes collected by them from owner-occupied residential property for the year 2006 for all purposes other than payment of general obligation debt. The Comptroller General shall pay these reimbursements on or after January 1, 2008, upon application of the property taxing entity.

(2)   Beginning January 1, 2008, property taxing entities of the State other than school districts must be reimbursed from the Homestead Exemption Fund for the taxes not collected because of the exemption allowed in the new item added to Section 12-37-220(B) of the 1976 Code in Part I of this act in the manner provided in this item. The Comptroller General shall pay these reimbursements upon application of the property taxing entity and the reimbursement shall be equal to the amount distributed in the previous year plus the reimbursement increases provided for in subsection (C). The reimbursement increase of a property taxing entity other than a school district as provided in subsection (C) for any year stated as a percentage shall be multiplied by the entity's reimbursement amount for the previous year to determine the total distribution to the entity for the year. No such property taxing entity shall receive less in reimbursements beginning in 2008 than it received in 2007.

(B)(1)   For the year 2007, school districts of this State must be reimbursed from the Homestead Exemption Fund dollar for dollar for the property taxes collected by them from owner-occupied residential property for the year 2006 for all purposes other than payment of general obligation debt. The Comptroller General shall pay these reimbursements on or after January 1, 2008, upon application of the school district.

(2)   Beginning January 1, 2008, school districts of this State must be reimbursed from the Homestead Exemption Fund for the taxes not collected because of the property tax exemption allowed in the new item added to Section 12-37-220(B) of the 1976 Code in Part I of this act in the manner provided in this item. The Comptroller General shall pay these reimbursements upon application of the school district and the reimbursement shall be equal to the amount distributed in the previous year plus the reimbursement increases provided for in subsection (C). The reimbursement increases of the several school districts as provided in subsection (C) for any year shall be aggregated and the reimbursement increase a particular school district shall receive for that year shall be equal to an amount that is the school district's proportionate share of such funds based on the district's weighted pupil units as a percentage of statewide weighted pupil units as determined annually pursuant to the Education Finance Act. No school district shall receive less in reimbursements beginning in 2008 than it received in 2007. For purposes of the reimbursement increases school districts receive under this item based on weighted pupil units determined pursuant to the Education Finance Act, an additional add-on weighting for students in poverty of 0.20 shall be included in the weightings provided in Section 59-20-40(1)(c) of the 1976 Code. The weighting for poverty shall provide additional revenues for students in kindergarten through grade twelve who qualify for Medicaid or who qualify for reduced or free lunches, or both. Revenues generated by this weighting must be used by districts and schools to provide services and research-based strategies for addressing academic or health needs of these students to ensure their future academic success, to provide summer school, reduced class size, after school programs, extended day, instructional materials, or any other research-based educational strategy to improve student academic performance. All amounts received by a district pursuant to the Education Finance Act must be expended only for classroom instruction and costs and expenses directly associated with classroom instruction.

(C)   Beginning with the 2008 reimbursements to all property taxing entities of this State, these reimbursements must be increased on an annual basis by an inflation factor equal to the percentage increase in the previous year of the Consumer Price Index, Southeast Region, as published by the United States Department of Labor, Bureau of Labor Statistics plus the percentage increase in the previous year in the population of the entity as determined by the Office of Research and Statistics of the Budget and Control Board. Distribution of these reimbursement increases shall be as provided in subsections (A) and (B) of this section.

(D)   The percentage of population growth in any year for any property taxing entity entitled to reimbursements from the Homestead Exemption Fund shall be based on estimates for such growth in the county wherein the property taxing entity is located as determined by the Office of Research and Statistics of the Budget and Control Board. Where the property taxing entity encompasses areas in more than one county, the population growth in that entity shall be the average of the growth in each county weighted to reflect the existing population of the property taxing entity in that county as compared to the existing population of the property taxing entity as a whole.

(E)   Upon the beginning of reimbursements to property taxing entities including school districts as provided in this Part, reimbursements for a particular year must be paid to the property taxing entities by August thirty-first of that year.

(F)   Notwithstanding any other provision of this section, the reimbursements provided pursuant to this section apply for real property located in redevelopment project areas pursuant to the Tax Increment Financing Law and the Tax Increment Financing Act for counties and for real property subject to a redevelopment plan adopted before the effective date of this act, the reimbursements provided pursuant to this section must not be less than dollar for dollar for the duration of the plan.

SECTION   2.   (A)   For purposes of determining reimbursements to property taxing entities including school districts for taxes not collected because of the property tax exemption allowed in the new item added to Section 12-37-220(B) of the 1976 Code in Part I of this act, ad valorem property tax revenue of a property taxing entity not collected as a result of a one percent local option sales tax or local sales tax imposed in the entity pursuant to state or local law shall nevertheless be considered collected for purposes of determining reimbursements under Part II of this act.

(B)   Beginning June 1, 2007, funds derived from a one percent local sales tax or local option sales tax imposed in a jurisdiction pursuant to state or local law which are used to reduce ad valorem property taxes imposed on owner-occupied residential property, must be thereafter applied on a pro-rata basis to reduce ad valorem property taxes on all other classes of property.

SECTION   3.   To the extent revenues in the Homestead Exemption Fund are insufficient to pay all reimbursements required by law, the difference must be paid from the state general fund.

SECTION   4.   Chapter 9, Title 4 of the 1976 Code is amended by adding:

"Section 4-9-56.   (A)   Beginning with the year 2007, a property taxing entity in this State including a school district may not levy any ad valorem taxation on owner-occupied residential property to which the exemption provided in the new item added to Section 12-37-220(B) of the 1976 Code in Part I of this act apply, with the exception of any levy for general obligation bonded debt purposes. A property taxing entity including school districts which violates this provision must have its aid-to-subdivisions allocations in future general appropriations acts reduced until the violation is cured. The millage levied by a property taxing entity for the year 2006 shall be the millage used to determine the property tax revenue lost as a result of the exemptions provided in the new item added to Section 12-37-220(B) of the 1976 Code in Part I of this act.

(B)   Beginning with the year 2007, a property taxing entity of this State including a school district may increase ad valorem property tax millage on all classes of real and personal property for general operating purposes, except owner-occupied residential property, above that levied for the previous year by an inflation factor equal to the percentage increase in the previous year of the Consumer Price Index, Southeast Region, as published by the United States Department of Labor, Bureau of Labor Statistics plus the percentage increase in the previous year in the population of the entity as determined by the Office of Research and Statistics of the Budget and Control Board. Any millage increase above this limitation requires a supermajority vote of the governing body of the entity entitled to levy property taxes defined as an affirmative vote by seventy-five percent of the total membership of the governing body of the entity. Seventy-five percent of the total membership of the governing body of the entity must be determined without rounding a fractional number into a whole number for the purpose of computing the required vote total.

If a property taxing entity does not increase millage by the maximum millage increase allowed pursuant to this subsection without a supermajority vote, the difference between the millage rate actually imposed and the maximum millage that could have been imposed for that year without a supermajority vote is deemed 'unused' millage.

In calculating the maximum annual millage increase that may be imposed without a supermajority vote, there must be added to the otherwise applicable total any unused millage from the preceding two tax years."

SECTION   1.   Article 5, Chapter 11, Title 11 of the 1976 Code is amended by adding:

"Section 11-11-415.   (A)   Except when a lower spending limit applies pursuant to Section 11-11-410, State appropriations for a fiscal year may not exceed appropriations authorized by the spending limitation prescribed in this section. State appropriations subject to the spending limitation are those appropriations authorized annually in the annual general appropriations act and any supplemental appropriations acts or joint resolutions for that fiscal year which fund general purposes. A statement of total 'General Revenues' must be included in the annual general appropriations act. As used in this section the appropriations limited as defined in this subsection must be those funded by 'General Revenues' as defined in the general appropriations act for fiscal year 2007-2008. All additional nonfederal and nonuser fee revenue items must be included in that category as they may be created by act of the General Assembly.

(B)(1)   The limitation on State appropriations for a fiscal year as provided in subsection (A) is the greater of:

(a)   base-year appropriations increased by a percentage equal to the annual percentage increase in state personal income for the most recently completed calendar year for which this figure is available; or

(b)   base-year appropriations increased by a percentage equal to the state's growth in population applied ratably over the period of the decennial United States census assuming a rate of increase equal to the rate in the most recently completed United States census for which population figures are available over the next preceding census and a percentage equal to the increase, if any, in the consumer price index in the most recently ended calendar year, as determined by the Bureau of Labor Statistics of the United States Department of Labor.

(2)   As used in this subsection:

(a)   'base-year appropriations' means general fund appropriations for the current fiscal year as of February fifteenth, including both recurring and nonrecurring revenues from whatever source derived and regardless of the time the appropriations are effective except that appropriations for the Capital Reserve Fund are not included in base-year appropriations. This general fund total must be adjusted to reflect any mid-year appropriations reductions, however imposed, made, or scheduled as of February fifteenth; and

(b)   'state personal income' means total personal income for a calendar year as determined by the Office of State Budget of the State Budget and Control Board based on the most recent data provided by the United States Department of Commerce.

(3)   The Office of Research and Statistics of the State Budget and Control Board, upon approval by the State Economist and in consultation with the director of the board's Office of State Budget, shall calculate and provide the appropriate percentages for population, consumer price index, and state personal income growth to the Ways and Means Committee of the House of Representatives and the Senate Finance Committee no later than February fifteenth of each year.

(C)   The Comptroller General shall notify the Governor, the Speaker of the House, and the President Pro Tempore of the Senate if the spending limit as contained in this section is exceeded. The General Assembly shall then take corrective action immediately upon meeting in the next regular session or a special session called for that purpose. This subsection does not apply to funds transferred from the general reserve fund to the general fund.

(D)   Notwithstanding the provisions of subsection (A) of this section, the General Assembly may suspend the spending limitation for a fiscal year for a specific amount by a special vote as provided in this subsection by enactment of legislation.

The special vote referred to in this subsection means an affirmative recorded roll-call vote in each branch of the General Assembly by at least two-thirds of the total membership in each branch."

SECTION   2.   Article 3, Chapter 1, Title 6 of the 1976 Code is amended by adding:

"Section 6-1-335.   (A)   The spending limit imposed on a local governing body pursuant to this section is in addition to and not in lieu of any other limit on spending or on the taxing power of a local governing body. Where a limit on spending by or on the taxing power of a local governing body imposed by the Constitution of this State or by general or local laws of this State imposes any limit resulting in a more restrictive spending limit than the limit imposed pursuant to this section, the more restrictive limit applies.

(B)   The limit on all appropriations for a fiscal year by a local governing body, except for appropriations to service general obligation debt or for the purposes provided in Section 6-1-320(B) is the greater of:

(1)   base-year appropriations increased by a percentage equal to the annual percentage increase in state personal income for the most recently completed calendar year for which this figure is available; or

(2)   base-year appropriations increased by a percentage equal to the jurisdiction's growth in population applied ratably over the period of the decennial United States census assuming a rate of increase equal to the rate in the most recently completed United States census for which population figures are available over the next preceding census and a percentage equal to the increase, if any, in the consumer price index in the most recently ended calendar year, as determined by the Bureau of Labor Statistics of the United States Department of Labor. For a school district, the population increase portion of this calculation is replaced by the actual annual increase in the student enrollment for the most recent year for which that figure is available for the district.

(C)   As used in this section:

(1)   'base-year appropriations' means appropriations for the current fiscal year as of February fifteenth, including both recurring and nonrecurring revenues from whatever source derived and regardless of the time the appropriations are effective except for appropriations for the purposes exempt from the limit pursuant to subsection (B) of this section. This total must be adjusted to reflect any mid-year appropriations reductions, however imposed, made, or scheduled as of February fifteenth; and

(2)   'state personal income' means total personal income for a calendar year as determined by the Office of State Budget of the State Budget and Control Board based on the most recent data provided by the United States Department of Commerce.

(D)   The Office of Research and Statistics of the State Budget and Control Board, upon approval by the State Economist and in consultation with the director of the board's Office of State Budget, shall calculate and provide the appropriate percentages for population, consumer price index, and state personal income growth to the local governing body no later than February fifteenth of each year."

SECTION   3.   The provisions of this Part take effect as provided in Part IV of this act and first apply for appropriations for fiscal years beginning after June 30, 2009.

SECTION   1.   A.     Section 11-27-30 of the 1976 Code, as last amended by Act 27 of 2001, is further amended by adding an item at the end to read:

"9.   For purposes of this section, a complete or partial successor-in-interest to, or other transferee of, the State or other associate of any kind of the State is deemed to be the State when the successor, transferee, or associate undertakes all or a portion of the operation or assumes all or a portion of a duty of the State."

B.     Section 11-27-40 of the 1976 Code, as last amended by Act 113 of 1999, is further amended by adding an item at the end to read:

"10.   For purposes of this section, a complete or partial successor-in-interest to, or other transferee of, the political subdivision of the State or other associate of any kind of the political subdivision of the State is deemed to be the political subdivision of the State when the successor, transferee, or associate undertakes all or a portion of the operation or assumes all or a portion of a duty of the political subdivision of the State."

C.     Section 11-27-50 of the 1976 Code, as last amended by Act 113 of 1999, is further amended by adding an item at the end to read:

"8.   For purposes of this section, a complete or partial successor-in-interest to, or other transferee of, the school district or other associate of any kind of the school district is deemed to be the school district when the successor, transferee, or associate undertakes all or a portion of the operation or assumes all or a portion of a duty of the school district."

D.     The provisions of subsections A., B., and C. of this section apply with regard to all transfers made after July 1, 2006, to which these subsections apply.

SECTION   2.   A.     Section 12-37-670 of the 1976 Code is amended to read:

"Section 12-37-670.   (A)   Each owner of land on which any new structures have been erected which shall not have been appraised for taxation shall list them for taxation with the county auditor of the county in which they may be situate on or before the first day of March next after they shall become subject to taxation. No new structure shall be listed or assessed until it is completed and fit for the use for which it is intended.

(B)(1)   Notwithstanding the provisions of subsection (A), a county governing body may by ordinance provide that an owner of land on which a new structure has been erected and which has not been appraised for taxation shall list the new structure for taxation with the county auditor of the county in which it is located by the first day of the next month after a certificate of occupancy is issued for the structure. A new structure must not be listed or assessed until it is completed and fit for the use for which it is intended, as evidenced by the issuance of the certificate of occupancy.

(2)   Additional property tax attributable to improvements listed with the county auditor on or before June thirtieth is due for the period from July first to December thirty-first for that property year, and payable when taxes are due on the property for that property tax year. Additional property tax attributable to improvements listed with the county auditor after June thirtieth of the property tax year is due and payable when taxes are due on the property for the next property tax year.

(3)   If a county governing body elects by ordinance to impose the provisions of this subsection, this election is also binding on all municipalities within the county imposing ad valorem property taxes."

B.   Section 12-37-680 of the 1976 Code is repealed.

SECTION   3.   Section 12-43-215 of the 1976 Code is amended to read:

"Section 12-43-215.   (A)   When owner-occupied residential property assessed pursuant to Section 12-43-220(c) is valued for purposes of ad valorem taxation, the value of the land must be determined on the basis that its highest and best use is for residential purposes.

(B)   Each county must submit to the Department of Revenue an annual report, in a form to be determined by the department, listing the names and addresses of all residential property in the county which is classified as 'owner-occupied'."

SECTION   4.   Chapter 20, Title 59 of the 1976 Code is amended by adding:

"Section 59-20-21.   Beginning with the year 2007, the State Board of Education, in determining the minimum education program designed to meet students' needs, may only consider factors required by statutory law or which directly affect classroom learning, and the local maintenance of effort required of a school district must be based on these determinations."

SECTION   5.   Chapter 20, Title 59 of the 1976 Code is amended by adding:

"Section 59-20-22.   Notwithstanding a school district's index of taxpaying ability, the minimum state funds a district shall receive in any year is forty percent of the applicable year's base student cost."

SECTION   1.   This act, except as otherwise provided herein and except for Parts III and IV, takes effect upon ratification of amendments to Article X of the Constitution of this State proposed at the general election of 2006 defining fair market value of real property as its fair market value when it's ownership last was transferred, increased by the value of improvements, and providing for an additional exemption from the property tax of one hundred percent of the fair market value of owner-occupied residential property. Parts III and IV of this act take effect upon approval by the Governor.

SECTION   2.   Notwithstanding any other provision of law, a county governing body is authorized to conduct a referendum at the same time as the 2006 general election as to whether or not a local option sales tax presently imposed in that jurisdiction should be repealed. If the qualified electors of the county vote in favor of repealing the local option sales tax, the tax shall be repealed as of January 1, 2007.   /   //

Renumber sections to conform.

Amend title to conform.

Senator KNOTTS explained the amendment.

With Senator KNOTTS retaining the floor, debate was interrupted by recess.

At 1:57 P.M., on motion of Senator McCONNELL, the Senate receded from business not to exceed twenty minutes.

The Senate reassembled at 2:48 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. P-16 (JUD4449.035)) proposed by Senator KNOTTS. The amendment was carried over.

Senator KNOTTS explained the amendment.

Senator MARTIN raised a Point of Order that a member could not filibuster his own amendment.

Senator SHEHEEN spoke on the Point of Order.

The PRESIDENT took the Point of Order under advisement.

Senator KNOTTS resumed explaining the amendment.

Senator KNOTTS moved that the amendment be adopted.

Senator MARTIN moved to lay the amendment on the table.

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

Alexander                 Drummond                  Elliott
Gregory                   Hayes                     Land
Leatherman *              Malloy                    Martin
McGill                    Mescher                   O'Dell
Patterson                 Rankin                    Ritchie
Sheheen                   Williams

Bryant                    Campsen                   Cleary
Cromer                    Fair                      Grooms
Hawkins                   Hutto                     Jackson
Knotts                    Lourie                    Matthews
McConnell                 Moore                     Peeler
Pinckney                  Reese                     Richardson
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 Senate refused to table the amendment. The question then was the adoption of the amendment.

Senator MARTIN argued contra to the adoption of the amendment.

At 3:41 P.M., Senator McCONNELL assumed the Chair.

Senator MARTIN continued speaking on the amendment.

At 3:44 P.M., the PRESIDENT assumed the Chair.

Senator SHEHEEN moved to carry over the amendment.

Amendment No. P-16 was carried over.

Senator HUTTO asked unanimous consent to make a motion to take up Amendment No. P-14 for immediate consideration.

There was no objection and Amendment No. P-14 was taken up for immediate consideration.

Senators GROOMS and SHEHEEN proposed the following Amendment No. P-14 (4449R022.LKG):

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:

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 (11) and (14) of Section 12-36-2120 of the 1976 Code are amended to read:

"(11)[Reserved](a)   toll charges for the transmission of voice or messages between telephone exchanges;

(b)   charges for telegraph messages;

(c)   carrier access charges and customer access line charges established by the Federal Communications department or the South Carolina Public Service department; and

(d)transactions involving automatic teller machines;

(14)   [Reserved]wrapping paper, wrapping twine, paper bags, and containers, used incident to the sale and delivery of tangible personal property;"

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.

At 4:04 P.M., on motion of Senator McCONNELL, the Senate receded from business not to exceed fifteen minutes, with Senator GROOMS retaining the floor.

At 4:25 P.M., the Senate resumed.

At 4:25 P.M., Senator MARTIN assumed the Chair.

Senator GROOMS explained the amendment.

With Senator GROOMS retaining the floor, Senator McCONNELL, with unanimous consent, addressed the body.

At 4:30 P.M., the PRESIDENT assumed the Chair.

Senator McCONNELL spoke on the Bill.

Senator McCONNELL asked unanimous consent to make a motion, with Senator GROOMS retaining the floor, that H. 4449 be carried over in the masthead position on the Calendar immediately following consideration of the General Appropriation Bill, not to be taken up for consideration prior to Tuesday, May 2, 2006.

Senator RYBERG spoke on the motion.

Senator McCONNELL spoke on the motion.

The motion was adopted.

On motion of Senator McCONNELL, with unanimous consent, debate was interrupted by adjournment, with Senator GROOMS retaining the floor.

Senators RYBERG, COURSON, BRYANT, GROOMS, KNOTTS, SETZLER, CROMER, CAMPSEN and HUTTO desired to be recorded as voting against the motion to adjourn.

Having received a favorable report from the Pickens County Delegation, the following appointments were confirmed in open session:

Reappointment, Pickens County Magistrate, with term to commence April 30, 2006, and to expire April 30, 2010

Phillip A. Snow, 117 Scenic Dr., Pickens, S.C. 29671-9495

Reappointment, Pickens County Magistrate, with term to commence April 30, 2006, and to expire April 30, 2010

Dale F. Dalton, P. O. Box 65, Liberty, S.C. 29657

Reappointment, Pickens County Magistrate, with term to commence April 30, 2006, and to expire April 30, 2010

Ernest David Forrest, Sr., 202 Wellington Road, Easley, S.C. 29642

Initial Appointment, Pickens County Magistrate, with term to commence April 30, 2002, and to expire April 30, 2006

Hon. Bruce E. Anders, 114 Furman Road, Pickens, S.C. 29671 VICE James King

Reappointment, Pickens County Magistrate, with term to commence April 30, 2006, and to expire April 30, 2010

Hon. Bruce E. Anders, 114 Furman Road, Pickens, S.C. 29671

On motion of Senator CLEARY, with unanimous consent, the Senate stood adjourned out of respect to the memory of Mr. Macon Arthur of Litchfield Beach, S.C., beloved husband of Marianne de Roubaix Arthur. Mr. Arthur was a retired attorney, veteran and he also served as Director of the Arthur State Bank in Union.

At 4:59 P.M., on motion of Senator McCONNELL, the Senate adjourned to meet tomorrow at 11:00 A.M. under the provisions of Rule 1 for the purpose of taking up local matters and uncontested matters which have previously received unanimous consent to be taken up.

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