Indicates Matter Stricken

Indicates New Matter

 

Committee Report

May 4, 2023

S. 284

Introduced by Senators Davis, Turner, Jackson, Scott, Kimpson, Senn, Campsen and Sabb

 

S. Printed 05/04/23--H.

Read the first time April 04, 2023

 

________

 

The committee on house ways and means

To who was referred a Bill (S. 284) to amend the South Carolina Code of Laws by amending Section 6-1-530, relating to use of revenue from local accommodations tax, so as to provide that the development, etc., respectfully

Report:

That they have duly and carefully considered the same, and recommend that the same do pass with amendment:

 

Amend the bill, as and if amended, SECTION 1, by striking Section 6-1-530(A)(7) and inserting:

       (7) development of workforce housing, which must include programs to promote home ownership. However, a county or municipality may not expend or dedicate more than fifteen percent of its annual local accommodations tax revenue for the purposes set forth in this item, and all such expenditures are subject to review and comment by the Joint Bond Review Committee.   The provisions of this item are no longer effective after December 31, 2030.

Amend the bill further, by deleting SECTION 2.

Amend the bill further, SECTION 3, by striking Section 6-4-10(4)(b)(ix) and inserting:

           (ix) development of workforce housing, which must include programs to promote home ownership.  However, a county or municipality may not expend or dedicate more than fifteen percent of its annual local accommodations tax revenue for the purposes set forth in this item (4)(b)(ix), and all such expenditures are subject to review and comment by the Joint Bond Review Committee.   The provisions of this item (4)(b)(ix) are no longer effective after December 31, 2030.

Amend the bill further, SECTION 5, by striking Section 6-4-12(F) and inserting:

    (F) The local government shall provide the housing impact analysis for an ordinance to the members of the legislative body of the local government, the Department of Revenue, and the Tourism Expenditure Revenue Committee before the ordinance is considered by the legislative body.  The Department of Revenue may not disburse any accommodations taxes to the local government for purposes of development of workforce housing unless and until the local government has provided the housing impact analysis to the parties required pursuant to this subsection.

Amend the bill further, by deleting SECTION 7.

Amend the bill further, SECTION 10, by striking subsection (C) and inserting:

    (C) The members of the study committee shall seek assistance from governmental agencies including the South Carolina Building Codes Council, the South Carolina Housing Authority, and the South Carolina Department of Agriculture, and from members of the private sector including, but not limited to, the Homebuilders Association of South Carolina, Habitat for Humanity South Carolina, the Realtors Association of South Carolina, the Municipal Association of South Carolina, the South Carolina Association of Counties, South Carolina Land Trust, Conservation Voters of South Carolina,  the South Carolina Chapter of the American Planning Association, and the Manufactured Housing Institute of South Carolina.

Amend the bill further, by adding an appropriately numbered SECTION to read:

SECTION X. Before the beginning of the 2030 legislative session, the Director of the Department of Parks, Recreation and Tourism, in consultation with the Secretary of Commerce and the Commission of Agriculture, shall issue a report to the General Assembly detailing the effects on tourism and workforce housing resulting from the codified provisions of this act.

Renumber sections to conform.

Amend title to conform.

 

BRUCE BANNISTER for Committee.

 

statement of estimated fiscal impact

Explanation of Fiscal Impact

 

Local Revenue

This bill permits local governments to use revenue generated by the local accommodations tax and the local hospitality for the development of workforce housing.  This is in addition to the current list of purposes that revenue from these taxes may be utilized.  The bill also allows counties and municipalities to use the portion of state accommodations tax allocated to tourism-related expenditures for the development of workforce housing.  Lastly, the bill permits counties and municipalities to utilize state accommodations tax revenue to issue bonds for the purpose of workforce housing, among other items. 

 

Since this bill is permissive, the number of counties and municipalities that may use revenues for the development of workforce housing is unknown.  Therefore, the amount of revenue utilized for these purposes is undetermined. 

 

For reference, based upon data in the FY 2020-21 Local Government Finance Report, 28 counties reported imposing a local accommodations tax, and 22 counties reported a local hospitality tax.  Please see the table below for a list of counties that reported imposing these taxes.

 

Counties Reporting a Local       Counties Reporting a Local Hospitality Tax *

Accommodations Tax *           

Abbeville                                 Beaufort

Aiken                                       Clarendon

Anderson                                 Colleton

Beaufort                                   Darlington

Berkeley                                  Dillon

Charleston                               Dorchester

Cherokee                                 Edgefield

Chester                                    Fairfield

Clarendon                                Florence

Colleton                                   Georgetown

Dorchester                               Greenville

Fairfield                                   Greenwood

Florence                                   Horry

Georgetown                             Jasper

Greenville                                Lancaster

Horry                                       Lee

Jasper                                      Richland

Kershaw                                  Spartanburg

Lancaster                                 Sumter

Lee                                          Union

Lexington                                Williamsburg

Marlboro                                  York

Oconee                                   

Pickens                                   

Richland                                 

Spartanburg                             

Sumter                                    

York                                       

*Please note that these counties reported the imposition of the above taxes. Since the data are not audited by RFA, this may not comprise a comprehensive list of counties imposing these taxes.

 

Additionally, based upon data in the FY 2020-21 Local Government Finance Report, 89 municipalities impose a local accommodations tax, and 113 municipalities impose a local hospitality tax.

 

 

Frank A. Rainwater, Executive Director

Revenue and Fiscal Affairs Office

 

________

 

 

 

 

 

 

 

 

 

A bill

 

to amend the South Carolina Code of Laws by amending Section 6-1-530, relating to Use of revenue from local accommodations tax, so as to provide that the development of workforce housing is one of the purposes for which local ACCOMMODATIONS taxes may be used; by amending Section 6-1-730, relating to Use of revenue from local hospitality tax, so as to provide that the development of workforce housing is one of the purposes for which local hospitality taxes may be used; by amending Section 6-4-10, relating to A special fund for tourism, management and use of special fund, so as to provide that the development of workforce housing is one of the purposes for which the special fund may be used; and by amending Section 6-4-15, relating to Use of revenues to finance bonds, so as to provide that the development of workforce housing is one of the purposes for which bonds may be issued.

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  Section 6-1-530(A) of the S.C. Code is amended to read:

 

    (A) The revenue generated by the local accommodations tax must be used exclusively for the following purposes:

       (1) tourism-related buildings including, but not limited to, civic centers, coliseums, and aquariums;

       (2) tourism-related cultural, recreational, or historic facilities;

       (3) beach access, renourishment, or other tourism-related lands and water access;

       (4) highways, roads, streets, and bridges providing access to tourist destinations;

       (5) advertisements and promotions related to tourism development;  or

       (6) water and sewer infrastructure to serve tourism-related demand.; or

       (7) development of workforce housing, which must include programs to promote home ownership.

 

SECTION 2.  Section 6-1-730(A) of the S.C. Code is amended to read:

 

    (A) The revenue generated by the hospitality tax must be used exclusively for the following purposes:

       (1) tourism-related buildings including, but not limited to, civic centers, coliseums, and aquariums;

       (2) tourism-related cultural, recreational, or historic facilities;

       (3) beach access and renourishment;

       (4) highways, roads, streets, and bridges providing access to tourist destinations;

       (5) advertisements and promotions related to tourism development;

       (6) water and sewer infrastructure to serve tourism-related demand;

       (7) control and repair of flooding and drainage within or on tourism-related lands or areas;  or

       (8) site preparation for items in this section including, but not limited to, demolition, repair, or construction.; or

       (9) development of workforce housing, which must include programs to promote home ownership.

 

SECTION 3.  Section 6-4-10(4) of the S.C. Code is amended to read:

 

    The funds received by a municipality or a county in county areas collecting more than fifty thousand dollars from the local accommodations tax provided in Section 12-36-2630(3) must be allocated in the following manner:

    (4)(a) The remaining balance plus earned interest received by a municipality or county must be allocated to a special fund and used for tourism-related expenditures.  This section does not prohibit a municipality or county from using accommodations tax general fund revenues for tourism-related expenditures.

       (b) The funds received by a county or municipality which has a high concentration of tourism activity may be used to provide additional county and municipal services including, but not limited to, law enforcement, traffic control, public facilities, and highway and street maintenance, as well as the continual promotion of tourism. The funds must not be used as an additional source of revenue to provide services normally provided by the county or municipality but to promote tourism and enlarge its economic benefits through advertising, promotion, and providing those facilities and services which enhance the ability of the county or municipality to attract and provide for tourists.

       "Tourism-related expenditures" include:

           (i) advertising and promotion of tourism so as to develop and increase tourist attendance through the generation of publicity;

           (ii) promotion of the arts and cultural events;

           (iii) construction, maintenance, and operation of facilities for civic and cultural activities including construction and maintenance of access and other nearby roads and utilities for the facilities;

           (iv) the criminal justice system, law enforcement, fire protection, solid waste collection, and health facilities when required to serve tourists and tourist facilities. This is based on the estimated percentage of costs directly attributed to tourists;

           (v) public facilities such as restrooms, dressing rooms, parks, and parking lots;

           (vi) tourist shuttle transportation;

           (vii) control and repair of waterfront erosion, including beach renourishment;

           (viii) operating visitor information centers.;

           (ix) development of workforce housing, which must include programs to promote home ownership.

       (c)(i) Allocations to the special fund must be spent by the municipality or county within two years of receipt. However, the time limit may be extended upon the recommendation of the local governing body of the county or municipality and approval of the oversight committee established pursuant to Section 6-4-35. An extension must include provisions that funds be committed for a specific project or program.

           (ii) Notwithstanding the provisions of subsubitem (i), upon a two-thirds affirmative vote of the membership of the appropriate local governing body, a county or municipality may carry forward unexpended allocations to the special fund beyond two years provided that the county or municipality commits use of the funds exclusively to the control and repair of waterfront erosion, including beach renourishment or development of workforce housing, which must include programs to promote home ownership. The county or municipality annually shall notify the oversight committee, established pursuant to Section 6-4-35, of the basic activity of the committed funds, including beginning balance, deposits, expenditures, and ending balance.

       (d) In the expenditure of these funds, counties and municipalities are required to promote tourism and make tourism-related expenditures primarily in the geographical areas of the county or municipality in which the proceeds of the tax are collected where it is practical.

 

SECTION 4.  Section 6-4-15 of the S.C. Code is amended to read:

 

    Section 6-4-15.  A municipality or county may issue bonds, enter into other financial obligations, or create reserves to secure obligations to finance all or a portion of the cost of constructing facilities, all of which must fulfill the purpose of this chapter, for civic activities, the arts, and cultural events, or workforce housing that includes programs to promote home ownership. which fulfill the purpose of this chapter.  The annual debt service of indebtedness incurred to finance the facilities or lease payments for the use of the facilities may be provided from the funds received by a municipality or county from the accommodations tax in an amount not to exceed the amount received by the municipality or county after deduction of the accommodations tax funds dedicated to the general fund and the advertising and promotion fund.  However, none of the revenue received by a municipality or county from the accommodations tax may be used to retire outstanding bonded indebtedness unless accommodations tax revenue was obligated for that purpose when the debt was incurred.

 

SECTION 5.  Chapter 4, Title 6 of the S.C. Code is amended by adding:

 

    Section 6-4-12.  (A) If a local government intends to use the funds for the development of workforce housing, then the local government shall prepare a housing impact analysis prior to giving second reading to the ordinance.

    (B) The analysis required by subsection (A) must include:

       (1) information about the effect of the ordinance on housing, including the effect of the ordinance on each of the following:

           (a) the cost of developing, construction, rehabilitating, improving, maintaining, or owning single family or multifamily dwellings;

           (b) the purchase price of new homes or the fair market value of existing homes;

           (c) the cost and availability of financing to purchase or develop housing;

           (d) housing costs; and

           (e) the density, location, setback, size, or height development on a lot, parcel, land division, or subdivision; and

       (2) an analysis of the relative impact of the ordinance on low- and moderate-income households.

    (C) The following applies to information on housing costs required to be included in the analysis conducted pursuant to subsection (B)(1)(d):

       (1) the analysis must include reasonable estimates of the effect of the ordinance on housing costs, expressed in dollar amounts. The local government shall include a brief summary of, or worksheet demonstrating, the computations used in determining the dollar amounts. However, if the local government determines that it is not possible to make an estimate expressed in dollar amounts, then the analysis must include a statement setting forth the reasons for the local government's determination; and

       (2) the analysis must include descriptions of both the immediate effect and, to the extent ascertainable, the long-term effect of the ordinance on housing costs.

    (D) Except as otherwise provided in this section, a housing impact analysis required pursuant to this section must be based on costs associated with the development, construction, financing, purchasing, sale, ownership, or availability of a median-priced single-family residence. However, the analysis may include estimates for larger developments as part of an analysis of the long-term effects of the ordinance.

    (E) A local government may request information from any state agencies, local units of government, universities or colleges, organizations, or individuals as necessary to prepare a housing impact analysis pursuant to this section.

    (F) The local government shall provide the housing impact analysis for an ordinance to the members of the legislative body of the local government, the Department of Revenue, and the Tourism Expenditure Revenue Committee before the ordinance is considered by the legislative body.  The Department of Revenue may not disburse any hospitality or accommodations taxes to the local government for purposes of development of workforce housing unless and until the local government has provided the housing impact analysis to the parties required pursuant to this subsection.

 

SECTION 6.  Section 6-4-5 of the S.C. Code is amended to read:

 

    Section 6-4-5. As used in this chapter:

    (1) "County area" means a county and municipalities within the geographical boundaries of the county.

    (2) "Cultural", as it applies to members of advisory committees in Section 6-4-25, means persons actively involved and familiar with the cultural community of the area including, but not limited to, the arts, historical preservation, museums, and festivals.

    (3) "Hospitality", as it applies to members of the committees in item (2), means persons directly involved in the service segment of the travel and tourism industry including, but not limited to, businesses that primarily serve visitors such as lodging facilities, restaurants, attractions, recreational amenities, transportation facilities and services, and travel information and promotion entities.

    (4) "Travel" and "tourism" mean the action and activities of people taking trips outside their home communities for any purpose, except daily commuting to and from work.

    (5) "Housing costs" for housing occupied by the owner means:

       (a) the principal and interest on a mortgage loan that finances the purchase of the housing;

       (b) the closing costs and other costs associated with a mortgage loan;

       (c) mortgage insurance;

       (d) property insurance;

       (e) utility-related costs;

       (f) property taxes; and

       (g) if the housing is owned and occupied by members of a cooperative or an unincorporated cooperative association, fees paid to a person for managing the housing.

    (6) "Housing costs" for rented housing means:

       (a) rent; and

       (b) utility-related costs, if not included in the rent.

    (7) "Ordinance" means an ordinance adopted pursuant to Section 6-29-530.

    (8) "Utility-related costs" means costs related to power, heat, gas, light, water, and sewage.

    (9) "Workforce housing" means residential housing for rent or sale that is appropriately priced for rent or sale to a person or family whose income falls within thirty percent and one hundred twenty percent of the median income for the local area, with adjustments for household size, according to the latest figures available from the United States Department of Housing and Urban Development (HUD).

 

SECTION 7.  Section 6-1-710 of the S.C. Code is amended by adding:

 

    (4) "Workforce housing" means residential housing for rent or sale that is appropriately priced for rent or sale to a person or family whose income falls within thirty percent and one hundred twenty percent of the median income for the local area, with adjustments for household size, according to the latest figures available from the United States Department of Housing and Urban Development (HUD).

 

SECTION 8.  Section 6-1-510 of the S.C. Code is amended by adding:

 

    (4) "Workforce housing" means residential housing for rent or sale that is reasonably and appropriately priced for rent or sale to a person or family whose income falls within thirty percent and one hundred twenty percent of the median income for the local area, with adjustments for household size, according to the latest figures available from the United States Department of Housing and Urban Development (HUD).

 

SECTION 9.  Section 6-29-510(D)(6) of the S.C. Code is amended to read:

 

    (6) a housing element which considers location, types, age, and condition of housing, owner and renter occupancy, and affordability of housing. This element includes an analysis to ascertain nonessential housing regulatory requirements, as defined in this chapter, that add to the cost of developing affordable housing but are not necessary to protect the public health, safety, or welfare and an analysis of market-based incentives that may be made available to encourage development of affordable housing, which incentives may include density bonuses, design flexibility, and streamlined permitting processes. The planning commission must solicit input for this analysis from homebuilders, developers, contractors, and housing finance experts when developing this element;

 

SECTION 10. (A) There is created the Land Development Study Committee to examine current and prospective methods to plan for and manage land development in South Carolina.

    (B) The study committee must be comprised of three members of the Senate appointed by the President of the Senate and three members of the House of Representatives appointed by the Speaker of the House. Staff from the Senate and House of Representatives shall assist the study committee.

    (C) The members of the study committee shall seek assistance from governmental agencies including the South Carolina Building Codes Council, the South Carolina Housing Authority, and the South Carolina Department of Agriculture, and from members of the private sector including, but not limited to, the Homebuilders Association of South Carolina, the South Carolina Association of Habitat for Humanity, the Realtors Association of South Carolina, the Municipal Association of South Carolina, the South Carolina Association of Counties, South Carolina Land Trust, Conservation Voters of South Carolina, and the South Carolina Chapter of the American Planning Association.

    (D) The study committee shall provide a report to the General Assembly by December 31, 2023, at which time the study committee shall dissolve.

 

SECTION 11. This act takes effect upon approval by the Governor.

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