Committee Report

January 29, 2025

 

S. 167

 

Introduced by Senator Campsen

 

S. Printed 1/29/25--S.

Read the first time January 14, 2025

 

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The committee on Senate Fish, Game and Forestry

To whom was referred a Bill (S. 167) to amend the South Carolina Code of Laws so as to enact the "South Carolina Waterways Protection Act"; by adding Section 50-9-975 so as to establish the South Carolina, etc., respectfully

Report:

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

 

GEORGE CAMPSEN for Committee.

 

 

statement of estimated fiscal impact

Explanation of Fiscal Impact

State Expenditure

This bill establishes the South Carolina Waterways Protection Fund to be used by DNR to remove various hazards to navigation from the waters of the state, to identify and mark hazards to navigation, and to establish and maintain a grant program to remove water navigation hazards.  The fund will be supported by a $3 fee attached to watercraft tax notices in the state. 

 

South Carolina Office of Resilience.  This bill specifies that SCOR may, upon a request from DNR, assist in the development and administration of a grant program established by the fund.  If DNR requests SCOR to coordinate and assist in developing the grant program, SCOR indicates that this could be managed with existing staff and resources and would have no impact on the agency.  If DNR requests SCOR to facilitate and manage the grant program in its entirety, SCOR anticipates the need to hire 4.0 additional FTEs, including a Grant Administrator, two Program Coordinators, and a Senior Fiscal Analyst, with total salary and fringe as well as one time setup costs of $310,948 in FY 2025-26 and $258,948 in each year thereafter.  However, as the responsibilities in this bill for SCOR are dependent upon a request for assistance from DNR, the General Fund expenditure impact for SCOR will depend on decisions by DNR.

 

Department of Natural Resources.  This bill requires DNR to administer the South Carolina Waterways Protection Fund and to use the funds to improve the navigation of waters in the state by removing or marking various hazards.  The department must allocate the funds in the four game zones within the state based upon the number of registered and documented watercraft in each game zone. Based on a previous response on similar legislation, this bill will result in an Other Funds expenditure impact of approximately $696,000 on DNR beginning in FY 2025-26 as the department anticipates the expenses associated with this bill are dependent upon the amount of revenue generated within the fund.  DNR is unsure which aspects of the program will be implemented first as anticipated revenues are not expected to fully fund the total cost to implement all responsibilities outlined in this bill. 

 

For reference, the following tables display the potential recurring and non-recurring expenses DNR anticipates will be needed to fulfill the responsibilities outlined in this bill. 

 

Non-Recurring Expenses

Recurring Expenses

State Treasurer's Office. Under this bill, revenues for the South Carolina Waterways Protection Fund must be remitted to STO and credited to an account separate and distinct from the General Fund and used for the purposes specified in the bill.  STO indicates this requirement will be managed within existing appropriations and will have no fiscal impact.

 

State Revenue

This bill establishes the South Carolina Waterways Protection Fund, which will be supported by a $3 fee attached to all watercraft tax notices in the state.  Based on data provided by DNR in FY 2024-25, there are 361,023 watercrafts registered in the state.  Of these, 134,000 are exempt from property taxes pursuant to Section 12-37-220(B)(38)(a), which exempts watercraft and motors that have an assessment of no more than $50. A $3 fee applied to the remaining 227,023 watercraft will result in an increase in Other Funds revenue totaling approximately $681,000.  Additionally, there are 4,986 vessels documented by the USCG.  USCG documentation is mandatory for all commercial vessels five net tons and over and is voluntary for recreational vessels five net tons and over. These watercrafts are also subject to property taxes in the state.  Assuming none of the USCG vessels are exempt from property tax, the $3 fee will increase Other Funds revenue by approximately $15,000.  Therefore, the total increase in Other Funds revenue will be approximately $696,000 annually. 

 

Local Expenditure

This bill establishes the South Carolina Waterways Protection Fund, which will be supported by a $3 fee attached to all watercraft tax notices in the state.  RFA contacted the county auditors to determine the potential impact to implement this fee and to ask how many tax notices are sent out annually.  The Counties of Abbeville, Allendale, Barnwell, Beaufort, Charleston, Cherokee, Chester, Chesterfield, Darlington, Lancaster, Laurens, Newberry, Oconee, Pickens, Spartanburg, Williamsburg, and York provided a response. 

 

The estimated number of tax notices provided included some combination of boats, boat motors, DNR registered watercraft, and USCG documented vessels.  Due to the varying types of watercraft included in the various responses, RFA has relied on the estimated number of taxable watercraft from DNR to determine the potential revenue impact of this bill.

 

Allendale, Chesterfield, Laurens, Newberry, and York did not address the potential expenditure impact of this bill.  Abbeville, Beaufort, Charleson, and Cherokee anticipate being able to add this $3 fee to tax notices with no increase in local expenditures. Barnwell, Chester, Darlington, Lancaster, Oconee, Pickens, and Spartanburg anticipate this bill will result in an undermined increase in expenses to update their systems to implement this $3 fee.  Williamsburg was unable to determine a potential impact without further information on the implementation of this fee. Based on these responses, this bill will have a one-time undetermined local expenditure impact that will vary among counties.    

 

 

Frank A. Rainwater, Executive Director

Revenue and Fiscal Affairs Office

 

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A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS SO AS TO ENACT THE "SOUTH CAROLINA WATERWAYS PROTECTION ACT"; BY ADDING SECTION 50-9-975 SO AS TO ESTABLISH THE SOUTH CAROLINA WATERWAYS PROTECTION FUND AND THE PURPOSES FOR WHICH REVENUES IN THE FUND MAY BE EXPENDED; AND BY ADDING SECTION 12-37-3215 SO AS TO REQUIRE THAT A TAX NOTICE FOR WATERCRAFT MUST INCLUDE A WATERWAYS PROTECTION FEE OF THREE DOLLARS.

 

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

 

SECTION 1.  This act may be cited as the "South Carolina Waterways Protection Act".

 

SECTION 2.  Article 9, Chapter 9, Title 50 of the S.C. Code is amended by adding:

 

    Section 50-9-975.  (A) The South Carolina Waterways Protection Fund is created for the purpose of receiving the three-dollar waterways protection fee that is attached to each tax notice for a watercraft, as provided in Section 12-37-3215.

    (B) Revenues for the fund must be remitted to the State Treasurer and credited to an account that is separate and distinct from the general fund. Balances in the fund must be retained and carried forward annually and interest earned on balances in the fund must be credited to the fund.

    (C) The fund must only be used by the department for the following purposes:

       (1) the removal of hazardous, abandoned, or unattended vessels, marine debris, or hazards to navigation from the waters of the State;

       (2) identification, marking, and lighting of hazards to navigation in accordance with applicable rules governing aids to navigation; and

       (3) the development and administration of a grant program to provide funds to applicants, whether public or private, to remove hazardous, abandoned, or unattended vessels, marine debris, or hazards to navigation from the waters of the State.

    (D) The department must allocate annual fund revenues for use in the four game zones of this State based upon the number of registered and documented watercraft in each game zone. If the department determines a game zone's proportional allocation is not used or obligated by the end of a fiscal year, then it may distribute up to seventy-five percent of the unused and unobligated allocation for use in the other game zones on an as-needed basis. The remaining unused and unobligated allocation must be added to the game zone's proportional allocation for the following fiscal year. For the purpose of this subsection, Game Zone 1 consists of the entirety of Greenville, Oconee, and Pickens Counties and Game Zone 2 consists of no part of Greenville, Oconee, and Pickens Counties.

    (E) The South Carolina Office of Resilience, upon request from the department, may assist in the development and administration of a grant program established under this section.

    (F) The department must provide an annual report on its website disclosing expenditures from the fund.

 

SECTION 3.  Article 26, Chapter 37, Title 12 of the S.C. Code is amended by adding:

 

    Section 12-37-3215.  A tax notice for a watercraft must include a waterways protection fee of three dollars. The fee must be deposited by the county treasurer into the South Carolina Waterways Protection Fund, as established in Section 50-9-975. The issuance or renewal of a certificate of number by the Department of Natural Resources is not contingent on the payment of a waterways protection fee.

 

SECTION 4.  This act takes effect on July 1, 2025.

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