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TO ENACT THE LEXINGTON COUNTY SCHOOL DISTRICT PROPERTY TAX RELIEF ACT BY ALLOWING THE IMPOSITION OF A SALES AND USE TAX EQUAL TO ONE PERCENT OF GROSS SALES IN LEXINGTON COUNTY FOLLOWING APPROVAL OF THE TAX BY THE QUALIFIED ELECTORS OF THE COUNTY IN A REFERENDUM HELD AT THE TIME OF THE 2004 GENERAL ELECTION, TO PROVIDE THAT THE TAX IS IMPOSED FOR SEVEN YEARS AND MAY BE EXTENDED OR REIMPOSED BY THE GENERAL ASSEMBLY BY LAW, TO PROVIDE THAT THE TAX IS IMPOSED IN THE SAME MANNER AND WITH THE SAME EXEMPTIONS AND MAXIMUM TAXES APPLICABLE FOR THE FIVE PERCENT STATE SALES AND USE TAX WITH AN ADDITIONAL EXEMPTION FROM THE ONE PERCENT TAX FOR FOOD WHICH LAWFULLY MAY BE PURCHASED WITH UNITED STATES DEPARTMENT OF AGRICULTURE FOOD COUPONS, TO PROVIDE THAT THE REVENUE OF THE TAX MUST BE ALLOTTED TO THE SCHOOL DISTRICTS OF LEXINGTON COUNTY BASED ON AVERAGE DAILY NUMBER OF STUDENTS RESIDING IN THAT PORTION OF THE DISTRICT THAT IS IN LEXINGTON COUNTY AND ALSO BASED ON THE POPULATION OF THE DISTRICT, TO PROVIDE THAT THE REVENUE MUST BE USED TO PROVIDE A CREDIT AGAINST THE SCHOOL TAX LIABILITY FOR PROPERTY IN THE DISTRICT AND TO PROVIDE THE METHOD OF CALCULATING THE CREDIT, AND TO PROVIDE THAT REFERENDUMS TO APPROVE MILLAGE INCREASES OR BOND AUTHORIZATIONS FOR ANY PURPOSE IN LEXINGTON COUNTY MAY ONLY BE HELD ON THE FIRST TUESDAY WHICH FOLLOWS THE FIRST MONDAY IN NOVEMBER OF A PARTICULAR YEAR.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. This act may be cited as the Lexington County School District Property Tax Relief Act.
SECTION 2. The General Assembly finds:
(1) The school districts in Lexington County have substantial differences in per-pupil assessed value of property.
(2) All of the school districts in Lexington County have school facilities needs, all of the school districts have passed referendums to provide funds for a portion of those needs, and several of the school districts have implemented lease-purchase agreements to provide for building construction. As a consequence, the millage rates for payment of bonds and lease-purchase agreements are, with one exception, higher than the statewide average millage rates for such purposes.
(3) The disparity in millage rates between school districts and the exceptionally high millage rate in one district imposes heavy burdens on some of the taxpayers in the county and discourages economic development in portions of the county. Further, because a high percentage of the county's residents and school children reside in manufactured housing, the cost of education is borne disproportionately by other taxpayers and by personal property, including vehicle owners.
(4) In order to address these concerns, the General Assembly finds that a sales tax, with the revenues being distributed to school districts on the basis of enrollment will substantially reduce property tax liabilities in all districts and alleviate the disparity in property tax rates among districts in the county. Accordingly, this act is intended to provide the residents of Lexington County with an option to impose a sales and use tax of one percent and to use the proceeds of the tax to provide a credit against school taxes levied for operations and debt service.
SECTION 3. (A) Subject to the requirements of this act and the referendum required by it, there is imposed a special sales and use tax of one percent to raise revenue to allow the property tax credit provided in this act. The special sales and use tax authorized by this act is imposed for seven years, beginning January 1, 2005, but it may be reimposed or extended by the General Assembly by law.
(B) The January 1, 2005, beginning date of this special sales and use tax of one percent may be delayed for up to sixty days by the Department of Revenue if it determines that the logistics of setting up the collection of this tax in Lexington County cannot be completed by January 1, 2005.
SECTION 4. (A) A referendum to impose a one percent special sales and use tax as authorized by this act must be held at the time of the 2004 general election.
(B) The Lexington County Election Commission shall conduct the referendum on the question of imposing the special sales and use tax in the county. Notice of the election must be provided in the manner provided by the general election law and include the question to be voted upon in the referendum.
(C) The question to be voted upon in the referendum must read substantially as follows:
"Shall a special sales and use tax of one percent be imposed in Lexington County for seven years beginning January 1, 2005, to raise revenue which must be used to provide a credit against the property taxes levied on taxable property in each school district of the county for school debt service and school operations?
The ballot, in the discretion of the election commission may contain a short explanation of the question to be voted upon in the referendum and the estimated impact of the tax, based on information from the South Carolina Department of Revenue as to the available revenues on existing liabilities.
(D) All qualified electors desiring to vote in favor of imposing the tax shall vote "yes" and all qualified electors opposed to levying the tax shall vote "no". Upon receipt of the returns of the referendum, the election commission shall certify the results and file the resolution with the Lexington County Clerk of Court and the South Carolina Department of Revenue. The certified results of the referendum is not open to question except by a civil action instituted within twenty days of the certification of the results by the county election commission. If a majority of the votes cast are in favor of imposing the tax, then the tax is imposed as provided in this act; otherwise the tax is not imposed.
SECTION 5. (A) If the tax is approved in the referendum, the tax except as otherwise provided must be imposed beginning upon the first day of January following the filing of the certified results of the referendum with the Department of Revenue.
(B) The tax terminates on the seventh anniversary of its imposition, unless extended as provided in this act.
SECTION 6. (A) The tax levied pursuant to this act 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 the amounts which may be added to the sales price because of the tax.
(B) The tax authorized by this act is in addition to all other local sales and use taxes and applies to the gross proceeds of the sales in the applicable jurisdiction which are subject to the tax imposed by Chapter 36, Title 12 of the 1976 Code and the enforcement provisions of Chapter 54, Title 12 of the 1976 Code. The gross proceeds of the sale of items subject to a maximum tax in Chapter 36 of Title 12 of the 1976 Code are exempt from the tax imposed by this act. The gross proceeds of the sale of food which may lawfully be purchased with United States Department of Agriculture food coupons are exempt from the tax imposed by this act. The tax imposed by this act also applies to tangible personal property subject to the use tax in Article 13, Chapter 36 of Title 12 of the 1976 Code.
(C) Taxpayers required to remit taxes under Article 13, Chapter 36, Title 12 of the 1976 Code shall identify the county in which the tangible personal property purchased at retail is stored, used, or consumed in this State.
(D) Utilities are required to report sales in the county in which consumption of the tangible personal property occurs.
(E) A taxpayer subject to the tax imposed by Section 12-36-920 of the 1976 Code, who owns or manages rental units in more than one school district shall separately report in his sales tax return the total gross proceeds from business done in each school district.
(F) The gross proceeds of sales of tangible personal property delivered after the imposition date of the tax levied under this act in the school district, 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 special local sales and use tax provided in this act if a verified copy of the contract is filed with the Department of Revenue within six months after the imposition of the special local sales and use tax.
(G) Notwithstanding the imposition date of the special local sales and use tax authorized pursuant to this act, with respect to services that are regularly billed on a monthly basis, the special sales and use tax is imposed beginning on the first day of the billing period beginning on or after the imposition date.
SECTION 7. (A) The revenues of the tax collected in the county pursuant to this act must be remitted to the State Treasurer and credited to a fund separate and distinct from the general fund of the State. After deducting the amount of 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 Lexington County Treasurer. Upon receipt of these funds, the county treasurer shall deposit these funds in a separate account for each school district as follows:
(1) sixty percent of the funds received during a year shall be credited to each school district on the basis of the school district's prior year's one hundred-thirty-five day average daily membership (ADM) as compared to the total prior year's ADM of all school districts in the county excluding from the calculations the ADM attributable to any portion of a school district not within Lexington County;
(2) forty percent of the funds received during a year shall be credited to each school district based on the district's Lexington County population according to the 2000 Census as compared to the population of the county as a whole according to the 2000 Census;
(3) beginning with the first day of the quarter immediately following the adoption by law of the 2010 Census as official, the sixty/forty percentage split contained in items (1) and (2) above is changed to a fifty/fifty split.
(B) The State Treasurer and the county treasurer may correct misallocation of costs, refunds, distributions, or credits by adjusting subsequent costs, refunds, distributions, or credits.
(C)(1) The revenues allotted to a district must be used to provide a credit against the school property tax liability on property taxable in the district in an amount determined by multiplying the appraised value of the taxable property by a fraction in which the numerator is the total estimated revenue allotted to the district during the applicable fiscal year of the district and the denominator is the total of the appraised value of taxable property in the district as of January first of the applicable property tax year. For motor vehicles subject to the payment of property taxes pursuant to Article 21, Chapter 37 of Title 12 of the 1976 Code, the credit provided under this subsection applies against the tax liability for motor vehicle tax years beginning after December of the year in which the credit is calculated. The credit applies first against the liability arising from millage imposed for debt service for schools, then against any liability arising from other methods of financing school capital projects, then against school building lease-purchase obligations, and finally against any liability arising from school operations.
(2) For purposes of this credit, school property tax liability does not include any liability to pay a fee in lieu of property taxes and taxable property does not include exempt property for which the owner must pay a fee in lieu of property tax.
(3) All interest accruing to the credit funds allotted to a district must be used to provide an additional credit as provided in this section.
(D) The credit provided by this act is in addition to any ad valorem school tax reductions provided by the Trust Fund for Tax Relief, and to the extent no ad valorem property tax liability remains after applying the reduction provided by the Trust Fund for Tax Relief, then the credit provided by this act may be applied against other property tax liability.
SECTION 8. The Department of Revenue shall furnish data to the State Treasurer and to the school districts receiving tax revenues pursuant to this act for the purpose of calculating distributions and estimating revenues. The information which must be supplied to each school district 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 of the 1976 Code. A person violating this section is subject to the penalties provided in Section 12-54-240 of the 1976 Code.
SECTION 9. Each board of trustees of the five Lexington County school districts shall annually report to the Lexington County Legislative Delegation the amount of revenue allocated to the district and the extent of the tax credits which reduced school tax liabilities that were realized from such revenue.
SECTION 10. The provisions of this act also expire and the special one percent sales and use tax if implemented shall no longer be authorized as of the first day of the year in which the State of South Carolina through the imposition of a statewide increase in the sales and use tax above five percent provides or will provide directly or indirectly school millage ad valorem property tax reductions to the taxpayers of the county as determined by the Department of Revenue at least equal to the total tax credit relief provided to such taxpayers by the provisions of this act.
SECTION 11. Notwithstanding any other provision of law, referendums to approve millage increases for any purpose or bond authorizations for any purpose in Lexington County may only be held on the first Tuesday which follows the first Monday in November of a particular year.
SECTION 12. The provisions of this act are declared to be severable and if any one or more of the provisions are deemed to be invalid by a court of competent jurisdiction, then the remainder of the provisions are deemed to be of full force and effect and are a full and complete authorization to the extent of this intent.
SECTION 13. This act takes effect upon approval by the Governor.
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