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AS PASSED BY THE SENATE
May 9, 2006
H. 4449
Introduced by 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
S. Printed 5/9/06--S.
Read the first time February 14, 2006.
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTIONS 12-36-1110, 12-36-1120, AND 12-36-1130 SO AS TO IMPOSE AN ADDITIONAL TWO PERCENT SALES AND USE TAX; TO AMEND SECTION 12-36-2120, AS AMENDED, RELATING TO SALES TAX EXEMPTIONS, SO AS TO EXEMPT THE SALE OF UNPREPARED FOOD; TO ADD SECTION 11-11-155 SO AS TO CREATE THE HOMESTEAD EXEMPTION FUND AND RESERVE FUND; TO AMEND SECTION 12-37-220, AS AMENDED, RELATING TO PROPERTY TAX EXEMPTIONS, SO AS TO PROVIDE AN ADDITIONAL EXEMPTION EQUAL TO ONE HUNDRED PERCENT OF THE FAIR MARKET VALUE OF OWNER-OCCUPIED RESIDENTIAL PROPERTY FROM THE PROPERTY TAX, AND TO PROVIDE THAT THIS EXEMPTION WITH CERTAIN EXCEPTIONS DOES NOT APPLY WITH RESPECT TO PROPERTY TAX IMPOSED FOR PAYMENT OF GENERAL OBLIGATION DEBT; TO ADD SECTION 12-37-932 SO AS TO PROVIDE THAT THE FAIR MARKET VALUE OF REAL PROPERTY FOR PURPOSES OF THE PROPERTY TAX IS ITS FAIR MARKET VALUE AS APPRAISED IN THE MANNER PROVIDED BY LAW WHEN OWNERSHIP OF THE REAL PROPERTY LAST WAS TRANSFERRED, INCREASED BY THE FAIR MARKET VALUE OF IMPROVEMENTS MADE TO THE REAL PROPERTY SINCE OWNERSHIP OF THE REAL PROPERTY LAST WAS TRANSFERRED, TO PROVIDE THAT ON THE FIRST DAY OF JANUARY IMMEDIATELY FOLLOWING THE EFFECTIVE DATE OF THIS PROVISION THE DUTIES, POWERS, AND FUNCTIONS OF LOCAL COUNTY PROPERTY TAX ASSESSORS ARE TRANSFERRED TO AND DEVOLVED UPON THE PROPERTY TAX DIVISION OF THE STATE DEPARTMENT OF REVENUE, TO PROVIDE THAT THE SALES TAX EXEMPTIONS IN SECTION 12-36-2120 SHALL BE REVIEWED BY THE GENERAL ASSEMBLY EVERY TEN YEARS BEGINNING IN 2010; TO AMEND SECTIONS 11-11-150, 12-43-210, AND 12-43-220, ALL AS AMENDED, RELATING TO THE TRUST FUND FOR TAX RELIEF, REASSESSMENT AND THE VALUATION AND CLASSIFICATION OF PROPERTY FOR PURPOSES OF THE PROPERTY TAX, SO AS TO MAKE CONFORMING AMENDMENTS AND OTHER CHANGES TO REFLECT THESE PROVISIONS; TO AMEND ACT 406 OF 2000, RELATING TO, AMONG OTHER THINGS, THE HOMESTEAD EXEMPTION, SO AS TO DELETE AN OBSOLETE PROVISION; 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; 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 INCLUDING SCHOOL DISTRICTS TO REIMBURSE THEM FOR THE REVENUE LOST AS A RESULT OF THE PROPERTY TAX EXEMPTIONS; TO PROVIDE THAT LOCAL SALES TAX AND LOCAL OPTION SALES TAX REVENUES PROVIDING PROPERTY TAX RELIEF TO OWNER-OCCUPIED RESIDENTIAL PROPERTY SHALL BE APPLIED FOR PROPERTY TAX RELIEF TO OTHER CLASSES OF PROPERTY; 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, AND TO PROVIDE FOR A SUPERMAJORITY VOTE OF THE GOVERNING BODY OF THE ENTITY TO EXCEED THIS LIMITATION; TO PROVIDE THAT ALL OF THE ABOVE PROVISIONS ARE CONTINGENT UPON RATIFICATION OF CERTAIN CONSTITUTIONAL AMENDMENTS TO ARTICLE X OF THE STATE CONSTITUTION PROVIDING FOR AN ADDITIONAL HOMESTEAD PROPERTY TAX EXEMPTION, DETERMINATION OF FAIR MARKET VALUE OF PROPERTY, AND RELATED MATTERS; TO AMEND SECTIONS 11-27-30, 11-27-40, AND 11-27-50, ALL AS AMENDED, RELATING TO THE EFFECT OF ARTICLE X OF THE SOUTH CAROLINA CONSTITUTION ON BONDS OF THE STATE, POLITICAL SUBDIVISIONS OF THE STATE, AND SCHOOL DISTRICTS, RESPECTIVELY, SO AS TO DEEM AFTER JULY 1, 2006, A COMPLETE OR PARTIAL SUCCESSOR-IN-INTEREST TO, OR OTHER TRANSFEREE OF, OR OTHER ASSOCIATE OF THE STATE, A POLITICAL SUBDIVISION, OR A SCHOOL DISTRICT TO BE THE STATE, POLITICAL SUBDIVISION, OR SCHOOL DISTRICT FOR BONDING PURPOSES 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, POLITICAL SUBDIVISION, OR SCHOOL DISTRICT; TO AMEND SECTION 12-37-670, RELATING TO LISTING AND ASSESSMENT OF NEW STRUCTURES FOR PROPERTY TAX PURPOSES, SO AS TO AUTHORIZE A COUNTY GOVERNING BODY BY ORDINANCE TO REQUIRE THAT A NEW STRUCTURE BE LISTED BY THE FIRST DAY OF THE MONTH AFTER THE CERTIFICATE OF OCCUPANCY IS ISSUED FOR THE STRUCTURE AND TO PROVIDE FOR THE TIMING OF PAYMENT OF TAXES DUE; TO REPEAL SECTION 12-37-680 RELATING TO A LOCAL COUNTY ORDINANCE ADOPTING THE SAME RULE; TO AMEND SECTION 12-43-215, RELATING TO OWNER-OCCUPIED RESIDENTIAL PROPERTY IN CONNECTION WITH AD VALOREM PROPERTY TAXATION, SO AS TO REQUIRE EACH COUNTY TO SUBMIT AN ANNUAL REPORT TO THE DEPARTMENT OF REVENUE LISTING THE NAMES AND ADDRESSES OF ALL PROPERTY CLASSIFIED AS "OWNER-OCCUPIED"; TO ADD SECTION 59-20-21 SO AS TO PROVIDE THAT BEGINNING WITH THE YEAR 2006, 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; TO ADD SECTION 59-20-22 SO AS TO PROVIDE THAT NOTWITHSTANDING A SCHOOL DISTRICT'S INDEX OF TAXPAYING ABILITY, THE MINIMUM STATE FUNDS A SCHOOL DISTRICT SHALL RECEIVE IN ANY YEAR IS FORTY PERCENT OF THE APPLICABLE YEAR'S BASE STUDENT COST, AND TO PROVIDE FOR THE MANNER IN WHICH ALL OF THESE PROVISIONS SHALL TAKE EFFECT OR BE REPEALED.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 10, Title 4 of the 1976 Code is amended by adding:
Section 4-10-720. As used in this article:
(1) 'Class of property' means property classified for property tax purposes pursuant to Section 12-43-220. Fee in lieu of property taxes, as defined by Chapter 12, Title 4 are exempt from this definition of a class of property. All classes of property are provided a credit for property tax as provided in this article.
(2) 'County area' means a county and all political subdivisions within its geographical boundaries.
(3) 'Homestead' means residential real property eligible for the four percent assessment ratio allowed pursuant to Section 12-43-220(c).
(4) 'Political subdivision' means a county and a school district located wholly or partly within a county area.
(5) 'Property tax' means all property tax millage imposed for operating purposes by a political subdivision within a county area from which all classes of property are provided a credit.
(6) 'ORS' means the Office of Research and Statistics of the State Budget and Control Board.
Section 4-10-730. (A)(1) 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 in order to provide a credit from property tax imposed by a political subdivision for school operations and county operations for all classes of property. An ordinance must be enacted or a 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.
(2) 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 the affected political subdivisions in the most recently completed fiscal year and in the case of school districts, must take into account payments to school districts pursuant to the exemption allowed pursuant to Sections 12-37-250 and 12-37-251.
(3) If the county or municipality within the county has enacted a tax increment financing redevelopment plan, or other financing plan that relies upon property tax for its funding to retire indebtedness or pay for project costs, the rate of tax must be set in an amount that must consider full funding for the project or retirement of indebtedness, which must include compliance with any covenants in the governing documents authorizing this indebtedness or future indebtedness heretofore authorized by the tax increment financing redevelopment plan that relies upon property tax for its funding for the amount that the sales tax would substitute for the property tax payments. The revenues of such tax attributable to the funding replacement for a tax increment redevelopment financing plan that relies upon property tax for its funding must be distributed by the county treasurer pursuant to Section 4-10-780.
(4) The governing body of the county shall obtain from ORS after ORS has obtained all information necessary to provide such estimate, a certified estimate of the rate of sales and use tax necessary in the county to equal the property tax not collected, and for the amount, if applicable, for the funding replacement for the tax increment financing redevelopment plan or other financing plan that relies upon property tax for its funding. This certified rate is the rate of tax that must appear in the referendum question.
(5) A qualified elector of the county desiring to circulate a petition shall file a written request with the governing body providing the school operations and county operations that are the subject of the petition and the governing body shall forward the request to ORS, which shall design the petition form in consultation with the State Election Commission and calculate and certify the tax rate necessary to provide the credits proposed in the petition. The petition form and a copy of the certification must be forwarded to the governing body of the county and the governing body shall provide the petition form to the qualified elector requesting the petition form.
(6) If competing petitions are timely filed with the governing body of the county and the signatures verified, the governing body may determine which petition initiated ordinance shall go on the ballot or it may substitute its own ordinance in lieu of any petition initiated ordinance.
(B) If the sales and use tax authorized pursuant to this article is imposed in a county, then the sales and use tax shall be credited to the school operations and county operations of all classes of property.
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 a November election in any year. 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 levied in _______ County for the purpose of allowing a credit for all classes of property from ad valorem tax liabilities imposed for school operations and county 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 classes of property otherwise taxable in the county are authorized to receive a credit for property taxes for school operations and county operations of the applicable political subdivision. 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 of the property tax credits are 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 a November election in any year.
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 levied in __________ County for the purpose of allowing a credit for all classes of property from ad valorem tax liabilities imposed for school operations and county operations be rescinded?
(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 the applicable property taxes apply 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)(1) 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.
(2) 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.
(3) Any additional local sales and use tax imposed by this article does not apply to:
(a) amounts taxed pursuant to Section 12-36-920, the tax on accommodations for transients;
(b) items subject to a maximum sales and use tax pursuant to Section 12-36-2110; and
(c) unprepared food that may be lawfully purchased with United States Department of Agriculture food coupons.
(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)(1) Revenues of the tax collected and deposited pursuant to subsection (A) of this section must be distributed by the county treasurer to the political subdivisions located in the county as determined by the ordinance establishing the referendum.
(2) The amount of the revenues of the tax collected that is attributable to the funding replacement for the tax increment financing redevelopment plan or other financing plan that relies upon property tax for its funding for a particular political subdivision must be distributed by the county treasurer to the political subdivision that has enacted this financing plan to be deposited into the special tax allocation fund or other similar fund of that political subdivision as may be required by the tax increment financing law, as applicable to counties or municipalities, or by other applicable law.
(3) For counties in which there is more than one school district, the county treasurer shall distribute the revenues of the tax:
(a) 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; or
(b) pursuant to a distribution plan unanimously agreed upon by all entities with fiscal authority over the school districts within the county; or
(c) pursuant to a distribution plan authorized by local act of the General Assembly or local ordinance.
(4) For school districts that are composed of more than one county, the county treasurer shall distribute the revenues of the tax:
(a) to the portion of the school district that resides in the county adopting the provisions of this article in proportion to the district's one-hundred-thirty-five-day average daily membership, as referenced in Section 59-20-40(1)(a), in comparison to the remainder of the school district outside of the county; or
(b) pursuant to a distribution plan authorized by agreement of the multiple counties comprising the school district through local act of the General Assembly or local ordinance. For purposes of this section, the one-hundred-thirty-five-day 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 Office of Research and Statistics of the Budget and Control Board shall furnish data to the State Treasurer and to the applicable political subdivisions receiving revenues for the purpose of calculating distributions and estimating revenues. The information that must be supplied to political subdivisions upon request includes, but is not limited to, gross receipts, net taxable sales, and tax liability by taxpayers. Information about a specific taxpayer is considered confidential and is governed by the provisions of Section 12-54-240. A person violating this section is subject to the penalties provided in Section 12-54-240.
Section 4-10-800. (A) Notwithstanding any other provision of law, a political subdivision receiving revenues of the tax authorized pursuant to this article must not impose an annual increase in property tax millage for school operations or county operations on all classes of property in an amount of more than 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.
(B)(1) Each political subdivision as defined in Section 4-10-720 of this article and each school district of this State shall prepare and maintain annual budgets which provide for sufficient income to meet its estimated expenses for each year. Whenever it shall happen that the ordinary expenses of a political subdivision for any year shall exceed the income of such political subdivision, the governing body of such political subdivision shall provide, by a supermajority vote of the governing body, for levying a tax in the ensuing year sufficient, with other sources of income, to pay the deficiency of the preceding year together with the estimated expenses for such ensuing year. For the purpose of this subsection, 'supermajority of the governing body' means seventy-five percent of the members of the entire governing body, whether present or not.
(2) If a tax must be levied to pay for:
(a) the deficiency of the preceding year,
(b) any catastrophic event outside the control of the governing body such as a natural disaster, severe weather event, act of God, or act of terrorism, fire, war, or riot,
(c) compliance with a court order or decree,
(d) taxpayer closure due to circumstances outside the control of the governing body that decreases by ten percent or more the amount of revenue payable to the taxing jurisdiction in the preceding year, or
(e) compliance with a regulation promulgated or statute enacted by the federal or state government after the ratification date of this section for which an appropriation or a method for obtaining an appropriation is not provided by the federal or state government,
then the amount of tax for each taxpayer must be listed on the tax statement as a separate surcharge, for each aforementioned applicable subitem, and not be included with a general millage increase. Each separate surcharge must have an explanation of the reason for the surcharge. The surcharge must be continued only for the years necessary to pay for the deficiency, for the catastrophic event, or for compliance with the court order or decree.
(C) Violations of this provision must result in the State Treasurer withholding (1) for political subdivisions, the funding provided by Aid to Subdivisions during the fiscal year in which the violation occurs, in an amount not to exceed one hundred fifty percent of the amount of excess revenues collected due to the violation or (2) for school districts, the funding provided by the Education Finance Act during the fiscal year in which the 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. Where applicable, the actual expenditures of the sales and use tax collected pursuant to this article that are used for school operations and for a balance to a school operations reserve fund established pursuant to Section 4-10-820 must 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. (A) There is established in the county treasury the Property Tax Relief Fund Reserve (reserve) as a fund separate and distinct from all other funds. In each political subdivision'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 operations for the political subdivision's fiscal year and above the amount required to be deposited to the special tax allocation fund for any tax increment indebtedness or any similar fund for other indebtedness to be paid from property tax or any project authorized to be paid pursuant to a tax increment funding redevelopment plan or other financing plan that relies upon property tax for its funding 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 operations for the political subdivision'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.
(B) If the monies in a political subdivision's reserve fund equal or exceed ten percent of the amount of sales and use tax required for operations for a political subdivision's fiscal year, the county treasurer is authorized to distribute to that political subdivision the excess accumulated over the ten percent amount for reduction in the bonded indebtedness or operations of the political subdivision.
(C) Earnings on the political subdivision's reserve must be credited to the reserve."
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 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 3. 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 4. 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 5. (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, allowing the credits 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 any credits are similarly postponed one year.
(2) The provisions of Section 12-45-75 take effect upon approval by the Governor and apply for real property tax years beginning after 2006.
(3) All other provisions take effect upon approval by the Governor.
This web page was last updated on Tuesday, June 23, 2009 at 2:37 P.M.