H 3891 General Bill, By Robinson and Cooper
 A BILL TO AMEND SECTIONS 12-24-20, 12-24-30, 12-24-40, AND 12-24-70, CODE OF
 LAWS OF SOUTH CAROLINA, 1976, RELATING TO A DEED RECORDING FEES, SO AS TO
 PROVIDE THAT THE FEE IS OWED BY THE GRANTEES IN THE CASE OF A DEED FROM A
 MASTER-IN-EQUITY, FROM A GOVERNMENT OR ITS SUBDIVISIONS, OR FROM AN INTERNAL
 REVENUE CODE TAX-EXEMPT RETIREMENT PLAN; TO CLARIFY THE MEANING OF "VALUE" AND
 TO PROVIDE FOR THE ELECTION TO USE THE PROPERTY TAX ASSESSMENT OF FAIR MARKET
 VALUE FOR PURPOSES OF CHAPTER 24; TO DELETE AND CLARIFY CERTAIN EXEMPTIONS
 FROM THE RECORDING FEE ON DEEDS AND TO REDEFINE "FAMILY"; AND TO PROVIDE TO
 CONTENTS OR AFFIDAVITS FILED IN CONNECTION WITH EXEMPT DEEDS.

   04/09/97  House  Introduced and read first time HJ-50
   04/09/97  House  Referred to Committee on Judiciary HJ-51
   05/07/97  House  Committee report: Favorable Judiciary HJ-31
   05/13/97  House  Debate adjourned until Wednesday, May 14, 1997 HJ-22
   05/14/97  House  Read second time HJ-15
   05/15/97  House  Debate adjourned HJ-17
   05/20/97  House  Read third time and sent to Senate HJ-18
   05/20/97  Senate Introduced and read first time SJ-12
   05/20/97  Senate Referred to Committee on Finance SJ-12

COMMITTEE REPORT

May 7, 1997

H. 3891

S. Printed 5/7/97--H.

Read the first time April 9, 1997.

To whom was referred a Bill (H. 3891), to amend Sections 12-24-20, 12-24-30, 12-24-40, and 12-24-70, Code of Laws of South Carolina, 1976, relating to a deed recording fee, etc., respectfully

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

DOUG SMITH, for Committee.

TO AMEND SECTIONS 12-24-20, 12-24-30, 12-24-40, AND 12-24-70, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO A DEED RECORDING FEE, SO AS TO PROVIDE THAT THE FEE IS OWED BY THE GRANTEES IN THE CASE OF A DEED FROM A MASTER-IN-EQUITY, FROM A GOVERNMENT OR ITS SUBDIVISIONS, OR FROM AN INTERNAL REVENUE CODE TAX-EXEMPT RETIREMENT PLAN; TO CLARIFY THE MEANING OF "VALUE" AND TO PROVIDE FOR THE ELECTION TO USE THE PROPERTY TAX ASSESSMENT OF FAIR MARKET VALUE FOR PURPOSES OF CHAPTER 24; TO DELETE AND CLARIFY CERTAIN EXEMPTIONS FROM THE RECORDING FEE ON DEEDS AND TO REDEFINE "FAMILY"; AND TO PROVIDE FOR CONTENTS OF AFFIDAVITS FILED IN CONNECTION WITH EXEMPT DEEDS.

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

SECTION 1. Section 12-24-20 of the 1976 Code, as added by Part II, Act 458 of 1996, is amended to read:

"Section 12-24-20. (A) Except as provided in subsection (B), the fee imposed by this chapter is the liability of the grantor, or the joint or and several liability of the grantors, but the grantee is secondarily liable for the payment of the fee.

(B) In the case of a master-in-equity deed, the liability for a deed from the federal government, a state or any of a state's political subdivisions, or a qualified retirement plan exempt from income taxes under the Internal Revenue Code to another person, the fee imposed by this chapter is on the grantee or grantees the liability of the grantee, or the joint and several liability of the grantees, and not the grantor."

SECTION 2. Section 12-24-30 of the 1976 Code, as added by Part II, Act 458 of 1996, is amended to read:

"Section 12-24-30. (A) For purposes of this chapter, the term 'value' means the realty's fair market value. In arm's-length real property transactions, this value is the sales price consideration paid or to be paid in money or money's worth for the realty including other realty, personal property, stocks, bonds, partnership interests and other intangible property, the forgiveness or cancellation of a debt, the assumption of a debt, and the surrendering of a right. The fair market value of the consideration must be used in calculating the consideration paid in money's worth. Taxpayers may elect to use the fair market value of the realty being transferred in determining fair market value of the consideration under the provisions of this section. However, in the case of realty transferred between a corporation, a partnership, or other entity and its stockholder, partner, or owner, and in the case of realty transferred to a trust or as a distribution to a trust beneficiary, 'value' means the realty's fair market value.

(B) A deduction from value is allowed for the amount of any lien or encumbrance existing on the land, tenement, or realty before the transfer and remaining on the land, tenement, or realty after the transfer.

(C) Taxpayers may elect to use the fair market value as determined for property tax purposes in determining fair market value under the provisions of this section."

SECTION 3. Section 12-24-40 of the 1976 Code, as added by Part II, Act 458 of 1996, is amended to read:

"Section 12-24-40. Exempted from the fee imposed by this chapter are deeds:

(1) transferring realty to the federal government in which the value of the realty, as defined in Section 12-24-30, is equal to or less than one hundred dollars;

(2) transferring realty to the federal government or to a state, its agencies and departments, and its political subdivisions, including school districts;

(3) that are otherwise exempted under the laws and Constitution of this State or of the United States;

(4) transferring realty in which no gain or loss is recognized by reason of Section 1041 of the Internal Revenue Code as defined in Section 12-6-40(A);

(5) transferring realty from an agent to the agent's principal in which the realty was purchased with the funds of the principal in order to partition one contiguous piece of realty, so long as no consideration is paid for the transfer other than the interests in the realty that are exchanged in order to effect the partition;

(6) transferring an individual grave space at a cemetery owned by a cemetery company licensed under Chapter 55 of Title 39;

(7) transferring realty to a member of the family or to a family trust or to a family partnership. "Family" means spouse, parents, sisters, brothers, grandparents, grandchildren, and lineal descendants. A "family trust" is a trust whose beneficiaries are all members of the family of the transferor. A "family partnership" is a partnership whose partners are all members of the family of the transferor that constitute a contract for the sale of timber to be cut;

(8) transferring realty to a legal heir or devisee corporation, a partnership, or a trust as a stockholder, partner, or trust beneficiary of the entity or so as to become a stockholder, partner, or trust beneficiary of the entity so long as no consideration is paid for the transfer other than stock in the corporation, interest in the partnership, beneficiary interest in the trust, or the increase in value in such stock or interest held by the grantor. However, the transfer of realty from a corporation, a partnership, or a trust to a stockholder, partner, or trust beneficiary of the entity is subject to the fee, even if the realty is transferred to another corporation, a partnership, or trust;

(9) that constitute a contract for the sale of timber to be cut transferring realty from a family partnership to a partner or from a family trust to a beneficiary, so long as no consideration is paid for the transfer other than a reduction in the grantee's interest in the partnership or trust. A 'family partnership' is a partnership whose partners are all members of the same family. A 'family trust' is a trust in which the beneficiaries are all members of the same family. The beneficiaries of a family trust also may include charitable entities. 'Family' means the grantor, the grantor's spouse, parents, grandparents, sisters, brothers, children, stepchildren, grandchildren, and the spouses and lineal descendant of any of them. A family partnership or family trust also includes charitable entities, other family partnerships and family trusts of the grantor, and charitable remainder and charitable lead trusts, if all the beneficiaries are charitable entities or members of the grantor's family. A 'charitable entity' means an entity which may receive deductible contributions under Section 170 of the Internal Revenue Code as defined in Section 12-6-40(A);

(10) transferring realty from an individual to a partnership, limited liability company, or corporation upon the formation of the entity if the individual is transferring the realty in order to become a partner, member, or shareholder in the entity. All other transfers of realty to or from the partnership, limited liability company, or corporation, not otherwise exempt, are subject to the fee;

(11) transferring realty in a statutory merger or consolidation from a constituent corporation to the continuing or new corporation;

(11) transferring realty in a merger or consolidation from a constituent partnership to the continuing or new partnership;

(12) transferring realty between a parent corporation and its subsidiary corporation, provided that no consideration of any kind is paid or is to be paid for the transfer;

(13) transferring realty to a nonprofit corporation organized and operated exclusively for either a religious, scientific, charitable, or educational purpose, and provided that no consideration of any kind is paid or is to be paid for the transfer;

(14)(12) that constitute a corrective deed or a quitclaim deed used to confirm title already vested in the grantee, provided that so long as no consideration of any kind is paid or is to be paid under the corrective or quitclaim deed;

(15) transferring realty from an individual to a partnership or limited liability company of which the individual is a partner or a member, provided that the transfer is subject to the fee to the extent that the transfer is a transfer of an undivided interest in the realty to partners or members other than the transferor. The determination as to the portion of the realty's value upon which the fee must be paid must be based on the percentage interest in the partnership or limited liability company of the partners or members other than the transferor."

SECTION 4. Section 12-24-70 of the 1976 Code, as added by Part II, Act 458 of 1996, is amended to read:

"Section 12-24-70. (A) An affidavit must accompany every deed presented for recording and must set forth the true, full, and complete value of the realty as defined in Section 12-24-30. In addition, the clerk or register of mesne conveyances may require any other information considered necessary. However, the clerk or register of mesne conveyances, at his discretion, may waive the affidavit requirement.

If the deed is exempt under Section 12-24-40, the affidavit must state that the deed is exempt and state the reason for the exemption. This affidavit must be signed by a responsible person connected with the transaction and the affidavit must state that connection. The clerk of court or register of mesne conveyances shall require an affidavit showing the value of the realty to be filed with a deed.

For deeds exempt under the provisions of this chapter, the value need not be stated on the affidavit, but the affidavit must state the reason the deed is exempt from the fee. The affidavit required by this section must be signed by a responsible person connected with the transaction and the affidavit must state that connection. The clerk of court or register of mesne conveyances, at his discretion, may waive the affidavit requirement.

(B) The clerk of court or register of mesne conveyances shall file these affidavits in his office.

(C) A person required to furnish the affidavit who wilfully furnishes a false or fraudulent affidavit is guilty of a misdemeanor and, upon conviction, must be fined not more than one thousand dollars or imprisoned not more than one year, or both."

SECTION 5. This act takes effect upon approval by the Governor.