S 1219 General Bill, By Setzler
 A Bill to amend Section 59-20-20, as amended, Code of Laws of South Carolina,
 1976, relating to the definitions of the index of taxpaying ability for
 purposes of the Education Finance Act, so as to provide that the assessments
 used are the audited assessments by school district submitted annually to the
 Comptroller General, to revise the date by which the auditor must report
 audited assessed values from February first to October first and to clarify
 and revise reporting requirements; to require the sales ratio data used to
 calculate the index to conform to the most recent studies corresponding to the
 base year and to define base year, and to provide for the Department of
 Revenue and Taxation to provide a preliminary index by November first of each
 year and a final index by February first.

   03/01/94  Senate Introduced and read first time SJ-4
   03/01/94  Senate Referred to Committee on Education SJ-4
   04/14/94  Senate Committee report: Favorable Education SJ-22
   04/19/94  Senate Read second time SJ-16
   04/19/94  Senate Ordered to third reading with notice of
                     amendments SJ-16
   04/20/94  Senate Read third time and sent to House SJ-12
   04/21/94  House  Introduced and read first time HJ-18
   04/21/94  House  Referred to Committee on Ways and Means HJ-18

COMMITTEE REPORT

April 14, 1994

S. 1219

S. Printed 4/14/94--S.

Read the first time March 1, 1994.

To whom was referred a Bill (S. 1219), to amend Section 59-20-20, as amended, Code of Laws of South Carolina, 1976, relating to the definitions of the index of taxpaying ability for purposes of the Education Finance Act, etc., respectfully

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

NIKKI G. SETZLER, for Committee.

A BILL

TO AMEND SECTION 59-20-20, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE DEFINITIONS OF THE INDEX OF TAXPAYING ABILITY FOR PURPOSES OF THE EDUCATION FINANCE ACT, SO AS TO PROVIDE THAT THE ASSESSMENTS USED ARE THE AUDITED ASSESSMENTS BY SCHOOL DISTRICT SUBMITTED ANNUALLY TO THE COMPTROLLER GENERAL, TO REVISE THE DATE BY WHICH THE AUDITOR MUST REPORT AUDITED ASSESSED VALUES FROM FEBRUARY FIRST TO OCTOBER FIRST AND TO CLARIFY AND REVISE REPORTING REQUIREMENTS; TO REQUIRE THE SALES RATIO DATA USED TO CALCULATE THE INDEX TO CONFORM TO THE MOST RECENT STUDIES CORRESPONDING TO THE BASE YEAR AND TO DEFINE BASE YEAR, AND TO PROVIDE FOR THE DEPARTMENT OF REVENUE AND TAXATION TO PROVIDE A PRELIMINARY INDEX BY NOVEMBER FIRST OF EACH YEAR AND A FINAL INDEX BY FEBRUARY FIRST.

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

SECTION 1. Section 59-20-20(3) of the 1976 Code, as last amended by Section 1570, Act 181 of 1993, is further amended to read:

"(3) `Index of taxpaying ability' means an index of a local district's relative fiscal capacity in relation to that of all other districts of the State based on the full market value of all taxable property of the district assessed on the basis of property classification assessment ratios set forth in Article 3, Chapter 43 of Title 12 for the second completed taxable year preceding the fiscal year in which the index is used and these assessments must be the audited assessments by school district contained in the annual report submitted yearly to the Comptroller General's office.. The county auditor shall provide fiscal year-end audited assessments of real and personal property to the Property Division of the Department of Revenue and Taxation the assessed value of property in for each of the school districts of the county not later than February first of each year for the second completed taxable year preceding the fiscal year in which the index is used not later than October first of each year. The index must be used to calculate each district's share of the revenue to be raised locally for the foundation program. The index must include an imputed value for the property tax base implicitly generating impact aid revenue. The property tax base must be imputed at two-thirds the average ratio of all true value assessed property value statewide to prior year local revenue statewide in the foundation program, the resulting product multiplied times the average impact aid receipts during the prior three years. If impact aid receipts during the federal fiscal year are less than the average receipts for the prior three years, then state aid to the impact aid districts must be adjusted in the final payment for the state fiscal year. If the State Department of Education determines from fiscal simulations that the school finance system does not meet requirements of Section 5(D) of P. L. 81-874, the Department of Revenue and Taxation shall exclude an imputed value of impact aid receipts from the index of taxpaying ability.

The index must be determined annually by the Department of Revenue and Taxation on the basis of the most current sales ratio data available based on studies made from sales ratio data based on the most recent studies made which correspond with the base year assessments used to compute the current index pursuant to Section 12-43-250 for assessed property within a school district. The sales ratio data utilized must be based on annual ratio studies made within the previous two calendar years base year is the second completed taxable year preceding the fiscal year in which the index is used. The Department of Revenue and Taxation shall provide the index not later than March first a preliminary index by November first of each year end and a final index by February first of each year to the State Department of Education and to the auditor of each county who shall provide the index to any governmental entity responsible for approving or levying of millages for school purposes. Changes and corrections may be made to the index before March February first but no change is allowed after that date. When the assessment of property is under appeal and the appeal extends beyond the year in which the assessment made pursuant to Section 12-43-305 is applied, the Department of Revenue and Taxation shall adjust the index of taxpaying ability in the year in which the appeal is resolved by the amount of any difference between the assessments. Any school district is entitled to a hearing before the Department of Revenue and Taxation to review its designated index of taxpaying ability within thirty days of filing a request for the hearing. The data gathered by the Department of Revenue and Taxation for the purpose of determining an annual index must be preserved as public records in the offices of the Department of Revenue and Taxation for four years. The raw information gathered from the various county officers reflecting the representative sales within the school districts, the consideration, and the reported market value or assessed value for each sale are a part of the public records so preserved. The Department of Revenue and Taxation shall file a statement stating the methodology employed in making the annual determination of the index and refer to all sources of factual information used in making the determination. All work sheets, computer printouts, and the actual calculation must be included as the public records to be preserved by the Department of Revenue and Taxation. In determining sales to assessment ratio, the Department of Revenue and Taxation shall use only reported consideration on sales for which deeds have been placed on public record. Where sufficient sales data is not available, the Department of Revenue and Taxation shall make appraisals in lieu of sales in order to determine the index. The appraisals, including all working papers, must be included as the public records to be preserved by the Department of Revenue and Taxation. With respect to school districts within counties where abstracts of duplicates reflecting the assessed value have been filed pursuant to Section 12-39-290, the same having been adopted by the auditors under Article 3, Chapter 43 of Title 12, the index must be on the basis of the value of the property as stated in the abstracts as adjusted by sales ratio studies up to full assessments based on full fair market value."

SECTION 2. This act takes effect upon approval by the Governor.