S 0411 General Bill, By J.M. Waddell, J.C. Hayes, Leatherman and I.E. Lourie
 A Bill to amend Sections 4-10-90 and 6-4-20, Code of Laws of South Carolina,
 1976, relating to estimating revenues and correcting allocations for purposes
 of the local option sales tax and the accommodations tax, so as to provide
 that misallocations may be corrected only by adjusting subsequent allocations
 in the same fiscal year as the misallocation; to amend Section 12-3-240,
 relating to the Tax Commission's authority to furnish income tax data to
 municipalities which levy a gross receipts tax, so as to allow the Commission
 to provide the data to counties; to amend the 1976 Code by adding Section
 12-3-270 so as to provide that funds received from collecting warrants for
 distraint may not supplement Tax Commission appropriations and must be
 deposited in the general fund of the State; to amend Sections 12-54-50 and
 12-54-120, relating to fees on bad checks given to the Tax Commission and tax
 liens, so as to increase the fee from ten to fifteen dollars, extend the fee
 to electronic fund transfers not made because of insufficient funds, and
 provide that a tax lien operates in the same manner as a judgment; to amend
 Sections 12-54-420 and 12-54-460, relating to the Setoff Debt Collection Act,
 so as to provide that debt setoffs must be made for private institutions of
 higher learning only for state-authorized student loans and to provide a
 notice procedure before a setoff may be made; and to amend the 1976 Code by
 adding Section 12-54-495 so as to provide that claimant agencies under the
 Setoff Debt Collection Act must indemnify the Tax Commission for liabilities
 arising under the Act.

   01/09/91  Senate Introduced and read first time SJ-16
   01/09/91  Senate Referred to Committee on Finance SJ-16
   02/13/91  Senate Committee report: Favorable with amendment
                     Finance SJ-13
   02/14/91  Senate Amended SJ-19
   02/14/91  Senate Read second time SJ-19
   02/14/91  Senate Ordered to third reading with notice of
                     amendments SJ-19
   01/15/92  Senate Recommitted to Committee on Finance SJ-188

COMMITTEE AMENDMENT ADOPTED

February 14, 1991

S. 411

Introduced by SENATORS Waddell, Leatherman, Lourie and Hayes

S. Printed 2/14/91--S.

Read the first time January 9, 1991.

A BILL

TO AMEND SECTIONS 4-10-90 AND 6-4-20, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO ESTIMATING REVENUES AND CORRECTING ALLOCATIONS FOR PURPOSES OF THE LOCAL OPTION SALES TAX AND THE ACCOMMODATIONS TAX, SO AS TO PROVIDE THAT MISALLOCATIONS MAY BE CORRECTED ONLY BY ADJUSTING SUBSEQUENT ALLOCATIONS IN THE SAME FISCAL YEAR AS THE MISALLOCATION; TO AMEND SECTION 12-3-240, RELATING TO THE TAX COMMISSION'S AUTHORITY TO FURNISH INCOME TAX DATA TO MUNICIPALITIES WHICH LEVY A GROSS RECEIPTS TAX, SO AS TO ALLOW THE COMMISSION TO PROVIDE THE DATA TO COUNTIES; TO AMEND THE 1976 CODE BY ADDING SECTION 12-3-270 SO AS TO PROVIDE THAT FUNDS RECEIVED FROM COLLECTING WARRANTS FOR DISTRAINT MAY NOT SUPPLEMENT TAX COMMISSION APPROPRIATIONS AND MUST BE DEPOSITED IN THE GENERAL FUND OF THE STATE; TO AMEND SECTIONS 12-54-50 AND 12-54-120, RELATING TO FEES ON BAD CHECKS GIVEN TO THE TAX COMMISSION AND TAX LIENS, SO AS TO INCREASE THE FEE FROM TEN TO FIFTEEN DOLLARS, EXTEND THE FEE TO ELECTRONIC FUND TRANSFERS NOT MADE BECAUSE OF INSUFFICIENT FUNDS, AND PROVIDE THAT A TAX LIEN OPERATES IN THE SAME MANNER AS A JUDGMENT; TO AMEND SECTIONS 12-54-420 AND 12-54-460, RELATING TO THE SETOFF DEBT COLLECTION ACT, SO AS TO PROVIDE THAT DEBT SETOFFS MAY BE MADE FOR PRIVATE INSTITUTIONS OF HIGHER LEARNING ONLY FOR STATE-AUTHORIZED STUDENT LOANS AND TO PROVIDE A NOTICE PROCEDURE BEFORE A SETOFF MAY BE MADE; AND TO AMEND THE 1976 CODE BY ADDING SECTION 12-54-495 SO AS TO PROVIDE THAT CLAIMANT AGENCIES UNDER THE SETOFF DEBT COLLECTION ACT MUST INDEMNIFY THE TAX COMMISSION FOR LIABILITIES ARISING UNDER THE ACT.

Amend Title To Conform

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

SECTION 1. Section 4-10-90(C) of the 1976 Code, as added by Act 317 of 1990, is amended to read:

"(C) The Tax Commission shall furnish data to the State Treasurer and to the governing bodies of the counties and municipalities receiving revenues for the purpose of calculating distributions and estimating revenues. The information which may be supplied to counties and municipalities includes, but is not limited to, gross receipts, net taxable sales, and tax liability by taxpayers. Information by taxpayer received by appropriate county or municipal officials 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. If because of refunds by the Tax Commission or for any other reason, an overpayment is made to a county or municipality, the State Treasurer shall withhold from subsequent payments a sufficient amount to adjust for the overpayment and direct funds to the proper entity. However, all corrections of allocations from the Local Sales and Use Tax Fund must be made within the current fiscal year. The State Treasurer may correct misallocations from the Property Tax Credit Fund and County/Municipal Revenue Fund by adjusting subsequent allocations, but these adjustments may be made only in allocations made in the same fiscal year as the misallocation."

SECTION 2. Section 6-4-20 of the 1976 Code, as added by Section 74, Part II, Act 612 of 1990, is amended by adding:

"(5) The State Treasurer may correct misallocations to counties and municipalities from accommodations tax revenues by adjusting subsequent allocations, but these adjustments may be made only in allocations made in the same fiscal year as the misallocation."

SECTION 3. Section 12-3-240 of the 1976 Code is amended to read:

"Section 12-3-240. Notwithstanding any other provisions of law to the contrary, the The Tax Commission shall make available to the authorities of any a municipality or county in the this State levying a tax based on gross receipts any records indicating the amount of such gross receipts reported to the Tax commission; provided that income tax but these tax records shall may be made available not before July 1, 1967 and only if in the event the Tax commission first has first satisfied itself that the gross receipts reported to the municipality or county were less than such the gross receipts as indicated by the records of the Tax commission."

SECTION 4. Chapter 3, Title 12 of the 1976 Code is amended by adding:

"Section 12-3-270. Funds received from the collection of warrants for distraint may not be expended to supplement appropriations to the Tax Commission. Any unexpended balance in the 'Warrant Revolving Fund' less an amount necessary for adequate cash flow must be deposited to the credit of the general fund of the State."

SECTION 5. Section 12-54-50 of the 1976 Code is amended to read:

"Section 12-54-50. When the bank upon on which any a uncertified check tendered to the commission in payment of any an obligation due to the commission, refuses payment of the check on account of insufficient funds of the drawer in the bank and the check is returned to the commission, a penalty of ten fifteen dollars must be imposed. This section applies to all taxes or license fees levied or assessed by the commission."

SECTION 6. Section 12-54-120 of the 1976 Code is amended to read:

"Section 12-54-120. If any a tax, additional tax, interest, or penalty imposed by the commission remains due and unpaid for a period of ten days, the commission may issue a warrant for distraint under its hand and official seal, directed to any an authorized agent of the commission commanding him to levy upon on and sell the real and personal property of the person for the payment of the amount thereof due, with added penalties, interest, and costs of executing the warrant, and to return the warrant to the commission and pay to it the money collected, by a time to be therein specified in the warrant not more than sixty days after receipt of the warrant. Immediately upon receipt of the warrant, the agent shall file a copy of the warrant with the clerk of court or, where appropriate, the register of mesne conveyances of any a county in this State in which property of the taxpayer named in the warrant may be or may have been located, and thereupon the clerk of court shall enter in the judgment docket, in the column for judgment debtors, the name of the taxpayer mentioned in the warrant and in appropriate columns the amount of tax, or portion thereof of the tax, and the penalties for which the warrant was issued, and the date when the copy was filed and shall index the warrant upon on the index of judgments. Thereupon When filed, the amount of the warrant so docketed becomes a lien upon on the title to and interest in real property or chattels real or any property of the taxpayer, against whom it is issued in the same manner as a judgment duly docketed in the clerk's office. including The lien created extends to bank deposits and all other choses in action on property incapable of manual levy or delivery."

SECTION 7. Section 12-54-420(1) of the 1976 Code, as amended by Act 668 of 1988, is further amended to read:

"(1) 'Claimant agency' means any a state agency, board, committee, commission, public or private institution of higher learning, and the Internal Revenue Service. It also includes a private institution of higher learning for the purpose of collecting debts related to default on authorized educational loans made pursuant to Chapter 111, 113, or 115 of Title 59."

SECTION 8. Section 12-54-460(A) of the 1976 Code, as added by Act 474 of 1988, is amended to read:

"(A) A claimant agency seeking to attempt collection of a delinquent debt through setoff shall notify the commission in writing and supply information the commission determines necessary to identify the debtor whose refund is sought to be setoff set off. A request for setoff may be made only after the claimant agency has notified the debtor of its intention to cause the debtor's refund to be set off. This notice must be given in person, left at the dwelling or usual place of business of the debtor, or sent by certified or registered mail to the debtor's last known address no less than thirty days before the claimant agency's request to the commission. The notice shall include a statement which sets forth administrative appeal procedures available to the debtor and alternatives available to the debtor which could prevent setoff. The claimant agency promptly shall notify the debtor when the liability out of which the setoff arises is satisfied. Notification to the commission and the furnishing of identifying information must occur on or before a date specified by the commission in the year preceding the calendar year during which the refund would be paid. Additionally, subject to the notification deadline specified above, the notification is effective only to initiate setoff for claims against refunds that would be made in the calendar year subsequent to the year in which notification is made to the commission."

SECTION 9. Article 3, Chapter 54, Title 12 of the 1976 Code is amended by adding:

"Section 12-54-495. Claimant agencies shall indemnify the commission against any injuries, actions, liabilities, or proceedings arising from performance under the provisions of this article."

SECTION 10. This act takes effect upon approval by the Governor.