H 3818 General Bill, By Kelley
 A Bill to amend the Code of Laws of South Carolina, 1976, by adding Article 3
 in Chapter 10 of Title 4, relating to local sales and use taxes, so as to
 enact the Special District Sales and Use Tax Act and to provide for the method
 of creating the District, the imposition of the tax, and the use of tax
 revenues; and to designate Sections 4-10-10 through 4-10-90 as Article 1,
 Chapter 10 of Title 4, entitled "Local Sales and Use Tax".

   04/01/93  House  Introduced and read first time HJ-8
   04/01/93  House  Referred to Committee on Ways and Means HJ-8

A BILL

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 3 IN CHAPTER 10 OF TITLE 4, RELATING TO LOCAL SALES AND USE TAXES, SO AS TO ENACT THE SPECIAL DISTRICT SALES AND USE TAX ACT AND TO PROVIDE FOR THE METHOD OF CREATING THE DISTRICT, THE IMPOSITION OF THE TAX, AND THE USE OF TAX REVENUES; AND TO DESIGNATE SECTIONS 4-10-10 THROUGH 4-10-90 AS ARTICLE 1, CHAPTER 10 OF TITLE 4, ENTITLED "LOCAL SALES AND USE TAX".

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 4-10-310. This article may be cited as the special district sales and use tax act.

Section 4-10-320. In a county where the local sales and use tax is not imposed, a contiguous part of the county, including municipalities, may be constituted a sales and use tax district as provided in this section. When the district is constituted, the one percent sales and use tax imposed pursuant to Article 1, Chapter 10 of Title 4 must be imposed in the district.

Section 4-10-330 (A) Upon a petition to the county election commission containing the signatures of at least five percent of the qualified electors residing in the proposed sales and use tax district, a referendum must be held in the proposed district with a question substantially as follows:

`Map of the Sales and Use Tax District

Must a one percent sales and use tax be levied in the above described district for the purpose of providing a credit against property taxes and funding certain nonrecurring governmental expenses in the district?

(B) A proposed district may not cross precinct lines or municipal boundary lines.

(C) The petition must be in the form provided by law, must contain a detailed map of the proposed district, and must be submitted to the county election commission. If the commission determines that the petitions are in order and contain sufficient signatures of qualified electors and that the described district meets the requirements of this section, the commission shall certify the petition and conduct a referendum on the eighth Tuesday following certification. If the eighth Tuesday is a state holiday, the referendum must be held on the next Tuesday which is not a state holiday. The commission shall cause the date and subject of the referendum to be published in a notice in a newspaper of general circulation in the proposed district at least four weeks and two weeks before the referendum date. The notice must be at least five by seven inches. The commission shall conduct the referendum in the proposed district applying the election laws of this State, mutatis mutandis. If the result is a majority in favor of the creation of the district, the commission shall certify the result to the South Carolina Tax Commission. The district is created and the tax imposed on the first day of the sixth month following the Tax Commission's receipt of the certified favorable referendum result.

(D) If the question is not approved, no referendum on this subject may be held in any part of the proposed district for at least one year.

Section 4-10-340. The tax imposed by this article is at the same rate and must be paid, collected, enforced, administered, and rescinded in the same manner as the tax imposed pursuant to Article 1, Chapter 10 of Title 4, mutatis mutandis.

Section 4-10-350. After deducting the amount of refunds and the cost to the commission of administering the tax, not to exceed one-half of one percent, the remaining revenue for the tax must be credited to two separate funds in the State Treasury as follows:

(1) ninety percent to a property tax credit fund, decreasing by five percent each successive twelve-month period until a permanent credited amount of seventy-five percent is achieved;

(2) ten percent to a nonrecurring expense fund increasing by five percent each successive twelve-month period until a permanent credited amount of twenty-five percent is achieved.

Section 4-10-360 Revenue in the funds must be distributed quarterly as follows:

(1) to each municipality in the district, in the proportion that the population of the municipality is of the total population of the district;

(2) to the county, in the proportion that the population of the unincorporated area of the district is of the total population of the district.

Earnings on the funds must be credited back to the funds in the manner that tax revenues are credited to the funds and for purposes of distribution are considered sales and use tax revenues.

Section 4-10-370. (A) Revenues from the nonrecurring expense fund may be used only for the following purposes and in the case of distributions to a county, only in a manner that directly benefits that portion of the county in the tax district:

(1) capital improvement, renovation, and restoration projects, including water and sewer projects;

(2) litter control;

(3) transportation improvements;

(4) vehicles, equipment, and supplies for police, emergency medical, and fire protection services;

(5) coastal zone management projects, including beach renourishment projects;

(6) wetland preservation;

(7) flood control;

(8) commons area enhancements;

(9) traffic control;

(10) public parking.

(B) Revenues from the nonrecurring expense fund may not be used to pay salaries for full-time or part-time public employees, but such revenues may be used to contract for the services of private sector employees.

(C) No expenditure may be made under this section unless it is first approved by a majority of the members of the legislative delegation representing any part of the tax district.

Section 4-10-380. Revenue from the property tax credit fund must be used to provide credits against ad valorem municipal and county property taxes of taxpayers in the district. The credit must be calculated in the manner provided in Section 4-10-40(B), mutatis mutandis. To the extent that the credit exceeds municipal and county property taxes due, the remaining credit then applies against property tax for schools. Where real property crosses district boundaries, the credit must be apportioned in the manner that the Tax Commission directs.

Section 4-10-390. If the local sales and use tax allowed pursuant to Chapter 10 of Title 4 is imposed in a county, a sales and use tax district created in the county pursuant to this article is abolished and the tax levied in the district is rescinded on the date the local sales and use tax is imposed."

SECTION 2. Sections 4-10-10 through 4-10-90 of the 1976 Code are designated Article 1, Chapter 10, Title 4 of the 1976 Code and entitled "Local Sales and Use Tax".

SECTION 3. This act takes effect upon approval by the Governor.