S 768 Session 112 (1997-1998)
S 0768 General Bill, By Ravenel
Similar(H 4120)
A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 7
TO TITLE 31 SO AS TO PROVIDE FOR THE ISSUANCE OF INDEBTEDNESS BY COUNTIES IN
CONNECTION WITH REDEVELOPMENT PROJECTS AND THE PAYMENT OF SUCH INDEBTEDNESS
FROM ADDED INCREMENTS OF TAX REVENUES.
05/20/97 Senate Introduced and read first time SJ-10
05/20/97 Senate Referred to Committee on Judiciary SJ-10
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA,
1976, BY ADDING CHAPTER 7 TO TITLE 31 SO AS TO
PROVIDE FOR THE ISSUANCE OF INDEBTEDNESS BY
COUNTIES IN CONNECTION WITH REDEVELOPMENT
PROJECTS AND THE PAYMENT OF SUCH INDEBTEDNESS
FROM ADDED INCREMENTS OF TAX REVENUES.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Title 31 of the 1976 Code is amended by adding:
"CHAPTER 7
Section 31-7-10. This chapter may be cited as the 'Tax Increment
Financing Act for Counties'.
Section 31-7-20. (A) The General Assembly finds that:
(1) Section 14(10) of Article X of the Constitution of South
Carolina provides that the General Assembly may authorize by
general law that indebtedness for the purpose of redevelopment
within counties may be incurred and that the debt service of such
indebtedness be provided from the added increments of tax revenues
to result from the project.
(2) An increasing demand for public services must be provided
from a limited tax base. Incentives must be provided for
redevelopment in areas which are, or threaten to become,
predominantly slum or blighted.
(3) There exist in many counties of this State blighted and
conservation areas; the conservation areas are rapidly deteriorating
and declining and may soon become blighted areas if their decline is
not checked; the stable economic and physical development of the
blighted areas and conservation areas are endangered by the presence
of blighting factors as manifested by progressive and advanced
deterioration of structures, by the overuse of housing and other
facilities, by a lack of physical maintenance of existing structures, by
obsolete and inadequate community facilities, and a lack of sound
community planning, by obsolete platting, diversity of ownership,
excessive tax, and special assessment delinquencies, or by a
combination of these factors; that as a result of the existence of
blighted areas and areas requiring conservation, there is an excessive
and disproportionate expenditure of public funds, inadequate public
and private investment, unmarketability of property, growth in
delinquencies and crime, and housing and zoning law violations in
such areas together with an abnormal exodus of families and
businesses so that the decline of these areas impairs the value of
private investments and threatens the sound growth and the tax base
of taxing districts in such areas, and threatens the health, safety,
morals, and welfare of the public.
(4) In order to promote and protect the health, safety, morals,
and welfare of the public, blighted conditions need to be eradicated
and conservation measures instituted and redevelopment of such
areas undertaken; to remove and alleviate adverse conditions it is
necessary to encourage private investment and restore and enhance
the tax base of the taxing districts in such areas by the redevelopment
of project areas. The eradication of blighted areas and treatment and
improvement of areas by redevelopment projects is declared to be
essential to the public interest.
(5) The use of incremental tax revenues derived from the tax
rates of various taxing districts in redevelopment project areas for the
payment of redevelopment project costs is of benefit to the taxing
districts because taxing districts located in redevelopment project
areas would not derive the benefits of an increased assessment base
without the benefits of tax increment financing, all surplus tax
revenues are turned over to the taxing districts in redevelopment
project areas, and all taxing districts benefit from the removal of
blighted conditions and the eradication of conditions requiring
conservation measures.
(B) The General Assembly intends to implement the authorization
granted in Article X, Section 14 of the Constitution of this State. The
authorization in this chapter provides for this State an essential
method for financing redevelopment. The governing bodies of the
counties are vested with all powers consistent with the Constitution
necessary, useful, and desirable to enable them to accomplish
redevelopment in areas which are or threaten to become blighted and
to sufficiently meet all constitutional requirements pertaining to
incurring indebtedness for the purpose of redevelopment and funding
the debt service of such indebtedness from the added increment of tax
revenues to result from such redevelopment as provided in Section
14(10) of Article X of the Constitution of this State. The indebtedness
incurred pursuant to Section 14(10) of Article X of the Constitution
is exempt from all debt limitations imposed by Article X. The powers
granted in this chapter must be in all respects exercised for the benefit
of the inhabitants of the State, for the increase of its commerce, and
for the promotion of its welfare and prosperity.
(C) All action taken by any county in carrying out the purposes of
this chapter shall perform essential governmental functions.
(D) Pursuant to the authorization granted in Article VIII, Section
13, of the Constitution of this State, if a redevelopment project area
is located in more than one county, the powers granted herein may be
exercised jointly.
Section 31-7-30. Unless the context clearly indicates otherwise:
(1) 'Blighted area means any improved or vacant area within the
boundaries of a redevelopment project area located within the
territorial limits of the unincorporated area of a county where:
(a) if improved, industrial, commercial, and residential
buildings or improvements, because of a combination of five or more
of the following factors: age; dilapidation; obsolescence;
deterioration; illegal use of individual structures; presence of
structures below minimum code standards; excessive vacancies;
overcrowding of structures and community facilities; lack of
ventilation, light, or sanitary facilities; inadequate utilities; excessive
land coverage; deleterious land use or layout; depreciation of
physical maintenance; lack of community planning, are detrimental
to the public safety, health, morals, or welfare or;
(b) if vacant, the sound growth is impaired by:
(i) a combination of two or more of the following factors:
obsolete platting of the vacant land; diversity of ownership of such
land; tax and special assessment delinquencies on such land;
deterioration of structures or site improvements in neighboring areas
adjacent to the vacant land; or
(ii) the area immediately prior to becoming vacant qualified
as a blighted area. Any area within a redevelopment plan established
by Chapter 10 of Title 31 is deemed to be a blighted area.
(2) 'Conservation area' means any improved area within the
boundaries of a redevelopment project area located within the
territorial limits of the unincorporated area of a county that is not yet
a blighted area but, because of a combination of three or more of the
following factors: dilapidation; obsolescence; deterioration; illegal
use of structures; presence of structures below minimum code
standards; abandonment; excessive vacancies; overcrowding of
structures and community facilities; lack of ventilation, light, or
sanitary facilities; inadequate utilities; excessive land coverage;
depreciation of physical maintenance; or lack of community
planning, is detrimental to the public safety, health, morals, or
welfare and may become a blighted area.
(3) 'Municipality' means an incorporated municipality of this
State.
(4) 'Obligations' means bonds, notes, or other evidence of
indebtedness issued by the county to carry out a redevelopment
project or to refund outstanding obligations.
(5) 'Redevelopment plan' means the comprehensive program of
the county for redevelopment intended by the payment of
redevelopment costs to reduce or eliminate those conditions which
qualified the redevelopment project area as a blighted area or
conservation area or combination thereof and thereby to enhance the
tax bases of the taxing districts which extend into the project
redevelopment area. Each redevelopment plan shall set forth in
writing the program to be undertaken to accomplish the objectives
and shall include, but not be limited to, estimated redevelopment
project costs, the anticipated sources of funds to pay costs, the nature
and term of any obligations to be issued, the most recent equalized
assessed valuation of the project area, an estimate as to the equalized
assessed valuation after redevelopment, and the general land uses to
apply in the redevelopment project area. A redevelopment plan
established by Chapter 10 of Title 31 is deemed a redevelopment plan
for purposes of this paragraph.
(6) 'Redevelopment project' means any buildings, improvements,
including street improvements, water, sewer and storm drainage
facilities, parking facilities, and recreational facilities. Any project or
undertaking authorized under Section 6-21-50 may also qualify as a
redevelopment project under this chapter. All such projects are to be
owned by the county.
(7) 'Redevelopment project area' means an area within the
unincorporated area of and designated by the county, which is not
less in the aggregate than one and one-half acres and in respect to
which the county has made a finding that there exist conditions that
cause the area to be classified as a blighted area or a conservation
area, or a combination of both blighted areas and conservation areas.
The total aggregate amount of all redevelopment project areas within
the unincorporated area of any one county may not exceed five
percent of the total acreage of the unincorporated area of the county.
(8) 'Redevelopment project costs' means and includes the sum
total of all reasonable or necessary costs incurred or estimated to be
incurred and any costs incidental to a redevelopment project. The
costs include, without limitation:
(a) costs of studies and surveys, plans, and specifications;
professional service costs including, but not limited to, architectural,
engineering, legal, marketing, financial, planning, or special services;
(b) property assembly costs including, but not limited to,
acquisition of land and other property, real or personal, or rights or
interest therein, demolition of buildings, and the clearing and grading
of land;
(c) costs of rehabilitation, reconstruction, repair, or remodeling
of a redevelopment project;
(d) costs of the construction of a redevelopment project;
(e) financing costs including, but not limited to, all necessary
and incidental expenses related to the issuance of obligations and
which may include payment of interest on any obligations issued
under the provisions of this chapter accruing during the estimated
period of construction of any redevelopment project for which the
obligations are issued and including reasonable reserves related
thereto;
(f) relocation costs to the extent that a county determines that
relocation costs must be paid or required by federal or state law.
(9) 'Taxing districts' means counties, incorporated municipalities,
schools, special purpose districts, and public and any other municipal
corporations or districts with the power to levy taxes.
(10) 'Vacant land' means any parcel or combination of parcels of
real property without industrial, commercial, and residential
buildings.
(11) 'County' means any county in the State.
Section 31-7-40. Obligations secured by the special tax allocation
fund set forth in Section 31-6-70 for the redevelopment project area
may be issued to provide for redevelopment project costs. The
obligations, when so issued, must be retired in the manner provided
in the ordinance authorizing the issuance of the obligations by the
receipts of taxes levied as specified in Section 31-6-110 against the
taxable property included in the area and other revenue as specified
in Section 31-6-110 designated by the county which source does not
involve revenues from any tax or license. In the ordinance the county
may pledge all or any part of the funds in and to be deposited in the
special tax allocation fund created pursuant to Section 31-6-70 to the
payment of the redevelopment project costs and obligations. Any
pledge of funds in the special tax allocation fund must provide for
distribution to the taxing districts of monies not required for payment
and securing of the obligations and the excess funds are surplus
funds. In the event a county only pledges a portion of the monies in
the special tax allocation fund for the payment of redevelopment
project costs or obligations, any funds remaining in the special tax
allocation fund after complying with the requirements of the pledge
are also considered surplus funds. All surplus funds must be
distributed annually to the taxing districts in the redevelopment
project area by being paid by the county to the county treasurer. The
county treasurer shall immediately thereafter make distribution to the
respective taxing districts in the same manner and proportion as the
most recent distribution by the county treasurer to the affected
districts of real property taxes from real property in the
redevelopment project area. In addition to obligations secured by the
special tax allocation fund, the county may pledge for a period not
greater than the term of the obligations toward payment of the
obligations any part of the revenues remaining after payment of
operation and maintenance, of all or part of any redevelopment
project. The obligations may be issued in one or more series, may
bear such date or dates, may mature at such time or times not
exceeding thirty years from their respective dates, may bear such rate
or rates of interest as the governing body shall determine, may be in
such denomination or denominations, may be in such form, either
coupon or registered, may carry such registration and conversion
privileges, may be executed in such manner, may be payable in such
medium of payment, at such place or places, may be subject to such
terms of redemption, with or without premium, may be declared or
become due before the maturity date thereof, may provide for the
replacement of mutilated, destroyed, stolen, or lost bonds, may be
authenticated in such manner and upon compliance with such
conditions, and may contain such other terms and covenants, as may
be provided by the governing body of the county. If the governing
body determines to sell any obligations the obligations must be sold
at public or private sale in such manner and upon such terms as the
governing body considers best for the interest of the county.
A certified copy of the ordinance authorizing the issuance of the
obligations must be filed with the treasurer of each county in which
any portion of a redevelopment project is situated and shall constitute
the authority for the extension and collection of the taxes to be
deposited in the special tax allocation fund.
A county also may issue its obligations to refund in whole or in part
obligations previously issued by the county under the authority of
this chapter, whether at or prior to maturity, and all references in this
chapter to 'obligations' are considered to include these refunding
obligations. The debt incurred by a county pursuant to this chapter is
exclusive of any statutory limitation upon the indebtedness a taxing
district may incur. All obligations issued pursuant to this chapter
shall contain a statement on the face of the obligation specifying the
sources from which payment is to be made and shall state that the full
faith, credit, and taxing powers are not pledged for the obligations.
The trustee or depositary under any indenture may be such persons
or corporations as the governing body designates, or they may be
nonresidents of South Carolina or incorporated under the laws of the
United States or the laws of other states of the United States.
Section 31-7-50. The proceeds from obligations issued under
authority of this chapter must be applied only for the purpose for
which they were issued. Any premium and accrued interest received
in any such sale must be applied to the payment of the principal of or
the interest on the obligations sold. Any portion of the proceeds not
needed for redevelopment project costs must be applied to the
payment of the principal of or the interest on the obligations.
Section 31-7-60. The obligations authorized by this chapter and
the income from the obligations and all security agreements and
indentures executed as security for the obligations made pursuant to
the provisions of this chapter and the revenue derived from the
obligations are exempt from all taxation in the State of South
Carolina except for inheritance, estate, or transfer taxes and all
security agreements and indentures made pursuant to the provisions
of this chapter are exempt from all state stamp and transfer taxes.
Section 31-7-70. A county, within five years after the date of
adoption of an ordinance providing for approval of a redevelopment
plan pursuant to Section 31-6-80, may issue obligations under this
chapter to finance the redevelopment project upon adoption of an
ordinance providing that:
(1) after the issuance of the obligations; and
(2) after the total equalized assessed valuation of the taxable real
property in a redevelopment project area exceeds the certified 'total
initial equalized assessed value' established in accordance with
Section 31-6-100(B) of all taxable real property in the project area,
the ad valorem taxes, if any, arising from the levies upon taxable real
property in the project area by taxing districts and tax rates
determined in the manner provided in Section 31-6-100(B) each year
after the obligations have been issued until obligations issued under
this chapter have been retired and redevelopment project costs have
been paid must be divided as follows:
(a) that portion of taxes levied upon each taxable lot, block,
tract, or parcel of real property which is attributable to the total initial
equalized assessed value of all taxable real property in the
redevelopment project area must be allocated to and when collected
must be paid by the county treasurer to the respective affected taxing
districts in the manner required by law in the absence of the adoption
of the redevelopment plan; and
(b) that portion, if any, of taxes which is attributable to the
increase in the current total equalized assessed valuation of all
taxable real property in the redevelopment project area over and
above the total initial equalized assessed value of taxable real
property in the redevelopment project area must be allocated to and
when collected must be paid to the county which shall deposit the
taxes into a special fund called the special tax allocation fund of the
county for the purpose of paying redevelopment project costs and
obligations incurred in the payment of the costs and obligations. The
county may pledge in the ordinance the funds in and to be deposited
in the special tax allocation fund for the payment of the costs and
obligations.
Any ordinance adopted based on acts of the county occurring before
the effective date of this chapter must incorporate by reference and
adopt those prior acts undertaken in accordance with the procedures
of this chapter as if they had been undertaken pursuant to this
chapter.
When obligations issued under this chapter have been retired and
redevelopment project costs incurred under this chapter have been
paid or budgeted pursuant to the redevelopment plan, as evidenced
by resolution of the governing body of the county, all surplus funds
then remaining in the special tax allocation fund must be paid by the
county treasurer immediately to the taxing districts in the
redevelopment project area in the same manner and proportion as the
most recent distribution by the treasurer to the affected districts of
real property taxes from real property in the redevelopment project
area.
Upon the payment of all redevelopment project costs, retirement of
all obligations of a county issued under this chapter, and the
distribution of any surplus monies pursuant to this section, the county
shall adopt an ordinance dissolving the tax allocation fund for the
project redevelopment area and terminating the designation of the
redevelopment project area as a redevelopment project area for
purposes of this chapter. Thereafter, the rates of the taxing districts
must be extended and taxes levied, collected, and distributed in the
manner applicable in the absence of the adoption of a redevelopment
plan and the issuance of obligations under this chapter.
If five years have passed from the time a redevelopment project
area is designated and the county has not issued obligations under
this chapter to finance the redevelopment project, upon the expiration
of the five-year term, the county shall adopt an ordinance terminating
the designation of the redevelopment project area.
Section 31-7-80. Prior to the issuance of any obligations under
this chapter, the county shall set forth by way of ordinance the
following:
(a) a copy of the redevelopment plan containing a statement of the
objectives of a county with regard to the plan;
(b) a statement indicating the need for and proposed use of the
proceeds of the obligations in relationship to the redevelopment plan;
(c) a statement containing the cost estimates of the redevelopment
plan and redevelopment project and the projected sources of revenue
to be used to meet the costs including estimates of tax increments and
the total amount of indebtedness to be incurred;
(d) a list of all real property in the redevelopment project area;
(e) the duration of the redevelopment plan;
(f) a statement of the estimated impact of the redevelopment plan
upon the revenues of all taxing districts in which a redevelopment
project area is located;
(g) findings that:
(i) the redevelopment project area is a blighted or conservation
area and that private initiatives are unlikely to alleviate these
conditions without substantial public assistance,
(ii) property values in the area would remain static or decline
without public intervention; and
(iii) redevelopment is in the interest of the health, safety, and
general welfare of the citizens of the county.
Before approving any redevelopment plan under this chapter, the
governing body of the county must hold a public hearing on the
redevelopment plan after published notice in a newspaper of general
circulation in the county in which the county and any taxing district
affected by the redevelopment plan is located not less than fifteen
days and not more than thirty days prior to the hearing. The notice
shall include:
(1) the time and place of the public hearing;
(2) the boundaries of the proposed redevelopment project area;
(3) a notification that all interested persons will be given an
opportunity to be heard at the public hearing;
(4) a description of the redevelopment plan and redevelopment
project; and
(5) the maximum estimated term of obligations to be issued
under the redevelopment plan.
Not less than forty-five days prior to the date set for the public
hearing, the county shall give notice to all taxing districts of which
taxable property is included in the redevelopment project area, and
in addition to the other requirements of the notice set forth in the
section, the notice shall request each taxing district to submit
comments to the county concerning the subject matter of the hearing
prior to the date of the public hearing.
If a taxing district does not file an objection to the redevelopment
plan at or prior to the date of the public hearing, the taxing district is
considered to have consented to the redevelopment plan and the
issuance of obligations under this chapter to finance the
redevelopment project, provided that the actual term of obligations
issued is equal to or less than the term stated in the notice of public
hearing. The county may issue obligations to finance the
redevelopment project if less than all taxing districts consent to the
redevelopment plan. The tax increment for a taxing district that does
not consent to the redevelopment plan must not be included in the
special tax allocation fund after the first fifteen years after the initial
issuance of obligations to finance such plan. No consent is required
of any taxing district if the term of the proposed initial obligations is
fifteen years or less or, in the case of any additional or refunding
obligations, if the term of the obligations is not greater than the later
of:
(a) fifteen years from the date of issuance of the initial or
refunded obligations or
(b) the remaining term of the initial or refunded obligations.
Prior to the adoption of an ordinance approving a redevelopment
plan pursuant to Section 31-6-80, changes may be made in the
redevelopment plan which do not alter the exterior boundaries or do
not substantially affect the general land use established in the plan or
substantially change the nature of the redevelopment project, without
further hearing or notice, provided that notice of the changes is given
by mail to each affected taxing district and by publication in a
newspaper or newspapers of general circulation within the taxing
districts not less than ten days prior to the adoption of the changes by
ordinance. Notice of the adoption of the ordinance must be published
by the county in a newspaper having general circulation in the
affected taxing districts. Any interested party may, within twenty
days after the date of publication of the notice of adoption of the
redevelopment plan, but not afterwards, challenge the validity of such
adoption by action de novo in the court of common pleas in the
county in which the redevelopment plan is located.
After adoption of an ordinance approving a redevelopment plan,
any alteration in the exterior boundaries, general land uses
established pursuant to the redevelopment plan, maximum term of
maturity of obligations to be issued under the plan, or nature of the
redevelopment project must be approved by ordinance of the county
in accordance with the procedures provided in this chapter for the
initial approval of a redevelopment project and designation of a
redevelopment project area.
Section 31-7-90. When there are any persons residing in the area
covered by the redevelopment plan:
(1) the redevelopment plan shall include:
(a) an assessment of the displacement impact of the
redevelopment project and provisions for the relocation of all persons
who would be displaced by the project, provided that no residents
may be displaced by a redevelopment project unless housing is made
available to them pursuant to the terms of this section;
(b) provisions for the creation of housing opportunities to the
extent feasible to enable a substantial number of the displaced
persons to relocate within or in close proximity to the area covered
by the redevelopment plan.
(2) Prior to authorizing the demolition of any residential units in
connection with a tax increment financing plan, the governing body
of the county must ensure that the redevelopment plan complies with
the requirements of this section and further that standard housing is
made available to all persons to be displaced.
(3) Persons displaced by a redevelopment plan are entitled to the
benefits and protections available under Section 28-11-10. The costs
of the relocation are proper expenditures for the proceeds of any
obligations issued under this chapter.
Section 31-7-100. (A) If a county by ordinance approves a
redevelopment plan pursuant to Section 31-6-80, the auditor of the
county, immediately after adoption of the ordinance pursuant to
Section 31-6-80, upon request of the county, must determine and
certify:
(1) the most recently ascertained equalized assessed value of all
taxable real property within the redevelopment project area, as of the
date of adoption of the ordinance adopted pursuant to Section
31-6-80, which value is the 'initial equalized assessed value' of the
property; and
(2) the total equalized assessed value of all taxable real property
within the redevelopment project area and certifying the amount as
the 'total initial equalized assessed value' of the taxable real property
within the redevelopment project area.
(B) After the county auditor has certified the total initial equalized
assessed value of the taxable real property in the area, then in respect
to every taxing district containing a redevelopment project area, the
county auditor or any other official required by law to ascertain the
amount of the equalized assessed value of all taxable property within
the district for the purpose of computing the rate percent of tax to be
extended upon taxable property within such district, shall in every
year that obligations are outstanding for redevelopment projects in
the redevelopment area ascertain the amount of value of taxable
property in a project redevelopment area by including in the amount
the certified total initial equalized assessed value of all taxable real
property in the area in lieu of the equalized assessed value of all
taxable real property in the area. The rate percent of tax determined
must be extended to the current equalized assessed value of all
property in the redevelopment project area in the same manner as the
rate percent of tax is extended to all other taxable property in the
taxing district. The method of extending taxes established under this
section terminates when the county adopts an ordinance dissolving
the special tax allocation fund for the redevelopment project.
Section 31-7-110. Revenues received by the county from any
property, building, or facility owned by the county or any agency or
authority established by the county in the redevelopment project area
may be used to pay redevelopment project costs or reduce
outstanding obligations of the county incurred under this chapter for
redevelopment project costs. If the obligations are used to finance the
extension or expansion of a system as defined in Section 6-21-40 in
the redevelopment project area, all or a portion of the revenues of the
system, whether or not located entirely within the redevelopment
project area, including the revenues of the redevelopment project,
may be pledged to secure the obligations issued under this chapter.
The county is fully empowered to use any of the powers granted by
either or both of the provisions of Chapter 17 of Title 6 (The Revenue
Bond Refinancing Act of 1937) or the provisions of Chapter 21 of
Title 6 (Revenue Bond Act for Utilities). In exercising the powers
conferred by the provisions, the county may make any pledges and
covenants authorized by any provision of those chapters. The county
may place the revenues in the special tax allocation fund or a separate
fund which must be held by the county or financial institution
designated by the county. Revenue received by the county from the
sale or other disposition of real property acquired by the county with
the proceeds of obligations issued under the provisions of this chapter
must be deposited by the county in the special tax allocation fund or
a separate fund which must be held by the county or financial
institution designated by the county. Proceeds of grants may be
pledged by the county and deposited in the special tax allocation fund
or a separate fund.
Section 31-7-120. Counties and municipalities may jointly adopt
redevelopment plans and authorize obligations as provided under the
provisions of this chapter and Chapter 6 of this title."
SECTION 2. This act is effective upon ratification of an
amendment to Section 14, Article X, of the Constitution of this State
authorizing counties to incur indebtedness for redevelopment
projects.
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