H 3018 Session 109 (1991-1992)
H 3018 General Bill, By Kirsh
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Article 15
to Chapter 21 of Title 12 so as to provide for a privilege tax on the
extraction of kaolin, create The High Technology Development Fund, and provide
for expenditures from the Fund.
12/12/90 House Prefiled
12/12/90 House Referred to Committee on Ways and Means
01/08/91 House Introduced and read first time HJ-42
01/08/91 House Referred to Committee on Ways and Means HJ-43
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976,
BY ADDING ARTICLE 15 TO CHAPTER 21 OF TITLE 12 SO AS
TO PROVIDE FOR A PRIVILEGE TAX ON THE EXTRACTION OF
KAOLIN, CREATE THE HIGH TECHNOLOGY DEVELOPMENT
FUND, AND PROVIDE FOR EXPENDITURES FROM THE FUND.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The General Assembly finds that the extraction of
minerals by mining is a basic and essential activity making an important
contribution to the well-being of South Carolina and the nation. South
Carolina does not impose a tax for the privilege of severing natural
resources in the State, whereas most other states do impose these taxes.
Other states use funds collected from privilege taxes to support their
educational systems and functions of government, which enhance
economic development in those states. Mining companies extract
significant amounts of the mineral kaolin from mines in South Carolina
for sale worldwide. A privilege tax on the production of kaolin in South
Carolina equivalent to five percent of the value of production at the mine
will not significantly weaken the economic incentives for investing in
South Carolina kaolin mining since the demand for kaolin is strong
worldwide and other sources of kaolin supplies are limited. Mining, by
its very own nature, does not create economic development because
once a natural resource is depleted the mining operations cease. A
privilege tax collected and distributed to a High Technology
Development Fund will save the benefits of the mining activity for
future generations of state citizens. A privilege tax of five percent will
not constitute burdensome taxation of kaolin mining because properties
for kaolin mines usually are afforded classifications for agricultural
production, which enjoy lower assessment ratios than manufacturing
property.
SECTION 2. Chapter 21, Title 12 of the 1976 Code is amended by
adding:
"Article 15
Privilege Tax on Kaolin
Section 12-21-2310. This article may be cited as 'The South
Carolina Privilege Tax on Kaolin Act'.
Section 12-21-2320. When used or referred to in this article,
unless a different meaning clearly appears from the context:
(1) 'Kaolin' means a clay of the hydrous aluminum silicate
category consisting of approximately the composition
2H20xA1203x2Si02. Kaolin consists of substantially pure kaolite, or
related clay minerals, that is naturally, or can be beneficiated to be white
or nearly white, will fire white or nearly white, and is amenable to
beneficiation by known methods to make it suitable for use in
whiteware, paper, rubber, paint, and similar uses.
(2) 'Value of production' means the total revenues received from
the first sale of kaolin for all kaolin produced from mines in this State.
When kaolin is transported from the mining site by the mine operator to
another site and processed further for sale, the mine operator may
establish the value of production based on prevailing market rates for the
first sales of unprocessed kaolin.
(3) 'Mine' means an opening or excavation for the extraction of
any material for sale.
(4) 'First sale' means the initial transfer of title to the kaolin after
the kaolin is mined.
(5) 'Mine operator' means a person, or association of persons,
engaged in mining operation, whether individually, jointly, or through
subsidiaries, agents, employees, or contractors.
(6) (a) 'Mining' means:
( i) the breaking of the surface soil to facilitate or
accomplish the extraction or removal of ores or mineral solids for sale
or processing or consumption in the regular operation of a business;
(ii) removal of overburden lying above natural
deposits of ore or mineral solids and removal of the mineral deposits
exposed, or by removal of ores and mineral solids from deposits lying
exposed in their natural state.
(b) Mining does not mean:
( i) removal of overburden and mining of limited
amounts of ores or mineral solids when done only for the purpose of
determining location, quantity, or quality of a natural deposit, so long as
no ores or mineral solids during exploratory excavation or mining are
sold, processed for sale, or consumed in the regular operation of a
business and provided the land affected does not exceed one acre in
area;
(ii) plants engaged in processing minerals except as
they are an integral on-site part of the removal of ores or mineral solids
from natural deposits;
( iii) excavation or grading when conducted solely in aid
of on-site farming or of on-site construction; or
( iv) dredging operations where the operations are
engaged in the harvesting of oysters, clams, or the removal of shells
from coastal bottoms.
Section 12-21-2330. A privilege tax of five percent is imposed on
the value of production of kaolin minerals produced from mining in this
State. The proceeds must be distributed into the 'High Technology
Development Fund'. The tax is payable to the Tax Commission by the
kaolin mine operator quarterly beginning October, 1990. The tax is due
fifteen days following the end of the state fiscal quarter.
Section 12-21-2340. A High Technology Development Fund must
be established by the State Treasurer. Proceeds from the privilege tax
on kaolin are to be distributed to the fund by the Tax Commission. The
use of these funds must be established annually by the General
Assembly. Proceeds only may be allocated to projects that further the
development of higher technology in the State."
SECTION 3. This act takes effect upon approval by the Governor.
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