H 3572 Session 110 (1993-1994)
H 3572 General Bill, By Kirsh
Similar(S 920, H 3533)
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Section
12-43-232 so as to provide that real property does not qualify as agricultural
real property unless the tract is five acres or more in the case of timberland
and ten acres or more for other than timberland, to provide that the ten acre
requirement does not apply if there is at least one thousand dollars of gross
farm income for at least three of the five taxable years preceding the
application for agricultural use, to make new owners of less than ten acres
eligible for agricultural use subject to the rollback tax if they fail to meet
the same income requirements in the first five years of operation, to
authorize the assessor to obtain tax information and the agriculture
stabilization and conservation service farm identification number to verify
applications, to provide that land idle under land retirement programs
qualifies for agricultural use if otherwise eligible, to provide that in the
case of lease operations, the lessor or lessee shall meet the requirements,
and to require applicants for agricultural use or the special assessment ratio
for certain agriculture operations to certify that the property meets the
applicable requirements; to amend the 1976 Code by adding Section 12-43-340,
so as to make it unlawful to make a false statement on an application for
agricultural use and the special assessment ratio for certain agriculture
operations and provide a penalty; and to exempt from the rollback tax
landowners made ineligible for agricultural use by the provisions of this Act.
02/25/93 House Introduced and read first time HJ-4
02/25/93 House Referred to Committee on Ways and Means HJ-4
02/08/94 House Committee report: Majority favorable with amend.,
minority unfavorable Ways and Means HJ-6
COMMITTEE REPORT
February 8, 1994
H. 3572
Introduced by REP. Kirsh
S. Printed 2/8/94--H.
Read the first time February 25, 1993.
THE COMMITTEE ON WAYS AND MEANS
To whom was referred a Bill (H. 3572), to amend the Code of Laws
of South Carolina, 1976, by adding Section 12-43-232 so as to provide
that real property does not qualify as agricultural real property, etc.,
respectfully
REPORT:
That they have duly and carefully considered the same, and
recommend that the same do pass with amendment:
Amend the bill, as and if amended, by striking all after the enacting
words and inserting:
/SECTION 1. Article 3, Chapter 43, Title 12 of the 1976 Code is
amended by adding:
"Section 12-43-232. In addition to all other requirements for
real property to be classified as agricultural real property, the property
must meet the following requirements:
(1) (a) If the tract is used to grow timber, the tract must be five
acres or more. Tracts of timberland of less than five acres which are
contiguous to or are under the same management system as a tract of
timberland which meets the minimum acreage requirement are treated
as part of the qualifying tract. Tracts of timberland of less than five
acres are eligible to be agricultural real property when they are owned
in combination with other tracts of nontimberland agricultural real
property that qualify as agricultural real property. For the purposes of
this item, tracts of timberland must be devoted actively to growing trees
for commercial use. (b) A tract which meets the acreage
requirement of subitem (a) of this item devoted to growing Christmas
trees is considered timberland. A Christmas tree tract not meeting the
acreage requirement qualifies as agricultural property if the landowner
reports gross income from Christmas trees that meets the income test
provided in item (3) of this section, mutatis mutandis.
(2) For tracts not used to grow timber as provided in item (1) of this
section, the tract must be ten acres or more. Nontimberland tracts of less
than ten acres which are contiguous to other such tracts which, when
added together, meet the minimum acreage requirement, are treated as
a qualifying tract. For purposes of this item (2) only, contiguous tracts
include tracts with identical owners of record separated by a dedicated
highway, street, or road or separated by any other public way.
(3) (a) Nontimberland tracts not meeting the acreage requirement
of item (2) qualify as agricultural real property if the person making the
application required pursuant to Section 12-43-220(d)(3) reported at
least one thousand dollars of gross farm income on his federal income
tax return Schedule E or F for at least three of the five taxable years
preceding the year of the application. The assessor may require the
applicant (i) to give written authorization consistent with privacy laws
allowing the assessor to verify farm income from the Department of
Revenue and Taxation or the Internal Revenue Service and (ii) to
provide the Agriculture Stabilization and Conservation Service (ASCS)
farm identification number of the tract and allow verification with the
ASCS office.
(b) A new owner making the application required pursuant to
Section 12-43-220(d)(3) for a nontimberland tract of less than ten acres
may claim the property as agricultural real property for each year for the
first five years of operation if he files federal income tax returns
reporting at least one thousand dollars of gross farm income on Schedule
E or F in at least three of the first five years. The assessor may require
the new owner (i) to give written authorization consistent with privacy
laws allowing the assessor to verify farm income from the Department
of Revenue and Taxation or the Internal Revenue Service and (ii) to
provide the Agriculture Stabilization and Conservation Service (ASCS)
farm identification number of the tract and allow verification with the
ASCS office.
If the new owner fails to meet the income requirements in the five-year period, the tract is not considered agricultural real property and is
subject to the rollback tax.
(c) Real property idle under a federal or state land retirement
program or property idle pursuant to accepted agricultural practices is
agricultural real property if the property otherwise would have qualified
as such property subject to satisfactory proof to the assessor.
(4) In the case of rented or leased agricultural real property, either
the lessor or the lessee shall meet the requirements of this section.
(5) On the application required pursuant to Section 12-43-220(d)(3),
the owner or his agent shall certify substantially as follows: `Subject to
the penalty provided in Section 12-43-340, either:
(a) `I certify that the property which is the subject of this
application meets the requirements to qualify as agricultural real
property as of January first of the current tax year'; or
(b) `I certify that the property which is the subject of this
application meets the requirements to qualify as agricultural real
property and for the special assessment ratio for certain agricultural real
property as of January first of the current tax year."
SECTION 2. Article 3, Chapter 43, Title 12 of the 1976 Code is
amended by adding:
"Section 12-43-340. It is unlawful for a person knowingly
and wilfully to make a false statement on the application required
pursuant to Section 12-43-220(d)(3) to a county assessor for the
classification of property as agricultural real property or for the special
assessment ratio for certain agricultural real property. A person
violating the provisions of this section is guilty of a misdemeanor and,
upon conviction, must be fined not more than two hundred
dollars."
SECTION 3. Real property initially classified as agricultural real
property and made ineligible for that classification by the provisions of
Section 12-43-232 of the 1976 Code, as added by this act, is not subject
to rollback tax.
SECTION 4. This act is effective for property tax years beginning
after 1994./
Amend title to conform.
Majority favorable. Minority unfavorable.
WILLIAM D. BOAN JENNINGS G. McABEE
For Majority. For Minority.
STATEMENT OF ESTIMATED FISCAL
IMPACT
This bill adds Section 12-43-232 so as to provide that real property
does not qualify as agricultural real property unless the tract is five acres
or more in the case of timberland and ten acres or more for other than
timberland, to provide that the ten acre requirement does not apply if
there is at least one thousand dollars of gross farm income for at least
three of the five taxable years preceding the application for agricultural
use; etc.
This bill would increase local property tax revenue by approximately
$13,600,000 per year beginning in FY 1994-95.
From a survey of county assessors, we estimate that approximately 4.5
percent of all property classified as agricultural real property would not
meet the proposed additional requirements in this legislation. The
revenue increase is derived from the increased assessed value of the
property relative to the fair market value for agricultural purposes.
Approved By:
A. Crawford Clarkson, Jr.
S.C. Tax Commission
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976,
BY ADDING SECTION 12-43-232 SO AS TO PROVIDE THAT
REAL PROPERTY DOES NOT QUALIFY AS AGRICULTURAL
REAL PROPERTY UNLESS THE TRACT IS FIVE ACRES OR
MORE IN THE CASE OF TIMBERLAND AND TEN ACRES OR
MORE FOR OTHER THAN TIMBERLAND, TO PROVIDE THAT
THE TEN ACRE REQUIREMENT DOES NOT APPLY IF THERE IS
AT LEAST ONE THOUSAND DOLLARS OF GROSS FARM
INCOME FOR AT LEAST THREE OF THE FIVE TAXABLE YEARS
PRECEDING THE APPLICATION FOR AGRICULTURAL USE, TO
MAKE NEW OWNERS OF LESS THAN TEN ACRES ELIGIBLE
FOR AGRICULTURAL USE SUBJECT TO THE ROLLBACK TAX
IF THEY FAIL TO MEET THE SAME INCOME REQUIREMENTS
IN THE FIRST FIVE YEARS OF OPERATION, TO AUTHORIZE
THE ASSESSOR TO OBTAIN TAX INFORMATION AND THE
AGRICULTURE STABILIZATION AND CONSERVATION
SERVICE FARM IDENTIFICATION NUMBER TO VERIFY
APPLICATIONS, TO PROVIDE THAT LAND IDLE UNDER LAND
RETIREMENT PROGRAMS QUALIFIES FOR AGRICULTURAL
USE IF OTHERWISE ELIGIBLE, TO PROVIDE THAT IN THE
CASE OF LEASE OPERATIONS, THE LESSOR OR LESSEE SHALL
MEET THE REQUIREMENTS, AND TO REQUIRE APPLICANTS
FOR AGRICULTURAL USE OR THE SPECIAL ASSESSMENT
RATIO FOR CERTAIN AGRICULTURE OPERATIONS TO
CERTIFY THAT THE PROPERTY MEETS THE APPLICABLE
REQUIREMENTS; TO AMEND THE 1976 CODE BY ADDING
SECTION 12-43-340 SO AS TO MAKE IT UNLAWFUL TO MAKE
A FALSE STATEMENT ON AN APPLICATION FOR
AGRICULTURAL USE AND THE SPECIAL ASSESSMENT RATIO
FOR CERTAIN AGRICULTURE OPERATIONS AND PROVIDE A
PENALTY; AND TO EXEMPT FROM THE ROLLBACK TAX
LANDOWNERS MADE INELIGIBLE FOR AGRICULTURAL USE
BY THE PROVISIONS OF THIS ACT.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Article 3, Chapter 43, Title 12 of the 1976 Code is
amended by adding:
"Section 12-43-232. In addition to all other requirements for
real property to be classified as agricultural real property, the property
must meet the following requirements:
(1) If the tract is used to grow timber, the tract must be five acres or
more. Tracts of timberland of less than five acres which are contiguous
to or are under the same management system as a tract of timberland
which meets the minimum acreage requirement are treated as part of the
qualifying tract. Tracts of timberland of less than five acres are eligible
to be agricultural real property when they are owned in combination
with other tracts of nontimberland agricultural real property that qualify
as agricultural real property. For the purposes of this item, tracts of
timberland must be devoted actively to growing trees for commercial
use.
(2) For tracts not used to grow timber as provided in item (1) of this
section, the tract must be ten acres or more. Nontimberland tracts of less
than ten acres which are contiguous to other such tracts which, when
added together, meet the minimum acreage requirement, are treated as
a qualifying tract. For purposes of this item (2) only, contiguous tracts
include tracts with identical owners of record separated by a dedicated
highway, street, or road or separated by any other public way.
(3) (a) Nontimberland tracts not meeting the acreage requirement
of item (2) qualify as agricultural real property if the person making the
application required pursuant to Section 12-43-220(d)(3) reported at
least one thousand dollars of gross farm income on his federal income
tax return Schedule E or F for at least three of the five taxable years
preceding the year of the application. The assessor may require the
applicant (i) to give written authorization consistent with privacy laws
allowing the assessor to verify farm income from the South Carolina Tax
Commission or the Internal Revenue Service and (ii) to provide the
Agriculture Stabilization and Conservation Service (ASCS) farm
identification number of the tract and allow verification with the ASCS
office.
(b) A new owner making the application required pursuant to
Section 12-43-220(d)(3) for a nontimberland tract of less than ten acres
may claim the property as agricultural real property for each year for the
first five years of operation if he files federal income tax returns
reporting at least one thousand dollars of gross farm income on Schedule
E or F in at least three of the first five years. The assessor may require
the new owner (i) to give written authorization consistent with privacy
laws allowing the assessor to verify farm income from the South
Carolina Tax Commission or the Internal Revenue Service and (ii) to
provide the Agriculture Stabilization and Conservation Service (ASCS)
farm identification number of the tract and allow verification with the
ASCS office.
If the new owner fails to meet the income requirements in the five-year period, the tract is not considered agricultural real property and is
subject to the rollback tax.
(c) Real property idle under a federal or state land retirement
program or property idle pursuant to accepted agricultural practices is
agricultural real property if the property otherwise would have qualified
as such property subject to satisfactory proof to the assessor.
(3) In the case of rented or leased agricultural real property, either
the lessor or the lessee shall meet the requirements of this section.
(4) On the application required pursuant to Section 12-43-220(d)(3),
the owner or his agent shall certify substantially as follows: `Subject to
the penalty provided in Section 12-43-340, either:
(a) "I certify that the property which is the subject of this
application meets the requirements to qualify as agricultural real
property as of January first of the current tax year"; or
(b) "I certify that the property which is the subject of this
application meets the requirements to qualify as agricultural real
property and for the special assessment ratio for certain agricultural real
property as of January first of the current tax year".'"
SECTION 2. Article 3, Chapter 43, Title 12 of the 1976 Code is
amended by adding:
"Section 12-43-340. It is unlawful for a person knowingly
and wilfully to make a false statement on the application required
pursuant to Section 12-43-220(d)(3) to a county assessor for the
classification of property as agricultural real property or for the special
assessment ratio for certain agricultural real property. A person
violating the provisions of this section is guilty of a misdemeanor and,
upon conviction, must be fined not more than two hundred
dollars."
SECTION 3. Real property initially classified as agricultural real
property and made ineligible for that classification by the provisions of
Section 12-43-232 of the 1976 Code, as added by this act, is not subject
to rollback tax.
SECTION 4. This act is effective for taxable years beginning after
1993.
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