S 0912 General Bill, By Passailaigue, Courson, Elliott, Ford, Lander, Mescher, 
Reese, M.T. Rose, Setzler, Washington and Wilson
 A Bill to amend Article 3, Chapter 37, Title 12, Code of Laws of South
 Carolina, 1976, relating to property tax exemptions, by adding Section
 12-37-224 so as to provide that real property shall be exempt from ad valorem
 taxation to the extent that the value of the real property has increased since
 the reassessment immediately prior to the most recent reassessment, unless the
 property has been transferred and to provide if the real property has been
 transferred then the value for the purposes of ad valorem taxation is the
 higher of the fair market value at the time of the most recent transfer as
 established by the sale or transfer or the value established by a reassessment
 preceding the most recent sale or transfer and to provide for the exceptions;
 and to amend Chapter 20, Title 59 of the 1976 Code, relating to the Education
 Finance Act, by adding Section 59-20-85 to hold districts harmless for changes
 in wealth or pupil numbers for the purpose of computing state aid.

   09/12/95  Senate Prefiled
   09/12/95  Senate Referred to Committee on Finance
   01/09/96  Senate Introduced and read first time SJ-59
   01/09/96  Senate Referred to Committee on Finance SJ-59

A BILL

TO AMEND ARTICLE 3, CHAPTER 37, TITLE 12, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PROPERTY TAX EXEMPTIONS, BY ADDING SECTION 12-37-224 SO AS TO PROVIDE THAT REAL PROPERTY SHALL BE EXEMPT FROM AD VALOREM TAXATION TO THE EXTENT THAT THE VALUE OF THE REAL PROPERTY HAS INCREASED SINCE THE REASSESSMENT IMMEDIATELY PRIOR TO THE MOST RECENT REASSESSMENT, UNLESS THE PROPERTY HAS BEEN TRANSFERRED AND TO PROVIDE IF THE REAL PROPERTY HAS BEEN TRANSFERRED THEN THE VALUE FOR THE PURPOSES OF AD VALOREM TAXATION IS THE HIGHER OF THE FAIR MARKET VALUE AT THE TIME OF THE MOST RECENT TRANSFER AS ESTABLISHED BY THE SALE OR TRANSFER OR THE VALUE ESTABLISHED BY A REASSESSMENT PRECEDING THE MOST RECENT SALE OR TRANSFER AND TO PROVIDE FOR EXCEPTIONS; AND TO AMEND CHAPTER 20, TITLE 59 OF THE 1976 CODE, RELATING TO THE EDUCATION FINANCE ACT, BY ADDING SECTION 59-20-85 TO HOLD DISTRICTS HARMLESS FOR CHANGES IN WEALTH OR PUPIL NUMBERS FOR THE PURPOSE OF COMPUTING STATE AID.

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

SECTION 1. Article 3, Chapter 37, Title 12 of the 1976 Code is amended by adding:

"Section 12-37-224. (A) Real property assessed pursuant to Section 12-43-220 is exempt from ad valorem taxation to the extent that the value of the property has increased since the reassessment immediately preceding to the most recent reassessment, except as provided in this section. This exemption is in addition to property tax exemptions allowed pursuant to Section 12-37-220(B). This exemption does not extend to increases in fair market value attributable to permanent improvements made to the property.

(B) (1) Except as provided in subsection (C), the fair market value of real property, for purposes of ad valorem taxation, assessed pursuant to Section 12-43-220, is the higher of (a) the fair market value at the time of the most recent transfer as established by the sale or transfer or (b) the assessed value established by a reassessment immediately preceding the most recent reassessment.

(2) The assessed value for transfers of real property occurring after the reassessments provided in subsection (D) shall be the higher of (a) the fair market value at the time of the most recent transfer as established by the sale or transfer or (b) the assessed value established pursuant to a reassessment as required by subsection (D).

(3) Nothing in this subsection shall be construed to authorize or allow a county or other political subdivision to impose an ad valorem tax based upon the values established in a reassessment program subsequent to the effective date of this section unless a transfer of the real property has occurred.

(C) For the purposes of this section the acquisition of residential property, assessed pursuant to Section 12-43-220(c) by a spouse by interspousal gift or by a surviving spouse from the deceased spouse by devise or operation of law, is not considered a transfer. In such instance, the assessed value of the property for the spouse is determined pursuant to subsection (A). The assessed value for all other real property shall be as provided in subsection (B).

(D) Real property must be reassessed every four years from the effective date of this section and its value for ad valorem taxation is the lower of (1) its fair market value or (2) its value as assessed at the reassessment immediately prior to the most recent reassessment.

(E) Notwithstanding any other provision of law, the value of property exempt from taxation in the manner provided in this section is considered taxable for purposes of bonded indebtedness pursuant to Sections 14 and 15 of Article X of the Constitution of this State, and for purposes of computing the `index of taxpaying ability' pursuant to Section 59-20-20(3)."

SECTION 2. Chapter 20, Title 59 of the 1976 Code is amended by adding:

"Section 59-20-85. Notwithstanding the computations prescribed in Section 59-20-40, the level of state contributions to each district shall not be reduced to a per-pupil level of foundation program funds below that per-pupil level of state funding of programs for the Education Finance Act.

Provided, a district shall not receive annually an increase in state funds less than the full rate of the inflationary adjustment in the base student cost specified in Section 59-20-40(1)(b). This increase shall be computed annually over and above the amount actually received from the State for the foundation program in the prior fiscal year."

SECTION 3. This act takes effect upon approval by the Governor, except that Section 12-37-224(A) takes effect January 1, 1996, and applies with respect to increases in fair market value attributable to countywide reassessment programs implemented after 1985. No refunds must be paid for property tax years before 1995 as a result of the exemption allowed by this section.