H 4633 General Bill, By Boan, R.A. Barber, H. Brown, Carnell, Cobb-Hunter, 
Delleney, J.G. Felder, J.L. Harris, P.B. Harris, D.N. Holt, M.H. Kinon, Kirsh, 
J.G. Mattos, J.G. McAbee, McCraw, McKay, D.E. McTeer, Phillips, Quinn and 
T.F. Rogers
 A Bill to amend the Code of Laws of South Carolina, 1976, by adding Section
 12-37-257 so as to establish an additional homestead exemption from school
 taxes imposed for purposes other than construction and provide that the
 exemption does not apply to school operating taxes levied after 1997, to phase
 in the amount of the exemption, to provide for the method of reimbursement of
 revenues lost because of the exemption, and to provide that the property
 exempt from school taxes pursuant to this Section is nevertheless considered
 taxable property for purposes of the Constitutional debt limit and the Index
 of Taxpaying Ability, to provide a spending limitation for counties,
 municipalities and special purpose and public service districts and an ad
 valorem tax revenue limitation for school districts for fiscal years 1994-95
 through 1997-98 and provide exceptions; to amend Sections 12-4-540, 12-37-10,
 12-37-210, 12-37-730, 12-37-760, and 12-37-780, relating to the powers of the
 Department of Revenue and Taxation with respect to property taxation of
 business property and the duties and powers of county auditors with respect to
 the filing of personal property tax returns, so as to provide that all
 personal property tax returns are filed with the Department of Revenue and
 Taxation, delete obsolete provisions and conform existing filing requirements
 to these changes; to amend Section 12-43-210, as amended, relating to
 countywide reassessment programs, so as to require such programs every five
 years on a schedule determined by the Department of Revenue and Taxation, and
 provide for the withholding of state aid to subdivisions' distributions to
 counties failing to comply with the schedule, to require the Department to
 determine personnel needs of county assessors and report its findings by May
 1, 1995, to provide for an initial schedule of reassessments; to provide that
 if a court of competent jurisdiction voids the homestead exemption allowed by
 this Act, the the spending limitations imposed on counties, municipalities,
 special purpose, public service districts, and school districts by this Act
 are similarly void; and to repeal Sections 12-37-20, 12-37-750, 12-37-810,
 12-37-820, 12-37-830, 12-37-850, 12-37-870, 12-37-910, 12-37-940, 12-37-1620,
 and 12-37-2010, relating to personal property taxes.

   01/27/94  House  Introduced and read first time HJ-7
   01/27/94  House  Referred to Committee on Ways and Means HJ-8
   02/10/94  House  Committee report: Favorable with amendment Ways
                     and Means HJ-506
   03/01/94  House  Debate adjourned until Wednesday, March 2, 1994 HJ-46
   03/01/94  House  Special order, set for Wednesday, 3/2/94, after
                     uncontested calendar (Under H 4850) HJ-60
   03/02/94  House  Amended HJ-2755
   03/02/94  House  Debate interrupted HJ-55
   03/03/94  House  Amended HJ-19
   03/03/94  House  Objection by Rep. Anderson HJ-41
   03/03/94  House  Debate interrupted HJ-68
   03/16/94  House  Amended HJ-29
   03/16/94  House  Debate interrupted HJ-108
   03/17/94  House  Amended HJ-15
   03/17/94  House  Recommitted to Committee on Ways and Means HJ-20
   03/17/94  House  Roll call Yeas-069 HJ-20

AMENDED VERSION

AMENDED FOURTH TIME

March 17, 1994

H. 4633

Introduced by REPS. Boan, Barber, Carnell, Cobb-Hunter, Felder, J. Harris, P. Harris, Holt, Kinon, Kirsh, McAbee, McCraw, McKay, McTeer, Mattos, Quinn, Rogers, Delleney, Phillips and H. Brown

S. Printed 3/16/94--H.

Read the first time January 27, 1994.

A BILL

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-37-257 SO AS TO ESTABLISH AN ADDITIONAL HOMESTEAD EXEMPTION FROM SCHOOL TAXES IMPOSED FOR PURPOSES OTHER THAN CONSTRUCTION AND PROVIDE THAT THE EXEMPTION DOES NOT APPLY TO SCHOOL OPERATING TAXES LEVIED AFTER 1997, TO PHASE IN THE AMOUNT OF THE EXEMPTION, TO PROVIDE FOR THE METHOD OF REIMBURSEMENT OF REVENUES LOST BECAUSE OF THE EXEMPTION, AND TO PROVIDE THAT THE PROPERTY EXEMPT FROM SCHOOL TAXES PURSUANT TO THIS SECTION IS NEVERTHELESS CONSIDERED TAXABLE PROPERTY FOR PURPOSES OF THE CONSTITUTIONAL DEBT LIMIT AND THE INDEX OF TAXPAYING ABILITY, TO PROVIDE A SPENDING LIMITATION FOR COUNTIES, MUNICIPALITIES, AND SPECIAL PURPOSE AND PUBLIC SERVICE DISTRICTS AND AN AD VALOREM TAX REVENUE LIMITATION FOR SCHOOL DISTRICTS FOR FISCAL YEARS 1994-95 THROUGH 1997-98 AND PROVIDE EXCEPTIONS; TO AMEND SECTIONS 12-4-540, 12-37-10, 12-37-210, 12-37-730, 12-37-760, AND 12-37-780, RELATING TO THE POWERS OF THE DEPARTMENT OF REVENUE AND TAXATION WITH RESPECT TO PROPERTY TAXATION OF BUSINESS PROPERTY AND THE DUTIES AND POWERS OF COUNTY AUDITORS WITH RESPECT TO THE FILING OF PERSONAL PROPERTY TAX RETURNS, SO AS TO PROVIDE THAT ALL PERSONAL PROPERTY TAX RETURNS ARE FILED WITH THE DEPARTMENT OF REVENUE AND TAXATION, DELETE OBSOLETE PROVISIONS AND CONFORM EXISTING FILING REQUIREMENTS TO THESE CHANGES; TO AMEND SECTION 12-43-210, AS AMENDED, RELATING TO COUNTYWIDE REASSESSMENT PROGRAMS, SO AS TO REQUIRE SUCH PROGRAMS EVERY FIVE YEARS ON A SCHEDULE DETERMINED BY THE DEPARTMENT OF REVENUE AND TAXATION, AND PROVIDE FOR THE WITHHOLDING OF STATE AID TO SUBDIVISIONS' DISTRIBUTIONS TO COUNTIES FAILING TO COMPLY WITH THE SCHEDULE, TO REQUIRE THE DEPARTMENT TO DETERMINE PERSONNEL NEEDS OF COUNTY ASSESSORS AND REPORT ITS FINDINGS BY MAY 1, 1995, TO PROVIDE FOR AN INITIAL SCHEDULE OF REASSESSMENTS; TO PROVIDE THAT IF A COURT OF COMPETENT JURISDICTION VOIDS THE HOMESTEAD EXEMPTION ALLOWED BY THIS ACT, THEN THE SPENDING LIMITATIONS IMPOSED ON COUNTIES, MUNICIPALITIES, SPECIAL PURPOSE PUBLIC SERVICE DISTRICTS, AND SCHOOL DISTRICTS BY THIS ACT ARE SIMILARLY VOID, AND TO REPEAL SECTIONS 12-37-20, 12-37-750, 12-37-810, 12-37-820, 12-37-830, 12-37-850, 12-37-870, 12-37-910, 12-37-940, 12-37-1620, AND 12-37-2010, RELATING TO PERSONAL PROPERTY TAXES.

Amend Title To Conform

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

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

"Section 12-37-257. (A) In addition to any other homestead exemption allowed by law, the amount of fair market value provided in subsection (B) of every homestead qualifying for the assessment ratio provided pursuant to Section 12-43-220(c) is exempt from all school taxes except school taxes levied for:

(1) debt service;

(2) payments for lease-purchases of school facilities; and

(3) additional school taxes for operating purposes levied for property tax years beginning after 1997.

(B) Amounts of fair market value exempt pursuant to subsection (A) are as follows:

Property Tax Year Exempt Amount

1994 $ 5,400

1995 21,000

1996 54,000

After 1996 one hundred

percent of fair

market value

(C) (1) The exemption allowed by this section is conditional on full funding of the Education Finance Act and on an appropriation by the General Assembly each year reimbursing school districts an amount equal to the Department of Revenue and Taxation's estimate of total school tax revenue loss resulting from the exemption in the next fiscal year. If the appropriation for a year is less than the certified estimate, the department shall calculate a proportionate reduction in the exemption amount otherwise applicable sufficient to eliminate any loss of revenue to school districts. The department shall notify the appropriate county tax officials of the reduced exemption and the reduced exemption amount applies instead of the amount provided in Subsection (B) for the appropriate tax year.

(2) The Department of Revenue and Taxation shall provide to the General Assembly and the Governor annually before December fifteenth a certified estimate of the total amount necessary to reimburse school districts for tax revenue not collected because of the exemption allowed by this section in the next fiscal year.

(3) (a) From the general fund of the State, the Comptroller General annually shall pay to the county treasurer of each county for the account of each school district in the county a sum equal to the taxes not collected for the school district because of the exemption provided in this section. The county treasurer shall furnish the Comptroller General on or before April first following the tax year, or during an extension authorized by the Comptroller General not to exceed sixty days, an accounting or statement as prescribed by the Comptroller General that reflects the amount of school district taxes not collected because of the exemption. Funds paid by the Comptroller General as the result of an erroneous or improper application must be returned to the Comptroller General for deposit to the credit of the general fund of the State. The Comptroller General shall promulgate regulations as may be necessary to carry out the provisions of this section.

(b) If reimbursement funds appropriated at least equal the estimated amount and the appropriated amount is insufficient to offset the revenue loss, the Comptroller General, from the general fund of the State, shall reimburse school districts the total reimbursement required regardless of the amount appropriated.

(D) Notwithstanding any other provision of law, the fair market value of a homestead exempted from property taxation in the manner provided in this section is considered taxable property 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)."

(B) The provisions of Section 12-37-257(C)(1) and (2), as added by this act, first apply for property tax year 1995 and fiscal year 1995-96.

SECTION 2. Beginning with county government spending for fiscal year 1995-96, total spending by a county government in a fiscal year, other than for special tax districts, may not exceed total county government spending in the prior fiscal year by more than the percentage increase in the consumer price index in the twelve months ending December 31 preceding the fiscal year as determined by the Bureau of Labor Statistics of the United State Department of Labor. Total county spending in the prior fiscal year does not include spending pursuant to items (2)(b), 3, 4, 5, and 6 of this section. Total spending by a county government for purposes of this limitation is the total of all county government spending in a fiscal year from all sources of funds and for all purposes, but total county government spending for the current fiscal year does not include:

(1) spending in an amount not exceeding the amount represented by applying the county's tax millage for the most recently completed property tax year to:

(a) the greater of:

(i) the assessed value of new construction and improvements to existing property not taxed prior to tax year 1994, or

(ii) the assessed value of property in the county for tax year 1993, multiplied by the growth in the county's population since the end of tax year 1993, divided by the county's population at the end of tax year 1993, together with

(b) net growth in the assessed value of property in the county due to changes in the county boundaries occurring after the end of tax year 1993;

(2)(a) spending of fee revenues generated by income-producing services first extended to customers in the current fiscal year;

(b) spending of fee revenues generated by facilities which charge admission or rental fees;

(3) spending of funds derived from state or federal sources and spending of local sales and use tax revenues distributed to the county pursuant to Chapter 10, Title 4 of the 1976 Code;

(4) a capital expenditure financed without borrowing using funds derived from any source other than county property taxes;

(5) spending for capital improvements projects as follows:

(a) debt service payments

(b) lease-purchase payments for lease-purchase agreements entered into prior to July 1, 1994, and

(c) lease purchase payments for lease-purchase agreements entered into on or after July 1, 1994, which are approved by a two-thirds vote of the governing body of the county or approved by referendum;

(6) spending necessary to comply with federal or state legislative, administrative, or judicial mandates requiring the expenditure of funds or the use of county personnel, facilities, or equipment;

(7) amounts placed in a general reserve fund with a balance not exceeding ten percent of the prior year's budgeted spending; provided, however, that any expenditure from funds contained in such a general reserve fund shall be subject to the same restrictions as any other spending under the provisions of this section;

(8) spending approved by at least a two-thirds vote of the governing body of the county;

(9) spending in an economically disadvantaged county to promote and support industrial recruitment in the county; and

(10) spending for economic development purposes.

SECTION 3. Beginning with municipal government spending for fiscal year 1995-96, total spending by a municipal government in a fiscal year may not exceed total municipal government spending in the prior fiscal year by more than the percentage increase in the consumer price index in the twelve months ending December 31 preceding the fiscal year as determined by the Bureau of Labor Statistics of the United States Department of Labor. Total municipal spending in the prior fiscal year does not include spending pursuant to items (2)(b), (3), (4), (5), and (6) of this section. Total spending by a municipal government for purposes of this limitation is the total of a municipal government spending in a fiscal year from all sources of funds and for all purposes, but total municipal government spending for the current fiscal year does not include:

(1) spending in an amount not exceeding the amount represented by applying the municipality's tax millage for the most recently completed property tax year to

(a) the greater of:

(i) the assessed value of new construction and improvements to existing property not taxed prior to tax year 1994, or

(ii) the assessed value of property in the municipality for tax year 1993, multiplied by the growth in the municipality's population since the end of tax year 1993, divided by the municipality's population at the end of tax year 1993, together with

(b) net growth in the assessed value of property in the municipality due to changes in the municipality boundaries occurrring after the end of tax year 1993;

(2)(a) spending of fee revenues generated by income-producing services first extended to customers in the current fiscal year;

(b) spending of fee revenues generated by facilities which charge admission or rental fees;

(3) spending of funds derived from state or federal sources and spending of local sales and use tax revenues distributed to the municipality pursuant to Chapter 10, Title 4 of the 1976 Code;

(4) a capital expenditure financed without borrowing using funds derived from any source other than county property taxes;

(5) spending for capital improvements projects as follows:

(a) debt service payments

(b) lease-purchase payments for lease-purchase agreements entered into prior to July 1, 1994, and,

(c) lease purchase payments for lease-purchase agreements entered into on or after July 1, 1994, which are approved by a two-thirds vote of the governing body of the municipality or approved by referendum;

(6) spending necessary to comply with federal or state legislative, administrative, or judicial mandates requiring the expenditure of funds or the use of municipal personnel, facilities, or equipment;

(7) amounts placed in a general reserve fund with a balance not exceeding ten percent of the prior year's budgeted spending; provided, however, that any expenditure from funds contained in such a general reserve fund shall be subject to the same restrictions as any other spending under the provisions of this section;

(8) spending approved by at least a two-thirds vote of the governing body of the municipality; and

(9) spending for identifiable and directly related to industrial recruitment and job development.

SECTION 4. Beginning with county special tax district, special purpose district, or public service district spending for fiscal year 1995-96, total spending by a county special tax district, special purpose district, or public service district in a fiscal year may not exceed total county special tax district, special purpose district, or public service district spending in the prior fiscal year by more than the percentage increase in the consumer price index in the twelve months ending December 31 preceding the fiscal year as determined by the Bureau of Labor Statistics of the United State Department of Labor. Total district spending in the prior fiscal year does not include spending pursuant to items (2)(b), 3, 4, 5, and 6 of this section. Total spending by a special purpose or public service district for purposes of this limitation is the total of special purpose or public service district spending in a fiscal year from all sources of funds and for all purposes, but does not include for the current fiscal year:

(1) spending in an amount not exceeding the amount represented by applying the district's tax millage for the most recently completed property tax year to

(a) the greater of:

(i) the assessed value of new construction and improvements to existing property not taxed prior to tax year 1994, or

(ii) the assessed value of property in the district for tax year 1993, multiplied by the growth in the district's population since the end of tax year 1993, divided by the district's population at the end of tax year 1993, together with

(b) net growth in the assessed value of property in the district due to changes in the district boundaries occurring after the end of tax year 1993;

(2)(a) spending of fee revenues generated by income-producing services first extended to customers in the current fiscal year;

(b) spending of fee revenues generated by facilities which charge admissions or rental fees;

(3) spending of funds derived from state or federal sources;

(4) a capital expenditure financed without borrowing using funds derived from any source other than district property taxes;

(5) spending for capital improvements projects as follows:

(a) debt service payments

(b) lease-purchase payments for lease-purchase agreements entered into prior to July 1, 1994, and,

(c) lease purchase payments for lease-purchase agreements entered into on or after July 1, 1994, which are approved by a two-thirds vote of the governing body authorized by law to levy district tax millage in the district or approved by referendum;

(6) spending necessary to comply with federal or state legislative, administrative, or judicial mandates requiring the expenditure of funds or the use of special purpose or public service district personnel, facilities, or equipment;

(7) amounts placed in a general reserve fund with a balance not exceeding ten percent of the prior year's budgeted spending; provided, however, that any expenditure from funds contained in such a general reserve fund shall be subject to the same restrictions as any other spending under the provisions of this section;

(8) spending approved by at least a two-thirds vote of the governing body authorized by law to levy district tax millage in the district; and

(9) spending for economic development purposes.

SECTION 5. Beginning with school district ad valorem tax revenues for operating purposes for school year 1995-96, total revenues of a school district from ad valorem taxes levied for operating purposes for a school year may not exceed the total of such revenues in the prior school year by more than the Education Finance Act inflation factor applicable for the current school year. For purposes of this section, the term 'ad valorem tax revenues' includes reimbursement of lost ad valorem tax revenues by the state pursuant to the provisions of Section 12-37-257(c). Total ad valorem tax revenue in the prior school year does not include revenues pursuant to items (2) and (3) of this section. However, the limitation on revenues imposed by this section does not apply to:

(1) ad valorem tax revenues in an amount not exceeding the amount represented by applying the school district's tax millage for the most recently completed property tax year to:

(a) the greater of:

(i) the assessed value of new construction and improvements to existing property not taxed prior to tax year 1994, or

(ii) the assessed value of property in the school district for tax year 1993, multiplied by the growth in the school district's average daily attendence as compared to school year 1993-1994, divided by the school district's average daily attendance in school year 1993-1994, together with

(b) net growth in the assessed value of property in the district due to changes in the school district boundaries occurring after the end of tax year 1993;

(2) spending for capital improvements projects as follows:

(a) debt service payments

(b) lease-purchase payments for lease-purchase agreements entered into prior to July 1, 1994, and,

(c) lease purchase payments for lease-purchase agreements entered into on or after July 1, 1994, which are approved by a two-thirds vote of the governing body authorized by law to levy school tax millage in the school district or approved by referendum;

(3) Ad valorem tax revenues necessary to comply with federal or state legislative, administrative, or judicial mandates requiring the expenditure of school district funds or the use of school district personnel, facilities, or equipment;

(4) amounts placed in a general reserve fund with a balance not exceeding ten percent of the prior year's budgeted spending; provided, however, that any expenditure from funds contained in such a general reserve fund shall be subject to the same restrictions as any other spending under the provisions of this section; and

(5) revenues of additional ad valorem taxes approved by at least a two-third's vote of the governing body authorized by law to levy school tax millage in the school district.

If the limit on revenue increases allowed by this section is insufficient to permit a school district to meet the maintenance of effort requirement of Section 59-21-1030 of the 1976 Code, then additional revenues may be raised by ad valorem taxes sufficient to meet this requirement.

The provisions of this section may not be construed to amend or repeal any existing provision of law limiting the fiscal autonomy of a school district to the extent those limitations are more restrictive than the provisions of this section.

SECTION 6. Section 12-43-210(B) of the 1976 Code, as last amended by Act 381 of 1988, is further amended to read:

"(B)(1) No reassessment program may be implemented in a county unless all real property in the county, including real property classified as manufacturing property, is reassessed in the same year. The department shall divide counties into five groups for purposes of assigning dates for counties to implement countywide reassessment programs. Each county shall implement a countywide reassessment program as scheduled by the department. Additionally, each county shall implement a countywide reassessment program at least every fifth year after the initial reassessment year scheduled by the department.

(2) The countywide reassessment program required by this section applies to all real property in a county, including manufacturing real property."

(B) Initial reassessment years pursuant to the provision of Section 12-43-210(B) of the 1976 Code, as amended by this act, are as follows:

County Group Year of Reassessment

1 1997

2 1998

3 1999

4 2000

5 2001.

SECTION 7. If the provisions of Section 12-37-257 of the 1976 Code as added by Section 1 of this act are declared unconstitutional, unlawful, or otherwise void by a court of competent jurisdiction, then the provisions of the spending and revenue limitations imposed by Sections 2, 3, 4, and 5 of this act are of no effect.

SECTION 8. Section 12-43-220(c) of the 1976 Code, as last amended by Section 219, Act 181 of 1993, is further amended by adding at the end:

"No residential property owner-occupant is eligible for the assessment ratio allowed by this item unless the person both resides and is domiciled in this State."

SECTION 9. The penultimate paragraph of Section 12-37-930 of the 1976 Code is amended to read:

"In no event should the The original cost must not be reduced more than eighty percent for property tax years before 1995. For property tax year 1995 and thereafter, original cost must not be reduced below the amounts provided in the following schedule:

1995 nineteen percent

1996 eighteen percent

1997 seventeen percent

1998 sixteen percent

1999 fifteen percent

2000 fourteen percent

2001 thirteen percent

2002 twelve percent

2003 eleven percent

After 2003 ten percent.

In the year of acquisition, depreciation shall be is allowed as if the property were owned for the full year. The term `original cost' shall mean means gross capitalized cost as shown by the taxpayer's records for income tax purposes."

SECTION 10. This act takes effect upon approval by the Governor.