Current Status Introducing Body:Senate Bill Number:920 Ratification Number:465 Act Number:406 Primary Sponsor:Leventis Type of Legislation:GB Subject:Agricultural property, timberland Date Bill Passed both Bodies:19940511 Computer Document Number:JIC/5192HC.94 Governor's Action:S Date of Governor's Action:19940525 Introduced Date:19940111 Date of Last Amendment:19940505 Last History Body:------ Last History Date:19940525 Last History Type:Act No. 406 Scope of Legislation:Statewide All Sponsors:Leventis J. Verne Smith Thomas Courson Passailaigue Giese Lander Reese Rose Mescher Type of Legislation:General Bill
Bill Body Date Action Description CMN Leg Involved ---- ------ ------------ ------------------------------ --- ------------ 920 ------ 19940525 Act No. 406 920 ------ 19940525 Signed by Governor 920 ------ 19940519 Ratified R 465 920 Senate 19940511 Concurred in House amendment, enrolled for ratification 920 House 19940510 Read third time, returned to Senate with amendment 920 House 19940505 Amended, read second time 920 House 19940504 Debate interrupted by adjournment 920 House 19940504 Amended 920 House 19940427 Made Special Order under H. 5173 920 House 19940421 Committee Report: Favorable 30 with amendment 920 House 19940405 Introduced, read first time, 30 referred to Committee 920 Senate 19940330 Read third time, sent to House 920 Senate 19940322 Amended 920 Senate 19940316 Read third time, sent to House; reconsidered vote whereby read third time 920 Senate 19940316 Amended 920 Senate 19940301 Amended, read second time 920 Senate 19940210 Committee Report: Favorable 06 with amendment 920 Senate 19940111 Introduced, read first time, 06 referred to Committee 920 Senate 19931206 Prefiled, referred to 06 CommitteeView additional legislative information at the LPITS web site.
(A406, R465, S920)
AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-43-215 SO AS TO REQUIRE THE LAND VALUE OF OWNER-OCCUPIED RESIDENTIAL REAL PROPERTY TO BE VALUED ON THE BASIS THAT ITS HIGHEST AND BEST USE IS FOR RESIDENTIAL PURPOSES; TO AMEND THE 1976 CODE 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 FOR TIMBERLAND AND TEN ACRES OR MORE FOR OTHER THAN TIMBERLAND, TO PROVIDE THAT THE TEN ACRE MINIMUM DOES NOT APPLY IF A ONE THOUSAND DOLLAR A YEAR GROSS FARM INCOME TEST IS MET IN AT LEAST THREE OF THE PRECEDING FIVE YEARS AND TO MAKE A PERSON FIRST APPLYING FOR AGRICULTURAL USE ON A LESS THAN TEN ACRE TRACT ELIGIBLE FOR AGRICULTURAL USE, SUBJECT TO THE ROLLBACK TAX IF THE OWNER FAILS TO MEET THE SAME INCOME TEST IN THE FIRST FIVE YEARS OF OPERATION, TO ALLOW THE ASSESSOR TO OBTAIN TAX AND OTHER INFORMATION TO VERIFY APPLICATIONS, TO PROVIDE THAT LAND IDLE UNDER LAND RETIREMENT PROGRAMS QUALIFIES FOR AGRICULTURAL USE IF OTHERWISE ELIGIBLE, TO PROVIDE THAT UNIMPROVED REAL PROPERTY SUBJECT TO A CONSERVATION EASEMENT MUST BE CLASSIFIED AS AGRICULTURAL REAL PROPERTY, TO PROVIDE THAT A NONTIMBERLAND TRACT NOT MEETING THE ACREAGE REQUIREMENT MUST REMAIN CLASSIFIED AS AGRICULTURAL REAL PROPERTY IF THE PROPERTY WAS CLASSIFIED AS AGRICULTURAL USE PROPERTY IN 1994 AND THE CURRENT OWNER OR AN IMMEDIATE FAMILY MEMBER HAS OWNED THE TRACT FOR AT LEAST TEN YEARS AS OF JANUARY 1, 1994, TO DEFINE "IMMEDIATE FAMILY", TO PROVIDE THAT EITHER A LESSOR OR LESSEE MAY MEET THE REQUIREMENT OF THIS SECTION, TO REQUIRE APPLICANTS FOR AGRICULTURAL USE AND THE SPECIAL ASSESSMENT RATIO FOR CERTAIN AGRICULTURAL PROPERTY TO CERTIFY THE PROPERTY MEETS THE APPLICABLE REQUIREMENTS; TO PROVIDE FOR TAXATION, INCLUDING PENALTIES, OF PROPERTY IN LIEU OF THE ROLLBACK TAX WHICH WAS NOT ELIGIBLE FOR AGRICULTURAL USE WHEN THE APPLICATION WAS MADE, AND TO PROVIDE FOR USE OF THE ADDITIONAL REVENUES; TO AMEND THE 1976 CODE BY ADDING SECTION 12-43-340 SO AS TO MAKE IT UNLAWFUL KNOWINGLY AND WILFULLY TO MAKE A FALSE STATEMENT ON THE AGRICULTURAL USE APPLICATION AND PROVIDE A PENALTY; TO AMEND SECTION 12-43-220(d)(3), AS AMENDED, RELATING TO THE VALUATION AND CLASSIFICATION OF PROPERTY FOR PURPOSES OF PROPERTY TAX, SO AS TO EXTEND THE TIME FOR MAKING THE AGRICULTURAL USE VALUE APPLICATION UNTIL THE FIRST TAX PENALTY DATE, TO PROVIDE THAT NO ROLLBACK TAX IS DUE ON PROPERTY INITIALLY CLASSIFIED AS AGRICULTURAL REAL PROPERTY WHEN CHANGED BY THIS ACT, TO REQUIRE ALL OWNERS TO REAPPLY FOR AGRICULTURAL USE VALUE TO MAINTAIN THAT USE AFTER 1994, AND TO MAKE THE PROVISION OF THIS ACT EFFECTIVE FOR PROPERTY TAX YEARS BEGINNING AFTER 1994.
Be it enacted by the General Assembly of the State of South Carolina:
Agricultural use
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) earned at least one thousand dollars of gross farm income 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) An owner making an initial 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 earned at least one thousand dollars of gross farm income 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.
(d) Unimproved real property subject to a perpetual conservation easement as provided in Chapter 8 of Title 27 must be classified as agricultural real property.
(e) A nontimberland tract that does not meet the acreage or income requirements of this section to be classified as agricultural real property must nevertheless be classified as agricultural real property if the current owner or an immediate family member of the current owner has owned the property for at least the ten years ending January 1, 1994, and the property is classified as agricultural real property for property tax year 1994.
The property must continue to be classified as agricultural real property until the property is applied to some other use or until the property is transferred to other than an immediate family member, whichever occurs first. For purposes of this subitem, `immediate family' is a person related to the current owner within the third degree of consanguinity or affinity and a trust all of whose noncontingent beneficiaries are related to the grantor of the trust within the third degree of consanguinity or affinity.
(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) (a) 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:
(i) `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
(ii) `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'.
(b) If it is determined that the property for which the certification was made did not meet the requirements to qualify for agricultural use classification at the time the certification was made, the property which is the subject of the certification is denied agricultural use value for the property tax year or years in question and in lieu of the rollback tax, the tax on the property for each tax year in question must be recalculated using fair market value, the appropriate assessment ratio, and the appropriate millage. There must be deducted from the recalculated tax liability any taxes paid for the year and the penalties provided pursuant to Section 12-45-180 must be added to the balance due. Interest at the rate of one percent a month must be added to the unpaid taxes calculated from the last penalty date. Additional property tax revenues derived from the operation of this section changing agricultural use property to some other use must be used only for the purpose of rolling back property tax millage."
Application
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."
Application date
SECTION 3. Section 12-43-220(d)(3) of the 1976 Code, as last amended by Section 219, Act 181 of 1993 and Act 87 of 1993, is further amended to read:
"(3) Agricultural real property does not come within the provisions of this section unless the owners of the real property or their agents make a written application therefor on or before the first penalty date for taxes due for the first tax year in which the special assessment is claimed. The application for the special assessment must be made to the assessor of the county in which the agricultural real property is located, on forms provided by the county and approved by the department and a failure to apply constitutes a waiver of the special assessment for that year. The governing body may extend the time for filing upon a showing satisfactory to it that the person had reasonable cause for not filing on or before the first penalty date. No additional annual filing is required while the use of the property remains bona fide agricultural and the ownership remains the same. The owner shall notify the assessor within six months of a change in use. For failure to notify the assessor of a change in use, in addition to any other penalties provided by law, a penalty of ten percent and interest at the rate of one-half of one percent a month must be paid on the difference between the amount that was paid and the amount that should have been paid, but not less than thirty dollars nor more than the current year's taxes."
Highest and best use
SECTION 4. Article 3, Chapter 43, Title 12 of the 1976 Code is amended by adding:
"Section 12-43-215. When owner-occupied residential property assessed pursuant to Section 12-43-220(c) is valued for purposes of ad valorem taxation, the value of the land must be determined on the basis that its highest and best use is for residential purposes."
Rollback tax not to apply
SECTION 5. 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.
Reapplication required
SECTION 6. Notwithstanding the provisions of Section 12-43-220(d) of the 1976 Code, every owner of property classified as agricultural real property for property tax year 1994 must reapply to the appropriate county assessor to maintain agricultural use classification for property tax years after 1994 in the manner provided in Section 12-43-220(d) of the 1976 Code as amended by this act. The application must contain the certification provided in Section 12-43-232 of the 1976 Code as added by this act. The county assessor shall send a written notice to every owner of land classified as agricultural property informing the owner of the reapplication requirement.
Time effective
SECTION 7. This act is effective for property tax years beginning after 1994.
Approved the 25th day of May, 1994.