Journal of the Senate
of the First Session of the 111th General Assembly
of the State of South Carolina
being the Regular Session Beginning Tuesday, January 10, 1995

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(B) No person who maintains a place or premises for the operation of machines licensed under Section 12-21-2720(A)(3) may advertise in any manner for the playing of the machines nor may a person offer or allow to be offered any special inducement to a person for the playing of machines permitted under Section 12-21-2720(A)(3).

(C) No person under twenty-one years of age may receive a payout as a result of the operation of the machines licensed under Section 12-21-2720(A)(3).

(D) No owner, operator, or marketer may be issued a permit by the commission for machines pursuant to Section 12-21-2720(A)(3) unless the owner, operator, or marketer has been a resident of the State for two years. The commission shall require a statement of residency to be filed with the commission as part of the application process for permits issued under Section 12-21-2720(A)(3) on forms and in a manner the commission considers appropriate. Reserved

(E) It is unlawful to operate machines licensed under Section 12-21-2720(A)(3) between the hours of midnight Saturday night and six o'clock a.m. Monday morning.

(F) A person violating subsections (A), (B), (D), or (E) of this section is subject to a fine of up to five thousand dollars to be imposed by the commission. The commission, upon a determination that the violation is wilful, may refer the violation to the Attorney General or to the appropriate circuit solicitor for criminal prosecution, and, upon conviction, the person must be fined not more than ten thousand dollars or imprisoned not more than two years, or both. The commission shall revoke the licenses of any person issued pursuant to the provisions of Article 19 of this chapter for a violation of subsection (C) of this section. Revocation is pursuant to the procedures set forth in Section 12-54-90."

Q. Sections 12-21-2719, 12-21-2728, 12-21-2732, and 12-21-2791 of the 1976 Code are repealed.

R. Subject to Part I of this act, this section takes effect July 1, 1996, except subsections N. and O. take effect upon approval by the Governor for purposes of promulgating regulations and processing applications.

SECTION 8. Article 5, Chapter 1, Title 59 of the 1976 Code is amended by adding:

"Section 59-1-460. (A) In addition to the regular annual state funding provisions for K-12 public education, the General Assembly shall appropriate additional amounts as follows:

Fiscal year 1996-97 thirty million dollars

Fiscal year 1997-98 sixty million dollars

Fiscal year 1998-99 eighty million dollars

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Fiscal year 1999-00 one hundred thirty

million dollars

Fiscal years after 1999-00 one hundred eighty

million dollars.

(B) Funds appropriated pursuant to this section first must be used to hold harmless school districts adversely impacted in the calculations of the index of taxpaying ability as a result of additional property tax homestead exemptions. The remaining funds must be distributed according to the provisions of the Education Finance Act and no local matching funds are required."

SECTION 9. Section 11-11-140(D) of the 1976 Code is amended to read:

"(D) Appropriations from surplus may not be made before the first meeting of the General Assembly following the Comptroller General's closing of the books on the fiscal year in which the surplus occurred and may be appropriated only for nonrecurring purposes. The provisions of this subsection do not apply to appropriations to cover midyear shortfalls in the Property Tax Relief Fund as established pursuant to Article 11, Chapter 36 of Title 12."

SECTION 10. In each county of the state in which the local option sales and use tax is not imposed, the referendum provided in Section 4-10-30 of the 1976 Code must be held on November 7, 1995. If the question is approved, the tax is imposed in the county in the manner provided by law. In each county in which is imposed the local option sales tax, the referendum provided in Section 4-10-35 of the 1976 Code must be held on November 7, 1995. If the question is approved, the tax is rescinded in the county in the manner provided by law.

PART III

Tax Relief

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

"Section 12-37-257. In addition to any other homestead exemption allowed by law, one hundred percent of the fair market value of every homestead qualifying for the assessment ratio provided pursuant to Section 12-43-220(c) is exempt from all ad valorem taxes except ad valorem taxes levied as follows:

(1) for debt service and for payments pursuant to lease-purchase agreements;

(2) by special purpose or public service districts;

(3) county special tax districts;

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(4) ad valorem taxes levied pursuant to a referendum in which a majority of the qualified electors of the jurisdiction voting in the referendum voted in favor of levying the taxes."

B. Subject to Part I of this act, Section 12-37-257 of the 1976 Code, as added by this section, is effective for property tax years beginning after 1995.

SECTION 2. The penultimate paragraph of Section 12-37-930 of the 1976 Code, as last amended by Act 516 of 1994, is further amended to read:

"In no event may The original cost must not be reduced more than eighty percent the percentage provided in the following schedule:

Property Tax Year Percentage

Before 1996 80

1996 82

1997 84

1998 86

1999 88

After 1999 90.

In the year of acquisition, depreciation is allowed as if the property were owned for the full year. The term `original cost' means gross capitalized cost, including property on which the taxpayer made the election allowed pursuant to Section 179 of the Internal Revenue Code of 1986, as shown by the taxpayer's records for income tax purposes."

SECTION 3. A. Section 12-7-435 of the 1976 Code, as last amended by Act 497 of 1994, is further amended by adding an appropriately lettered item at the end to read:

"( ) Twenty-eight and one-half percent of amounts otherwise subject to tax under Section 12-7-210 received by or attributed to a taxpayer as a result of the taxpayer's status as a:

(1) shareholder of a subchapter `S' corporation;

(2) partner in a partnership; or

(3) member of a limited liability company.

No deduction is allowed under this item for a guaranteed payment to a partner for personal services rendered by the partner for the partnership."

B. This section is effective for taxable years beginning after 1994.

SECTION 4. Chapter 29, Title 4 of the 1976 Code is amended by adding:

"Section 4-29-72. For agreements executed after June 30, 1996, the provisions of Section 4-29-67 apply regardless of the amount of the project investment."

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SECTION 5. Section 4-29-10(3) of the 1976 Code is amended to read:

"(3) `Project' means any land and any buildings and other improvements on the land including, without limiting the generality of the foregoing, water, sewage treatment and disposal facilities, air pollution control facilities, and all other machinery, apparatus, equipment, office facilities, and furnishing which are considered necessary, suitable, or useful by the following or any combination thereof: (a) any enterprise for the manufacturing, processing, or assembling of any agricultural or manufactured products and facilities for an enterprise engaged in the sale or distribution to the public of electricity, gas, or telephone services; (b) any commercial enterprise engaged in storing, warehousing, distributing, transporting, or selling products of agriculture, mining, or industry, or engaged in providing laundry services to hospitals, to convalescent homes, or to medical treatment facilities of any type, public or private, within or outside of the issuing county or incorporated municipality and within or outside of the State; (c) any enterprise for research in connection with any of the foregoing or for the purpose of developing new products or new processes or improving existing products or processes; (d) any enterprise engaged in commercial business including, but not limited to, wholesale, retail, or other mercantile establishments; office buildings; computer centers; tourism, sports, and recreational facilities; convention and trade show facilities; and public lodging and restaurant facilities if the primary purpose is to provide service in connection with another facility qualifying under this subitem; and (e) any enlargement, improvement, or expansion of any existing facility in subitems (a), (b), (c), and (d) of this item. The term `project' does not include facilities for an enterprise primarily engaged in the sale or distribution to the public of electricity, gas, or telephone services. A project may be located in one or more counties or incorporated municipalities. The term `project' also includes any structure, building, machinery, system, land, interest in land, water right, or other property necessary or desirable to provide facilities to be owned and operated by any person, firm, or corporation for the purpose of providing drinking water, water, or wastewater treatment services or facilities to any public body, agency, political subdivision, or special purpose district."

SECTION 6. A. Notwithstanding the rates of the soft drink license tax imposed pursuant to Article 13, Chapter 21, Title 12 of the 1976 Code, the license tax due from a taxpayer pursuant to that article is reduced by one-third for returns due during fiscal year 1996-97 and by two-thirds for returns due during fiscal year 1997-98.

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B. Article 13, Chapter 21, Title 12 of the 1976 Code is repealed effective July 1, 1998.

SECTION 7. A. Section 12-36-2120 of the 1976 Code is amended by adding an appropriately numbered item at the end to read:

"( ) Effective July 1, 1998, food items eligible for purchase with United States Department of Agriculture food coupons, not including restaurant meals."

B. Notwithstanding the rates of tax imposed pursuant to Chapter 36, Title 12 of the 1976 Code, the rate of tax imposed pursuant to that chapter on the gross proceeds of sales, or the sale price of food items eligible for purchase with United States Department of Agriculture food coupons, not including restaurant meals, is three percent for sales or consumption in fiscal year 1996-97 and one percent for such sales or consumption in fiscal year 1997-98. Eighty percent of the revenues from sales taxes imposed by this section must be credited to the general fund of this State and the remainder must be credited to the Education Improvement Act Fund.

SECTION 8. A. Article 5, Chapter 4, Title 12 of the 1976 Code is amended by adding:

"Section 12-4-565. In addition to the depreciation allowed in determining the value of personal property according to the manuals and guidelines authorized pursuant to Section 12-4-560, there is allowed an additional percentage reduction for depreciation for personal property required to be titled by a state or federal agency, not including units of manufactured housing, according to the following schedule:

Additional Depreciation

Tax Year Percentage

1997 4.75

1998 9.50

1999 14.25

2000 19.00

After 2000 23.75."

SECTION 9. The first paragraph of Section 12-43-220(a) of the 1976 Code is amended to read:

"All real and personal property owned by or leased to manufacturers and utilities and used by the manufacturer or utility in the conduct of the business must be taxed on an assessment equal to ten and one-half the

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percent of the fair market value of the property provided in the following schedule:

Property tax Year Assessment Ratio

Before 1996. . . . . 10.5
1996 . . . . . 10.0
1997. . . . .9.5
After 1997. . . . .9.0."

PART IV

Administration

SECTION 1. A. Section 12-4-310 of the 1976 Code, as last amended by Act 361 of 1992, is further amended by adding at the end:

"(11) collect taxes on properties assessed by the department as provided in Section 12-4-540 except for business personal property. The State Treasurer shall distribute property taxes collected pursuant to this item daily by electronic transfer to county treasurers for the credit of the taxing entities in the county."

B. The amendment to Section 12-4-310 of the 1976 Code as contained in this section is effective for taxes due for tax years beginning after 1995.

SECTION 2. A. Section 12-4-540(A) of the 1976 Code is amended to read:

"(A) The commission department has the sole responsibility for the appraisal, assessment, and equalization of the taxable values of corporate headquarters, corporate office facilities, and distribution facilities and of the real and personal property owned, used, or leased by the following businesses in the conduct of their business:

(1) manufacturing;

(2) railway;

(3) private carline;

(4) airline;

(5) water, heat, light and power;

(6) telephone;

(7) cable television;

(8) sewer;

(9) pipeline;

(10) mining.

In addition, the commission department has the sole responsibility for the appraisal, assessment, and equalization of the taxable values of the business personal property of merchants."

B. The amendment to Section 12-4-310 of the 1976 Code as contained in this section is effective for tax years beginning after 1995.

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SECTION 3. A. Section 12-37-970 of the 1976 Code, as last amended by Act 181 of 1993, is further amended to read:

"Section 12-37-970. The assessment for property taxation of merchants' inventories, equipment, furniture, and fixtures, and manufacturers' real and tangible personal property, and the machinery, equipment, furniture, and fixtures of all other taxpayers required to file returns with the South Carolina Department of Revenue and Taxation for purposes of assessment for property taxation, must be determined by the department from property tax returns submitted by the taxpayers to the department on or before the due date for the taxpayer's state income return, including any extension last day of the fourth month after the close of the accounting period regularly employed by the taxpayer for income tax purposes in accordance with Chapter 7 of this title. The department by regulation shall prescribe the form of return required by this section, the information to be contained in it, and the manner in which the returns must be submitted and shall provide a method of filing this return as a part of the taxpayer's state income tax return. Every taxpayer required to make return to the department of property for assessment for property taxation must make the return to the department not less than once each calendar year. Whenever by a change of accounting period, or otherwise, more than one accounting period ends within any one calendar year, the taxpayer must make one such return within the prescribed time for filing following the end of each of the accounting periods and the department shall determine the assessment from the return setting forth the greatest value.

When property required to be returned as herein provided is sold after the end of the seller's accounting year and before January first next ensuing and when the purchaser's accounting year ends after the seller's and before January first next ensuing, the property must be returned by the seller as of the end of his accounting period. The purchaser is not required to list and return the property as of the close of his accounting period during the calendar year of sale. The seller and the purchaser are jointly and singularly liable for the tax that is due and payable by reason of this provision. The provision of this section does not apply to motor vehicles licensed for use on public highways.

When property required to be returned as provided in this section is sold before the end of the seller's accounting year and before January first next ensuing and when the purchaser's accounting year ends before the date of purchase and before January first next ensuing, the property must be listed and returned by the taxpayer holding title as of December thirty-first and is liable for the tax for the ensuing year.

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The Department of Revenue and Taxation shall forward the assessments prepared as a result of the returns submitted pursuant to this section for business personal property to the appropriate local taxing authorities no later than August fifteenth of the applicable tax year."

B. Section 12-37-905 of the 1976 Code is repealed.

C. This section is effective for property tax years beginning after 1995.

SECTION 4. A. Section 12-43-250 of the 1976 Code is amended to read:

"Section 12-43-250. The Commission shall make sales ratio studies in all counties of the State and when, in the judgment of the Commission, a county needs to reassess or remap property, the Commission shall make application to the circuit court in which the county is located for a determination of whether or not the county shall be required to commence reassessment or remapping. If the circuit court determines that the county needs reassessment or remapping, such county shall be required to commence the reassessment or remapping within thirty days of such determination. All taxable real property in a county must be appraised and equalized once every fourth year beginning with the 1996 property tax year. Upon completion of a reassessment and equalization program, property taxpayers must be notified of any resulting change in value or classification. The values determined by the program first apply for the property tax year beginning after the completion of the program and notification of taxpayers. If a county fails to comply with this section, the Comptroller General shall withhold twenty percent of the reimbursement due the county pursuant to Section 12-36-1120."

B. The Department of Revenue and Taxation shall establish a schedule of initial reassessments for all counties in conformity with the provisions of Section 12-43-250 of the 1976 Code as amended by this section.

SECTION 5. A. Section 12-43-300 of the 1976 Code, as last amended by Act 181 of 1993, is further amended to read:

"Section 12-43-300. (A) Whenever the market value estimate of any property is fixed by the assessor assessing authority at a sum greater by one thousand dollars or more than the amount returned by the owner or his agent, or whenever any property is valued and assessed for taxation which has not been returned or assessed previously, the assessor assessing authority shall, on or before July first, or as soon thereafter as may be practicable, in the year in which the valuation and assessment is made give written notice thereof to the owner of the property or his agent. In reassessment years, the written reassessment notice to owners or agents must be given by July first. If there is no timely written notice, the prior

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current year's assessed value must be the basis for assessment for the current succeeding taxable year. The notice must include the prior market value, the total market value estimate, the value estimate if applicable, the assessment ratio, the total new assessment, the percentage changes over the prior market value, if there is no change in use or physical characteristics of the property, number of acres or lots, location of property, tax map, appeal procedure, and other pertinent ownership and legal description data required by the South Carolina Department of Revenue and Taxation. The notice may be served upon the owner or his agent personally or by mailing it to the owner or his agent at his last known place of residence which may be determined from the most recent listing in the applicable telephone directory, Department of Revenue and Taxation Motor Vehicle Registration List, county treasurer's records, or official notice from the property owner or his agent. The owner or his agent, if he objects to the valuation and assessment, shall serve written notice of his objection upon the assessor assessing authority within thirty days of the date of the mailing of the notice. In years when there is no notice of appraisal because of a less than one thousand dollar change or no change in the appraised or assessed value, the owner or agent has until March first to serve written notice of objection upon the assessor assessing authority of the appraised or assessed value. In those years, failure to serve written notice of objection by March first constitutes a waiver of the owner's right of appeal for that tax year and the assessor assessing authority is not required to review any request filed after March first. The assessor assessing authority shall then schedule a conference with the owner or agent within twenty days of receipt of the notice. If the assessor assessing authority requests it, the owner, within thirty days after the conference, shall complete and return to the assessor assessing authority the form as may be approved by the Department of Revenue and Taxation relating to the owner's property and the reasons for his objection. Within thirty days after the conference, or as soon thereafter as practicable, the assessor assessing authority shall mail written notice of his action upon the objection to the owner. The owner or agent, if still aggrieved by the valuation and assessment, may appeal from the action to the Board of Assessment Appeals a department hearing officer by giving written notice of the appeal and the grounds thereof to the assessor assessing authority within thirty days from the date of the mailing of the notice. The assessor assessing authority shall notify promptly the Board of Assessment Appeals hearing officer of the appeal, who shall schedule a hearing on the appeal within thirty days after notice from the assessing authority and notify the
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taxpayer of the hearing date and furnish the taxpayer a summary of the applicable procedures for the hearing.

(B) The governing body of the county may by ordinance extend the time for filing an objection to the valuation and assessment of real property resulting from reassessment within a county.

(C) The Department of Revenue and Taxation shall prescribe a standard reassessment form designed to contain the information required in subsection (A) in a manner that may be understood easily.

(D) At the hearing provided in subsection (A), the hearing officer shall consider the issues raised by the taxpayer and the assessing authority and subsequently shall make a determination which is binding on both parties. The department shall prescribe the procedure applicable to these hearings which shall require information from both parties sufficient for the hearing officer to make an appropriate determination. These hearings must be conducted informally. Any party aggrieved by the determination of the hearing officer may appeal the decision to the Administrative Law Judge Division in the manner prescribed by law which shall hear the matter de novo as a contested case pursuant to Chapter 23 of Title 1. Notwithstanding the provisions of this section, a taxpayer aggrieved by the determination of the assessing authority whose property is assessed pursuant to Section 12-43-220(a) or who objects to the classification imposed by that section may waive the hearing before the hearing officer and appeal directly to the Administrative Law Judge Division for a de novo hearing of the appeal.

(E) The department shall provide sufficient hearing officers to hear all appeals expeditiously."

B. The amendment to Section 12-37-300 of the 1976 Code contained in this section applies to appeals for taxes filed for tax years after 1995.

SECTION 6. A. Article 5, Chapter 4, Title 12 of the 1976 Code is amended by adding:

"Section 12-4-580. The governing body of a county may by ordinance transfer to the department the responsibility for the appraisal, assessment, and equalization of the taxable real property under the jurisdiction of the county assessor. When this transfer occurs, the department shall perform the functions of the county assessor in that county. Before this transfer occurs, the county governing body and the department shall agree to the employees, duties, functions, and other related items to be transferred to the department. Upon agreement, and with the approval of the State Budget and Control Board, the transfer allowed under this section occurs on the first day of July following approval by the board if sufficient funds are appropriated to the department to meet the additional expenses. The

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State Budget and Control Board shall conduct a study to determine the expenses of the department in the transfer of functions and personnel authorized by this section and shall make recommendations to the General Assembly of the appropriations necessary to meet these expenses."

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