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SECTION 4. A. The gross proceeds of sales of tangible personal property delivered after June 30, 1996 in this State, either under the terms of a construction contract executed before July 1, 1996, or a written bid submitted before July 1, 1996, culminating in a construction contract entered into before or after July 1, 1996, are exempt from the tax provided in Section 12-36-1110 of the 1976 Code if a verified copy of the contract is filed with the South Carolina Department of Revenue and Taxation before January 1, 1997.

B. Notwithstanding the date of general imposition of the tax imposed pursuant to Section 12-36-1110 of the 1976 Code, with respect to services that are regularly billed on a monthly basis, the tax is imposed beginning on the first day of the billing period beginning on or after July 1, 1996.

SECTION 5. Article 20, Chapter 21, Title 12 of the 1976 Code is amended by adding:

"Section 12-21-2795. (A) Beginning July 1, 1996, a tax equal to fifteen percent of the gross machine income is imposed and must be remitted to the department weekly on a schedule determined by the department. The revenue must be remitted by electronic transfer in a manner provided by the department. Revenues of this tax must be deposited to the credit of the Property Tax Relief Fund. All payments not remitted when due must be paid together with a penalty under the provisions of Section 12-54-40.

(B) A machine owner, operator, or licensed establishment who falsely reports or wilfully fails to report the amount due required by this section

SECTION 6. Article 5, Chapter 1, Title 59 of the 1976 Code is amended by adding:

"Section 59-1-460. 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 16.54 million dollars

Fiscal year 1997-98 39.44 million dollars

Fiscal year 1998-99 62.34 million dollars

Fiscal year 1999-00 102.14 million dollars

Fiscal years after 1999-00 171.14 million dollars."

SECTION 7. 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 1. A. Article 3, Chapter 37, Title 12 of the 1976 Code is amended by adding:

"Section 12-37-253. In addition to any other homestead exemption allowed by law, fifty thousand dollars 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) by county special tax districts;

(4) any 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."

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 1995.

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."

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

SECTION 6. 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, 1999, 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

SECTION 7. 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 9.50

1998 14.25

after 1998 23.75."

SECTION 8. 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 percent of the fair market value of the property provided in the following schedule:

Property tax Year Assessment Ratio
Before 1996 10.5

After 1995 9.0."

SECTION 1. Chapter 1, Title 6 of the 1976 Code is amended by adding:

"Section 6-1-75. (A) As used in this section:

(1) `Consumer Price Index' means the percentage increase if any, in the consumer price index in the last completed calendar year as determined by the Bureau of Labor Statistics of the United States Department of Labor. In the case of a school district, `Consumer Price

(2) `Fee' means a charge imposed by a political subdivision. `Fee' does not include:

(a) a charge for copying public documents;

(b) admission charges to places of recreation or amusement;

(c) charges for medical services;

(d) an amount charged for debt service on capital projects;

(e) criminal fines or penalties for administrative violations.

(3) `Political subdivision' means a county, municipality, consolidated political subdivision, or school district of this State. A political subdivision does not include a special purpose or public service district.

(4) `Referendum' means a referendum called by the governing body of a political subdivision for the specific purpose of obtaining approval for a property tax increase or imposition of a new fee in which a majority of the qualified electors of the political subdivision voting in the referendum vote in favor of the additional tax or new fee.

(B) (1) The governing body of a political subdivision may not increase the millage it imposes for a tax year over the millage it imposed for the prior year by more than the consumer price index except by a two-thirds vote. If the consumer price index allows a millage increase without a referendum and no additional millage is imposed for that tax year, then the millage that may be imposed for the succeeding tax year without a referendum may be increased by the millage rate increase allowed but not imposed for the prior tax year. In a reassessment year, the limits imposed by this item apply to a rollback millage rate and not the millage rate imposed for the prior tax year. The rollback millage rate is computed by dividing current year property tax revenues by the budget year property tax assessment base.

(2) If the financing of a service is changed from property tax revenues to user fees, the governing body of the political subdivision shall reduce the millage by an amount sufficient to offset the amount of property tax formerly budgeted to provide the service.

(C) The governing body of a political subdivision may not increase in any one year a fee it imposes by more than the consumer price index.

(D) (1) Except as provided in items (2) and (4) the governing body of a political subdivision may not impose any new fee except by referendum and any new fee may only be imposed to provide a specific service or for the completion of a specific project. In the case of a fee

(2) No referendum is required for the imposition of a new fee to comply with a judicial, legislative, or regulatory mandate requiring the use of funds, personnel, facilities, or equipment first applying after June 30, 1996, but before such a fee may be imposed, the governing body of the imposing political subdivision shall provide for a public hearing on the fee with at least thirty days' advance notice to the public.

(3) No fee may be imposed that results in overlapping impositions on the same payors for similar services or projects.

(4) No referendum is required for the governing body of a political subdivision to impose a new fee to meet expenses incurred by the political subdivision as a result of a natural disaster if the causative event was certified a natural disaster by the Governor.

(E) The provisions of this section are cumulative to any other provision of law limiting the revenue raising power of political subdivisions of this State and the provisions of this section may not be construed to amend or repeal any existing provision of law limiting the revenue raising power to the extent those limitations are more restrictive than the provisions of this section."

SECTION 1. Part I of this section takes effect upon approval by the Governor. The remaining provisions of this section take effect July 1, 1996, or as otherwise provided but only upon the certification of the State Election Commission to the Code Commissioner and the Department of Revenue and Taxation of a majority "yes" vote in the referendum provided by this section./

Amend sections, totals and title to conform.

Senator LEATHERMAN argued in favor of the adoption of the amendment.

Senator LEATHERMAN moved that the amendment be adopted.

Senators PASSAILAIGUE, McCONNELL and COURSON proposed the following Amendment No. 97 (JIC\5926HTC.95), which was tabled:

Amend Amendment No. 93, bearing Document Number JIC\5924HTC.95, as and if amended, Part II, by striking all after the amending language and inserting:

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

"Section 12-37-224. In addition to property tax exemptions allowed pursuant to Section 12-37-220(B), there is allowed as an exemption from ad valorem taxation an amount of the fair market value of residential real property assessed pursuant to Section 12-43-220(c) and real property and improvements thereon assessed pursuant to Section 12-43-220(e) equal to increases in fair market value resulting from reassessments occurring after the year the present owner acquired ownership. When the property is transferred, its value for purposes of ad valorem taxation is its fair market value at that time. This exemption does not extend to increases in fair market value attributable to permanent improvements made to the property. For purposes of this exemption, 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 change of ownership."

B. This section takes effect January 1, 1995, 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./

Amend sections, totals and title to conform.

Senator PASSAILAIGUE argued in favor of the adoption of the amendment.

Senator BRYAN raised the Point of Order that the amendment was out of order inasmuch as it was not germane to Amendment No. 93.

Senators McCONNELL, LEATHERMAN and PASSAILAIGUE spoke on the Point of Order.

The PRESIDENT overruled the Point of Order.

Senator BRYAN raised a Point of Order that Amendment Nos. 93 and 61 were out of order inasmuch as they were violative of Section 11-11-440 of the South Carolina Code of Laws, 1976, as amended, which prohibits "any general tax increase ... new general taxes in the permanent provisions of the State General Appropriation Act" and further provides "such general tax increases or new general taxes must be enacted only by separate act."

Senators McCONNELL, LEATHERMAN and PASSAILAIGUE spoke on the Point of Order.

The PRESIDENT took the Point of Order under advisement.

Senator LEATHERMAN raised a Point of Order that the Point of Order raised by Senator BRYAN under Section 11-11-440 relative to Amendment No. 61 was out of order inasmuch as it came too late.

Senators LEATHERMAN and McCONNELL spoke on the Point of Order.

The PRESIDENT took the Point of Order under advisement.

Senator PASSAILAIGUE continued arguing in favor of the adoption of Amendment No. 97.

Senator PASSAILAIGUE moved that Amendment No. 97 be adopted.

Senator SETZLER asked unanimous consent to be recorded as voting in favor of the adoption of Amendment No. 97, voting against the adoption of Amendment No. 93, and against the adoption of Amendment No. 61.

There was no objection.

Senator BRYAN raised a Point of Order that Amendment No. 97 was out of order inasmuch as the amendment was to the third degree.

Senators McCONNELL, PASSAILAIGUE and BRYAN spoke on the Point of Order.

The PRESIDENT referred to the motion made by Senator McCONNELL on April 27, 1995, in which members could offer amendments "without regard to questions of degree and without prejudice due to the adoption of the committee amendment" and overruled the Point of Order.

Senator McCONNELL argued in favor of the adoption of the amendment and Senator MATTHEWS argued contra.

Senator MATTHEWS moved to lay the amendment on the table.

The "ayes" and "nays" were demanded and taken, resulting as follows:

Alexander         Bryan            Cork

Courtney          Drummond         Elliott

Ford              Giese            Hayes

Holland           Jackson          Land

Lander            Leatherman       Leventis

Matthews          McGill           Moore

O'Dell            Patterson        Rankin

Reese             Ryberg           Saleeby

Short             Smith, J.V.      Stilwell

Waldrep

Courson           Martin           McConnell

Mescher           Passailaigue     Peeler

Richter           Rose             Russell

Thomas            Wilson

The amendment was laid on the table.

The question then was the adoption of Amendment No. 93.

On motion of Senator DRUMMOND, debate was interrupted by adjournment.

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