Current Status Bill Number:4847 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19980319 Primary Sponsor:Ways and Means Committee HWM 30 All Sponsors:Ways and Means Committee Drafted Document Number:JIC\5425HTC.98 Residing Body:Senate Current Committee:Finance Committee 06 SF Date of Last Amendment:19980401 Subject:Property tax, personal; Motor Vehicle and Personal Property Tax Relief Trust Fund; Taxation, exemptions
Body Date Action Description Com Leg Involved
______ ________ _______________________________________ _______ ____________
Senate 19980407 Introduced, read first time, 06 SF
referred to Committee
House 19980402 Read third time, sent to Senate
House 19980401 Amended, read second time
House 19980331 Debate adjourned until
Wednesday, 19980401
House 19980325 Request for debate by Representative H. Brown
Cromer
Neilson
Allison
Spearman
Young-
Brickell
Bailey
Chellis
Hinson
Law
Cave
Neal
J. Smith
Riser
J. Hines
Loftis
Leach
Kelley
Vaughn
Davenport
R. Smith
Kinon
House 19980319 Introduced, read first time
View additional legislative information at the LPITS web site.
AMENDED
April 1, 1998
H. 4847
S. Printed 4/1/98--H.
Read the first time March 19, 1998.
The bill requires that fifteen percent of the BEA's projected year-to-year general fund revenue growth be remitted to the Motor Vehicle and Personal Property Tax Relief Trust Fund. Because the Constitutional amendment could be ratified as early as January 1999, it could have an impact on FY1998-99 revenues. In FY1998-99 this transfer would amount to an estimated $18.1 million. In FY1999-00 this transfer would amount to an estimated $34.7 million.
This proposal will set up a fund to reimburse local taxing entities for personal property taxes up to a maximum of the amount collected for tax year 1998. That amount is estimated at $1.3 billion. This revenue would be reimbursed to local governments from the growth in state revenues. Each year fifteen percent new general fund revenue will be allocated to the fund. The Constitutional amendment requires local governments to annually adjust the millage rate applied to these properties to collect only $1.3 billion as collected in FY1998-99. The BEA estimates that the general fund will collect $241 million in new money in FY1998-99. Since one-half of FY1998-99 is in tax year 1999, $18.1 million in FY1998-99 would be the obligation to the Motor Vehicle and Personal Property Tax Relief Trust Fund. The BEA estimates that the general fund will collect $231 million in new money in FY1999-00. Fifteen percent, or $34.7 million, of the expected new collection would be set aside in the Motor Vehicle and Personal Property Tax Relief Trust Fund in FY1999-00.
Approved By:
William C. Gillespie
Board of Economic Advisors
This bill would save local taxpayers $18.1 million in FY 1998-99 and $52.8 million in FY 1999-00. This bill would have no negative impact on local government revenues. This bill has a potential to cause a shift in tax incidence pursuant to Section 6-1-85(b).
This proposal will set up a fund to reimburse local taxing entities for personal property taxes up to a maximum of the amount collected for tax year 1998. That amount is estimated at $1.3 billion. This tax revenue would be reimbursed to local governments from the growth in state revenues. Each year fifteen percent of new general fund revenue will be allocated to the fund. The Board of Economic Advisors (BEA) estimates that the general fund will collect $241 million in new money in FY 1998-99. Since one-half of FY 1998-99 is in tax year 1999, $18.1 million would be allocated to the fund in FY 1998-99. The BEA estimates that the general fund will collect $231 million in new money in FY 1999-00. Fifteen percent of the new revenue collected, or $34.7 million, would be allocated to the fund in FY 1999-00.
Approved By:
William C. Gillespie
Division of Budget and Analysis
This bill would change the incidence of local property taxes among classes of property. Those changes from the levels that would occur in the absence of this bill are as follows:
Category ($ Million) FY 1998 FY 1999 FY 2000 FY 2001FY 2002
Personal Property (Vehicles) 0 -18 -87 -163-245
Business Personal0 0 -2 -4 -5
Manufacturing (personal) 0 0 -13 -27-41
Utility (personal)0 0 -7 -15-22
Commercial/Rental (personal) 0 0 -5 -9-14
Owner Occupied (real) 0 0 29 6196
Manufacturing (real) 0 0 6 129
Utility (real) 0 0 1 3 4
Commercial/Rental (real) 0 0 23 4670
Agriculture Private (real) 0 0 1 12
Agriculture Corporate (real) 0 0 0 11
Motor Vehicle and Personal
Property Tax Relief Trust Fund 0 18 53 93136
The analysis projects the local revenue requirements from current property taxes at its historical rate of 5.2% per year. A baseline projection in the absence of this bill for taxes in each category shown above was made according to its historical rate of growth. It is anticipated that local taxing entities would not enact other taxes to compensate for any shortfall. A projection was made fixing personal property taxes at 1.3 billion dollars in FY 99 and adjusting millage to meet local revenue requirements from the property tax. The amount of the property tax relief fund in each year was subtracted from the local revenue requirement in computing the level of millage imposed on real property. The changes to the baseline are shown above. Details underlying these estimates may be obtained from the Office of Economic Research upon request.
Approved By:
William C. Gillespie
Division of Budget and Analysis
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-37-460 SO AS TO PROVIDE FOR A PHASED-IN EXEMPTION FOR THE PROPERTY TAX ON PERSONAL PROPERTY BEGINNING WITH THE MILLAGE IMPOSED ON MOTOR VEHICLES FOR SCHOOL OPERATING PURPOSES EXTENDING OVER TIME TO ALL PROPERTY TAXES ON ALL PERSONAL PROPERTY, TO ESTABLISH THE MOTOR VEHICLE AND PERSONAL PROPERTY TAX RELIEF TRUST FUND AND REQUIRE A CUMULATIVE FIFTEEN PERCENT OF RECURRING GENERAL FUND REVENUE GROWTH TO BE CREDITED TO THE FUND TO REIMBURSE LOCAL TAXING ENTITIES FOR PERSONAL PROPERTY TAXES NOT COLLECTED BECAUSE OF THE EXEMPTION PROVIDED BY THIS SECTION, TO REQUIRE LOCAL TAXING ENTITIES TO ADJUST MILLAGE IMPOSED ON PERSONAL PROPERTY ANNUALLY SO THAT THE AMOUNT RAISED BY THE MILLAGE AND THE REIMBURSEMENT IN TOTAL DO NOT EXCEED 1998 TAX YEAR PERSONAL PROPERTY TAX REVENUES, TO PRESCRIBE THE ORDER OF THE VARIOUS TAX LIABILITIES TO WHICH THE EXEMPTION APPLIES, TO PROVIDE FOR REIMBURSEMENTS TO LOCAL TAXING ENTITIES WHEN ALL PERSONAL PROPERTY IS WHOLLY EXEMPT FROM PROPERTY TAX, TO PROVIDE THAT PROPERTY EXEMPTED FROM PROPERTY TAX BY THIS SECTION NEVERTHELESS IS CONSIDERED TAXABLE PROPERTY AT ITS 1998 ASSESSED VALUE FOR PURPOSES OF BONDED INDEBTEDNESS AND THE INDEX OF TAXPAYING ABILITY, AND TO PROVIDE APPROPRIATE DEFINITIONS.
Amend Title To Conform
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 12-37-460. (A) As used in this section:
(1) 'Local personal property base payment' means an amount equal to the revenues actually collected in calendar year 1998 by a taxing entity from property tax on all personal property. It also includes amounts allowed as a credit against personal property tax pursuant to Article 1, Chapter 10 of Title 4 in calendar year 1998.
(2) 'Motor vehicle' means every vehicle which is self-propelled, including a motorcycle, which is required to be registered and licensed pursuant to Chapter 3 of Title 56 and which is assessed for property tax pursuant to Section 1(8), Article X of the Constitution of this State and Section 12-43-220(f).
(3) 'Personal property' means that property subject to the assessment provided pursuant to Section 1, Article X of the Constitution of this State including motor vehicles as defined in item (2) of this subsection.
(4) 'Taxing entity' means a county, municipality, school district, or special purpose or public service district.
(5) 'Total personal property base payment' means an amount equal to the total revenues actually collected in calendar year 1998 by all taxing entities in this State from property tax on personal property. It also includes amounts allowed as a credit against personal property tax pursuant to Article 1, Chapter 10 of Title 4 in calendar year 1998.
(6) 'Trust fund' means the Motor Vehicle and Personal Property Tax Relief Trust Fund established pursuant to subsection (B) of this section.
(7) 'State Personal Property Tax Reimbursement' means the reimbursement allocated monthly to a county for its taxing entities to reimburse for the exemptions allowed by this section. The allocation to a county is determined by the Director of the Department of Revenue for each fiscal year by multiplying trust fund revenues by the proportion that the local personal property base payment of all county taxing entities is of the total personal property base payment.
(B) There is established in the State Treasury the Motor Vehicle and Personal Property Tax Relief Trust Fund, separate and distinct from all other funds, to which must be credited amounts provided in subsection (C) of this section. Revenues in this Trust Fund must be used to provide taxing entities the reimbursement required pursuant to this section for property tax not collected because of the exemption allowed by this section. The Trust Fund is administered by the Comptroller General. Earnings on the trust fund must be credited to the general fund of the State.
(C) Annually, the Board of Economic Advisors shall remove from its estimated revenue projection for the succeeding fiscal year an amount equal to fifteen percent of projected year-to-year recurring general fund growth plus the total of all amounts previously credited to the Trust Fund, but not more than the total personal property base payment. This amount is automatically credited to the Trust Fund for the applicable fiscal year, is not available for appropriation, and is not considered part of the general fund of the State except for the purpose of calculating amounts which annually must be credited to the Trust Fund. Amounts credited must be earmarked from state income tax revenues.
(D) From revenue credited to the Trust Fund for a fiscal year, each county must be allocated monthly its state personal property tax reimbursement.
(E)(1) During the phase-in of the exemption allowed by this section:
(a) the county auditor shall adjust the millage imposed by county taxing entities on personal property to a uniform millage, which when added to the taxing entity's reimbursement under this section, does not exceed the taxing entity's local personal property base payment.
(b) Based on the State Personal Property Tax Reimbursement, the county auditor shall calculate and prescribe a percentage reduction on each personal property tax bill falling due in the applicable fiscal year, reducing liabilities in the following order:
(i) school operating millage on motor vehicles;
(ii) school bonded indebtedness and lease purchase payments for school construction and renovation millage on motor vehicles;
(iii) all other millage on motor vehicles;
(iv) millage on all personal property other than motor vehicles.
Liability in each category must be eliminated before reductions are applied to the remaining categories.
(2) From the State Personal Property Tax Reimbursement, each taxing entity in the county must be reimbursed monthly for revenues not collected by it because of the percentage reduction on the personal property tax it otherwise would receive.
(3) When all personal property is wholly exempt, each taxing entity shall receive a monthly reimbursement equal to one-twelfth of its local personal property base payment.
(F) Notwithstanding any other provision of law, property exempted from property tax as provided in this section is considered taxable property for purposes of bonded indebtedness pursuant to Sections 14 and 15, 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). However, only that assessed value applicable for such property for the 1998 property tax year may be so considered."
SECTION 2. Except where otherwise provided, this act takes effect upon ratification of an amendment to the Constitution of this State providing for the separate assessment of property taxes on all personal property pursuant to Section 1A, Article X of the Constitution of this State and which fixes the millage imposed on such property to no more than the millage rate imposed on it for property tax years beginning in 1998. Upon such ratification, the exemption allowed pursuant to Section 12-37-460 of the 1976 Code, as added by this act, first applies for motor vehicle tax years beginning after June, 1999. Regardless of the effective date of this act, no refund is allowed for the exemption allowed by this act as a result of an effective date occurring after June, 1999.