South Carolina General Assembly
112th Session, 1997-1998

Bill 4854


Indicates Matter Stricken
Indicates New Matter


                    Current Status

Bill Number:                    4854
Type of Legislation:            General Bill GB
Introducing Body:               House
Introduced Date:                19980319
Primary Sponsor:                Boan
All Sponsors:                   Boan and R. Smith 
Drafted Document Number:        DKA\4760MM.98
Residing Body:                  House
Current Committee:              Ways and Means Committee 30
                                HWM
Date of Last Amendment:         19980421
Subject:                        Property tax penalties, county
                                treasurer may waive or reduce;
                                uncollectible; Taxation,
                                assessments

History

Body    Date      Action Description                       Com     Leg Involved
______  ________  _______________________________________  _______ ____________

House   19980430  Recommitted to Committee                 30 HWM
House   19980429  Debate adjourned until
                  Thursday, 19980430
House   19980422  Debate adjourned until
                  Tuesday, 19980428
House   19980421  Amended, debate interrupted
                  by adjournment
House   19980416  Request for debate by Representative             Harrell
                                                                   Knotts
                                                                   Klauber
                                                                   Hawkins
                                                                   Woodrum
                                                                   Easterday
                                                                   Leach
                                                                   Hamilton
                                                                   Campsen
                                                                   Vaughn
                                                                   R. Smith
House   19980416  Objection by Representative                      Sheheen
                                                                   Scott
                                                                   Miller
                                                                   Battle
                                                                   Witherspoon
                                                                   Spearman
                                                                   Cave
                                                                   Govan
                                                                   Inabinett
House   19980415  Debate interrupted
House   19980415  Amended
House   19980408  Committee report: Favorable with         30 HWM
                  amendment
House   19980319  Introduced, read first time,             30 HWM
                  referred to Committee


View additional legislative information at the LPITS web site.


(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

Indicates Matter Stricken
Indicates New Matter

AMENDED--NOT PRINTED IN THE HOUSE

Amendment No. 1--P:\AMEND\DKA\4886MM.98

Amendment No. 2--P:\AMEND\PT\1874MM.98

Amendment No. 5--P:\AMEND\DKA\4907MM.98

Amendment No. 6--P:\AMEND\DKA\4927MM.98

April 21, 1998

H. 4854

Introduced by Reps. Boan and R. Smith

S. Printed 4/8/98--H.

Read the first time March 19, 1998.

THE COMMITTEE ON WAYS AND MEANS

To whom was referred a Bill (H. 4854), to amend Title 12, Code of Laws of South Carolina, 1976, relating to taxation, etc., respectfully

REPORT:

That they have duly and carefully considered the same, and recommend that the same do pass with amendment:

Amend the bill, as and if amended, by striking SECTION 1 in its entirety.

Amend further, Section 12-60-2910(A)(2), SECTION 8, page 5, line 13, by inserting after /be/ on line 13 / timely /.

When amended the item reads:

/ (2) last day the tax levied upon the assessment may be timely paid./

Renumber sections to conform.

Amend title to conform.

Amend the bill, as and if amended, by adding an appropriately numbered SECTION to read:

/SECTION __. A. Article 5, Chapter 37, Title 12 of the 1976 Code is amended by adding:

"Section 12-37-717. Notwithstanding any other provision of law, when a certificate of occupancy or other evidence of completion is issued on new construction designated for owner-occupied legal residential use, the use and value of the property which is the subject of the certificate are considered to have changed effective on the date the certificate is issued. The property tax on the property for the tax year the certificate is issued must be prorated using the value and owner-occupied legal residential use of the property for each part of the year."

B. Section 12-37-717 takes effect upon approval by the Governor for tax years beginning after December 31, 1999./

Renumber sections to conform.

Amend title to conform.

HENRY E. BROWN, JR., for Committee.

STATEMENT OF ESTIMATED FISCAL IMPACT

This bill would have no impact on state revenue. Sections 1 and 7 of this bill would reduce local property tax revenue by a negligible amount due to the potential waiving of penalties and lower interest rate imposed on unpaid taxes. This reduction in revenue would be partially offset by reduced interest paid by the county on over payments.

SECTION 1. Provides that the county treasurer may waive or reduce penalties.

SECTION 2. Provides a mechanism to allow counties to write off uncollectible taxes when there is no property to levy on. A provision to allow this was inadvertently repealed.

SECTION 3. Language in Title 6 superseded the first sentence of this section. This will not eliminate the rollback millage provision.

SECTION 4. Allows the assessment for legal residences to apply under contracts for sale.

SECTION 5. Clarifies the definition of assessment of the tax to make it consistent with the other statutory language.

SECTION 6. Clarifies that no conference is necessary if assessor agrees with the taxpayer concerning questions on assessments.

SECTION 7. Provides that the rate of interest paid and collected in regard to this section must be one-half of one percent per month. This eases the burden on the interest calculation by the counties.

SECTION 8. Allows for the appeal of a personal property assessment or the denial of a homestead exemption request at the later of thirty days after the notice is mailed or the last day the taxes may be paid.

SECTION 9. Repeals provisions contained elsewhere in the statutes.

Approved By:

William C. Gillespie

Board of Economic Advisors

A BILL

TO AMEND TITLE 12, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO TAXATION, BY ADDING SECTION 12-45-420 SO AS TO ALLOW A COUNTY TREASURER TO WAIVE OR REDUCE TAX PENALTIES, BUT NOT INTEREST; BY ADDING SECTION 12-49-85 SO AS TO PROVIDE A PROCEDURE FOR REMOVAL OF UNCOLLECTIBLE AD VALOREM PROPERTY TAXES FROM THE PROPERTY TAX LIST; TO AMEND SECTION 12-37-251, AS AMENDED, RELATING TO THE HOMESTEAD EXEMPTION FROM PROPERTY TAXATION, SO AS TO DELETE THE LIMIT ON THE REASSESSMENT MILLAGE RATE FOR REAL AND PERSONAL PROPERTY; TO AMEND SECTION 12-43-220, AS AMENDED, RELATING TO ASSESSMENT RATIOS FOR PROPERTY TAXATION, SO AS TO REQUIRE THE RECORDING OF A CONTRACT OF SALE WHEN THE FOUR PERCENT ASSESSMENT RATE ON A LEGAL RESIDENCE IS CLAIMED PURSUANT TO A CONTRACT OF SALE; TO AMEND SECTION 12-54-85, AS AMENDED, RELATING TO TIME LIMITS ON ASSESSMENT OF TAXES AND FEES, SO AS TO ESTABLISH THAT PROPERTY TAX ASSESSMENT OCCURS ON THE LATER OF THE LAST DAY THE TAX MAY BE PAID OR THE DATE OF THE TAX NOTICE; TO AMEND SECTION 12-60-2520, RELATING TO A TAXPAYER'S WRITTEN REQUEST TO MEET WITH THE ASSESSOR, SO AS TO REQUIRE CORRECTION OF THE ASSESSMENT UPON DETERMINATION THAT TAXPAYER'S WRITTEN REQUEST IS MERITORIOUS; TO AMEND SECTION 12-60-2550, RELATING TO APPEAL OF AN ASSESSMENT, SO AS TO ESTABLISH AN INTEREST RATE OF ONE-HALF OF ONE PERCENT EACH MONTH TO BE COLLECTED IN SPECIFIED CIRCUMSTANCES; TO AMEND SECTION 12-60-2910, AS AMENDED, RELATING TO A TAXPAYER'S REQUEST TO MEET WITH THE AUDITOR, SO AS TO FURTHER PROVIDE FOR WHEN THE OBJECTION TO THE TAX AND A REQUEST FOR A MEETING WITH THE AUDITOR MUST BE MADE; AND TO REPEAL SECTION 12-43-225 RELATING TO APPLICATIONS FOR SPECIAL ASSESSMENT RATIOS AND SECTION 12-49-80 RELATING TO COLLECTION OF BACK TAXES BY THE STATE WITHIN TEN YEARS OF THEIR DUE DATE.

Amend Title To Conform

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

SECTION 1. The 1976 Code is amended by adding:

"Section 12-49-85. (A) If the person officially charged with the collection of ad valorem taxes on real or personal property for a county determines that the tax, assessment, or penalty is uncollectible, he shall record that determination and the reason for it on a list he maintains. At least annually he shall provide the list to the county auditor, who may remove a particular determination from the duplicate list, but the auditor shall record the removal and the reason for it as prescribed by the Comptroller General.

(B) The reasons for removal of a tax, assessment, or penalty from the duplicate list may include, but are not limited to:

(1) insufficient property of the person charged with the uncollectible tax, assessment, or penalty to collect it;

(2) collection of the tax, assessment, or penalty has been enjoined by a competent court.

(C) Subject to the provisions of Section 12-54-85(E), the auditor and the person officially charged with the collection of ad valorem taxes shall review the list annually. If it is later determined that the tax, assessment, or penalty was improperly removed from the duplicate list or is collectible, it must be returned to the duplicate list for collection, with all penalties and interest accruing."

SECTION 2. Section 12-37-251(E) of the 1976 Code, as last amended by Act 401 of 1996, is further amended to read:

"(E) In the year of reassessment the millage rate for all real and personal property must not exceed the rollback millage, except that the rollback millage may be increased by the percentage increase in the consumer price index for the year immediately preceding the year of reassessment. Rollback millage is calculated by dividing the prior year property tax revenues by the adjusted total assessed value applicable in the year the values derived from a countywide equalization and reassessment program are implemented. This amount of assessed value must be adjusted by deducting assessments added for property or improvements not previously taxed, for new construction, and for renovation of existing structures."

SECTION 3. Section 12-43-220(c) of the 1976 Code, as last amended by Act 431 of 1996, is further amended by adding:

"(5) To qualify for the four percent assessment ratio, the owner-occupant of a legal residence that is being purchased under a contract for sale or a bond for title must record the contract for sale or the bond for title in the office of the register of mesne conveyances or the clerk of court in those counties where the office of the register of mesne conveyances has been abolished.

For purposes of this subsection, a contract for sale or a bond for title is the sale of real property by a seller, who finances the sale and retains title to the property solely as security for the debt."

SECTION 4. Section 12-54-85(E) of the 1976 Code is amended to read:

"(E) No A tax may not be collected by levy, warrant for distraint, or proceedings in court, unless the:

(1) the levy, warrant for distraint, or proceedings in court were begun within ten years after the assessment of the tax,;

(2) the taxpayer has agreed to extend this period,; or

(3) the running of this period is suspended in accordance with this section.

For property tax purposes, the 'assessment of the tax' occurs on the later of the last day the tax may be paid without penalty or the date of the tax notice."

SECTION 5. Section 12-60-2520(B) of the 1976 Code, as added by Act 60 of 1995, is amended to read:

"(B) Within thirty days of the date of the request for a meeting or as soon thereafter as practical, If, upon examination of the property taxpayer's written objection, the county assessor agrees with the taxpayer, the county assessor must correct the error. If, upon the examination, the county assessor does not agree with the taxpayer, the assessor shall schedule a conference with the property taxpayer within thirty days of the date of the request for a meeting or as soon after that as practical. If the matter is not resolved at the conference, the assessor shall advise the property taxpayer of the right to protest and provide the taxpayer a form on which to file the protest. The property taxpayer has thirty days after the date of the conference to file a written protest with the assessor. The protest must contain:

(1) the name, address, and telephone number of the property taxpayer;

(2) a description of the property in issue;

(3) a statement of facts supporting the taxpayer's position;

(4) a statement outlining the reasons for the appeal, including any law or other authority, upon which the taxpayer relies; and

(5) the value and classification which the property taxpayer considers the fair market value, special use value, if applicable, and the proper classification.

The taxpayer may use the form prepared by the department, but use of the form is not mandatory."

SECTION 6. Section 12-60-2550(B) and (C) of the 1976 Code, as added by Act 60 of 1995, is amended to read:

"(B) After final review of the protest or appeal, if the property tax assessment is greater than the adjusted property tax assessment, a corrected property tax assessment must be made and entered. Interest determined in accordance with Section 12-54-25 must be collected in the same manner as the tax, except the rate of interest must be one-half of one percent for each month or portion of a month.

(C) After final review of the protest or appeal, if the property tax assessment is less than the adjusted property tax assessment, a corrected property tax assessment must be made and entered. The overpayment of tax must be refunded together with interest determined in accordance with Section 12-54-25, except the rate of interest must be one-half of one percent for each month or portion of a month."

SECTION 7. Section 12-60-2910(A) of the 1976 Code, as last amended by Act 431 of 1996, is further amended to read:

"(A) A property taxpayer may object to a personal property tax assessment or a denial of a homestead exemption made by the county auditor by requesting, in writing, to meet with the auditor at any time on or before the last day the tax levied upon the assessment can be timely paid later of:

(1) thirty days after the tax notice is mailed; or

(2) last day the tax levied upon the assessment may be timely paid."

SECTION 8. Sections 12-43-225 and 12-49-80 of the 1976 Code are repealed.

SECTION 9. A. Article 5, Chapter 37, Title 12 of the 1976 Code is amended by adding:

"Section 12-37-717. Notwithstanding any other provision of law, when a certificate of occupancy or other evidence of completion is issued on new construction designated for owner-occupied legal residential use, the use and value of the property which is the subject of the certificate are considered to have changed effective on the date the certificate is issued. The property tax on the property for the tax year the certificate is issued must be prorated using the value and owner-occupied legal residential use of the property for each part of the year."

B. Section 12-37-717 takes effect upon approval by the Governor for tax years beginning after December 31, 1999.

SECTION 10. A. Chapter 51, Title 12 of the 1976 Code is amended by adding:

"Section 12-51-180. (A)(1) Notwithstanding any other provision of law, the successful bidder at the delinquent tax sale of an owner-occupied residential property assessed at the four percent ratio for a legal residence, pursuant to Section 12-43-220(c), shall pay legal tender on the day of the sale to the person officially charged with the collection of delinquent taxes in the amount of unpaid property taxes, assessments, penalties, costs, and taxes levied for the year in which the redemption period begins. The balance of the bid amount is due when the redemption period expires and before execution and delivery of the tax title as provided in subsection (D). Upon payment, the person officially charged with the collection of delinquent taxes shall furnish the purchaser a receipt for the sums paid and attach a copy of the receipt to the execution with the endorsement of his actions which must be retained by him.

(2) Expenses of the sale must be paid first and the balance of all delinquent tax sale monies collected must be turned over to the treasurer. Upon receipt of the funds, the treasurer immediately shall mark the public tax records regarding the property sold as follows: Paid by tax sale held on (insert date). All other monies received must be retained, paid out, and accounted for by the delinquent tax collector.

(3) Once a tax deed has been issued as provided in subsection (D), the defaulting taxpayer must be notified in writing by the delinquent tax collector of any excess due the taxpayer. The notice must be addressed and mailed to the defaulting taxpayer in the manner provided in Section 12-51-40(b) for taking exclusive possession of real property. Expenses of providing this notice are considered costs of the sale for purposes of determining the amount, if any, of the excess.

(B)(1) The defaulting taxpayer, a grantee from the owner, or a mortgage or judgment creditor may within twelve months from the date of the delinquent tax sale redeem an item of real estate which is owner-occupied residential property assessed at the four percent ratio for a legal residence by paying to the person officially charged with the collection of delinquent taxes a sum equal to all taxes, assessments, penalties, and costs.

(2) The defaulting taxpayer also shall pay to the person officially charged with the collection of delinquent taxes a sum equal to eight percent interest on the amount actually remitted by the successful bidder on the day of the sale to the official, to include unpaid property taxes, assessment, penalties, costs, and taxes levied for the year in which the redemption period begins, pursuant to subsection (A).

(3) If, before the expiration of the redemption period, the purchaser assigns his interest in real property which is owner-occupied residential property assessed at the four percent ratio for a legal residence and purchased at a delinquent tax sale, the grantee from the successful bidder shall furnish the person officially charged with the collection of delinquent taxes a conveyance, witnessed and notarized. The person officially charged with the collection of delinquent taxes shall replace the successful bidder's name and address with the grantee's name and address in the delinquent tax sale book.

(C) Upon redemption of the real estate which is owner-occupied residential property assessed at the four percent ratio for a legal residence pursuant to Section 12-43-220(c), the person officially charged with the collection of delinquent taxes shall cancel the sale in the tax sale book and note on it the amount paid, by whom, and when. The successful purchaser at the delinquent tax sale must be notified promptly by mail to return the tax sale receipt to the person officially charged with the collection of delinquent taxes in order to be expeditiously refunded the sums paid pursuant to subsection (A).

(D)(1) Upon failure of the defaulting taxpayer, a grantee from the owner, or a mortgage or judgment creditor, to redeem realty which is owner-occupied residential property assessed at the four percent ratio for a legal residence within the time period allowed for redemption, the person officially charged with the collection of delinquent taxes, within thirty days or as soon after that as possible, shall collect the balance of the bid amount from the successful bidder and make a tax title to the purchaser or the purchaser's assignee. Delivery of the tax title to the clerk of court or register of deeds is considered 'putting the purchaser or assignee in possession'.

(2) The tax title must include, among other things, the name of the defaulting taxpayer, the date of the execution, the date the realty was posted and by whom, and the dates each certified notice was mailed to the party or parties of interest, to whom mailed and whether or not received by the addressee.

(3) The successful purchaser or assignee is responsible in the amount of fifteen dollars for the cost of the tax title plus documentary stamps necessary to be affixed and recording fees. The successful purchaser or assignee shall pay the amounts to the person officially charged with the collection of delinquent taxes before delivery of the tax title to the clerk of court or register of deeds and upon payment, the person officially charged with the collection of delinquent taxes is responsible for promptly transmitting the tax title to the clerk of court or register of deeds for recording and remitting the recording fee and documentary stamps cost.

(4) If the tax sale of an item produces an overage in cash above the full amount due in taxes, assessments, penalties, and costs, the overage belongs to the defaulting taxpayer to be claimed or assigned according to law. If neither claimed nor assigned within five years of date of public auction tax sale, the overage escheats to the general fund of the governing body. Before the escheat date unclaimed overages must be kept in a separate account and invested so as not to be idle, and the governing body of the political subdivision retains the earnings for keeping the overage. On escheat date the overage must be transferred to the general funds of the governing body.

(5) If the successful bidder fails to remit the balance of the bid amount within the thirty-day period described in subsection (D)(1), the amount paid on the day of the sale, including unpaid property taxes, assessments, penalties, costs, and taxes levied for the year in which the redemption period begins, as described in Section 12-51-60, escheats to the general fund of the governing body. The amount must be applied promptly to the delinquent amount owed by the defaulting taxpayer, and the defaulting taxpayer may redeem the item of real estate within twelve months from the date of the application of the sums paid on the day of the sale to the delinquent amount owed by the defaulting taxpayer. Redemption must be effected in the same manner as described in Section 12-57-90(B)."

B. This section takes effect upon approval by the Governor.

SECTION 11. Section 12-6-3360(m)(2), (6), (10), and (13) of the 1976 Code, as last amended by Act 143 of 1997, is further amended to read:

"(2) 'Appropriate agency' means the Department of Revenue, for corporations subject to tax under Section 12-6-530 and the Department of Insurance for corporations subject to the premium tax under Chapter 7 of Title 38 except that for taxpayers subject to the premium tax imposed by Chapter 7 of Title 38 it means the Department of Insurance.

(6) 'Processing facility' means an establishment engaged in services such as manufacturing-related, computer-related, communication-related, energy-related, or transportations-related services, but the term 'processing facility' does not include an establishment where retail sales of that prepares, treats, or converts tangible personal property or services are made to retail customers into finished goods or another form of tangible personal property. The term also includes a business entity engaged in processing agricultural, aquacultural, or maricultural products. It does not include a facility where retail sales of tangible personal property are made to retail customers.

(10) 'Corporate office facility' means the location where corporate managerial, professional, technical, and administrative personnel are domiciled and employed, and where corporate financial, personnel, legal, technical, support services, and other business functions are handled. Support services include, but are not limited to, claims processing, date entry, word processing, sales order processing, and telemarketing. The term does not include an establishment where retail sales of tangible personal property or retail services are made to retail customers except for a facility which processes customer sales orders by mail, telephone, or electronic means, if the facility also processes shipments of tangible personal property to customers and if at least seventy-five percent of the dollar amount of goods sold through the facility are sold to customers outside of this State a corporate headquarters that meets the definition of a 'corporate headquarters' contained in Section 12-6-3410(J)(1).

(13) 'Qualifying service-related facility' means:

(a) an establishment engaged in an activity or activities listed under the Standard Industrial Classification (SIC) Code 80 according to the Federal Office of Management and Budget Standard Industrial Classification Manual, 1987 edition; or,

(b) a business, for which over fifty percent of the gross receipts are from providing services, as opposed to manufacturing or selling or dealing in tangible personal property and which creates at least two hundred fifty jobs at a single location other than a business engaged in legal, accounting, or investment services or retail sales, which has a net increase of at least:

(i) two hundred fifty jobs at a single location;

(ii) one hundred twenty-five jobs at a single location and the jobs have an average cash compensation level of more than one and one-half times the per capita income in the county where the jobs are located at the time the jobs are filled;

(iii) seventy-five jobs at a single location and the jobs have an average cash compensation level of more than twice the per capita income in the county where the jobs are located at the time the jobs are filled; or

(iv) thirty jobs at a single location and the jobs have an average cash compensation level of more than two and one-half times the per capita income in the county where the jobs are located at the time the jobs are filled.

The per capita income for each county is determined by using the most recent data available from the Board of Economic Advisors. Determination of the required number of jobs is in accordance with the monthly average described in subsection (F)."

SECTION 12. Section 1 of this act takes effect upon approval by the Governor. The remaining sections of this act are effective for property tax years beginning after December 31, 1998.

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