Current Status Bill Number:940 Type of Legislation:General Bill GB Introducing Body:Senate Introduced Date:19980121 Primary Sponsor:Courson All Sponsors:Courson, Wilson, Leatherman, Ryberg, Giese, Peeler, Russell, Thomas, Fair and Grooms Drafted Document Number:jic\5143htc.98 Residing Body:Senate Subject:Personal Property Tax Relief Fund established, Taxation, Acts Cited by Popular Name, State Treasury, Treasurers
Body Date Action Description Com Leg Involved
______ ________ _______________________________________ _______ ____________
Senate 19980421 Recalled from Committee 06 SF
Senate 19980121 Introduced, read first time, 06 SF
referred to Committee
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Indicates Matter Stricken
Indicates New Matter
RECALLED
April 21, 1998
S. 940
Introduced by Senators Courson, Wilson, Leatherman, Ryberg, Giese, Peeler, Russell, Thomas, Fair and Grooms
S. Printed 4/21/98--S.
Read the first time January 21, 1998.
The bill requires that thirty percent of the BEA's projected year-to-year general fund revenue growth be remitted to the Personal Property Tax Relief 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 $36.2 million. In FY1999-00 this transfer would amount to an estimated $67.5 million.
This proposal will set up a fund to reimburse local taxing entities for "all other personal property" taxes up to a maximum of the amount collected for tax year 1998. That amount is estimated at $706 million. "All other personal property" includes motor vehicles, boats, airplanes, and business personal property, and is currently assessed at 10.5 percent. This revenue would be reimbursed to local governments from the growth in state revenues. Each year thirty 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 $706 million 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, $36.2 million in FY1998-99 would be the obligation to the Personal Property Tax Relief Fund. The BEA estimates that the general fund will collect $225 million in new money in FY1999-00. Thirty percent, or $67.5 million, of the expected new collection would be set aside in the Personal Property Tax Relief Fund.
Approved By:
William C. Gillespie
Board of Economic Advisors
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-37-460 SO AS TO ESTABLISH THE PERSONAL PROPERTY TAX RELIEF FUND, PROVIDE FOR REVENUES TO BE CREDITED TO IT, TO USE THE REVENUES OF THE FUND TO PROVIDE REIMBURSEMENTS TO LOCAL TAXING ENTITIES FOR A PHASED-IN EXEMPTION FROM PROPERTY TAX OF PROPERTY CLASSIFIED AS "ALL OTHER PERSONAL PROPERTY", TO PROVIDE THE METHOD OF CALCULATING THE EXEMPTION AND REIMBURSEMENT, AND TO PROVIDE THE CIRCUMSTANCES UNDER WHICH THE EXEMPTION BECOMES TOTAL AND PERMANENT.
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 base payment' means an amount equal to the revenue received by a taxing entity from nondelinquent property tax on personal property collected in the 1998 calendar year.
(2) 'Personal property' means that property classified as 'all other personal property' pursuant to Section 1(8), Article X of the Constitution of this State.
(3) 'Taxing entity' means a county, municipality, school district, or special purpose or public service district.
(4) 'Total base payment' means an amount equal to the total revenue received by all taxing entities in this State from nondelinquent property tax on personal property collected in the 1998 calendar year.
(B) There is established in the State Treasury the Personal Property Tax Relief Fund, separate and distinct from all other funds, to which must be credited amounts provided in subsection (C) of this section. Revenues in this 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.
(C) Annually, the Board of Economic Advisors shall remove from its estimated revenue projection for the succeeding fiscal year an amount equal to thirty percent of projected year-to-year general fund revenue growth plus the total of all amounts previously credited to the Personal Property Tax Relief Fund by transfer, but not more than the total base payment. This amount is not available for appropriation and is not considered a part of the general fund of the State for purposes of appropriation formulas based on percentages of general fund revenues. The State Budget and Control Board shall transfer at the beginning of each fiscal year to the Personal Property Tax Relief Fund all amounts removed from the general fund revenue estimate pursuant to this section. When the exemption allowed by this section first equals one hundred percent of fair market value of the affected property and thereafter, the amount annually transferred must equal the total base payment.
(D) (1) From revenues credited to the Personal Property Tax Relief Fund for a fiscal year, the director of the Department of Revenue shall calculate and prescribe a uniform percentage of fair market value of personal property that is exempt from property tax that shall apply for such property for the applicable tax year. The calculation must be based on the percentage that the amount in the fund for the year is of the total base payment.
(2) At the time the amount available in the Personal Property Tax Relief Fund first equals the total base payment, then for that year and subsequent years personal property is wholly exempt from property tax.
(E)(1) During the phase-in of the exemption allowed by this section, all property taxing entities shall adjust the millage imposed on personal property to a millage, which when added to the taxing entity's reimbursement under this section, does not exceed the local base payment. In no case may the millage exceed the 1998 property tax millage rate.
(2) A taxing entity must be reimbursed during each year an amount equal to the exemption percentage for the year multiplied by its local base payment. The reimbursement must be paid in a manner that substantially reflects the stream of revenues that would occur if this property were not exempt.
(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. This act takes effect upon ratification of an amendment to the Constitution of this State providing for the separate assessment of property taxes on property classified as "all other personal property" pursuant to Section 1(8), 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 the 1999 property tax year except that for motor vehicle taxes paid in advance, the exemption 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.