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Bill 79

                    Current Status

Bill Number:                      79
Type of Legislation:              General Bill GB
Introducing Body:                 Senate
Introduced Date:                  19990112
Primary Sponsor:                  Wilson
All Sponsors:                     Wilson, Courson, Elliott, Ryberg, Giese, 
                                  Russell, Reese, Grooms
Drafted Document Number:          l:\council\bills\kgh\15054htc99.doc
Residing Body:                    Senate
Current Committee:                Finance Committee 06 SF
Subject:                          Property tax on motor vehicles, personal 
                                  items; phased-in exemption, Trust Fund for Tax 
                                  Relief Reserve; Taxation


                        History

Body    Date      Action Description                     Com     Leg Involved
______  ________  ______________________________________ _______ ____________
Senate  19990112  Introduced, read first time,           06 SF
                  referred to Committee
Senate  19981118  Prefiled, referred to Committee        06 SF


                             Versions of This Bill

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-37-460 SO AS TO PROVIDE REIMBURSEMENTS TO LOCAL TAXING ENTITIES FOR A PHASED-IN EXEMPTION FROM PROPERTY TAX OF PRIVATE PASSENGER MOTOR VEHICLES, TO PROVIDE THE METHOD OF CALCULATING THE EXEMPTION AND REIMBURSEMENT, AND TO PROVIDE THE CIRCUMSTANCES UNDER WHICH THE EXEMPTION BECOMES TOTAL AND PERMANENT; AND TO AMEND SECTION 11-11-150, RELATING TO THE TRUST FUND FOR TAX RELIEF, SO AS TO PROVIDE THE AMOUNTS WHICH MUST BE CREDITED TO IT TO PAY THE REIMBURSEMENT REQUIRED BY SECTION 12-37-460 AS ADDED BY THIS ACT AND TO PROVIDE A TRUST FUND RESERVE.

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 2000 calendar year.

(2) 'Personal property' means private passenger motor vehicles as defined in Section 56-3-630.

(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 2000 calendar year.

(B) There is credited to the Trust Fund for Tax Relief (Trust Fund) established pursuant to Section 11-11-150 amounts provided in subsection (C) of this section. Revenues credited pursuant to this section 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-five percent of projected year-to-year general fund revenue growth plus the total of all amounts previously credited to the trust fund pursuant to this subsection 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 credit at the beginning of each fiscal year to the trust 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 personal property and thereafter, the amount annually credited must equal the total base payment.

(D)(1) Before the one hundred percent exemption first applies from revenues credited to the trust fund pursuant to this section 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 applies to the property for the applicable tax year.

(2) At the time the amount credited to the trust fund pursuant to this section 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, each property taxing entity shall adjust the millage imposed on personal property to a millage which, when added to the taxing entity's reimbursement under this section, produces revenue that does not exceed the local base payment. The millage may not exceed the 2000 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 the property for the 2000 property tax year may be considered."

SECTION 2. Section 11-11-150 of the 1976 Code, as added by Section 29, Part II of Act 419 of 1998, is amended to read:

"Section 11-11-150. (A) In calculating estimated state individual and corporate income tax revenues for a fiscal year, the Board of Economic Advisors shall deduct amounts sufficient to pay the reimbursement required pursuant to:

(1) Section 12-37-251 for the residential property tax exemption;

(2) Section 12-37-270 for the homestead exemption for persons over age sixty-five or disabled;

(3) Section 12-37-460 for the personal property tax exemption;

(4) Section 12-37-935(B) for manufacturer's additional depreciation; and

(4)(5) Section 12-37-450 for the inventory tax exemption.

When the amount of a reimbursement enumerated in this subsection varies annually, the amount otherwise required to be deducted for that reimbursement must be increased by three percent. This additional three percent constitutes the Trust Fund Reserve, which must be used as provided in subsection (G)(1) of this section.

(B) There is established in the State Treasury the Trust Fund for Tax Relief (Trust Fund) which must be maintained separately from the general fund of the State and all other funds. The amounts deducted from state income tax revenues pursuant to subsection (A) are automatically credited to the Trust Fund for the applicable fiscal year. The Board of Economic Advisors shall account for the Trust Fund revenue separately from general fund revenues in reports to the Governor and the General Assembly.

(C) The tax as collected must be apportioned to the Trust Fund and to the General Fund in proportion to the reimbursement estimates of the Board of Economic Advisors, as required in subsection (A).

(D) An unexpended balance in the Trust Fund at the end of a fiscal year, including any unexpended Trust Fund Reserve, must remain in the Trust Fund, and is considered a part of the amount required to be credited to the Trust Fund in the succeeding fiscal year.

(E) The provisions of this section must not be construed as affecting funding levels for public education.

(F) Earnings on the Trust Fund must be credited to the general fund of the State.

(G)(1) The Trust Fund Reserve is considered a part of the Trust Fund, and it must be used only as a reserve to offset shortfalls occurring when the total reimbursements actually paid in a fiscal year exceed the amount credited to the Trust Fund for that year, not including the Trust Fund Reserve. The Trust Fund Reserve must be exhausted before the provisions of item (3) of this subsection apply.

(2) Nothing in this section prohibits appropriations by the General Assembly of additional revenues to the Trust Fund.

(2)(3) Regardless of amounts transferred or appropriated to the Trust Fund for a fiscal year, there is appropriated to the Trust Fund from the general fund of the State additional amounts necessary to pay the reimbursements due from the Trust Fund."

SECTION 3. This act takes effect upon ratification of an amendment to the Constitution of this State providing for the separate assessment of property taxes on motor vehicles pursuant to Section 1(8), Article X of the Constitution of this State and which fixes the millage imposed on the property to no more than the millage rate imposed on it for property tax years beginning in 2000. Upon ratification:

(1) 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, 2001.

(2) Amounts required to be credited pursuant to Section 12-37-460 of the 1976 Code, as added by this act, first must be credited for fiscal year 2001-02. Regardless of the effective date of this act, a refund is not allowed for the exemption provided in this act as a result of an effective date occurring after June, 2001.

This web page was last updated on Wednesday, December 9, 2009 at 9:03 A.M.