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COMMITTEE REPORT
May 9, 2001
S. 419
Introduced by Senators Pinckney, Drummond, Matthews, J. Verne Smith, Passailaigue, Ford, Glover, McConnell, Grooms and Jackson
S. Printed 5/9/01--S.
Read the first time March 7, 2001.
To whom was referred a Bill (S. 419) to amend Sections 4-10-330, as amended, 4-10-340, and 4-10-360, as amended, Code of Laws of South Carolina, 1976, relating to the ballot question and revenue uses, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass:
HUGH K. LEATHERMAN, SR. for Committee.
REVENUE IMPACT1
This bill is not expected to reduce state general fund revenue in FY 2001-02.
Explanation
This bill would allow a county to impose a one-cent capital projects sales and use tax to pay the debt service on bonds issued for capital projects in addition to other sources of funds. The one-cent capital projects sales and use tax must be approved by a referendum during the time of a general election. If sales taxes are to be used to defray debt service on bonds issued to pay the costs of a capital project, a notice must be posted in a newspaper of general circulation two weeks before the referendum indicating the principal amount of the proposed bond and that the issuance of the bonds is a part of the referendum question. If the one-cent sales tax is inadequate to cover the amount of the proposed bonds issued, the referendum must include the additional sources of funds to be used for payment of the bond. The revenues from the one-cent sales tax are remitted to the Department of Revenue and placed in a separate and distinct account from the general fund with the State Treasurer. The one-cent capital projects sales tax terminates at the end of the calendar quarter during which the Department of Revenue receives a certification from the county treasurer or county administrator that the amounts of debt service on the proposed bonds have been fully repaid. This bill is not expected to reduce state general fund revenue in FY 2001-02.
Approved By:
William C. Gillespie
Board of Economic Advisors
1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact, Section 2-7-76 for a local revenue impact, and Section 6-1-85(B) for an estimate of the shift in local property tax incidence.
TO AMEND SECTIONS 4-10-330, AS AMENDED, 4-10-340, AND 4-10-360, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE BALLOT QUESTION AND REVENUE USES, TAX IMPOSITION AND TERMINATION, AND REVENUE DISTRIBUTION UNDER THE CAPITAL PROJECTS SALES TAX ACT, SO AS TO SPECIFICALLY AUTHORIZE THE TAX REVENUE TO BE USED TO PAY DEBT SERVICE ON BONDS ISSUED TO FUND THE APPROVED PROJECTS, TO PROVIDE THAT THE DEPARTMENT OF REVENUE SHALL COLLECT THE TAX THROUGH THE QUARTER IN WHICH THE COUNTY CERTIFIES THAT NO BONDS REMAIN OUTSTANDING, TO PROVIDE THAT THE REFERENDUM QUESTION APPROVING A PROJECT MAY BE REVISED TO INCLUDE THE PRINCIPAL AMOUNT OF THE BONDS TO BE ISSUED FOR THE PROJECT WITH THE SOURCE TO PAY THE BONDS IF THE SALES TAX REVENUE IS INSUFFICIENT, TO PROVIDE THAT A QUESTION SO REVISED CONSTITUTES AN AUTHORIZATION TO ISSUE THE BONDS, TO PROVIDE ADDITIONAL REPORTING REQUIREMENTS ON THE USES OF QUARTERLY DISTRIBUTIONS OF THESE TAX REVENUES, AND TO PROVIDE FOR THE USE OF THESE REVENUES FOR THE REPAYMENT OF BONDS WHEN THE REQUIRED REFERENDUM AND REFERENDUM APPROVAL OCCURRED BEFORE THE EFFECTIVE DATE OF THIS ACT.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. A. Section 4-10-330(A)(3) of the 1976 Code, as added by Act 138 of 1997, is amended to read:
"(3)(a) If the county proposes to issue bonds to provide for the payment of any costs of the projects, the maximum amount of bonds to be issued, whether the sales tax proceeds are to be pledged to the payment of the bonds and, if other sources of funds are to be used for the projects, specifying the other sources;
(b) the maximum cost of the project or facilities funded from proceeds of the tax and the maximum amount of net proceeds to be raised by the tax, or portion of the project or portion of the facilities, to be funded from proceeds of the tax or bonds issued as provided in this article and the maximum amount of net proceeds expected to be used to pay the cost or debt service on the bonds, as the case may be; and"
B. Section 4-10-330(C) of the 1976 Code, as added by Act 138 of 1997, is amended to read:
"(C) Upon receipt of the ordinance, the county election commission must shall conduct a referendum on the question of imposing the sales and use tax in the area of the county that is to be subject to the tax. If the ordinance is received prior to October 1, 1997, a referendum for this purpose may be held on Tuesday, November 4, 1997; however, if the ordinance is received on October 1, 1997, or thereafter, a A referendum for this purpose must be held at the time of the general election. Two weeks before the referendum the election commission must shall publish in a newspaper of general circulation the question that is to appear on the ballot, with the list of projects and the cost of the projects. If the proposed question includes the use of sales taxes to defray debt service on bonds issued to pay the costs of any project, the notice must include a statement indicating that principal amount of the bonds proposed to be issued for the purpose and, if the issuance of the bonds is to be approved as part of the referendum, stating that the referendum includes the authorization of the issuance of bonds in that amount. This notice is in lieu of any other notice otherwise required by law."
C. Section 4-10-330(D) of the 1976 Code, as added by Act 138 of 1997, is amended by adding a paragraph at the end to read:
"If the referendum includes the issuance of bonds, the question must be revised to include the principal amount of bonds proposed to be authorized by the referendum and the sources of payment of the bonds if the sales tax approved in the referendum is inadequate for the payment of the bonds."
SECTION 2. Section 4-10-340(B)(2) of the 1976 Code, as added by Act 138 of 1997, is amended to read:
"(2) the end of the calendar month during which the Department of Revenue determines that the tax has raised revenues sufficient to provide the net proceeds equal to or greater than the amount specified in the referendum question the end of the calendar quarter during which the Department of Revenue receives a certificate under Section 4-10-360 indicating that no more bonds approved in the referendum remain outstanding that are payable from the sales tax and that all the amount of the costs of the projects approved in the referendum will have been paid upon application of the net proceeds during this quarter."
SECTION 3. Section 4-10-360 of the 1976 Code, as amended by Act 93 of 1999, is further amended to read:
"Section 4-10-360. The revenues of the tax collected under this article must be remitted to the Department of Revenue and placed on deposit with the State Treasurer and credited to a fund separate and distinct from the general fund of the State. After deducting the amount of any refunds made and costs to the Department of Revenue of administering the tax, not to exceed one percent of the revenues, the State Treasurer shall distribute the revenues quarterly to the county treasurer in the county area in which the tax is imposed and the revenues must be used only for the purposes stated in the imposition ordinance. The State Treasurer may correct misallocations by adjusting subsequent distributions, but these adjustments must be made in the same fiscal year as the misallocations. However, allocations made as a result of city or county code errors must be corrected prospectively. Within thirty days of the receipt of any quarterly payment, the county treasurer or the county administrator shall certify to the Department of Revenue amounts of net proceeds applied to the costs of each project and the amount of project costs remaining to be paid and, if bonds have been issued that were approved in the referendum, a schedule of payments remaining due on the bonds that are payable from the net proceeds of the sales tax authorized in the referendum."
SECTION 4. This act takes effect upon approval by the Governor and applies with respect to referenda held on or after that date. A county holding a referendum and adopting an ordinance pursuant to Article 3, Chapter 10, Title 4 of the 1976 Code, before the effective date of this act in which the ordinance provides that the proceeds of the sales tax would be used to repay bonds issued to fund project costs may continue to collect the tax and apply the revenue to the repayment of the bonds while any of these bonds remain outstanding, but in no event may the tax be collected for any period longer than the maximum term of the tax provided in the referendum.
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