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Indicates Matter Stricken
Indicates New Matter
January 28, 2004
Introduced by Reps. Littlejohn, Bailey, Cotty, Anthony, Whipper, Mahaffey, R. Brown, J.H. Neal, Rutherford, Frye, Bales, Bowers, G. Brown, J. Brown, Cobb-Hunter, Dantzler, Freeman, Gourdine, Harvin, Hayes, Ott, Herbkersman, Clark, Lee, E.H. Pitts, Martin, McCraw, Moody-Lawrence, Neilson, Phillips, Rhoad, Rivers, Scott, F.N. Smith, Snow, Stille, Townsend and Umphlett
S. Printed 1/28/04--H.
Read the first time February 13, 2003.
TO AMEND CHAPTER 10 OF TITLE 4, CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 4 TO PROVIDE, SUBJECT TO A COUNTYWIDE REFERENDUM, FOR THE IMPOSITION OF A SPECIAL ONE PERCENT SALES AND USE TAX WITHIN A COUNTY FOR NOT MORE THAN SEVEN YEARS WITH THE REVENUE OF THE TAX USED TO DEFRAY GENERAL OBLIGATION DEBT SERVICE OR OTHERWISE DEFRAY THE COSTS OF CAPITAL IMPROVEMENTS OF THE SCHOOL DISTRICTS WITHIN SUCH COUNTY, TO PROVIDE THAT THE TAX MAY BE IMPOSED ONLY AFTER ITS APPROVAL IN A REFERENDUM HELD IN THE COUNTY, TO PROVIDE FOR THE REFERENDUM, AND TO PROVIDE THAT, IF IMPOSED, THE TAX MUST BE COLLECTED BY THE SOUTH CAROLINA DEPARTMENT OF REVENUE AND REMITTED TO THE SOUTH CAROLINA TREASURER FOR SCHOOL DISTRICTS OF THE COUNTY IN WHICH THE TAX IS IMPOSED, TO PROVIDE THAT THE TAX IS IMPOSED AND IS SUBJECT TO THE SAME EXEMPTIONS AND MAXIMUM TAXES AS PROVIDED IN THE SOUTH CAROLINA SALES TAX ACT EXCEPT FOR AN ADDITIONAL EXEMPTION FOR FOOD ITEMS WHICH LAWFULLY MAY BE PURCHASED WITH UNITED STATES DEPARTMENT OF AGRICULTURE FOOD COUPONS, AND TO PROVIDE FOR THE METHOD OF APPLYING THE REVENUES OF THE TAX TO SCHOOL DISTRICT GENERAL OBLIGATION DEBT SERVICE.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 10 of Title 4 of the 1976 Code is amended by adding:
Section 4-10-400. This act may be cited as the South Carolina School Districts Property Tax Relief Act.
Section 4-10-405. For purposes of this article, the following terms and words are defined as follows:
(A) 'Board of Trustees' means the governing body of a school district.
(B) 'County' means a county within which the sales and use tax authorized by this article is imposed.
(C) 'County Auditor' means the county auditor of the county.
(D) 'County Treasurer' means the county treasurer of the county.
(E) 'Election authority' means the authority charged with the conduct of countywide elections within the county.
(F) 'School district' means a school district located wholly or partially in a county.
Section 4-10-410. Subject to the requirements of this article, there may be imposed a one percent sales and use tax within a county for the distribution to the school districts located wholly or partially therein. The proceeds of the tax must be distributed to the school districts as provided in this article. The board of trustees of a school district, before the expenditure of the proceeds of the tax authorized by this article, must by resolution determine the specific purposes for which the proceeds of the tax distributed to that school district must be expended. However, in any case the proceeds only must be applied to reduce ad valorem property taxes imposed to pay debt service on general obligation bonds of that school district issued prior to or following a referendum authorized in Section 4-10-420 of this article, or otherwise defray the cost of capital improvements within that school district.
Section 4-10-420. (A) The tax authorized by this article may be imposed within a county upon the adoption of an approving resolution by the boards of trustees of each school district, and the subsequent approval of the imposition of the tax by referendum open to all qualified electors residing in the county.
The approving resolutions must specify the same period, stated in calendar years, not to exceed seven years, for which the tax must be imposed, the date upon which the referendum is held, the precincts and polling places for the referendum, and the question to appear on the referendum ballot. The approving resolutions, upon adoption, must be forwarded to the election authority. The referendums required by this article may only be conducted in even-numbered years at the same time as the general election with the polling places of all precincts required to be open.
(B) Each board of trustees of a school district must include in its resolution adopted pursuant to this section a description of the capital improvements and general obligation bonds to which sales and use tax proceeds allocated to that school district will be applied. Such descriptions may be noted on the ballot at the option of the board of trustees, but in any case shall be binding upon the school district.
(C) Upon receipt of approving resolutions from the boards of trustees of all school districts, the election authority shall conduct a referendum on the question of imposing the tax in the county. Notice of the election must be provided in the manner provided by the general election law and include the question to be voted upon in the referendum. Expenses of the referendum must be paid by the school districts, proportionally according to the number of persons residing in each school district who are registered to vote in the county.
(D) The ballot to be voted upon in the referendum must read substantially as follows:
Must a special one percent sales and use tax be imposed in _____ County for not more than ____ years with the revenue of the tax used to pay debt service on general obligation bonds of, or directly to defray the cost of capital improvements for, or both of these purposes, the (number) school districts (as further described below) in _____County?
The ballot may contain a short explanation of the question to be voted upon in this referendum.
(E) Upon receipt and certification of the returns of the referendum, the election authority shall by resolution certify the results of the referendum by resolution and within ten days thereafter file the resolution with the clerk of court for the county and with the South Carolina Department of Revenue. The result of the referendum, as declared by resolution of the election authority and as filed with the clerk of court, is not open to question except by a civil action instituted in the county within twenty days of the filing of the resolution. If a majority of the total votes cast are in favor of imposing the tax, then the tax is imposed as provided in this act; otherwise the tax is not imposed. A referendum within a county on the imposition of the tax authorized in this article must not be held on a Saturday and must not be held more than once in a period of twelve consecutive months.
Section 4-10-430. (A) If the tax is approved in the referendum, the tax must be imposed beginning upon the first day of the fourth full month following the filing of the declaration of results of the referendum with the Department of Revenue.
(B) The tax terminates upon the earlier of:
(1) the final day of the maximum time specified for the imposition; or
(2) sixty days following the filing with the Department of Revenue of certified copies of resolutions adopted by the boards of trustees of each of the school districts, each requesting termination of the tax.
Section 4-10-440. (A) The tax levied pursuant to this article must be administered and collected by the Department of Revenue in the same manner that other sales and use taxes are collected. The Department of Revenue may prescribe the amounts which may be added to the sales price because of the tax.
(B) The tax authorized by this article is in addition to all other local sales and use taxes and applies to the gross proceeds of the sales in the county which are subject to the tax imposed by Chapter 36 of Title 12 and the enforcement provisions of Chapter 54 of Title 12. The gross proceeds of the sale of items subject to a maximum tax in Chapter 36 of Title 12 are exempt from the tax imposed by this article. The gross proceeds of the sale of food which may lawfully be purchased with United States Department of Agriculture food coupons are exempt from the tax imposed by this article. The tax imposed by this article also applies to tangible personal property subject to the use tax in Chapter 36 of Title 12.
(C) Taxpayers required to remit use taxes under Chapter 36 of Title 12 shall identify the county in which the tangible personal property purchased at retail is stored, used, or consumed in this State.
(D) Utilities are required to report sales in the county in which consumption of the tangible personal property occurs.
(E) A taxpayer subject to the tax imposed by Section 12-36-920 who owns or manages rental units in more than one county shall separately report in his sales tax return the total gross proceeds from business done in each county.
(F) The gross proceeds of sales of tangible personal property delivered after the imposition date of the tax levied under this article in the county, either under the terms of a construction contract executed before the imposition date, or a written bid submitted before the imposition date, culminating in a construction contract entered into before or after the imposition date, are exempt from the special local sales and use tax provided in this section if a verified copy of the contract is filed with the Department of Revenue within six months after the imposition of the special local sales and use tax.
(G) Notwithstanding the imposition date of the sales and use tax authorized pursuant to this article, with respect to services that are regularly billed on a monthly basis, the sales and use tax is imposed beginning on the first day of the billing period beginning on or after the imposition date.
Section 4-10-450. (A) The revenues of the sales and use tax collected under this article must be remitted to the State Treasurer and credited to a fund separate and distinct from the general fund of the State. After deducting the amount of 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 monthly to the county treasurer for the benefit of the school districts in the amounts established in accordance with subsection (B) of this section. The State Treasurer may correct misallocation costs or refunds by adjusting subsequent distributions, but these adjustments must be made in the same fiscal year as the misallocation.
(B) The State Treasurer shall distribute proceeds of the tax, less amounts attributable to refunds and administration as provided in subsection (A) of this section to the county treasurer and thereafter by the county treasurer to the school districts located in the county in direct proportion to the one hundred thirty-five-day average daily membership of each of the school districts for the fiscal year immediately preceding that in which a distribution is made, as certified by the State Treasurer upon advice of the State Department of Education. For purposes of this section, the one hundred thirty-five-day average daily membership excludes any student not residing in the county.
(C) Except as provided in Section 4-10-460, withdrawals by the school districts of tax proceeds from the county treasurer must be made in the same manner as are funds appropriated to the school districts by the State. Pending these withdrawals, taxes must be deposited in accounts for each school district, separate and distinct from accounts established for any other purpose, and investment earnings derived from monies in such an account must be credited to the account. Each school district shall maintain records which demonstrate that tax proceeds are spent only for the purposes as approved by its board of trustees and in accordance with this article.
(D) The proceeds of the sales and use tax paid to the county treasurer for the benefit of that school district must be applied only for the purposes set forth in the resolution adopted pursuant to Section 4-10-420.
Section 4-10-460. (A) If a school district has provided in its resolution adopted pursuant to Section 4-10-420 that any portion of the proceeds of the sales and use tax allocated to it shall be applied to debt service on general obligation bonds, such school district shall notify the county treasurer in writing no later than the first day of August of each year of the amount of sales and use taxes to be applied to offset the debt service millage levy for such general obligation bonds. The amount so specified must not exceed the amount of sales and use tax proceeds held by the county treasurer for that school district as of the June thirtieth immediately preceding such first day of August. The notice applies only to debt service payments to be made in the eighteen-month period following that June thirtieth.
Upon receipt of notice from a school district pursuant to this section, the county treasurer shall certify to the county auditor, by the fifteenth day of August of the amount of sales and use taxes designated by the school district for application to general obligation bond debt service payments. The county auditor shall reduce the next levy of property taxes required to pay debt service on such general obligation bonds by the amount of sales and use tax revenues certified as held by the county treasurer and designated by the school district for the purpose. This amount of sales and use taxes thereafter must not be released to the school district, but must be held by the county treasurer to pay debt service on general obligation bonds. However, any sales and use taxes held by the county treasurer in excess of the amounts designated by the school district for payment of debt service on such general obligation bonds must be expended as directed by the school district in accordance with this article. Any investment earnings derived from the sales and use tax must be expended as directed by the school district in accordance with this article. Any sales and use taxes allocated to a school district and not required to accomplish the purposes described in the resolution of such school district adopted pursuant to Section 4-10-420 may be applied to debt service on any general obligation bonds of such school district. With respect to a school district situated in more than one county, the requirements of this section with respect to the reduction of millage levied for general obligation bonds apply with respect to the auditor and treasurer of each county in which the school district is located, and the levy of millage for debt service within a school district shall in all instances be uniform.
(B) If the school district presents the county treasurer with a surety bond or letter of credit from a financial institution which is rated in one of the two highest rating categories by two national ratings agencies, the county treasurer may treat the amount available under such surety as if it were taxes held by the county treasurer and shall provide the certificate called for in the foregoing paragraph to the auditor by including the amount available under the surety or letter of credit so long as such amount is not in excess of ninety percent of the actual sales and use taxes allocated to the school district in the prior fiscal year, or which would have been allocated if the sales and use tax had been in force for all of such prior fiscal year. The county auditor shall reduce the next levy of ad valorem property taxes required to pay debt service on bonds to which the tax is applicable by the amount so certified by the county treasurer. In the event the sales and use taxes thereafter allocated to the school district are less than the amount required to pay debt service on bonds during the eighteen-month period established in Section 4-10-460(A), the county treasurer shall draw upon such surety to provide for timely payment of such general obligation bonds. The costs of such surety, including any reimbursements for payments thereon, are deemed to be part of the debt service requirements for such general obligation bonds covered by such surety and may be paid from amounts available in the fund created in accordance with Section 4-10-460(A). Any reimbursement to the financial institution providing such surety may be paid from such fund from taxes collected in the year after any draw.
Section 4-10-470. The Department of Revenue, the State Department of Education, and the county auditor shall furnish data to the State Treasurer and to the school districts receiving tax revenues pursuant to this article for the purpose of calculating distributions and estimating revenues. The information which must be supplied to school districts upon request includes, but is not limited to, gross receipts, net taxable sales, and tax liability by taxpayers. Information about a specific taxpayer is considered confidential and is governed by the provisions of Section 12-54-240. A person violating this section is subject to the penalties provided in Section 12-54-240.
Section 4-10-475. Notwithstanding any of the provisions of this article, the revenue of the tax allowed by this article only may be applied to debt service on bonds issued pursuant to a favorable vote in a referendum held for the purpose of approving the bond issue or for other means of school facilities construction approved by a majority of the qualified electors of the school district voting in a referendum to authorize the particular means of facilities construction by other than a referendum-approved bond issue. To the extent revenues of the tax to the district exceed accounts necessary to pay the cost of referendum-approved school construction, the excess must be used to rollback school district operating millage.
Section 4-10-480. The tax authorized herein may be renewed and imposed within a county in the same manner as proceedings for the initial imposition of the tax. A referendum on the question of reimposition of a tax shall not be held more than two years prior to the date upon the tax then in effect is scheduled to terminate, provided that any reimposition shall become effective immediately upon the termination of the tax previously imposed.
"Section 4-10-485. Notwithstanding any other provision of this chapter to the contrary, any revenue received under this chapter by a school district may not be used to service any general obligation debt above the eight percent limitation provided in Section 16 of Article X of the Constitution of this State."
Section 4-10-487. A school district proposing to issue bonds that are to be authorized in a referendum held at the same time as a referendum on the question of imposing the sales tax authorized by this article must first obtain an estimate from the Board of Economic Advisors of the sales tax revenue that would be payable to that school district from the proceeds of the sales tax. The principal amount of bonds authorized for a school district in a referendum held at the same time as the referendum to authorize the imposition of the sales tax authorized by this article must not exceed the estimate by the Board of Economic Advisors of sales tax revenue for the school district.
Section 4-10-490. This article shall be construed as cumulative and additional authority for the purposes described herein and shall not be construed to impliedly repeal any existing laws or prohibit the adoption of any additional laws with respect thereto, it being the purpose and intention of this article to create an additional and alternate method for the purposes herein named."
SECTION 2. This act takes effect upon approval by the Governor.
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