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A197, R156, H4086
Sponsors: Rep. Hayes
Document Path: l:\council\bills\dka\3432dw05.doc
Introduced in the House on May 12, 2005
Introduced in the Senate on May 18, 2005
Passed by the General Assembly on May 27, 2005
Became law without Governor's signature, June 8, 2005
Summary: Dillon County School Facilities Financing Act
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 5/12/2005 House Introduced, read first time, placed on calendar without reference HJ-1 5/17/2005 House Debate adjourned HJ-15 5/17/2005 House Read second time HJ-53 5/18/2005 House Read third time and sent to Senate HJ-61 5/18/2005 Senate Introduced, read first time, placed on local & uncontested calendar SJ-6 5/25/2005 Senate Read second time SJ-58 5/25/2005 Senate Unanimous consent for third reading on next legislative day SJ-58 5/26/2005 Senate Read third time and enrolled 5/27/2005 Senate Read third time and enrolled 6/1/2005 Ratified R 156 6/8/2005 Became law without Governor's signature 6/15/2005 Copies available 6/15/2005 Effective date 06/08/05 7/20/2005 Act No. 197
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
(A197, R156, H4086)
AN ACT TO ENACT THE DILLON COUNTY SCHOOL FACILITIES FINANCING ACT SO AS TO AUTHORIZE THE IMPLEMENTATION FOLLOWING REFERENDUM APPROVAL OF A SALES AND USE TAX IN DILLON COUNTY NOT TO EXCEED TWO PERCENT TO OFFSET PAYMENT OBLIGATIONS RELATED TO GENERAL OBLIGATIONS ISSUED TO FINANCE SCHOOL CONSTRUCTION, ACQUISITION, AND RENOVATION OR FOR DIRECT PAYMENTS FOR SCHOOL CONSTRUCTION, ACQUISITION, AND RENOVATION, AND TO PROVIDE FOR OTHER MATTERS RELATING TO IMPLEMENTING THIS ACT.
Be it enacted by the General Assembly of the State of South Carolina:
Dillon County School Facilities Financing Act
SECTION 1. This act may be cited as the Dillon County School Facilities Financing Act.
SECTION 2. The General Assembly finds:
(1) The school districts in Dillon County have substantial school facilities needs.
(2) The imposition of ad valorem property taxes for operational and debt service purposes by the school districts in the county to pay for these school facilities needs will impose disproportionately heavy burdens on some of the taxpayers in the county and discourage economic development in the county.
(3) In order to address these concerns, the General Assembly finds that a sales and use tax, with the revenues being distributed to school districts as must be determined by the Dillon County Board of Education, substantially will reduce property tax burdens in each of the school districts and alleviate the disparity in property tax rates among the school districts in the county.
(4) Accordingly, this act is intended to provide the residents of Dillon County with an option to impose a sales and use tax of two percent and to use the proceeds of the tax to pay, directly or indirectly, for the costs of financing school facilities in the districts.
Definitions, tax referendum
SECTION 3. (A) As used in this act:
(1) "Board" means the Dillon County Board of Education, and each of the Boards of Trustees of the three school districts in Dillon County, as the case may be.
(2) "Bond referendum" means a referendum held under the School Bond Act by any of the districts.
(3) "County" means Dillon County, South Carolina.
(4) "County auditor" means the Dillon County Auditor.
(5) "County treasurer" means the Dillon County Treasurer.
(6) "Department" means the South Carolina Department of Revenue.
(7) "District" means any one of the three school districts in the county.
(8) "School Bond Act" means Article 1 of Chapter 71, Title 59 of the 1976 Code.
(B) Subject to the requirements of this section and notwithstanding the limitations provided in Section 4-10-310 of the 1976 Code, the board, by resolution, may impose a sales and use tax not exceeding two percent, the amount and distribution to each district to be determined by the board, within the county for a specified period of time to collect revenues to be used to:
(1) defray payment obligations related to the financing of the construction, acquisition, and renovation of school facilities, including, but not limited to, debt service on general obligation bonds issued pursuant to the School Bond Act; and
(2) pay directly the costs of the construction, acquisition, and renovation of school facilities.
(C)(1)The board, by resolution, may vote to impose the tax authorized by this section but the tax may not be levied unless the voters approve the question presented in the referendum. The resolution must specify:
(a) each district's proposed program of facilities improvements to be financed through the imposition of the tax; and
(b) the maximum time, stated in calendar years or calendar quarters, or a combination of them, for which the tax may be imposed.
(2) Upon receipt of the resolution, the Dillon County Election Commission shall conduct a referendum on the question of imposing the optional special sales and use tax in the county. Notice of the election must be provided in the manner provided by the general election law. The notice must include the question to be voted upon. Expenses of the referendum must be paid by the districts.
(3) The question to be voted upon in the referendum must read substantially as follows:
"Shall a special sales and use tax not exceeding two percent be imposed in Dillon County for not more than (specify) years in order to raise revenues which will be applied to pay directly the cost of or defray payment obligations of general obligation bonds in an amount not exceeding (specify) issued to finance school facility construction, acquisition, and renovation in Dillon County, including (describe improvements)?
Those voting in favor of the question shall deposit a ballot with a check or cross mark in the square after the word 'Yes', and those voting against the question shall deposit a ballot with a check or cross mark in the square after the word 'No'."
The ballot, in the discretion of the board, may contain a short explanation of the question to be voted upon in this referendum.
(4) All qualified electors desiring to vote in favor of imposing the tax shall vote "yes" and all qualified electors opposed to levying the tax shall vote "no". Upon receipt of the returns of the referendum, the Dillon County Election Commission shall certify the result and file the certification with the Dillon County Clerk of Court. The certification also must be filed with the department. The certified results of the referendum are not open to question except by a civil action instituted within twenty days of the filing of the certificate with the clerk of court. If a majority of the 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 on imposition of the tax authorized in this section may not be held more than once in a period of twelve consecutive months.
(E)(1) If the tax is approved in the referendum, the tax must be imposed beginning upon the first day of the third full month following the filing of the declaration of results of the referendum with the department. However, the timing of the imposition does not result in the rate of sales and use tax paid by the citizens of the county exceeding eight percent. In order to ensure this limit is not exceeded, the sales tax may be phased in one cent at a time.
(2) The tax terminates:
(a) on the final day of the maximum time specified for the imposition; or
(b) earlier, but not if later, upon payment of the final maturing payment of any financing undertaken by a district for the purposes set forth in its proposed program of facilities improvement, or upon payment of the final maturing installment of any financing undertaken by the district or on behalf of the district to refund obligations issued for purposes of constructing, acquiring, or renovating school facilities.
(3) When the optional sales and use tax is imposed for more than one purpose, the board shall determine the priority for the expenditure of the net proceeds of the tax for the purposes stated in the referendum.
(F)(1) The tax levied pursuant to this section must be administered and collected by the department in the same manner that other sales and use taxes are collected. The department may prescribe the amounts which may be added to the sales price because of the tax.
(2) The tax authorized by this section 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, Title 12 of the 1976 Code and the enforcement provisions of Chapter 54, Title 12 of the 1976 Code. The gross proceeds of the sale of items subject to a maximum tax in Chapter 36 of Title 12 of the 1976 Code are exempt from the tax imposed by this section. The gross proceeds of the sale of food which may be purchased with United States Department of Agriculture food coupons are exempt from the tax imposed by this act. The tax imposed by this section also applies to tangible personal property subject to the use tax in Article 13, Chapter 36 of Title 12 of the 1976 Code.
(3) Taxpayers required to remit taxes pursuant to Article 13, Chapter 36, Title 12 of the 1976 Code shall identify the county in which the tangible personal property purchased at retail is stored, used, or consumed in this State.
(4) Utilities are required to report sales in the county in which consumption of the tangible personal property occurs.
(5) A taxpayer subject to the tax imposed by Section 12-36-920 of the 1976 Code, who owns or manages rental units in more than one county separately shall report in his sales tax return the total gross proceeds from business done in each county.
(6) The gross proceeds of sales of tangible personal property delivered after the imposition date of the tax levied pursuant to this section 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 within six months after the imposition of the special local sales and use tax.
(7) Notwithstanding the imposition date of the special local sales and use tax authorized pursuant to this section, with respect to services that regularly are billed on a monthly basis, the special local sales and use tax is imposed beginning on the first day of the billing period beginning on or after the imposition date.
(G) The revenues of the tax collected in the county pursuant to this section 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 administering the tax, not to exceed one percent of the revenues, the State Treasurer shall distribute the revenues quarterly to the county treasurer who shall either hold the funds, or at the direction of the board, disburse the funds on a pro rata basis, to be established by resolution of the board, to each of the three districts to defray payment obligations related to the financing of the construction, acquisition, and renovation of school facilities, or pay directly the costs of the construction, acquisition, and renovation of school facilities. 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.
(H) The department shall furnish data to the State Treasurer and to the districts for the purpose of calculating distributions and estimating revenues. The information that must be supplied to the 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 of the 1976 Code. A person violating this section is subject to the penalties provided in Section 12-54-240 of the 1976 Code.
SECTION 4. (A) Any of the districts may conduct a bond referendum, either in conjunction with or subsequent to the referendum to be held pursuant to Section 3 of this act.
(B) If a district conducts a bond referendum and subsequently issues general obligation bonds under the authorization of such bond referendum, the debt service for which is to be paid from proceeds of the sales and use tax, then:
(1) the county treasurer shall certify to the county auditor on July fifteenth of each calendar year as to the amount of tax revenues of the sales and use tax authorized by this act held by him as of June thirtieth of the calendar year. The county auditor shall reduce the next levy of ad valorem property taxes required to pay debt service on the bonds to which the tax is applicable by the amount of tax revenues certified as collected as of June thirtieth by the county treasurer. Tax revenues collected as of June thirtieth of a calendar year in excess of the amounts required to pay debt service due in the eighteen months following June thirtieth on bonds to which the tax is applicable may be applied for other purposes of this act; and
(2) if a 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 the surety as if it were tax revenues held by the county treasurer and shall provide the certificate called for in subsection (B)(1) to the county auditor by including the amount available under the surety or letter of credit if the amount is not in excess of ninety percent of the actual taxes collected during the prior 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. If the taxes collected are less than the amount required, the county treasurer shall draw upon the surety to provide for timely payment of debt service on the bonds. The costs of this surety may be paid from amounts available in the fund created in accordance with section 3(G) and any reimbursement to the surety may be paid from the fund from taxes collected in the year after any draw.
SECTION 5. This act takes effect upon approval by the Governor.
Ratified the 1st day of June, 2005.
Became law without the signature of the Governor -- 6/8/05.
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