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COMMITTEE REPORT
May 11, 2005
H. 3703
Introduced by Reps. Vaughn, Loftis, Haskins, Davenport, Altman, Bailey, Bales, R. Brown, Cato, Ceips, Cooper, Herbkersman, Littlejohn, Rhoad, Rice and Walker
S. Printed 5/11/05--H.
Read the first time March 3, 2005.
To whom was referred a Bill (H. 3703) to amend the Code of Laws of South Carolina, 1976, by adding Section 12-43-275, so as to replace calculation and imposition of a rollback property tax, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass with amendment:
Amend the bill, as and if amended, by striking Section 12-43-275, as contained in Section 1, beginning on Page 1, and inserting:
/ Section 12-43-275. For the property tax year of implementation of a countywide assessment and equalization program conducted pursuant to Section 12-43-217, the property tax millage for operating purposes of all property taxing entities in the county must be adjusted to a rate estimated to produce no more operating revenues than the total of such revenues received by the entity in the preceding property tax year, increased by estimated property tax operating revenue attributable to property and improvements not previously taxed, for new construction, and for renovations to existing structures, plus an additional amount equal to one percent of the sum of these two amounts. /
Renumber sections to conform.
Amend title to conform.
ROBERT W. HARRELL, JR. for Committee.
REVENUE IMPACT 1/
Removing local government's ability to increase millage by the amount of increase in the consumer price index, estimating a 2.2% increase in the consumer price index, would amount to $119,100,000 of revenue growth local governments would not receive due to increases in the consumer price index over the five year reassessment cycle.
Explanation
Section 1 would allow operating property tax revenue to grow in reassessment years by the amount of growth attributable to property and improvements not previously taxed plus an additional one percent.
Section 2 of the bill removes a local government's ability to increase the millage rate by the amount of increase in the consumer price index each year. The consumer price index has increased by 1.6%, 2.3% and 2.7% in the last three calendar years. Removing local government's ability to increase millage by the amount of increase in the consumer price index, estimating a 2.2% increase in the consumer price index, would amount to $119,100,000 of revenue growth local governments would not receive due to increases in the consumer price index over the five year reassessment cycle. Millage rate increases would require a positive majority vote of the appropriate governing body.
Section 3 of the bill removes the rollback millage calculation made obsolete by this bill.
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 by the BEA, or Section 2-7-76 for a local revenue impact or Section 6-1-85(B) for an estimate of the shift in local property tax incidence by the Office of Economic Research.
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-43-275, SO AS TO REPLACE CALCULATION AND IMPOSITION OF A ROLLBACK PROPERTY TAX MILLAGE RATE FOR REASSESSMENT YEARS WITH A REASSESSMENT YEAR MILLAGE RATE CALCULATED TO PRODUCE NO MORE THAN ONE PERCENT ADDITIONAL PROPERTY TAX REVENUE THAN SUCH REVENUE IN THE PRECEDING YEAR; TO AMEND SECTION 6-1-320, AS AMENDED, RELATING TO MILLAGE RATE LIMITATIONS ON LOCAL GOVERNING BODIES, SO AS TO DELETE AUTHORIZATION FOR MILLAGE RATE INCREASES EQUAL TO INCREASES IN THE CONSUMER PRICE INDEX WITHOUT A POSITIVE MAJORITY VOTE OF THE GOVERNING BODY; AND TO AMEND SECTION 12-37-251, AS AMENDED, RELATING TO THE RESIDENTIAL PROPERTY TAX EXEMPTION FROM SCHOOL OPERATING MILLAGE AND CALCULATION OF THE ROLLBACK TAX SO AS TO DELETE THE ROLLBACK TAX PROVISIONS MADE OBSOLETE BY THE PROVISIONS OF THIS ACT.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Article 3, Chapter 43, Title 12 of the 1976 Code is amended by adding:
"Section 12-43-275. For the property tax year of implementation of a countywide reassessment program conducted pursuant to Section 12-43-217, the property tax millage for operations of all property taxing entities in the county must be adjusted to a rate estimated to produce no more revenue than the total of such revenue received by the entity in the preceding property tax year plus an additional one percent."
SECTION 2. Section 6-1-320(A) of the 1976 Code is amended to read:
"(A) Notwithstanding Section 12-37-251(E), a A local governing body may increase the millage rate imposed for general operating purposes above the rate imposed for such purposes for the preceding tax year only to the extent of the increase in the consumer price index for the preceding calendar year as provided in this section. However, in the year in which a reassessment program is implemented, the rollback a millage rate not to exceed the rate, as calculated pursuant to Section 12-37-251(E) 12-43-275, must be used in lieu of the previous year's millage rate."
SECTION 3. Section 12-37-251(E) of the 1976 Code is amended to read:
"(E) Rollback millage is calculated by dividing the prior year property tax revenues by the adjusted total assessed value applicable in the year the values derived from a countywide equalization and reassessment program are implemented. This amount of assessed value must be adjusted by deducting assessments added for property or improvements not previously taxed, for new construction, and for renovation of existing structures. Reserved"
SECTION 4. This act takes effect January 1, 2006.
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