South Carolina General Assembly
117th Session, 2007-2008

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S. 1213


General Bill
Sponsors: Senators Ceips and Scott
Document Path: l:\s-res\ccc\007resi.dag.doc
Companion/Similar bill(s): 4745

Introduced in the Senate on March 19, 2008
Currently residing in the Senate Committee on Finance

Summary: Residential Improvement District Act


     Date      Body   Action Description with journal page number
   3/19/2008  Senate  Introduced and read first time SJ-4
   3/19/2008  Senate  Referred to Committee on Finance SJ-4

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(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)



Be it enacted by the General Assembly of the State of South Carolina:

SECTION    1.    Title 6 of the 1976 Code is amended by adding:


Residential Improvement District Act

Section 6-35-10.    This chapter may be cited as the 'South Carolina Residential Improvement District Act'.

Section 6-35-20.    As used in this chapter:

(1)    'Assessment' means a charge against the real property belonging to an owner within a district created pursuant to this chapter that must be proportionate to the value of the improvements to be constructed within the district as determined by the owner. An assessment imposed under this chapter remains valid and enforceable in accordance with the provisions of this chapter even if there is a later subdivision and transfer of the relevant property or a part of it.

(2)    'Improvements' include, but are not limited to, capital public infrastructure improvements, such as a parkway, park and playground; a recreation facility, athletic facility, and pedestrian facility; sidewalk; parking facility ancillary to another public facility; facade redevelopment; storm drain; the relocation, construction, widening, and paving of a street, road, and bridge, including demolition of them; underground utility dedicated or to be dedicated to public use; all improvements permitted under Chapter 35, Title 4; a building or other facility for public use; public works eligible for financing under the provisions of Section 6-21-50; and things incidental to an improvement including, but not limited to, planning, engineering, promotion, marketing, and acquisition of necessary easements and land, and may include a facility for lease or use by a private person, firm, or corporation. Improvements also include the construction of a new school and the renovation and expansion of an existing school. However, maintenance and an operational expense are not considered to be improvements. The construction of the improvements must comply with applicable state and federal law and regulations governing the construction of similar public improvements installed or constructed by a private entity. Improvements may be designated by the governing body as public works eligible for revenue bond financing pursuant to Section 6-21-50, and these improvements, taken in the aggregate, may be designated by the governing body as a 'system' of related projects within the meaning of Section 6-21-40. The owner, after due investigation and study, may determine that improvements located outside the boundaries of a district confer a benefit upon property inside a district or are necessary to make improvements within the district effective for the benefit of property inside the district. Improvements must service primarily an owner of the property within the district, this requirement being deemed to be met if the improvements are situated within:

(a)    the district; or

(b)    a designated service area that benefits the district.

(3)    'Improvement plan' means a plan that identifies improvements for which an assessment may be used as a funding source.

(4)    'District' means an area within the county or municipality designated by the owner pursuant to the provisions of this chapter and within which an improvement plan is to be accomplished. A district may be comprised of noncontiguous parcels of land. A district may be made up of varying proposed land uses including, but not limited to, residential, commercial, industrial, institutional, or a combination of some or all of those. A district may not include the grounds of the State House in the City of Columbia. Multiple districts may not be formed over the same property at the same time.

(5)    'Governing body' means, as appropriate, the county council or the municipal council or councils that has or have authority over the geographic area in which the improvement district lies. School boards are not included within the definition of governing body under this chapter.

(6)    'Owner' means the legal owner or owners of the real property that comprises the district as of the effective date of this chapter.

(7)    'Service area' means, based on sound planning or engineering principles, or both, a defined geographic area served by a particular improvement. A provision in this chapter may not be interpreted to alter, enlarge, or reduce the service area or boundaries of a political subdivision that is authorized or set by law. A service area may consist of tracts in more than one state, county, or municipality, provided that each relevant governing body approves the creation of the service area and the district. It is anticipated that each improvement may have its own specific service area.

Section 6-35-30.    A county or municipality, in conjunction with and approval from the legal owner of the relevant real property, may exercise the powers and provisions of this chapter.

Section 6-35-40.    Nothing contained in this chapter may be construed to limit or restrict the existing powers of an owner, county, or municipality. The authorization contained in this chapter is in addition to their powers and is provided as an additional means for the provision of infrastructure and improvements related to new development.

Section 6-35-50.    (A)(1)    An assessment may be imposed and collected by the governing body only upon passage of an ordinance, as defined in Section 6-35-170, creating the district.

(2)    The amount of the assessment must be based on actual costs of the improvement or reasonable estimates of those costs, supported by sound engineering studies.

(3)    In addition to the requirements provided in Section 6-35-170, an ordinance authorizing the imposition of an improvement district assessment must:

(a)    establish a procedure for timely processing of applications for determinations by the governing body of assessments applicable to all property subject to assessments and for the timely processing of applications for individual assessments, credits, or reimbursements allowed or paid under this article;

(b)    include a description of acceptable levels of service for improvements;

(c)    provide a methodology for the termination of the assessment; and

(d)    include a needs assessment of the impacted school district or districts.

(B)    A governing body that has not adopted a comprehensive plan pursuant to Chapter 29 of this title may not impose an assessment, unless the governing body adopts an owner-proposed improvement plan, which substantially complies with the requirements of Section 6-1-960.

(C)    A governing body shall prepare and publish an annual report describing, for each district, the amount of all assessments collected, appropriated, or spent during the preceding year. An annual summary must be provided along with the property tax bill to property owners within the district.

(D)    Payment of an assessment may result in an incidental benefit to property owners or residents within the service area other than the payor.

Section 6-35-60.    As required by the ordinance process in Section 6-35-170, the owner or government entity is authorized to acquire, own, construct, establish, install, enlarge, improve, and expand any improvement and to finance the acquisition, construction, establishment, installation, enlargement, improvement, expansion, in whole or in part, by the imposition of assessments in accordance with this chapter, the issuance of special district bonds, or any other method of financing provided that the full faith and credit of the applicable county or municipality is not pledged as security for it. Under no circumstances shall assessments or the burden of funding an improvement be charged to a property other than that which makes up the district.

Section 6-35-70.    Bonds issued by the county or municipality pursuant to this chapter do not count against the applicable school district for the purposes of calculating the bond-borrowing limit pursuant to Article X of the Constitution of this State.

Section 6-35-80.    (A)    Upon receipt of a district proposal from an owner, the governing body may establish the district by ordinance, provided that it finds that the district accomplishes the following:

(1)    the proposed improvements would be beneficial to the proposed district and the proposed service area;

(2)    the improvements are located within the service area; and

(3)    in circumstances where the district is made up of noncontiguous parcels, all parcels that comprise the district are situated within the relevant service area for each improvement.

Section 6-35-90.    The owner may include, within a proposed district, improvements that have been constructed or are under construction at the time of the establishment of the district.

Section 6-35-100.    The governing body shall collect, upon the issuance of any bond securitized by assessments, an improvement fee in an amount of four percent of the total value of each bond. The improvement fee must be used to construct improvements or collective improvements, as defined in Section 6-35-110, in a service area that is related to and serves the district. The governing body may contract with the owner, or with a third party, for the construction of the improvements. The improvements must be part of the improvement plan.

Section 6-35-110.    (A)    The owner may include, within a proposed district, improvements that are proposed to be funded by multiple districts, know as a 'collective improvement'. The owner and the governing body may agree to designate all or part of the improvement fee for the construction of the collective improvement. If this occurs and if the collective improvement has not been identified previously in an ordinance for another district, then the proposal must include:

(1)    a description of the collective improvement;

(2)    the estimated cost of it;

(3)    a deadline by which the collective improvement must be initiated; and

(4)    provisions for alternative uses of these funds on other improvements within the same service area if` the collective improvement is not initiated within the approved timeline.

(B)    The proposal must provide for payment of a liquidated sum from funds generated by assessments, or any financing facilities funded from assessments, into a trust account maintained by the governing body. This trust account is to be maintained only for the purpose of funding that specific collective improvement. Funds from multiple districts, including ones that are created after the creation of the trust fund and the identification of the collective improvement, may be commingled in these trust accounts for the purpose of funding the collective improvement.

Section 6-35-120.    (A)    The governing body, by resolution, shall describe the district and the improvement plan; the projected time schedule for the accomplishment of the improvement plan; the estimated cost; and the amount of the cost to be derived from assessments or other financing facilities funded by assessments, together with the proposed basis and rates of assessments to be imposed within the district.

(B)    The resolution also must establish the time and place of a public hearing to be held. The public hearing may not take place:

(1)    in a county, no earlier than thirty days nor more than forty-five days following the adoption of the resolution; or

(2)    in a municipality, no earlier than twenty days nor more than forty days following the adoption of the resolution.

Section 6-35-130.    (A)    A resolution providing for a district, when adopted, must be published:

(1)    once a week for two successive weeks in a newspaper of general circulation within the relevant incorporated municipality; or

(2)    once a week for three successive weeks in a newspaper of general circulation within the relevant county.

(B)    The final publication must be at least ten days before the date of the scheduled public hearing. At the public hearing and at any adjournment of the meeting, all interested persons may be heard either in person or by attorney.

Section 6-35-140.    The governing body may provide by the resolution for the payment of the cost of the improvements by assessments on the property within the district, or by any other financing facility paid for by the assessments.

Section 6-35-150.    The rates of assessments within the district need not be uniform. The owner and the governing body shall agree upon the rates of assessment across different sections of, or uses within, the district.

Section 6-35-160.    The improvements are to be or become the property of the municipality, county, State, special purpose districts, or other public or quasi-public entity. The public or quasi-public entity may lease these improvements to other public, quasi-public, or nonpublic entities.

Section 6-35-170.    (A)    The governing body begins the process for adoption of an ordinance creating a district by enacting a resolution, upon the written proposal of all owners of the property comprising the proposed district, directing the local planning commission to review the owner proposal, and recommending a residential improvement district ordinance, developed in accordance with the requirements of this chapter.

(B)    Upon receipt of the resolution enacted pursuant to subsection (A), the local planning commission, within the time designated in the resolution, shall make recommendations to the governing body for the boundaries of the district, the service area or areas, the improvements, and the assessments.

(C)    A district may not be established without the express written consent of all owners of the property comprising the proposed district.

(D)    The governing body shall consider the ordinance in accordance with Section 6-1-130.

Section 6-35-180.    If the governing body creates an assessment, a certified copy by the clerk of the municipality or county must be filed in the office of the clerk of court of the relevant county. If the district is located in a municipality, it must be filed in the county in which the municipality is situated. From the time of the filing, the assessment constitutes and is a lien on the real property against which it is assessed superior to all other liens and encumbrances, except the lien for property taxes, and must be assessed annually and collected with the property taxes on it."

SECTION    2.    This act takes effect upon approval by the Governor.


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