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Sponsors: Reps. Gullick, Mulvaney, Breeland, Scarborough, Stavrinakis, E.H. Pitts and Haley
Document Path: l:\council\bills\bbm\9821htc07.doc
Companion/Similar bill(s): 366, 367, 3372, 3422
Introduced in the House on March 1, 2007
Currently residing in the House Committee on Ways and Means
Summary: Homestead Exemption Fund
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 3/1/2007 House Introduced and read first time HJ-53 3/1/2007 House Referred to Committee on Ways and Means HJ-53 5/22/2007 House Member(s) request name added as sponsor: E.H.Pitts, Haley
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VERSIONS OF THIS BILL
TO AMEND SECTIONS 11-11-155 AND 11-11-156, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE HOMESTEAD EXEMPTION FUND AND THE MANNER IN WHICH THE SCHOOL DISTRICTS OF THE STATE RECEIVE REVENUES FROM THE HOMESTEAD EXEMPTION FUND, SO AS TO CLARIFY THE METHOD OF DETERMINING AND CALCULATING THESE PAYMENTS AND PROVIDING FOR THE ANNUAL REIMBURSEMENT ADJUSTMENT BASED ON STATEWIDE POPULATION GROWTH TO INSTEAD BE BASED ON SCHOOL DISTRICT POPULATION GROWTH WITH A "HOLD HARMLESS" PROVISION, PROVIDING THE SCHEDULE OF THE PAYMENTS TO SCHOOL DISTRICTS, SPECIFYING THE SOURCE OF THE TWO AND ONE-HALF MILLION DOLLAR MINIMUM PAYMENT TO A COUNTY FOR SCHOOL DISTRICTS IN THE COUNTY, AND SPECIFYING WHEN A REMAINING BALANCE IN THE HOMESTEAD EXEMPTION FUND IS REMITTED TO COUNTIES FOR PURPOSES OF THE COUNTY OPERATING MILLAGE PROPERTY TAX CREDIT FOR OWNER-OCCUPIED RESIDENTIAL PROPERTY.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 11-11-155(C) of the 1976 Code, as added by Act 388 of 2006, is amended to read:
"(C) Subject to the provisions of Section 11-11-156(C), an unexpended balance in the Homestead Exemption Fund at the end of a fiscal year must remain in the Homestead Exemption Fund."
SECTION 2. Section 11-11-156 of the 1976 Code, as added by Act 388 of 2006, is amended to read:
"Section 11-11-156. (A)(1) Beginning with fiscal year 2007-2008, school districts of this State must be reimbursed from the Homestead Exemption Fund in the manner provided in this subsection.
The Comptroller General shall pay these reimbursements upon application of the school district and the The reimbursements reimbursement due a school district for fiscal year 2007-2008 and thereafter shall be equal to the amount estimated to be collected or reimbursed in fiscal year 2007-2008 by the district from school operating millage imposed on owner-occupied residential property therein consists of three tiers. The tier one reimbursement is an amount equal to the amount received by the district pursuant to the provisions of Section 12-37-251 as those provisions applied for fiscal year 2006-2007. The tier one reimbursement is fixed at the fiscal year 2006-2007 amount and continues into succeeding fiscal years at this fixed amount. The tier two reimbursement is the amount to be received by the district pursuant to the provisions of Section 12-37-270 for fiscal year 2006-2007 for the school operating millage portion of the reimbursement for the homestead exemption allowed pursuant to Section 12-37-250. The tier two reimbursement is fixed at this fiscal year 2006-2007 amount and continues into succeeding fiscal years at this fixed amount. The tier three reimbursement is derived from the revenue of the tax imposed pursuant to Article 11, Chapter 36 of Title 12, and for fiscal year 2007-2008, consists of an amount equal dollar for dollar to the revenue that would be collected by the district from property tax for school operating purposes imposed by the district on owner-occupied residential property for that fiscal year as if no reimbursed exemptions applied, plus an amount that a district may have received in its fiscal year 2006-2007 reimbursements pursuant to Section 12-37-251 in excess of the computed amount of that exemption from school operating millage for that year, reduced by the total of the district's tier one and tier two reimbursements.
(2) Beginning in fiscal year 2008-2009 a school district
shall must receive in reimbursements what it received in fiscal year 2007-2008 plus the reimbursement increases provided for in item (3). From the total tier three reimbursement increase attributable to population increase, a school district must receive an amount reflecting the proportion that the population increase of that particular school district, as determined pursuant to item (4) of this subsection, is of statewide population growth as determined pursuant to item (3) of this subsection but not less than the amount it received pursuant to this calculation for the prior year. The inflation factor portion of the tier three reimbursement increases of the several school districts as provided in item (3) for any year shall must be aggregated and the reimbursement increase a particular school district shall receive receives for that year shall be attributable to the inflation factor must equal to an amount that is the school district's proportionate share of such funds based on the district's weighted pupil units as a percentage of statewide weighted pupil units as determined annually pursuant to the Education Finance Act. For purposes of the reimbursement increases school districts receive under this subsection based on weighted pupil units determined pursuant to the Education Finance Act, an additional add-on weighting for students in poverty of 0.20 shall must be included in the weightings provided in Section 59-20-40(1)(c) of the 1976 Code. The weighting for poverty shall must provide additional revenues for students in kindergarten through grade twelve who qualify for Medicaid or who qualify for reduced or free lunches, or both. Revenues generated by this weighting must be used by districts and schools to provide services and research-based strategies for addressing academic or health needs of these students to ensure their future academic success, to provide summer school, reduced class size, after school programs, extended day, instructional materials, or any other research-based educational strategy to improve student academic performance.
(3) Beginning with the fiscal year 2008-2009 reimbursements, these tier three reimbursements must be increased on an annual basis by an inflation factor equal to the percentage increase in the previous year of the Consumer Price Index, Southeast Region, as published by the United States Department of Labor, Bureau of Labor Statistics plus the percentage increase in the previous year in the population of the State as determined by the Office of Research and Statistics of the State Budget and Control Board. Distribution of these reimbursement increases
shall must be as provided in this subsection.
(4) The percentage of population growth in any year for any school district entitled to reimbursements from the Homestead Exemption Fund
shall must be based on estimates for such growth in the county wherein the school district is located as determined by the Office of Research and Statistics of the State Budget and Control Board. Where the school district encompasses areas in more than one county, the population growth in that entity shall must be the average of the growth in each county weighted to reflect the existing population of the school district in that county as compared to the existing population of the school district as a whole.
Upon the beginning of reimbursements for a particular year, the reimbursements must be paid to a school district on or after January first of that year. (a) No later than December thirty-first of each year, the Office of Research and Statistics of the State Budget and Control Board shall provide each school district with a preliminary estimate of the district's reimbursements from the Homestead Exemption Fund for the fiscal year beginning the following July first. A final estimate must be provided to each district by February fifteenth. The February fifteenth forecast may be adjusted if the Office of Research and Statistics determines that changing conditions have affected the forecast.
(b) The Department of Revenue shall pay the reimbursements provided pursuant to this subsection to the county treasurer for the credit of each school district in the county. The reimbursement must be paid on the application of the county treasurer according to the following schedule:
(i) ninety percent of the tier one reimbursement must be paid in the last quarter of the calendar year no later than December first. The balance of the tier one reimbursement must be paid in the last quarter of the fiscal year that ends June thirtieth following the first tier one reimbursement date;
(ii) tier two reimbursements must be paid on the same schedule as the second tier one reimbursement;
(iii) tier three reimbursements must be paid in nine equal monthly installments based on one-tenth of the Office of Research and Statistics estimate, beginning not later than October fifteenth. A final adjustment balance payment must be made before the closing of the State's books for the fiscal year.
(6) To the extent revenues in the Homestead Exemption Fund are insufficient to pay all reimbursements to a school district required by this subsection (A) and subsection (B), the difference must be paid from the state general fund.
(7) Operating millage levied in a county for alternative schools, career and technology centers, and county boards of education whether or not levied countywide or on a school district by school district basis in a county also is considered school operating millage to which the reimbursements provided for in this section apply.
(8) Reimbursements to a school district under this subsection
shall must be considered in the computation of the required Education Improvement Act maintenance of local effort.
(B)(1) After the required reimbursements to school districts in a county have been made from the Homestead Exemption Fund for any year pursuant to subsection (A), a county, if the districts
therein in that county have not together received a total of at least two million five hundred thousand dollars in tier three reimbursements, the county must receive an additional disbursement from the Homestead Exemption Fund to bring the total reimbursements to the districts in that county to at least two million five hundred thousand dollars. This additional disbursement shall must be paid to the county for disbursement to the school districts located within that county. These distributions under this subsection to any district in the county shall must be equal to the one hundred thirty-five day average daily membership of the district divided by the total average daily membership of all students in the districts in the county times the required amount of funds to bring the total reimbursements to the school districts in that county to at least two million five hundred thousand dollars.
(2) If a school district encompasses more than one county, the one hundred thirty-five day average daily membership of the students from that county attending schools of the district must be used to compute the distributions required by this subsection.
(3) The distributions to a county and then to a school district under this subsection
shall must be considered to be outside of the Education Finance Act and shall must not be considered when computing the maintenance of local effort required of that district under the Education Improvement Act.
The When determined, any balance in the Homestead Exemption Fund remaining at the end of a fiscal year after the payments to school districts and counties pursuant to subsections (A) and (B) of this section must be segregated within the Homestead Exemption Trust Fund and remitted in the next fiscal year to counties in the proportion that the population of the county is to the total population of the State. Population data must be as determined in the decennial United States Census and the most recent update to that data as determined by the Office of Research and Statistics of the State Budget and Control Board. Revenues received by the county must be used to provide a property tax credit against the property tax liability for county operations on owner-occupied residential property classified for property tax purposes pursuant to Section 12-43-220(c). The credit is an amount determined by dividing the total estimated revenues credited to the county during the applicable fiscal year by the number of parcels in the county eligible for the credit. Credit that exceeds the tax due on a parcel must be reallocated in a uniform amount to remaining parcels with a property tax liability for county operations. The distributions under this subsection are not an obligation of the state general fund if sufficient funds are not available to make such distributions from the Homestead Exemption Fund.
(D) Notwithstanding any other provision of this section, the reimbursements provided pursuant to this section for the property tax exemption allowed by Section 12-37-220(B)(47) must include full payment to each taxing entity for the incremental property tax that, in the absence of such exemption, would otherwise be payable to such taxing entity with respect to owner-occupied residential real property located in a redevelopment project area pursuant to the tax increment financing law for cities, counties, or redevelopment authorities. Such payment for incremental property taxes shall be calculated in accordance with the applicable tax increment financing law and shall be based on the assessed value of, and the school operating millage rate otherwise applicable to, the owner-occupied residential property in question."
SECTION 3. This act takes effect upon approval by the Governor.
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