Issue 22- 04
June 25, 2004

B. Municipal Capital Projects Sales Tax - H. 3903. The main bill to grant a special local option sales tax bond penny to municipalities was H. 3903. Several other bills were amended with the contents of H. 3903, most notably S. 813. All of these died with the close of the legislative session. This legislation is unnecessary because the existing local option bond penny authorization requires a joint county-municipal committee to consider all projects from the entire county area.

C. School Capital Projects Sales Tax - H. 3612. This bill and several others with similar provisions died. This proposal had serious problems. Additionally, the proposal would not have delivered the promised property tax relief, because it fails to address the problem of the statutory school millage drivers.

D. Preserving Local Land Use Control. The Hog bill, H. 3555 and H. 3082, was the main challenge to local land use control and it died at the close of the session. There was a solid core of opposition to the proposal on the Senate floor and the bill was never reached for debate. Another challenge to local land use decisions was the billboard bill, H. 4556, and that bill was sent back to committee from the House floor.

E. Vested Rights - H. 3858, R. 411. This legislation creates a default property rights vesting time before issuance of a building permit, only if the local governing body does not enact a clear time of vesting ordinance of its own prior to July 1, 2005. This was a compromise reached between SCAC, the Homebuilders Association, Realtors and MASC. The Governor is expected to sign this bill shortly.

F. Court Revenue Collection Training. SCAC supported comprehensive annual training for county and court personnel handling the collection, reporting and disbursement of court fees, fines, assessments and surcharges revenue. The state budget contains $10,000 specifically earmarked for training of the clerks of court, treasurers, magistrates and their staff on the statutes regulating the collection and distribution of court fees, fines and assessments. The State Treasurer’s office and Court Administration are to provide this annual training.

This was the big disappointment of the 2004 legislative session. In the waning hours of the final day the 20% cap on valuations from H. 3689 was bobtailed onto H. 3065 and the House concurred in the amendment. There is no clear indication from the Governor’s office as to what action the Governor might take on this legislation. The Governor has until January to sign or veto the legislation or the bill will become law without his signature in January. There is not a line item veto for general bills, so the entire bill would have to be vetoed. Click here for an editorial from the Charleston Post & Courier calling for a veto.

LEGISLATIVE ACTION REQUEST:
! Request that the Governor veto H. 3065.
! Send information to the Governor’s office regarding H. 3065, so that he can appreciate the disruption among the property taxpayers this legislation would cause if signed or allowed to become law. Information the Governor might find useful includes: the extent of the millage increases required by the bill, the number of property tax bills which be higher or lower as a result of allowing the bill.
! Educate the public on the tax shift which results from this 20% cap legislation.

The Governor’s Office mailing address is P.O. Box 12267, Columbia, S.C. 29211.

SCAC President Gonza Bryant issued this statement following the passage of the 20% cap:

The Association of Counties has opposed a statewide mandatory cap on property tax values from day one. We worked with groups representing economically disadvantaged individuals, utility companies, and other business interests to defeat this legislation.

The legislature has insisted that the tax valuation cap proposal is revenue neutral to the governmental entities which depend upon property tax revenue. However, it is grossly unfair to a number of different groups of property tax payers. Property owners who receive the benefit of the valuation cap, would receive that break at the expense of every other property owner. The property owners who would pay increased taxes include those least able to afford an additional share of the property tax burden, those taxpayers who are employers, and taxpayers who comprise the vast majority of the middle class.

There is also the very real likelihood of a great deal of disruption from implementation of the cap and a subsequent court decision that the proposal is unconstitutional. There are several grounds upon which a court could find the legislation unsound. Procedurally, there was no two thirds vote necessary to adopt a property tax exemption. The bill also relates to more than one topic which were not included in the title of the bill. Substantively, the bill violates the provisions of Article X of the South Carolina Constitution which requires that property taxes be levied on the fair market value of property and that they be fair and uniform.

From a tax policy standpoint, we do everything possible to grow the tax base and reduce tax rates to raise the revenue necessary to fund government services. This proposal reduces the tax base and forces tax rates to be higher than they otherwise would be.

Many, if not most local governments have already adopted budgets and many of those have also set property tax rates. There is a great potential for disruption of county, city and school services if this bill is signed into law then successfully challenged in the courts or vetoed and overridden.

B. County Veteran Affairs Office Funding - S. 638, R. 388. This bill would pay money for county veterans affairs offices directly to the county treasurer's office by the State Treasurer at the beginning of the fiscal year.

C. Public Bank Deposits - S. 668, R. 341. This legislation would allow banks to use irrevocable letters of credit to be used as security for public deposits in excess of federal deposit insurance.

D. Probate Judge Autonomy - H. 3793. This legislation to give probate judges autonomy was sent back to subcommittee after reaching the full House Judiciary Committee.

E. Multi-County Business Parks - H. 5086. A provision which would have given school boards an inappropriate role in the creation of multi-county business parks and seriously limited this successful economic development tool was deleted from DOR’s big annual tax (BAT) bill at the House Ways & Means Committee. The provision did not resurface in the various reiterations of the BAT bill.

F. Mandatory Tax Sale Parcel Partition - S. 732. This legislation would have made tax sales nearly impossible to defend in court, even if the delinquent taxpayer allowed the redemption period to expire. The bill died in a House Ways & Means subcommittee. The Tax Collectors Association is continuing to work with bill sponsors to find a workable solution.

B. At Will Employment - H. 3448, Act No. 185. This act makes a clear statement that an employee handbook does not create an employment contract if a very specific disclaimer process is followed.

C. Second Injury Fund Elimination - H. 4449. Progress was made in the effort to eliminate the Second Injury Fund. Although not ultimately successful, there was debate in the budget and H. 4449 was heard in subcommittee.

D. No Golf Course Left Behind - S. 917 & H. 5027. This legislation to give golf courses a special property tax assessment rule was defeated this year. The coup de gras in the legislative debate was one of the more memorable speeches given on the House floor this year by Rep. Ken Kennedy. The county assessors and golf course owners are continuing to work on a mutually agreeable compromise.

E. School Millage Drivers - H. 4557. The House included the repeal of the maintenance of local effort school millage driver as a budget proviso, which was deleted from the budget in the Senate. The fight was then taken up in H. 4557 too late in the session to expect passage of the bill, but progress was made.

F. Big Annual Tax (BAT) Bill - H. 3065. The BAT bill began as H. 5086, was placed in various different combinations of provisions on several other bills and ultimately passed in H. 3065. The final version contained the 20% cap bill which is discussed in Item 2 above. The other items in the bill are covered briefly here. There were a number of SCAC legislative agenda items which were in the bill for a while but did not make it into the final version. Those items included the mobile home lienholder notification procedures, provisions to address tax sale costs arising after the Watson case, and a flat $15 business license tax authorization. The bill did include a restriction on the use of net present value calculations to create a level stream of payments from a fee in lieu of tax agreement, a provision to allow DOR to disclose whether a taxpayer has claimed legal residence assessment ratio in a county, and a provision to change §6-1-320 to match the CPI calculation method used by DOR in determining the millage rate limitation for local governments.

G. Isolated Wetlands - H. 4934. This legislation was introduced to give DHEC the authority to regulate isolated wetlands as a result of a court decision limiting federal regulations. SCAC was successful in getting language favorable to county governments. The bill died on the Senate floor.

H. Revision of Comprehensive Plan Contents - H. 4354. This bill died in the Senate after SCAC, other parties, and the bill’s sponsor worked out an agreement.

I. Land Use Orientation and Continuing Education Requirement Deadline Extension - H. 3858. Land use officials and employees are required to have orientation and continuing education courses as a result of last year’s takings legislation. SCAC’s suggested appointee was appointed by the Governor and confirmed by the Senate, as were three of the remaining four members of the committee. It became apparent that getting the committee organized and courses approved in time to allow officials to meet the January 1, 2005 deadline would be problematic. So H. 3858, R. 411 was amended to change the deadline in §6-29-1320 to require municipalities and counties with a population of 35,000 and greater to comply by January 1, 2006, and smaller jurisdictions to comply by January 1, 2007.

Newly-Introduced Legislation

House Bills

None

Senate Bills

None

Ratification of Acts

The following bills have been passed by both chambers and are now before the Governor for his signature or veto.

Note: The Governor has until the second day after the General Assembly returns to take action on a bill. If the Governor takes no action the legislation becomes law.

(R.338), S. 104 - Legalizes tattooing and provides for its regulation.

(R.339), S. 277 - Establishes criteria by which counties may offer economic incentives for renovation and rehabilitation of historic homes and permits sales tax proceeds to be used for public parking garages and beach renourishment projects.

(R.341), S. 668 - Authorizes a municipality, county, school district, other local government unit, political subdivision, or county treasurer to secure deposits made by them in the form of a letter of credit.

(R.347), S. 852 - Provides that the definition of "public service", as it relates to the SC and Police Officer’s Retirement systems, include paid service as an employee of an institution of higher education while a student at the institution.

(R.350), S. 1043 - Various provisions relating to the dissolution of a military facilities redevelopment authority.

(R.356), H. 3409 - Provides a process for establishing fireworks prohibited zones in counties and municipalities.

(R.360), H. 4320 - Constitutional amendment deleting the specific limit of 10 shareholders for a corporation to be eligible for a 4% assessment ratio on its agricultural real property.

(R.361), H. 4454 - Provides that for certain political subdivisions that were created to operate hospitals on a local or regional basis, the ability to call for or conduct advisory or binding referenda rest solely with the governing board of the political subdivision and the governmental bodies that appoint the board.

(R.369), H. 4767 - Requires each county’s board of voter registration to provide voter registration applications to each high school in the county upon the administration’s request.

(R.378), H. 5020 - Provides for the requirements, terms, and conditions of guaranteed energy saving contracts.

(R.386), S. 131 - Enacts the SC Military Preparedness and Enhancement Act.

(R.387), S. 548 - Exempts the SC Law Enforcement Accreditation Council from tort liability.

(R.388), S. 638 - Provides that funding for county veterans affairs’ offices be paid directly to their offices by the State Treasurer.

(R.393), S. 848 - Provides that only certain vehicles may use or display any blue or red lights or display the word police.

(R.395), S. 965 - Changes DJJ procedures and exceptions for confining juveniles in adult jails.

(R.401), H. 3065 - DOR’s annual "clean up bill" , Overdue Tax Debt Collection Act, and the 20% cap on property tax assessments.

(R.409), H. 3778 - Provides that local authorities may erect signs informing the public that a person driving a vehicle involved in an accident may stop the vehicle at the scene or as close as possible without obstructing traffic. Also requires investigations of accidents involving police vehicles include a field investigation to identify possible witnesses.

(R.411), H. 3858 - Enacts the Vested Rights Act.

(R.412), H. 3867- Increases the size of jury pools for magistrate and municipal courts and requires magistrate jurors lists to be prepared by October annually.

(R.419), H. 4482 - Enacts the Federal Defense Facilities Utilization Integrity Protection Act which requires local governments to seek the input of military officials whose facilities may be affected by land use plans or zoning ordinances.

(R.420), H. 4527 - Provides state income tax deductions for reserve police officers.

(R.422), H. 4575 - Requires the clerk of court to notify a child support obligee when a rule to show cause is issued.

(R.423), H. 4869 - Various provisions relating to law enforcement towing procedures.

(R.424), H. 4675 - Prohibits suspension of the mandatory litter gathering sentence for the crime of littering unless the court directs the offender to pay an additional monetary penalty instead of the sentence.

(R.426), H. 4720 - Enacts the Uniform Electronic Transactions Act.

(R.427), H. 4735 - Provides for appearance, construction, and foundation standards for modular homes certified for placement in this state and a sales tax exemption of 50% of the gross proceeds from the sale of a modular home.

(R.428), H. 4740 - Enacts the SC Safe Routes to School Act which requires counties, municipalities, and school districts to identify safe routes for students to bike or walk to school.

(R.432), H. 4968 - Enacts the Motion Picture Incentive Act, providing for new tax incentives for motion picture production companies.

The 115^th South Carolina General Assembly adjourned sine die at 5:00 pm Thursday. Every bill, good, bad or immaterial is now dead. At the beginning of the session, there were a large number of bills moving along the legislative process which would have been detrimental to local government operations which did not pass. Primary among those bills was the Hog Bill. There were also a number of positive bills which were moving and fell by the wayside in the last few days. That is the nature of the legislative process. The filibuster kills you one day and saves you the next.

The successes of the session were primarily the result of the hard work any number of county officials put into the legislative program - making phone calls, generating background data, writing letters, educating members of the media, relaying the results of those contacts to SCAC staff so that those legislators could be contacted at appropriate times on issues. One of the finest examples of that hard work was the assessors and the effort they put into research, contacting legislators, attending committee meetings and working with the golf course owners association to see if an alternative acceptable to all could be worked out on the golf course valuation legislation.

This edition of the Friday Report will be a quickie, hitting the highlights and moving on. The Thursday House and Senate journals have not yet been printed. SCAC will publish a final Friday Report with a more thorough wrap up in two to three weeks, depending upon availability of information.
 

The Hog Bill did not pass. The bill was not taken up in the Senate because of the efforts of several Senators who had promised extended debate. Senators Leventis, Malloy, Ravenel and Richardson were very active in their opposition. Please thank them and others who supported Home Rule. There was a flurry of activity on Tuesday from folks seeking a compromise but the proposals were not accepted by either side. This year’s success was also made possible by the hard fight put up in the House. That effort was led by Reps. Bill Cotty, Eldridge Emory, Doug Jennings, Ken Kennedy, Jay Lucas, Walt McLeod, Vida Miller, Becky Richardson, Thayer Rivers, James Smith, and Seth Whipper. Another tip of the hat to the Coastal Conservation League and SC Sierra Club who stood with us all the way. You can count on a similar proposal being introduced next year.

SCAC will put out a Technical Bulletin on this legislation very shortly. Although the Governor has until the General Assembly reconvenes in January to take action on this bill, it would affect this fall’s property tax bills in the counties implementing a reassessment program this year.

County officials must do two things beginning now: (1) Begin planning the implementation of this act if you are in a county implementing a reassessment program this year as there will be very significant effort and cost to reprogram computers and much greater effort will be needed to accurately predict the value of a mill. (2) Begin educating the public on the effect of artificially reducing the valuation of select segments of the property tax base on the millage rate everyone pays. This was the biggest obstacle in fighting this bill. Most people looking at the legislation focused only on the positive and forgot - or never realized - that the great majority of tax bills will go up as a result of the millage adjustment necessary to maintain the revenue neutrality the General Assembly said was the result of the bill. Even the newspapers have neglected to examine the full effects of this legislation.

B. School Bond Sales Tax - H. 3612. This was the countywide school bond penny proposal. H. 3612 failed to receive 2^nd reading in the Senate. H. 5210 was amended to include the contents of H. 3612 and it was referred to the Senate Finance Committee. Other attempts to insert H. 3612 into other legislation failed.

C. Boat Taxes - H. 4440. This bill was amended to include the flat business license tax legislation in the Senate. The House amended it back to its original version containing a mandatory 6% assessment ratio and cap on all boat tax bills at $1500.00. The Senate did not reach H. 4440 and it died.

D. Tattoo Parlors - S. 104. This legislation to legalize tattoo parlors has been ratified. Local zoning ordinances should probably be checked to see where these businesses may be placed.

E. Building Code Adoptions - S. 897. The House voted nonconcurrence in the Senate amendments and the bill apparently died for lack of additional action.

F. Vested Rights - H. 3858. The bill will require an amendment to the local land use ordinance if the county wants to maintain control over the vesting. The bill also gives an additional grace period for a local government to comply with the educational provisions of last year’s takings bill. H. 3858 was enrolled for ratification.

G. Child Support Notice - H. 4575. This legislation was enrolled for ratification.

H. County Veteran Affairs Office Funding - S. 638. The bill would pay money for county veterans affairs offices directly to the county treasurer's office by the State Treasurer. S. 638 was enrolled for ratification.

I. Military Bases & Land Use Planning - H. 4482. This bill has been enrolled for ratification. H. 4482 requires local governments to notify military installations of land use planning changes that may affect their installations so that military officials may be given the opportunity to provide their input.

Newly-Introduced Legislation

House Bills

None

Senate Bills

None

Ratification of Acts

None