Issue 12-06
March 31 , 2006

Property Tax Restructuring In the Senate - H. 4449 & others

Hang in there with us, the action on this bill changes by the minute and a lot happened this week. There are more plans than there are Senators and it is anybody’s guess as to what the final Senate product will look like.

The Senate Finance subcommittee considering the sales tax for property tax swap did not get the figures on their proposal to create a circuit breaker and create a county operating tax exemption. Therefore they recommended stripping all the provisions from H. 4449 and reporting out a plan when all the details were worked out. That is what the Finance Committee did on Tuesday and it has been set for Special Order pending second reading on the Senate calendar.

Thursday afternoon, the subcommittee voted 4-3 to send out a new plan suggested by Sen. Scott Richardson. He argued that granting relief on county operations taxes created inequities because of differing service levels and numbers of services. The new plan does the following:
• increases the statewide sales tax by 1%;
• grants a owner occupied property tax exemption for the school operating
   property tax; ($166 M)
• grants a personal vehicle property tax exemption for the school operating
   property tax; ($323 M)
• grants the 5% of income circuit breaker to be paid through a refundable
   income tax credit; ($104 M)
• creates a $60 M reserve fund.

The proposal still does not address reform of the statutory school millage drivers which are also referred to as maintenance of local effort. SCAC staff has been working with several senators in an effort to get this provision added to whatever proposal gets adopted by the Senate. Without reforming the statutory requirement for school millage increases, no property tax relief plan will provide lasting relief.

NOW IS THE TIME TO CONTACT THE MEMBERS OF THE SENATE - ESPECIALLY THE FINANCE COMMITTEE MEMBERS - TO:

● SUPPORT THE SUBCOMMITTEE PLAN OUTLINED ABOVE,
● ASK THAT SCHOOL MILLAGE DRIVER REFORM BE
   INCLUDED, AND
● REINFORCE THE MANY INEQUITIES CREATED BY
   ADDRESSING COUNTY OPERATIONAL MILLAGE - INCLUDING:
   THE VARYING SERVICE LEVELS FROM COUNTY TO COUNTY;
   DISTRIBUTION FORMULA PROBLEMS; AND SCHOOL MILLAGE
   IS THE OVERWHELMING MAJORITY OF ANY TAX BILL.

House Completes Budget Debate

The House completed debate on the budget bill this week. Although the debate was lengthy and took up the entire week, their were almost no changes from the Ways and Means version of the budget.

Despite a compelling argument given by Rep. Harry Ott to delete the proviso, the bill continues to include an increase in the per diem paid to the Department of Juvenile Justice to $50. (Proviso 39.20). The House also refused to adopt an amendment which would have required DJJ to exclusively spend local government tax dollars on juveniles sent to DJJ by local governments.

Senate Finance subcommittees will continue work on their version of the budget. It is anticipated that Finance Committee will take up the budget the week of Easter. Members of the Senate Finance subcommittee should be reminded:
• A 100% increase in juvenile detention per diem cost is nothing more than a
  mandated increase in cost to the property taxpayers of their county. Aren’t they in
  favor of keeping the millage down?

• When the per diem was set at $25, DJJ received an increase in court assessment
   revenue amounting to another $2.8 million in FY 04-05. Section 14-1-208(C)
  (11) specifically states “that per diem costs charged to local governments utilizing
   the juvenile detention centers do not exceed twenty-five dollars a day.”

• The increase to $50 per day and the assessment revenue total $4.5 million. This
  equates to over $46,000 per child annually (not including education costs) for
  juvenile detention in funding. What is DJJ doing at that facility? This figure also
 does not include additional federal funds DJJ receives.

ASK THE FINANCE COMMITTEE MEMBERS TO VOTE AGAINST THE PROVISO INCREASING THE DJJ PER DIEM FOR JUVENILE DETENTION. The members of the Senate Finance Subcommittee are:
Sens. Fair, Short, Reese and Verdin.

Eminent Domain / Takings - S. 1030, H. 4502 and H. 4503

A Senate Judiciary subcommittee plans to address S. 1030, H. 4502 (Constitutional Amendment) and H. 4503 (statutory provisions) next week.
S. 1030 and H. 4502 provide only eminent domain changes to address the recent Kelo Supreme Court case. H. 4503 contains both eminent domain changes and regulatory takings provisions.

Regulatory takings and changes to address the recent Kelo Supreme Court case are two different issues and need to be addressed separately. The takings language in H. 4503 would severely restrict local governments’ ability to address citizen concerns involving zoning and other land use regulations unless local governments paid large sums of money to implement protections.

Please contact Sens. Gregory, Campsen, Elliott, Rankin, Ford, and Sheheen and ask that they vote not to include any regulatory takings provisions in eminent domain legislation.

The 2006 version of the Hog Bill - S. 1205

The bill was set for Special Order and debate began on Thursday and is now in interrupted debate in the Senate. This means that S. 1205 will be taken up for final action next week. The pending question will be the adoption of the Committee amendment which exempts county zoning and land use plans if they do not contain restrictions on agriculture that exceed State regulations. In an effort to recognize the fact that one size doesn’t fit all, Sen. Lourie is proposing an amendment that allows DHEC to exceed State regulations where circumstances dictate. Prior enacted local ordinances are still not grandfathered and unless they are protected they will be considered null and void.

Identity Theft

The Senate Banking & Insurance Committee is working on comprehensive identity theft legislation. The bill that is currently being considered gives an individual the right to request removal from an image or copy of an official record, available on the internet, any social security, drivers license, state identification, passport, checking account, savings account, credit card, debit card number or PIN code. A fee cannot be charged for the redaction pursuant to the request. The bill also requires immediate and conspicuous posting of signs throughout public offices notifying people of their rights to request the removal of this information.

In addition, the bill prohibits a public body from:
• collecting an SSN or any portion of it containing 6 digits or more unless
  authorized by law;
• failing to segregate a person’s SSN on a page separate from the rest of the record
  so that it may be redacted;
• failing to notify a person, before collecting an SSN, that the person is entitled to
  know why the number is being collected and used;
• intentionally making available to the general public an individual’s SSN or more
  than 5 digits of it;
• intentionally printing a person’s SSN on any card required for the individual to
  access government services;
• requiring an individual to transmit their SSN over an internet connection that is not
  encrypted;
• requiring an individual to use their SSN to access a website without the
  requirement of a password;
• printing an individual’s SSN on materials mailed to that individual.

A person preparing or filing a document to be recorded by the register of deeds or clerk of court who unlawfully includes an individual’s SSN, driver’s license, state ID, passport, checking account, savings account, credit card, debit card, or PIN code is guilty of a misdemeanor and may be fined up to $500 for each violation. Liability may not accrue to a register of deeds or clerk of court or his agents for claims or damages that arise from an SSN or other identifying information on the public record.

The House companion bill, H. 4297, is expected to be considered by a House Judiciary subcommittee next week. Please contact your legislators to explain the impact these provisions will have on your county.

Newly-Introduced Legislation

H. 4911 - Permits a court to order a noncustodial parent to participate in an employment training program and be arrested for failure to comply.

H. 4913 - Annual tax clean-up bill.

H. 4918 - Creates the offenses of unlawful restraint and false imprisonment and provides penalties.

H. 4926 - Creates the Mill Village Infrastructure Bank Trust Fund.

H. 4928 - Creates the Department of Behavioral Health Services and devolves the powers of the Department of Alcohol and Other Drug Abuse Services, the Department of Disabilities and Special Needs, and the Department of Mental Health.

H. 4930 - Permits a municipality to impose a tax or fee on the transfer of real property if another municipality in the same county was imposing the fee before January 1, 1991.
 

S. 1284 - Establishes the crimes of vehicular homicide and vehicular great bodily injury.

S. 1285 - Provides civil immunity for persons providing CPR training involving the use of automated external defibrillators.

S. 1286 - Permits a court to order a noncustodial parent to participate in an employment training program and be arrested for failure to comply.

S. 1289 - Permits a county to enact a local option sales tax in order to exempt homesteads from property tax imposed for school operations.

S. 1290 - Constitutional amendment permitting counties to impose a sales tax to exempt homesteads from property tax levied for school operations.

S. 1291 - Permits counties to impose a sales tax, upon referendum approval, to be used to exempt homesteads from property tax levied for school operations.

S. 1294 - Revises the manner in which vacancies for the office of coroners are filled and revises the duties of a coroner.

Issue 11-06
March 24 , 2006

Property Tax Restructuring in the Senate -- H.4449

Thursday afternoon the Senate Finance subcommittee considering the various sales tax for property tax swap plans adopted the outline of a proposal to grant property tax relief using a statewide one half cent sales tax increase. The revenue, a little over $300 million will be split into two different property tax relief programs outlined below.

The subcommittee will meet briefly to review the draft of the plan at 2:00 pm on Tuesday, March 28 and the plan will then be before the full Senate Finance Committee at 3:00 pm that day.

IF YOU HAVE CONCERNS ABOUT ANY FEATURE OF THIS PLAN,  CONTACT YOUR SENATOR  IMMEDIATELY. THE MEMBERS OF THE SUBCOMMITTEE ARE: Senators Courson, Grooms, Hayes, Land, Matthews, Richardson, and Short. THEY SHOULD BE CONTACTED BEFORE THEY MEET ON TUESDAY.
(Click here for Sen. Fin. Roster w/ s/c members highlighted)  

THE PROPOSAL:
The proposal is only a concept at this point with many undetermined features. Below is the best information we have at this point and a list of unanswered questions.

● Raise $300+ million through a one half cent increase in the state sales tax to be placed into a trust fund.

● Place 5% of the revenue into a reserve account.

● Use approximately $100 million to fund a circuit breaker for owner occupied residential property. If the total property tax on the home (after all tax relief and exemptions) exceeds 5% of the federal income tax Adjusted Gross Income (AGI) for the household in the home, the State will pay the amount over the 5% threshold.

    ○ There is no set mechanism to pay that amount over the 5% threshold. The mechanism discussed in the meeting was for a taxpayer to apply with the county showing their income tax form and processing a request to the State for the payment over the 5% threshold. It is not clear if the amount over 5% would not be collected awaiting payment from the State, OR if there would be a check paid to the taxpayer to cover the amount over 5% which was paid or whether the State or county would issue any such check. There was some earlier discussion of using a refundable income tax credit for the amount over the circuit breaker threshold. Use approximately $200 million to create an owner occupied residential property tax EXEMPTION FROM COUNTY OPERATING PROPERTY TAXES with a mechanism similar to the $100,000 exemption from school operating taxes. This exemption would be in addition to the homestead exemption for the elderly and disabled.

    ○ There is no word yet as to whether there would be a fixed exemption amount or whether the exemption amount would fluctuate according to how much revenue was in the trust fund from sales tax revenue.

    ○ There is no word yet on the reimbursement mechanism as to whether it would be dollar for dollar reimbursement or a per capita distribution (regardless of the amount of revenue exempted), or some different formula. The discussion on Thursday seems to indicate that the subcommittee is leaning towards a per capita distribution formula.

    ○ There is no word yet on the schedule which would be used to make payments of reimbursements to counties.

● There was no discussion of addressing the statutory school millage drivers (maintenance of local effort). So any relief granted through the county operating tax break will disappear as those formulas increase school millage rates each year.

● Any millage increase by the county after the exemption is in place will shift to classes of property other than residential - manufacturing, commercial and personal property.

● County budget formulation would be difficult at best because either the value of exempted property would be unknown or the amount of the reimbursement would be unknown.

● No previous property tax exemption & reimbursement program has remained unchanged.

THIS PROPOSAL WILL HAVE SERIOUS ADVERSE CONSEQUENCES FOR COUNTY OPERATIONS.

Newly-Introduced Legislation

H. 4810, H. 4811 & H. 4812 - General appropriation bills.

H. 4865 - Permits DOC to enter into agreements with foreign countries for the confinement of inmates convicted of drug related offenses or sexual abuse of children.

H. 4874 - Enacts the Economic Development Incentive Act, providing various tax incentives for
manufacturing facilities.

H. 4877 - Provides for a document of rescission to correct an erroneous recording of a deed or other lien affecting real property.

H. 4880 - Constitutional amendment providing that the General Assembly specify the composition of the State Board of Education.

H. 4888 - Provides for a cigarette tax increase of 1.5 cents per cigarette which must be increased by .25 cents per cigarette annually for the next two years.

H. 4890 - Includes mental cruelty as a ground for divorce.

H. 4891 - Constitutional amendment including mental cruelty as a ground for divorce.
 

S. 1261 - Provides that SLED must issue a permit to carry a concealable weapon to a resident or qualified non-resident upon proper application.

S. 1262 - Establishes a comprehensive salary study committee to review and make recommendations concerning legislative, executive and judicial salaries.

S. 1267 - Establishes procedures for the electronic monitoring of sex offenders.

S. 1268 - Includes the offense of trafficking cocaine base as a violent crime.

S. 1269 - Makes it unlawful for a person under 20 to drive while using a cell phone.