State House

In This Section

2006 Legislative Alerts

May 17, 2006
Regulatory Takings and DHEC — Poultry Farm Setbacks

May 11, 2006
Eminent Domain/Takings

April 5, 2006
2006 Version of the Hog Bill

March 24, 2006
Property Tax Restructuring

Feb. 2, 2006
Billboards

Jan. 5, 2006
Senate Property Tax Restructuring


May 17, 2006
Regulatory Takings and DHEC — Poultry Farm Setbacks

The House will debate two bills of major importance to counties tomorrow, Thursday, May 19. Now is the last chance to have an effect on these two bills—bills that will have a devastating affect upon Home Rule. Please call your House member, and ask him/her to take the following action:

  1. Vote AGAINST Regulatory Takings to S. 1029 and S. 1031. These two bills clarify the South Carolina law on takings as addressed in the recent U.S. Supreme Court case, Kehoe v. City of New London. Regulatory takings, on the other hand, would severely restrict local government's ability to enact or enforce zoning or other land use restrictions. If passed, regulating sexually-oriented businesses and other such land use regulation will be beyond the control of county councils, and residents in your community will be greatly disadvantaged.
  2. OPPOSE DHEC authority to regulate poultry farm setbacks – S. 1205. Allowing a state agency to determine setbacks for a "one size fits all" statewide standard will erode local control. Ultimately, your citizens will be asking you to fix problems you can't help with.

Please take immediate action (today or tomorrow morning) and let your Representative know how this will affect your community.


May 11, 2006
Eminent Domain/Takings

House Judiciary Committee Chairman Jim Harrison indicates efforts will be made to amend S. 1029 and S. 1031 at the full Judiciary Committee, next Tuesday, by substituting the House language in H. 4502 and H. 4503.

The House language, as passed by the Committee, combines regulatory takings and changes to address the recent Kehoe Supreme Court case. Please see the attached roster for the contact information of the Representatives on this committee, and let them know these are two different issues that need to be addressed separately. Ask that they keep these bills clean by not adopting amendments, including regulatory takings.

At the subcommittee meeting this morning, there were two members (Reps. Harrison and Delleney) for adding the takings language into the Senate bills that currently address Kehoe concerns, and two members (Reps. Hagood and Coleman) to keep the takings provisions out. The bills were sent to the full committee with the Senate language, which does not address takings. Rep. Harrison said he plans to propose the amendments to add takings provisions to the full Committee.

As passed in H. 4502 and H. 4503, the regulatory takings provisions would have severe financial and "quality of life" impacts upon our communities. The takings language in these bills 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.

The regulatory takings provisions would provide that any landowner could sue the local government, if zoning or land use regulations were imposed upon their property. The liability that local governments would face if they enacted or enforced a land use regulation would either increase the cost of local government, bankrupt local government or prohibit local governments from protecting citizens from inappropriate land uses nearby.

Please make every effort to let members of the House Judiciary Committee know the positive things that have been accomplished in your community through land use controls, such as sexually-oriented business ordinances, protection of industrial sites from conflicting land uses, preservation of single-family residential areas, buffering of airports to allow expansion of airport service, etc. Let them know by e-mailing/calling before next Tuesday.


April 5, 2006
2006 Version of the Hog Bill — S. 1205

This bill has been set for Special Order and will probably be debated next week in the Senate.

As currently configured, S. 1205 will not protect or grandfather local ordinances that placed greater setbacks on agricultural operations, if those exceeded state regulatory setback protections. Our research indicates that your county has passed such an ordinance, and if S. 1205 passes in its current form, that ordinance will be rendered null and void.

Senator John Matthews has an amendment that would grandfather your local law. If you want to protect this ordinance, you need to contact your Senator and ask that they support the Matthews' or other amendments that protect prior actions by county governments.


March 24, 2006
Property Tax Restructuring

Thursday afternoon, the Senate Finance Subcommittee considering 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, which are outlined below.

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

If you have concerns about any feature of this plan, contact your Senator immediately. Members of the subcommittee are: Sens. Courson, Grooms, Hayes, Land, Matthews, Richardson and Short. They should be contacted before they meet on Tuesday.

The Proposal

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

  1. Raise $300+ million through a one-half cent increase in the state sales tax to be placed into a trust fund.
  2. Place 5 percent of the revenue into a reserve account.
  3. 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 percent of the federal income tax Adjusted Gross Income (AGI) for the household in the home, the state will pay the amount over the 5 percent threshold.
    • There is no set mechanism to pay that amount over the 5 percent 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 percent threshold. It is not clear if the amount over 5 percent 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 percent 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.
  4. 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 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 on the reimbursement mechanism as to whether it would be dollar-for-dollar reimbursement, 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 on the schedule which would be used to make payments of reimbursements to counties.
  5. 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.
  6. 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.
  7. County budget formulation would be difficult at best, because either the value of exempted property or the amount of the reimbursement would be unknown.
  8. No previous property tax exemption and reimbursement program has remained unchanged.

This proposal will have serious adverse consequences for county operations.


Feb. 2, 2006
H. 3381 — Billboards

As you learned from last week's Friday Report, H. 3381, the "billboards" legislation, was given final approval by the Senate. Differences between the House and Senate versions will probably be resolved in conference. The bill will then be ratified and sent to the Governor for his signature. This bill is a win for special interests and a loss for local government. Our only chance now rests with the Governor.

We are asking that you contact the Governor's Office and urge him to veto H. 3381 when it gets to his desk (803) 734-2100.

Here are a few of the reasons this legislation should be vetoed:

  • There is no estimate of the fiscal impact. The bill provides a formula for "just compensation" that is slanted towards the billboard industry, with no incentive for a sign owner to enter the process in good faith. The result is government-financed (i.e., taxpayer-financed) "business insurance" for the billboard industry.
  • It imposes a stricter standard on local governments than the state. The state is only required to pay the original cost of constructing the sign as compensation, while local governments have to pay substantially more. Why impose a different, more stringent standard for local governments?
  • It contains a retroactive effective date. The effective date of April 14, 2005 would invalidate any local billboard ordinances or amendments enacted after that date. This is a bad legislative practice.
  • Regulation of signs is a police power and does not constitute a "taking." This legislation ignores court rulings that have held uniformly that the taking of private property without compensation does not apply to the legitimate exercise of police powers, which the regulation of signs certainly is.
  • It further erodes Home Rule. It essentially eliminates the ability of local governments to remove billboards by making it excessively expensive to do so, further eroding decision-making at the local level.
  • It is special-interest legislation. It caters to a well-financed industry at the expense of local taxpayers and sets a dangerous precedent.

Please contact the Governor NOW and ask him to veto H. 3381 when it gets to his desk!


Jan. 5, 2006
Senate Property Tax Restructuring

Now is the time to contact members of the Senate, especially Judiciary Committee members, to:

  1. Ask that the implementing legislation scheduled for a Judiciary Committee hearing on Tuesday, Jan. 10 be sent to a subcommittee for study and refinement, and
  2. Convey the contents of the SCAC Property Tax Restructuring Proposal, which is attached.

This first round of contacts needs to be made prior to the Tuesday meeting of the Senate Judiciary Committee meeting—especially the request to send the implementing legislation to subcommittee.

After reading this update, you may wish to raise your concerns about the legislation adopted in Senate Judiciary Committee and the proposals as a whole. It is equally important to relay SCAC's proposal as an alternative solution to concerns about property taxes.

Wednesday, Jan. 4, the full Senate Judiciary Committee met and sent three property tax restructuring bills (S. 960, S. 969 & S. 970) to the Senate floor. There will be at least two more bills introduced in the Senate, one of which has already been scheduled for a Senate Judiciary Committee meeting on Tuesday, Jan. 10, 2006. A quick outline of the legislation, how these bills fit together and areas of concern follows:

There are two constitutional amendments:

S. 960 deals with assessment system changes, and S. 969 creates a constitutional millage limitation. There will also be two bills introduced with the statutory implementing mechanisms and procedures of the constitutional changes and a sales tax for property tax swap.

  1. S. 960 — Assessment Constitutional Amendment:
    • Effective for tax year 2007, adopts a "point of sale" or property tax valuation freeze as the default method of assessment which is to be used for property taxation. A parcel would then be revalued upon transfer to another owner, and the value of improvements would be added as they were made. The General Assembly is allowed, but not required, to adopt an annual inflationary adjustment to the point of sale valuation.
    • Under the point of sale method, rollback valuations to tax year 2004 or the reassessment valuation implemented preceding the 2004 valuation.
    • Allows the county, by ordinance, or citizens through initiative petition referendum, to adopt another assessment method the General Assembly may provide in statutory implementation legislation. Those other methods are to include a fair market value method (similar to the current system) which is to be performed on an annual basis.
    • Under a point of sale method, assessed values for purposes of bonded indebtedness and the Index of Taxpaying Ability (used for state school funding distributions) would remain as they were prior to adoption of the point of sale method.
    • Under an amendment adopted in concept Wednesday, the millage rate used in a point of sale method could be adjusted in the year of implementation of the point of sale system to make the change revenue neutral.
  2. S. 969 — Millage Rate Limitation Constitutional Amendment:
    • Limits increases in the school operating millage rate to the increase in the average increase in "total personal income growth" for the state for the previous three years. The total personal income growth rate is typically a little higher than the Consumer Price Index (CPI), but is based upon individual incomes—instead of the costs of goods and services—and is produced by the U.S. Department of Commerce.
    • Retains existing millage rate limitations imposed on school districts by local legislation, if they are more restrictive.
    • Limits increases in the operating millage of taxing entities, other than schools, to the increase in the average increase in "total personal income growth" for the state for the previous three years. The total personal income growth rate is typically a little higher than the Consumer Price Index, but is based upon individual incomes—instead of the costs of goods and service—and is produced by the U.S. Department of Commerce.
    • Allows taxing entities, other than schools, to provide a tax levy surcharge to be set forth separately from the general millage to pay for a prior year's deficit, compliance with a court order or decree, or any catastrophic event outside the control of the governing body. This surcharge could be used only as long as the condition exists.
    • Allows the millage limitation for taxing entities, other than school districts, to be overridden by referendum held at the time of the general election.
    • Authorizes the General Assembly to adopt, by general statute, a more restrictive millage limitation for taxing entities other than school districts.

S. 970 — Repeal of Existing Statutory Millage Rate Limitation

This bill repeals S.C. Code §6-1-320 containing the existing millage rate limitation, contingent upon ratification of a constitutional millage rate limitation for schools and other taxing entities.

Assessment Provision Implementation Bill

This bill has not been drafted, but will probably contain provisions discussed during the recess period to include provisions such as:

  • Assessors would be required to receive certification and training, likely through the Department of Revenue.
  • For those counties opting to retain a fair market value method of assessment, a system similar to that used in Maryland—where one portion of the tax base is assessed each year, and the remaining tax base is adjusted through a computer model. The entire county would be reassessed in parts until all parcels were reassessed, and the cycle would start again.
  • Alternative assessment methods which could include a percentage increase cap or other approaches.

Sales Tax for Property Tax Swap Bill

This bill is still being drafted but earlier committee discussions indicate the following provisions:

  • Eliminate all property taxes levied for school operations on owner-occupied homes and vehicles. The plan also includes an income tax credit for renters.
  • Raise the total statewide sales tax to 7 percent. Although it is not completely clear whether it has been voted upon yet, the Senate is trying to exempt food from the sales tax completely.
  • The distribution to school districts will most likely be dollar-for-dollar replacement in the first year and through some sort of weighted pupil average in the years going forward.
  • The plan includes a $125 million reserve in case estimates from the sales tax are not reached.

Concerns about the Current Senate Proposal

The assessment amendment could pass without the statutory implementation legislation to allow alternative methods of assessment. One size does not fit every county in the state.

  1. The millage limitation for taxing entities other than schools does not take into account:
    • The costs of items beyond government control, such as gasoline, Workers' Compensation insurance premiums, health insurance costs, etc.
    • The cost of future unfunded federal mandates such as stricter clean air regulations, stricter solid waste landfill regulations, homeland security requirements, new procedures to handle programs such as child support collection, etc.
    • The additional cost of higher population. With homes being exempted from school property taxes, there will likely be an influx of residents from outside the state; and their property will generate less of the cost of services they demand.
    • Loss of a major industry through closure or relocation, that constitutes a large part of the property tax base—some industries can provide 40 percent of the tax base for an entire county.
  2. Why would we address property tax increases without reforming the statutory millage rate drivers which have caused school millage rates to balloon in the past?
  3. The referendum to override the millage limitation could only be held after the time that tax bills are mailed and being paid. What happens when there is an immediate need to preserve existing services, and there are not enough contingency funds to address the cost of the emergency?
  4. If one jurisdiction holds a tax rate referendum, would tax bill issuance for all jurisdictions have to be postponed to await the results, or would multiple bills be anticipated?
  5. What will be the fate of the existing TIF bonds and bonds paid through a local option sales tax that currently includes food?
  6. How much lead time would counties have to implement any new assessment method, and how would those costs be covered in light of the millage rate caps being discussed?

SCAC Tax Restructuring Proposal

The proposal listed below was developed as a result of the policy position adopted by the SCAC Legislative Committee. Many of the features contained in the current Senate proposal are contained in this proposal with modifications. Please convey the SCAC proposal to members of the General Assembly.

If you have questions, please call the SCAC office at 1-800-922-6081, and ask for Robert Croom or Tim Winslow. We would also appreciate hearing the results of any contacts you make with members of the General Assembly.


SCAC Proposal on Property Tax Restructuring

Swap Portion

  1. Eliminate all property taxes levied for school operations on homes and vehicles.
  2. Provide an income tax credit for renters.
  3. Increase the total sales tax to 7 percent, and eliminate certain sales tax exemptions and limitations.
  4. Exempt food from the statewide sales tax.
  5. Provide a dollar-for-dollar distribution to school districts in the first year with a weighted pupil average in the future.

Assessment Portion

  1. Provide point of sale valuation as of the first property tax year after successful constitutional referendum/ratification.
  2. The General Assembly may adopt an inflationary increase in property values.
  3. Counties may choose by ordinance to adopt a "Maryland Plan" of reassessment; or adopt the current valuation method with a 25 percent reassessment cap. The "Maryland Plan" of reassessment is when one portion of the tax base is reassessed each year and the remaining portions are adjusted utilizing statistics and computer models. All parcels are reassessed within a predetermined number of years.
  4. Permit optional regionalization of Assessors' offices.

Millage Portion

  1. Statutorily limit millage rate increases to an inflation factor determined by the percentage of total personal income growth of a county and a factor to reflect population growth. To exceed the millage cap would require:
    1. A positive majority vote via roll-call;
    2. A declaration of emergency (hurricane, terrorist attack, etc.);
    3. A court order; or
    4. Relocation of a taxpayer that represents 5 percent or greater of the total property tax collected in the county.

Millage Driver Reform

  1. Provide a revised minimum local effort millage driver formula which defines the school services to be maintained using terminology from the In$ite Financial Analysis Model for Education—including Instruction, Instructional Support (excluding extracurricular programs) and Leadership (excluding program management).
  2. Amend §59-21-1030 to define "level of financial effort per pupil" as the appropriated funds from the previous fiscal year divided by the estimated average daily membership for the previous year.

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