Bill 1175

                    Current Status

Bill Number:               1175
Ratification Number:       774
Act Number                 655
Introducing Body:          Senate
Subject:                   Index of taxpaying ability

(A655, R774, S1175)

AN ACT TO AMEND SECTION 59-20-20, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEFINITIONS FOR PURPOSES OF THE EDUCATION FINANCE ACT, SO AS TO REVISE THE DEFINITION OF "INDEX OF TAXPAYING ABILITY", TO ESTABLISH A SCHEDULE OF REPORTING INFORMATION NECESSARY TO CALCULATE THE INDEX, TO PROVIDE THAT THE TAX COMMISSION SHALL PROVIDE PRELIMINARY DATA IN THE INDEX TO APPROPRIATE OFFICIALS NOT LATER THAN MARCH FIRST AND A FINAL INDEX NOT LATER THAN MAY FIRST WHICH MAY NOT BE CHANGED DURING THE APPLICABLE SCHOOL YEAR AND MAY BE CHANGED OR CORRECTED ONLY IN THE INDEX FOR THE FOLLOWING YEAR, AND TO AMEND SECTION 12-43-305, RELATING TO PAYMENT OF PROPERTY TAXES WHEN VALUATION IS ON APPEAL, SO AS TO PROVIDE THAT IN THE CASE OF OVERPAYMENTS, THE ASSESSED VALUE FOR THE CURRENT YEAR MUST BE REDUCED BY THE CUMULATIVE AMOUNT OF THE EXCESS ASSESSMENT AND TO PROVIDE THAT WHEN AN APPEAL EXTENDS BEYOND THE END OF THE TAXABLE YEAR, THE ASSESSOR SHALL ENTER THE VALUE OF THE PROPERTY UNDER APPEAL AT EIGHTY PERCENT OF THE VALUE FOR THE CURRENT YEAR.

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

Index of taxpaying ability

SECTION 1. Section 59-20-20(3) of the 1976 Code is amended to read:

"(3) 'Index of taxpaying ability' means an index of a local district's relative fiscal capacity in relation to that of all other districts of the State based on the full market value of all taxable property of the district assessed on the basis of property classification assessment ratios set forth in Article 3, Chapter 43 of Title 12. The county auditor shall provide to the Tax Commission the assessed value of property in each of the school districts of the county not later than February first of each year. The index must be used to calculate each district's share of the revenue to be raised locally for the foundation program. The index must include an imputed value for the property tax base implicitly generating impact aid revenue. The property tax base must be imputed at two-thirds the average ratio of all true value assessed property value statewide to prior year local revenue statewide in the foundation program, the resulting product multiplied times the average impact aid receipts during the prior three years. If impact aid receipts during the federal fiscal year are less than the average receipts for the prior three years, then state aid to the impact aid districts must be adjusted in the final payment for the state fiscal year. If the State Department of Education determines from fiscal simulations that the school finance system does not meet requirements of Section 5(d) of P. L. 81-874, the Tax Commission shall exclude an imputed value of impact aid receipts from the index of taxpaying ability.

The final index must be determined annually by the Tax Commission on the basis of the most current sales ratio data available based on studies made pursuant to Section 12-43-250 for assessed property within a school district. The sales ratio data utilized must be based on annual ratio studies made within the previous two calendar years. The Tax Commission shall provide a preliminary index to the State Department of Education not later than March first and the State Department of Education shall provide information contained in the index to school districts not later than March fifteenth. Not later than May first, the Tax Commission shall provide the final index to the State Department of Education and to the auditor of each county who shall provide the index to any governmental entity responsible for approving or levying of millages for school purposes. The final index may not be changed during the applicable school year. Changes and corrections occurring during the year must be reflected in the index for the following year. When the assessment of property is under appeal and the appeal extends beyond the year in which the assessment made pursuant to Section 12-43-305 is applied, the Tax Commission shall adjust the index of taxpaying ability in the year in which the appeal is resolved by the amount of any difference between the assessments. Any school district is entitled to a hearing before the Tax Commission to review its designated index of taxpaying ability within thirty days of filing a request for the hearing. The data gathered by the Tax Commission for the purpose of determining an annual index must be preserved as public records in the offices of the Tax Commission for four years. The raw information gathered from the various county officers reflecting the representative sales within the school districts, the consideration, and the reported market value or assessed value for each sale are a part of the public records so preserved. The Tax Commission shall file a statement stating the methodology employed in making the annual determination of the index and refer to all sources of factual information used in making the determination. All work sheets, computer printouts, and the actual calculation must be included as the public records to be preserved by the Tax Commission. In determining sales to assessment ratio, the Tax Commission shall use only reported consideration on sales for which deeds have been placed on public record. Where sufficient sales data is not available, the Tax Commission shall make appraisals in lieu of sales in order to determine the index. The appraisals, including all working papers must be included as the public records to be preserved by the Tax Commission. With respect to school districts within counties where abstracts of duplicates reflecting the assessed value have been filed pursuant to Section 12-39-290, the same having been adopted by the auditor under Article 3, Chapter 43 of Title 12, the index must be on the basis of the value of the property as stated in the abstracts as adjusted by sales ratio studies up to full assessments based on full fair-market value."

Appeals

SECTION 2. Section 12-43-305 of the 1976 Code is amended to read:

"Section 12-43-305. Upon receipt of written notice of appeal of a property valuation and if it is reasonably expected that the appeal may delay the assessment of the property beyond December thirty-first of the tax year, the assessing officer shall prepare immediately an assessment for the property under appeal based upon eighty percent of the assessed value of the property for the current year. The Tax Commission shall notify the auditor of the property under the jurisdiction of the commission which is under appeal. The auditor shall adjust the assessment of property under appeal to eighty percent of the assessed value and enter the adjusted assessment on the tax duplicate and the tax must be paid as in other cases.

After final review of the appeal, if the valuation is greater than the value of the assessment set by the assessing official in accordance with this section, an assessment must be made and entered based on the difference between the value of the assessment determined by this section and the value settled by the appeal.

If the valuation is less than that set as provided in this section, the assessment of the current year must be reduced by the cumulative difference between the assessment as entered and that determined by final review. The tax paid on the difference between the assessment as entered and that determined after final review must be refunded together with interest at the rate of one percent a month on the amount of the overpayment.

Interest at the rate of one percent must be added for each month the tax was unpaid because of the appeal and collected in the same manner as the tax."

Time effective

SECTION 3. This act takes effect January 1, 1988, and for purposes of calculating the index of taxpaying ability for the 1988-89 school year only, adjustments may be made through July 1, 1988.