South Carolina General Assembly
112th Session, 1997-1998

Bill 3397


Indicates Matter Stricken
Indicates New Matter


                    Current Status

Bill Number:                       3397
Type of Legislation:               General Bill GB
Introducing Body:                  House
Introduced Date:                   19970205
Primary Sponsor:                   Wilkins
All Sponsors:                      Wilkins, D. Smith, Limbaugh,
                                   Haskins, Robinson, Cato, Knotts,
                                   Harrison, Loftis, Delleney,
                                   Davenport, Vaughn, Easterday,
                                   Young-Brickell, Cotty, McMaster,
                                   Fleming, Harrell, Allison, Law,
                                   Riser, Mason, Simrill, Cooper,
                                   Barrett, H. Brown, Sandifer, Rice,
                                   Hinson, Sharpe, Seithel, R. Smith,
                                   Kelley, Chellis, Klauber, Cromer,
                                   Dantzler, Meacham, Keegan, Trotter,
                                   Tripp, Lanford, Whatley, Littlejohn,
                                   Edge, Quinn, Kirsh, Bauer, Jordan
                                   and Walker
Drafted Document Number:           jic\5070htc.97
Residing Body:                     Senate
Current Committee:                 Finance Committee 06 SF
Date of Last Amendment:            19970401
Subject:                           Political subdivision,
                                   counties, municipal corporation,
                                   public service, schools; spending
                                   limit, uniform service charge



History


Body    Date      Action Description                       Com     Leg Involved
______  ________  _______________________________________  _______ ____________
Senate  19970403  Introduced, read first time,             06 SF
                  referred to Committee
House   19970402  Read third time, sent to Senate
House   19970401  Amended, read second time
House   19970325  Request for debate by Representative             Trotter
                                                                   Sandifer
                                                                   Cooper
                                                                   Riser
                                                                   Barrett
                                                                   Easterday
                                                                   Leach
House   19970320  Request for debate by Representative             Limbaugh
                                                                   Harrison
                                                                   Simrill
House   19970319  Committee report: Favorable with         25 HJ
                  amendment
House   19970205  Introduced, read first time,             25 HJ
                  referred to Committee

View additional legislative information at the LPITS web site.


(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

Indicates Matter Stricken
Indicates New Matter

AMENDED

April 1, 1997

H. 3397

Introduced by Reps. Wilkins, D. Smith, Limbaugh, Haskins, Robinson, Cato, Knotts, Harrison, Loftis, Delleney, Davenport, Vaughn, Easterday, Young-Brickell, Cotty, McMaster, Fleming, Harrell, Allison, Law, Riser, Mason, Simrill, Cooper, Barrett, H. Brown, Sandifer, Rice, Hinson, Sharpe, Seithel, R. Smith, Kelley, Chellis, Klauber, Cromer, Dantzler, Meacham, Keegan, Trotter, Tripp, Lanford, Whatley, Littlejohn, Edge, Quinn, Kirsh, Bauer, Jordan and Walker

S. Printed 4/1/97--H.

Read the first time February 5, 1997.

STATEMENT OF ESTIMATED FISCAL IMPACT

1. Estimated Cost to State-First Year

$Minimal/Costs Can Be Absorbed

2. Estimated Cost to State-Annually Thereafter

$Minimal/Costs Can Be Absorbed

The Budget & Control Board states that any costs associated with the legislation would be minimal and could be absorbed by the agency.

The Department of Revenue states that the additional administrative cost will be offset by the revenue retained by the agency for such purposes.

The Office of State Treasurer states that any costs associated with the legislation would be minimal and could be absorbed by the agency.

This bill would have no direct impact on county expenditures.

Approved By:

Michael L. Shealy

Office of State Budget

A BILL

TO AMEND SECTION 4-9-55, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO LIMITATIONS ON STATE-IMPOSED MANDATES ON A COUNTY, SO AS TO DELETE EXEMPTIONS FOR APPROPRIATIONS BILLS, TO DESIGNATE SECTIONS 4-10-10 THROUGH 4-10-100 AS ARTICLE 1, CHAPTER 10 OF TITLE 4, ENTITLED "LOCAL OPTION SALES TAX"; TO AMEND CHAPTER 10, TITLE 4, RELATING TO LOCAL TAXES, BY ADDING ARTICLE 3 ENACTING THE CAPITAL PROJECT SALES TAX ACT AND PROVIDING FOR THE PURPOSES OF RATE AND METHOD OF IMPOSITION OF THIS TAX, TO DESIGNATE SECTIONS 6-1-10 THROUGH 6-1-110 AS ARTICLE 1, CHAPTER 1 OF TITLE 6, ENTITLED "GENERAL PROVISIONS"; TO AMEND SECTION 6-1-70, RELATING TO THE REQUIREMENTS THAT LOCAL GOVERNMENTS REMIT LOCALLY IMPOSED REAL ESTATE TRANSFER FEES TO THE STATE TREASURER, SO AS TO PROHIBIT THE IMPOSITION OF REAL ESTATE TRANSFER TAXES OR FEES BY ALL POLITICAL SUBDIVISIONS INCLUDING SCHOOL DISTRICTS, UNLESS SPECIFICALLY AUTHORIZED BY LAW; TO AMEND THE 1976 CODE BY ADDING SECTION 6-1-85 SO AS TO REQUIRE A TAX INCIDENCE STATEMENT TO ANY BILL OR RESOLUTION POTENTIALLY SHIFTING THE INCIDENCE OF A TAX; TO AMEND CHAPTER 1, TITLE 6, RELATING TO PROVISIONS APPLICABLE TO VARIOUS LOCAL UNITS OF GOVERNMENT, BY ADDING ARTICLES 3, 5, AND 7 SO AS TO LIMIT THE REVENUE RAISING AUTHORITY OF LOCAL GOVERNMENTS AND PROVIDE EXCEPTIONS, AND AUTHORIZING LOCAL ACCOMMODATIONS AND HOSPITALITY TAXES AND PROVIDING FOR THE PURPOSES, RATES OF, AND METHOD OF IMPOSITION OF THESE TAXES.

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

SECTION 1. Sections 4-10-10 through 4-10-100 of the 1976 Code are designated as Article 1, Chapter 10 of Title 4, entitled "Local Option Sales Tax."

SECTION 2. Chapter 10, Title 4 of the 1976 Code is amended by adding:

"Article 3

Capital Project Sales Tax Act

Section 4-10-300. This article may be cited as the 'Capital Project Sales Tax Act'.

Section 4-10-310. Subject to the requirements of this article, the county governing body may impose a one percent sales and use tax by ordinance, subject to a referendum, within the county area for a specific purpose or purposes and for a limited amount of time to collect a limited amount of money. The revenues collected pursuant to this article may be used to defray debt service on bonds issued to pay for projects authorized in this article. However, at no time may any portion of the county area be subject to more than one percent sales tax levied pursuant to this article, pursuant to Chapter 37 of Title 4, or pursuant to any local law enacted by the General Assembly.

Section 4-10-320. (A) The governing body of any county is authorized to create a commission subject to the provisions of this section. The commission consists of six members, all of whom must be residents of the county, appointed as follows:

(1) The governing body of the county must appoint three members of the commission.

(2) The municipalities in the county must appoint three members, who must be residents of incorporated municipalities within the county, and who are selected according to the following mechanism:

(a) The total population of all incorporated municipalities within the county, as determined by the most recent United States census, must be divided by three, the result being an apportionate average.

(b) The respective population of each municipality in the county must be divided by the apportionate average to determine an appointive index.

(c) Each municipality in the county appoints a number of members to the commission equal to the whole number indicated by their appointive index. However, no single municipality may appoint more than two members to the commission; unless there is only one municipality in the county, and in such case the municipality is entitled to three appointments to the commission.

(d) When less than three members are selected to the commission in accordance with the prescribed appointive index method, the remaining member or members must be selected in a joint meeting of the commission appointees of the municipalities in the county. The member or members must be chosen from among the residents of the municipalities in the county that before this time have not provided a representative for the commission.

(e) In the event no municipality is entitled to appoint a member to the commission pursuant to the formula in subitem (c) of this subsection, the municipality with the highest appointive index must be deemed to have an appointive index of one.

(B) When the governing body of any county creates a commission, it must be created in accordance with the procedures specified in subsection (A) and only upon the request of the governing body of the county. If within the thirty-day period following the adoption of a resolution to create the commission, one or more of the municipalities fails or refuses to appoint their proportionate number of members to the commission, the county governing body must appoint an additional number of members equal to the number that any such municipality is entitled to appoint. A vacancy on the commission must be filled in the manner of the original appointment.

(C) The commission created pursuant to this section must consider proposals for funding capital projects within the county area. The commission then formulates the referendum question that is to appear on the ballot pursuant to Section 4-10-330(D).

Section 4-10-330. (A) The sales and use tax authorized by this article is imposed by an enacting ordinance of the county governing body containing the ballot question formulated by the commission pursuant to subsection 4-10-320(C), subject to referendum approval in the affected area. The ordinance must specify:

(1) the purpose for which the proceeds of the tax are to be used, which may include projects located within or without, or both within and without, the boundaries of the local governmental entities, including the county and municipalities located in the county area, and may include the following types of projects:

(a) highways, roads, streets, and bridges;

(b) courthouses, administration buildings, civic centers, hospitals, emergency medical facilities, police stations, fire stations, jails, correctional facilities, detention facilities, libraries, coliseums, or any combination of these projects;

(c) cultural, recreational, or historic facilities, or any combination of these facilities;

(d) water, sewer, or water and sewer projects;

(e) flood control projects and storm water management facilities;

(f) jointly operated projects of the county, a municipality and school district, or any combination of those entities, for the projects delineated in subitems (a) through (e) of this subsection;

(g) any combination of the projects described in subitems (a) through (f) of this item;

(2) the maximum time, stated in terms of calendar or fiscal years or quarters, or a combination thereof, not to exceed seven years from the date of imposition, for which the tax may be imposed;

(3) the maximum cost of the project or facilities funded from proceeds of the tax and the maximum amount of net proceeds to be raised by the tax; and

(4) any other condition precedent, as determined by the commission, to the imposition of the sales and use tax authorized by this article or condition or restriction on the use of sales and use tax revenue collected pursuant to this article.

(B) When the tax authorized by this article is imposed for more than one purpose, the enacting ordinance must set forth the priority in which the net proceeds are to be expended for the purposes stated. The enacting ordinance may set forth a formula or system by which multiple projects are funded simultaneously.

(C) Upon receipt of the ordinance, the county election commission must conduct a referendum on the question of imposing the sales and use tax in the county area. The referendum must be held only on the Tuesday following the first Monday in November in general election years. Two weeks before the referendum the election commission must publish in a newspaper of general circulation the question that is to appear on the ballot, with the list of projects and the cost of the projects. This notice is in lieu of any other notice otherwise required by law.

(D) The referendum question to be on the ballot must read substantially as follows:

'Must a special one percent sales and use tax be imposed in (county) for not more than (time) to raise the amounts specified for the following purposes?

(1) $______ for _________

(2) $______ for _________

(3) etc.

Yes []

No []'

(E) All qualified electors desiring to vote in favor of imposing the tax for the stated purposes shall vote 'yes' and all qualified electors opposed to levying the tax shall vote 'no'. If a majority of the votes cast are in favor of imposing the tax, then the tax is imposed as provided in this article and the enacting ordinance. The election commission shall conduct the referendum under the election laws of this State, mutatis mutandis, and shall certify the result no later than December thirty-first to the county governing body and to the Department of Revenue. Expenses of the referendum must be paid by the governmental entities that would receive the proceeds of the tax in the same proportion that those entities would receive the net proceeds of the tax.

(F) Upon receipt of the returns of the referendum, the county governing body must, by resolution, declare the results thereof. In such event, the results of the referendum, as declared by resolution of the county governing body, are not open to question except by a suit or proceeding instituted within thirty days from the date such resolution is adopted.

Section 4-10-340. (A) If the sales and use tax is approved in the referendum, the tax is imposed on the first of May following the date of the referendum. If the certification is not timely made to the Department of Revenue, the imposition is postponed for twelve months.

(B) The tax terminates on the earlier of:

(1) the final day of the maximum time period specified for the imposition; or

(2) the end of the calendar month during which the Department of Revenue determines that the tax has raised revenues sufficient to provide the net proceeds equal to or greater than the amount specified in the referendum question.

(C) Amounts collected in excess of the required net proceeds must first be applied, if necessary, to complete a project for which the tax was imposed; otherwise, the excess funds must be credited to the general fund of the governmental entities receiving the proceeds of the tax, in the proportion which they received the net proceeds of the tax while it was imposed.

Section 4-10-350. (A) The tax levied pursuant to this article must be administered and collected by the Department of Revenue in the same manner that other sales and use taxes are collected. The department may prescribe amounts that may be added to the sales price because of the tax.

(B) The tax authorized by this article is in addition to all other local sales and use taxes and applies to the gross proceeds of sales in the applicable area that is subject to the tax imposed by Chapter 36 of Title 12 and the enforcement provisions of Chapter 54 of Title 12. The gross proceeds of the sale of items subject to a maximum tax in Chapter 36 of Title 12 are exempt from the tax imposed by this article. The tax imposed by this article also applies to tangible personal property subject to the use tax in Article 13, Chapter 36 of Title 12.

(C) Taxpayers required to remit taxes under Article 13, Chapter 36 of Title 12 must identify the county, municipality, or both, in which the personal property purchased at retail is stored, used, or consumed in this State.

(D) Utilities are required to report sales in the county, municipality, or both, in which the consumption of the tangible personal property occurs.

(E) A taxpayer subject to the tax imposed by Section 12-36-920, who owns or manages rental units in more than one county, municipality, or combination thereof, must report separately in his sales tax return the total gross proceeds from business done in each county or municipality.

(F) The gross proceeds of sales of tangible personal property delivered after the imposition date of the tax levied under this article in a county, either under the terms of a construction contract executed before the imposition date, or a written bid submitted before the imposition date, culminating in a construction contract entered into before or after the imposition date, are exempt from the sales and use tax provided in this article if a verified copy of the contract is filed with the Department of Revenue within six months after the imposition date of the sales and use tax provided for in this article.

(G) Notwithstanding the imposition date of the sales and use tax authorized pursuant to this chapter, with respect to services that are billed regularly on a monthly basis, the sales and use tax authorized pursuant to this article is imposed beginning on the first day of the billing period beginning on or after the imposition date.

Section 4-10-360. The revenues of the tax collected under this article must be remitted to the Department of Revenue and placed on deposit with the State Treasurer and credited to a fund separate and distinct from the general fund of the State. After deducting the amount of any refunds made and costs to the Department of Revenue of administering the tax, not to exceed one percent of the revenues, the State Treasurer shall distribute the revenues quarterly to the county treasurer in the county area in which the tax is imposed and the revenues must be used only for the purposes stated in the imposition ordinance. The State Treasurer may correct misallocations by adjusting subsequent distributions, but these adjustments must be made in the same fiscal year as the misallocations.

Section 4-10-370. The Department of Revenue shall furnish data to the State Treasurer and to the county treasurers receiving revenues for the purpose of calculating distributions and estimating revenues. The information that must be supplied to counties and municipalities upon request includes, but is not limited to, gross receipts, net taxable sales, and tax liability by taxpayers. Information about a specific taxpayer is considered confidential and is governed by the provisions of Section 12-54-240. A person violating this section is subject to the penalties provided in Section 12-54-240."

SECTION 3. Sections 6-1-10 through 6-1-110 of the 1976 Code are designated as Article 1, Chapter 1 of Title 6, entitled "General Provisions."

SECTION 4. Section 6-1-70 of the 1976 Code, as added by Act 497 of 1994, is amended to read:

"Section 6-1-70. The governing body of each county and, municipality, school district, or special purpose district may not impose any fee or tax of any nature or description on the transfer of real property unless the General Assembly has expressly authorized by general law the imposition of the fee or tax. Provided, however, that all other provisions of law notwithstanding, local governmental entities having already levied, collected, and spent such real property transfer fees or taxes for the intended purpose of the fee or tax shall not be required to remit any of those revenues to the State. which enacts and collects any fee which is charged on the transfer of real estate shall, not later than ten days after the close of a fiscal year quarter, remit to the State Treasurer an amount equal to the amount of real estate transfer fees collected in the previous fiscal year quarter. The county or municipality may voluntarily elect to have the State Treasurer or Comptroller General, as appropriate, deduct the amount required to be remitted from any distributions authorized to be made to the county or municipality under Aid to Subdivisions."

SECTION 5. Chapter 1, Title 6 of the 1976 Code is amended by adding:

"Section 6-1-85. (A) The Budget and Control Board, Division of Budget and Analyses, shall monitor and review the tax burden borne by the classes of property listed in Article X, Section 1 of the State Constitution. To determine the tax burden of each class of property, the Division of Budget and Analyses may use a ratio that compares total property taxes paid by the property class divided by the total fair market value of the property class. The Department of Revenue shall provide to the Division of Budget and Analyses the information on assessed values and fair market values of properties as collected in accordance with Section 59-20-20(3).

(B) The Budget and Control Board, Division of Budget and Analyses, shall develop a methodology to determine and estimate tax incidence. A tax incidence statement, prepared by the Division of Budget and Analyses, must be attached to any bill or resolution that has the potential to cause a shift in tax incidence. The tax incidence refers to the ultimate payer of a tax.

(C) The Budget and Control Board, Division of Budget and Analyses, may consult with outside experts with respect to fulfilling the requirements of subsections (A) and (B) of this section.

(D) Reports of the Budget and Control Board, Division of Budget and Analyses required under this section must be published and reported to the Governor, the members of the Budget and Control Board, the members of the General Assembly and made available to the public."

SECTION 6. Chapter 1, Title 6 of the 1976 Code is amended by adding:

"Article 3

Authority of Local Governments to Assess Taxes and Fees

Section 6-1-300. As used in this article:

(1) 'Consumer price index' means the consumer price index for all-urban consumers published by the U.S. Department of Labor. In the event of a revision of the consumer price index, the index that is most consistent with the consumer price index for all-urban consumers as calculated in 1996 must be used.

(2) 'Intergovernmental transfer of funding responsibility' means an act, resolution, court order, administrative order, or other action by a higher level of government that requires a lower level of government to use its own funds, personnel, facilities or equipment.

(3) 'Local governing body' means the governing body of a county or municipality. As used in Section 6-1-320 only, local governing body also refers to the body authorized by law to levy school taxes.

(4) 'New tax' is a tax that the local governing body had not enacted as of December 31, 1996.

(5) 'Positive majority' means a vote for adoption by the majority of the members of the entire governing body, whether present or not. However, if there is a vacancy in the membership of the governing body, a positive majority vote of the entire governing body as constituted on the date of the final vote on the imposition is required.

(6) 'Service fee, user fee or uniform service charge' means a charge required to be paid in return for a particular government service or program made available to the payer that benefits the payer in some manner different from the members of the general public not paying the fee.

(7) 'Specifically authorized by the General Assembly' means an express grant of power:

(a) in a prior act;

(b) in Article 3, Chapter 10 of Title 4, the 'Capital Project Sales Tax Act'; Article 5, Chapter 1 of Title 6, the 'Local Accommodations Tax Act', Article 7, Chapter 1 of Title 6, the 'Local Hospitality Tax Act', and Section 10 of this act; or

(c) in a future act.

Section 6-1-310. A local governing body may not impose a new tax after December 31, 1996, unless specifically authorized by the General Assembly.

Section 6-1-315. By ordinance adopted by a positive majority vote, a local governing body may impose a business license tax or increase the rate of a business license tax, authorized by Sections 4-9-30(12) and 5-7-30.

Section 6-1-320. (A) Notwithstanding Section 12-37-251(E), a local governing body may only increase the millage rate imposed for general operating purposes above the rate imposed for such purposes for the prior tax year to the extent of the increase in the consumer price index for the preceding fiscal year. However, in the year in which a reassessment program is implemented, the rollback millage, as calculated pursuant to Section 12-37-251(E), must be used in lieu of the previous year's millage rate.

(B) Notwithstanding the limitation upon millage rate increases contained in subsection (A), the millage rate limitation may be suspended and the millage rate may be increased for the following purposes:

(1) in response to a natural, environmental or other disaster as declared by the Governor;

(2) to offset a prior year's deficit, as required by Section 7, Article X of the South Carolina Constitution;

(3) to raise the revenue necessary to comply with judicial mandates requiring the use of county or municipal funds, personnel, facilities, or equipment;

(4) to meet the minimum required local Education Finance Act inflation factor as projected by the State Budget and Control Board, Division of Research and Statistics, and the per pupil maintenance of effort requirement of Section 59-21-1030, if applicable.

(C) The millage rate limitation provided for in subsection (A) of this section may be overridden and the millage rate may be further increased by a positive majority vote of the appropriate governing body. The vote must be taken at a specially-called meeting held solely for the purpose of taking a vote to increase the millage rate. The governing body must provide public notice of the meeting notifying the public that the governing body is meeting to vote to override the limitation and increase the millage rate. Public comment must be received by the governing body prior to the override vote.

(D) The restriction contained in this section does not affect millage that is levied to pay bonded indebtedness or payments for real property purchased using a lease-purchase agreement or used to maintain a reserve account. Nothing in this section prohibits the use of energy-saving performance contracts as provided in Section 48-52-670.

(E) The provisions of this section may not be construed to amend or repeal any existing provision of law limiting the fiscal autonomy of a governing body authorized to levy school taxes to the extent those limitations are more restrictive than the provisions of this section. For purposes of this section, the `governing body authorized by law to levy school taxes' does not include the General Assembly.

(F) The positive majority vote of the governing body required by this section does not apply to school districts that have their budget approved by qualified electors at a town meeting.

Section 6-1-330. (A) A local governing body, by ordinance approved by a positive majority, is authorized to charge and collect a service fee, user fee or uniform service charge. A local governing body must provide public notice of any new service fee, user fee, or uniform service charge being considered and the governing body is required to hold a public hearing on any proposed new service fee, user fee, or uniform service charge prior to final adoption of any new service fee, user fee, or uniform service charge. Public comment must be received by the governing body prior to the final reading of the ordinance to adopt a new service fee, user fee, or uniform service charge. A fee adopted or imposed by a local governing body prior to December 31, 1996, remains in force and effect until repealed by the enacting local governing body, notwithstanding the provisions of this section.

(B) The revenue derived from a service fee, user fee, or uniform service charge imposed to finance the provision of public services must be used to pay costs related to the provision of the service or program for which the fee was paid. If the revenue generated by a fee is five percent or more of the imposing entity's prior fiscal year's total budget, the proceeds of the fee must be kept in a separate and segregated fund from the general fund of the imposing governmental entity.

(C) A local governing body may charge and collect a utility fee in exchange for the provision of utility services. Notwithstanding subsection (B), a local governing body that charges different rates for customers outside its corporate boundaries from those rates charged to customers inside its corporate boundaries may only transfer from the utility fee fund to the general fund that portion of the annual utility fee revenue that corresponds to the rate of return not to exceed the current yield on a thirty-year, AAA municipal bond as determined by the United States Department of the Treasury for the latest day available prior to the end of the calendar year plus five percent. The maximum amount that may be transferred on an annual basis from the utility fee fund is calculated by multiplying net utility assets by the aforementioned return.

(D) If a governmental entity proposes to adopt a service fee, user fee, or uniform service charge to fund a service that was previously funded by property tax revenue, the notice required pursuant to Section 6-1-80 must include that fact in the text of the published notice.

SECTION 7. Title 6, Chapter 1 of the 1976 Code is amended by adding:

"Article 5

Local Accommodations Tax

Section 6-1-500. This article may be cited as the 'Local Accommodations Tax Act'.

Section 6-1-510. As used in this article:

(1) 'Local accommodations tax' means a tax on the gross proceeds derived from the rental or charges for accommodations furnished to transients as provided in Section 12-36-920(A) and which is imposed on every person engaged or continuing within the jurisdiction of the imposing local governmental body in the business of furnishing accommodations to transients for consideration.

(2) 'Local governing body' means the governing body of a county or municipality.

(3) 'Positive majority' means a vote for adoption by the majority of the members of the entire governing body, whether present or not. However, if there is a vacancy in the membership of the governing body, a positive majority vote of the entire governing body as constituted on the date of the final vote on the imposition is required.

Section 6-1-520. (A) A local governing body may impose, by ordinance, a local accommodations tax, not to exceed three percent. However, an ordinance imposing the local accommodations tax must be adopted by a positive majority vote. The governing body of a county may not impose a local accommodations tax in excess of one and one-half percent within the boundaries of a municipality without the consent, by resolution, of the appropriate municipal governing body.

(B) All proceeds from a local accommodations tax must be kept in a separate fund segregated from the imposing entity's general fund. All interest generated by the local accommodations tax fund must be credited to the local accommodations tax fund.

Section 6-1-530. (A) The revenue generated by the local accommodations tax must be used exclusively for the following purposes:

(1) tourism-related buildings, including, but not limited to, civic centers, coliseums, and aquariums;

(2) cultural, recreational, or historic facilities;

(3) beach access and renourishment;

(4) highways, roads, streets, and bridges providing access to tourist destinations;

(5) advertisements and promotions related to tourism development; or

(6) water and sewer infrastructure to serve tourism-related demand.

(B) In a county in which at least nine hundred thousand dollars in accommodations taxes is collected annually pursuant to Section 12-36-920, the revenues of the local accommodations tax authorized in this article also may be used for the operation and maintenance of those items provided in (A)(1) through (6) including police, fire protection, emergency medical services, and emergency-preparedness operations directly attendant to those facilities.

Section 6-1-540. The cumulative rate of county and municipal local accommodations taxes for any portion of the county area may not exceed three percent, unless the cumulative total of such taxes were in excess of three percent prior to December 31, 1996, in which case the cumulative rate may not exceed the rate that was imposed as of December 31, 1996.

Section 6-1-550. In an area of the county where the county has imposed a local accommodations tax that is annexed by a municipality, the municipality must receive only that portion of the revenue generated in excess of the county local accommodations tax revenue for the previous twelve months in the area annexed.

Section 6-1-560. Real estate agents, brokers, corporations, or listing services required to remit taxes under this section must notify the appropriate local governmental entity or entities if rental property, previously listed by them, is dropped from their listings."

SECTION 8. Chapter 6, Title 1 of the 1976 Code is amended by adding:

"Article 7

Local Hospitality Tax

Section 6-1-700. This article may be cited as the 'Local Hospitality Tax Act'.

Section 6-1-710. As used in the article:

(1) 'Local governing body' means the governing body of a county or municipality.

(2) 'Local hospitality tax' is a tax on the sales of prepared meals and beverages sold in establishments or sales of prepared meals and beverages sold in establishments licensed for on-premises consumption of alcoholic beverages, beer, or wine.

(3) 'Positive majority' means a vote for adoption by the majority of the members of the entire governing body, whether present or not. However, if there is a vacancy in the membership of the governing body, a positive majority vote of the entire governing body as constituted on the date of the final vote on the imposition is required.

Section 6-1-720. (A) A local governing body may impose, by ordinance, a local hospitality tax not to exceed two percent of the charges for food and beverages. However, an ordinance imposing the local hospitality tax must be adopted by a positive majority vote. The governing body of a county may not impose a local hospitality tax in excess of one percent within the boundaries of a municipality without the consent, by resolution, of the appropriate municipal governing body.

(B) All proceeds from a local hospitality tax must be kept in a separate fund segregated from the imposing entity's general fund. All interest generated by the local hospitality tax fund must be credited to the local hospitality tax fund.

Section 6-1-730. (A) The revenue generated by the hospitality tax must be used exclusively for the following purposes:

(1) tourism-related buildings, including, but not limited to, civic centers, coliseums, and aquariums;

(2) cultural, recreational, or historic facilities;

(3) beach access and renourishment;

(4) highways, roads, streets, and bridges providing access to tourist destinations;

(5) advertisements and promotions related to tourism development; or

(6) water and sewer infrastructure to serve tourism-related demand.

(B) In a county in which at least nine hundred thousand dollars in accommodations taxes is collected annually pursuant to Section 12-36-920, the revenues of the hospitality tax authorized in this article also may be used for the operation and maintenance of those items provided in (A)(1) through (6) including police, fire protection, emergency medical services, and emergency-preparedness operations directly attendant to those facilities.

Section 6-1-740. The cumulative rate of county and municipal hospitality taxes for any portion of the county area may not exceed two percent, unless the cumulative total of such taxes were in excess of two percent or authorized to be in excess of two percent prior to December 31, 1996, in which case the cumulative rate may not exceed the rate that was imposed or passed by ordinance as of December 31, 1996.

Section 6-1-750. In an area of the county where the county has imposed a local hospitality tax that is annexed by a municipality, the municipality must receive only that portion of the revenue generated in excess of the county local hospitality tax revenue for the previous twelve months in the area annexed."

SECTION 9. Notwithstanding any provision of this act, any ordinance enacted by a county or municipality prior to March 15, 1997, imposing an accommodations fee which does not exceed the three percent maximum cumulative rate prescribed in Section 6-1-540, is calculated upon a base consistent with Section 6-1-510(1), and the revenue from which is used for the purposes enumerated in Section 6-1-530, remains authorized and effective after the effective date of this act and the enacting county or municipality is authorized to issue bonds, pursuant to Article X, Section14(10) of the Constitution of this State, utilizing the procedures of Section 4-29-68, for the purposes enumerated in Section 6-1-530, and to retire such debt using the proceeds of such an accommodations fee ordinance and the pledge of such other non-tax revenues as may be available for those purposes."

SECTION 10. Upon approval by the Governor, this act takes effect July 1, 1997, except as otherwise provided.

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