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Current Status Bill Number:View additional legislative information at the LPITS web site.1032 Type of Legislation:General Bill GB Introducing Body:Senate Introduced Date:20000113 Primary Sponsor:Rankin All Sponsors:Rankin Drafted Document Number:l:\s-res\lar\002elde.kad.doc Residing Body:Senate Current Committee:Finance Committee 06 SF Subject:Homestead Property Tax Deferral for the Elderly Act, Taxation, Exemptions, Aging History Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ Senate 20000113 Introduced, read first time, 06 SF referred to Committee Versions of This Bill
TO AMEND CHAPTER 37, TITLE 12, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE ASSESSMENT OF PROPERTY TAXES, BY ADDING ARTICLE 4, "THE HOMESTEAD PROPERTY TAX DEFERRAL FOR THE ELDERLY ACT", WHICH ALLOWS ELDERLY INDIVIDUALS ENTITLED TO THE HOMESTEAD PROPERTY TAX EXEMPTION TO DEFER ALL OR PART OF AD VALOREM TAXES LEVIED ON THE HOMESTEAD BY FILING AN ANNUAL APPLICATION.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 37, Title 12 of the 1976 Code is amended by adding:
Section 12-37-505. This article may be cited as the Homestead Property Tax Deferral for the Elderly Act.
Section 12-37-510. As used in this article:
(1) `Gross household income' means all income, for all individuals residing within the household, from whatever source derived including, but not limited to, the following sources:
(a) compensation for services including fees, commissions, and similar items;
(b) gross income derived from business;
(c) gains derived from dealings in property;
(d) interest;
(e) rents;
(f) royalties;
(g) dividends;
(h) alimony and separate maintenance payments;
(i) income from life insurance and endowment contracts;
(j) annuities;
(k) pensions;
(l) income from discharge of indebtedness;
(m) distributive share of partnership gross income;
(n) income from an interest in an estate or trust; and
(o) federal old-age, survivor, or disability benefits.
(2) `Household' means an individual or group of individuals living together in a room or group of rooms as a housing unit.
(3) `Tax collector' means the county auditor or municipal officer authorized by law to receive property tax payments.
Section 12-37-515. (A) Any individual who is entitled to claim a homestead exemption pursuant to Section 12-37-250 may elect to defer payment of all or part of the ad valorem taxes levied on his homestead by filing an annual application for tax deferral with the tax collector before May first of the year for which the deferral is sought. If the homestead for which a deferral is requested has an assessed value for purposes of ad valorem taxation of two thousand dollars or more, the deferral may apply only to the taxes on that portion of the assessed value which is two thousand dollars or less.
(B) It is the duty of each applicant for a deferral to demonstrate affirmatively his compliance with the requirements of this article.
Section 12-37-520. (A) As an alternative to the tax deferral authorized by Section 12-37-515, an individual who is entitled to claim a homestead exemption pursuant to Section 12-37-250 may elect to defer payment of all or any part of that portion of the ad valorem taxes levied on the individual's homestead which exceeds four percent of the individual's gross household income for the immediately preceding calendar year. An application for tax deferral under this section must be filed annually with the tax collector before May first of the year for which the deferral is sought. If an individual files for a tax deferral under this section, he may not file for a tax deferral under Section 12-37-515.
(B) The amount of the assessed value of the homestead does not limit the tax deferral authorized by this section.
(C) It is the duty of each applicant for a deferral under this section to demonstrate affirmatively the applicant's compliance with this section and other provisions of this article.
Section 12-37-522. No tax deferral in any one year may be granted pursuant to Section 12-37-515 or Section 12-37-520:
(1) if the total amount of deferred taxes and interest plus the total amount of all other unsatisfied liens on the homestead exceeds eighty-five percent of the fair market value of the homestead as shown on the county tax duplicate for the immediately preceding tax year;
(2) if the applicant's gross household income for the immediately preceding calendar year exceeds twenty thousand dollars;
(3) if the homestead for which the deferral is sought is subject to any lien, the terms of which are dictated by federal law, rule, or regulation prohibiting deferral of taxes; or
(4) with respect to taxes levied to retire bonded indebtedness or for special assessments.
Section 12-37-525. (A) The application for deferral must be made upon a form prescribed by the Department of Revenue and Taxation and furnished by the tax collector. The application form must advise the applicant of the manner in which interest is computed. Each application form must contain an explanation of the conditions to be met for approval and the conditions under which deferred taxes and interest become due, payable, and delinquent. Each application form must clearly state that all deferrals pursuant to this article constitute a lien on the applicant's homestead.
(B) A form of oath must be provided and administered to the individual seeking the deferral. The oath may be administered by the tax collector or any individual authorized by law to administer oaths.
(C) (1) The tax collector shall consider each annual application for homestead tax deferral within thirty days of the date the application is filed or as soon as practicable thereafter. If the tax collector finds that the applicant is entitled to the tax deferral, he shall approve the application and file the application in the permanent records. If the tax collector finds that the applicant is not entitled to the deferral, he shall send a notice of disapproval to the applicant giving his reasons for the disapproval within thirty days of the filing of the application either by personal delivery or by certified mail to the mailing address given by the applicant, and he shall make a return on the original notice of the manner in which the notice was served on the applicant and shall file the return among the permanent records of his office. The original notice of disapproval sent to the applicant must advise the applicant of his right to appeal the decision of the tax collector to the Administrative Law Judge Division and must inform the applicant of the procedure for filing an appeal.
(2) An appeal of the decision of the tax collector to the Administrative Law Judge Division must be in the manner provided by law for appeals to the division.
(D) Each application must contain a list and the current value of all outstanding liens on the applicant's homestead.
(E) If proof of fire and extended coverage insurance has not been furnished with a prior application, each applicant shall furnish proof of this insurance in an amount which is in excess of the sum of all outstanding liens and deferred taxes and interest with a loss payable clause to the tax collector.
Section 12-37-530. (A) The amount of taxes deferred pursuant to this article accrues interest until paid at the rate of eight percent a year.
(B) Interest on taxes deferred pursuant to this article in any year begins accruing on the date the taxes were due.
Section 12-37-535. The taxes and interest deferred pursuant to this article constitute a prior lien and attach as of the date and in the same manner and must be collected as are other liens for taxes, as provided for under this title, but the deferred taxes and interest are due, payable, and delinquent as provided in this article. Notwithstanding any other provision of law, the lien established by this section continues on the property until the deferred taxes and interest are paid in full.
Section 12-37-540. Each year, at the time the tax notices are mailed, the tax collector shall notify each property owner to whom a homestead tax deferral has been previously granted of the accumulated sum of deferred taxes and interest outstanding.
Section 12-37-545. (A) If there is a change in tax-deferred property so that the owner is no longer entitled to a homestead exemption for the property pursuant to Section 12-37-250, or if the owner fails to maintain the required fire and extended insurance coverage, the total amount of deferred taxes and interest for all previous years are due and payable either on the date on which the change occurs or on the date failure to maintain insurance occurs.
(B) If there is a change in ownership of tax-deferred property, the total amount of deferred taxes and interest for all previous years is due and payable on the date the change in ownership occurs. However, when the change in ownership is to a surviving spouse and the spouse is eligible for a homestead exemption on the property pursuant to Section 12-37-250, the surviving spouse may continue the deferral of previously deferred taxes and interest pursuant to this article.
(C) During any year in which the total amount of deferred taxes, interest, and all other unsatisfied liens on a homestead exceeds eighty-five percent of the fair market value of the homestead, the tax collector shall immediately notify the owner of the homestead that the portion of taxes and interest which exceeds eighty-five percent of the value of the homestead is due and payable within thirty days of receipt of the notice. Failure to pay the amount due shall cause the total amount of deferred taxes and interest also to become due and payable at the end of the thirty days.
(D) Each year, upon notification, each owner of property on which taxes and interest have been deferred shall submit to the tax collector a list, and the current value, of all outstanding liens on the owner's homestead. Failure to respond to the notification within thirty days of its receipt shall cause the total amount of deferred taxes and interest to become due and payable at the end of the thirty days.
(E) All deferred taxes which are made due and payable by this section are delinquent and subject to interest in accordance with Section 12-54-20 beginning one hundred twenty days following the date the deferred taxes become due and payable.
Section 12-37-550. (A) All or part of the deferred taxes and accrued interest may be paid at any time to the tax collector by:
(1) the owner of the property or the spouse of the owner, or
(2) the next of kin of the owner, heir of the owner, child of the owner, or any person having or claiming a legal or equitable interest in the property, provided that no objection is made by the owner within thirty days after the tax collector notifies the owner of the fact that the payment has been tendered. Any payment made under this item must be deposited in a special escrow account for the thirty-day period; and the tax collector may not make distribution of the amount while the funds are held in escrow.
(B) Any partial payment made pursuant to this section must be applied first to accrued interest. By ordinance of the governing body of the county or municipality, a minimum amount of partial payment which may be accepted pursuant to this part may be established, but required minimum payment may not exceed twenty-five dollars.
Section 12-37-555. When deferred taxes or interest is collected, the tax collector shall maintain a record of the payment, which record must contain a description of the property and the amount of taxes or interest collected for the property. The tax collector shall distribute payments received to the local taxing entities to whom the taxes are owed and the interest must be distributed as taxes are distributed.
Section 12-37-560. If any holder of a deed to secure debt or any mortgagee elects to pay the taxes of an applicant who qualifies for and receives a tax deferral, the election does not give the holder of the deed or the mortgagee the right to foreclose.
Section 12-37-565. Except with respect to requirements dictated by federal law, rule, or regulation, no mortgage, deed to secure debt, or other agreement may contain a provision, clause, or statement which prohibits the owner from claiming a real property tax deferral on his homestead. Any provision, clause, or statement executed after December 31, 1995, is void and unenforceable.
Section 12-37-570. (A) The following penalties are imposed on a person who wilfully files information required under this article which is incorrect:
(1) The person shall pay the total amount of taxes and interest deferred, which is immediately due;
(2) The person is disqualified from filing a homestead tax deferral application for the next three years; and
(3) The person shall pay a penalty of twenty-five percent of the total amount of taxes and interest deferred.
(B) A person against whom the penalties prescribed in this section have been imposed may appeal the penalties imposed to the Administrative Law Judge Division within thirty days after the penalties are imposed."
SECTION 2. This section takes effect January 1, 2001, and first applies with respect to property taxes due for the 2001 tax year.
SECTION 3. This act takes effect upon approval by the Governor.
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