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TO AUTHORIZE THE DILLON COUNTY BOARD OF EDUCATION TO CONSTRUCT, RENOVATE, AND REPAIR SCHOOL BUILDINGS IN THE COUNTY USING LEASE-PURCHASE FINANCING AGREEMENTS IN THE PRINCIPAL AMOUNT NOT TO EXCEED, IN THE AGGREGATE, SIXTY MILLION DOLLARS AND TO GIVE SPECIFIC POWERS TO THE BOARD AND PROVIDE FOR CERTAIN LIMITATIONS REGARDING LEASE-PURCHASE AGREEMENTS; TO DIRECT THE DILLON COUNTY AUDITOR TO LEVY MILLAGE IN SPECIFIED AMOUNTS SUBJECT TO CERTAIN LIMITATIONS; TO AUTHORIZE A REFERENDUM TO BE CONDUCTED IN DILLON COUNTY TO IMPOSE A SALES AND USE TAX FOR THE PURPOSE OF COLLECTING REVENUES TO PAY FOR EXPENSES RELATED TO A LEASE-PURCHASE AGREEMENT AND TO PROVIDE FOR THE METHOD OF IMPOSING, ADMINISTERING, AND COLLECTING THE TAX; AND TO REPEAL ACT 197 OF 2005, RELATING TO THE IMPOSITION OF A SALES AND USE TAX FOR SCHOOL INFRASTRUCTURE NEEDS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The General Assembly finds that:
(1) A definite and compelling need exists for new and renovated school facilities in Dillon County as a result of the dilapidated and obsolete conditions of many of the existing school facilities in the county.
(2) The use of lease-purchase financing to provide for renovations to and construction of schools in Dillon County is necessary and appropriate in light of the current conditions.
(3) A sales and use tax authorized by referendum will reduce property tax burdens in Dillon County and alleviate the disparity in property tax rates among the several school districts.
SECTION 2. (A)(1) The Dillon County Board of Education is authorized to acquire, construct, renovate, repair, furnish, and equip school buildings and other facilities relating to the provision of public education in Dillon County using a lease-purchase financing agreement or agreements in the principal amount not to exceed, in the aggregate, sixty million dollars. The Dillon County Board of Education must approve by resolution each lease-purchase agreement. The term of any lease entered into in connection with lease-purchase financing agreements must not exceed forty years from the date of delivery of the agreement. The chairman and secretary of the Dillon County Board of Education are authorized to execute and deliver all leases and other documents as necessary or convenient to accomplish the purposes of this act. A lease-purchase agreement undertaken pursuant to this section may be refinanced in the discretion of the Dillon County Board of Education if the refinancing results in a debt service savings.
(2) In connection with lease-purchase financing agreements, the Dillon County Board of Education is authorized, without the prior review or consent of a person or entity, to:
(a) enter into leases of real property and improvements on real property with one or more corporations, as determined by the Dillon County Board of Education;
(b) procure insurance, guarantees, letters of credit, reserve fund surety bonds, and other forms of collateral, security, or credit support from a public or private entity for the payment of amounts due under a lease-purchase agreement authorized by this act, including the payment of premiums or fees on any insurance, guarantees, letters of credit, and other forms of collateral, security, or credit support and, from time to time, to make reimbursements and replenishments as required;
(c) enter into contracts and expend funds to obtain accounting, management, legal and financial consulting, bond underwriting, trusteeship, and other professional services necessary or convenient to accomplish the purposes of this act;
(d) enter into leases and other contracts with each of the school districts in Dillon County for their use of school facilities financed in accordance with this act; and
(e) enter into contracts or agreements and make covenants as are necessary, proper, or convenient to accomplish the purposes of this act.
(B) Notwithstanding another provision of this act, a lease-purchase agreement must not be entered into unless, prior to the entry into an agreement, the Dillon County Board of Education determines that the revenues from the millage levy and the sales and use tax authorized pursuant to this act are sufficient to pay all amounts owed under the agreement or other agreements entered into pursuant to this act.
(C) School buildings and other facilities financed by an agreement must be titled in the name of the Dillon County Board of Education during the time a lease-purchase financing agreement authorized pursuant to this act remains in effect. The title to real property to be improved pursuant to a lease-purchase financing agreement, which is presently titled in the name of a school district in Dillon County, shall be transferred to the Dillon County Board of Education prior to the effective date of the lease-purchase agreement applicable to the property. Upon the termination of a lease-purchase financing agreement and all related leases, title to the school buildings and other facilities must be transferred to the boards of trustees of the school districts in which the buildings and facilities are located.
(D) The Dillon County Board of Education shall document and record the proceedings connected with each lease-purchase financing agreement authorized pursuant to this act. A copy of the record of the proceedings must be filed and indexed in the office of the Clerk of Court for Dillon County in the same manner and book used for filing and indexing required pursuant to Section 11-15-10 of the 1976 Code. An action must not commence if the Dillon County Board of Education enters into a lease-purchase financing agreement after the expiration of twenty days from the date of filing and indexing.
SECTION 3. Notwithstanding Act 388 of 2006 or another provision of law, if the electors of Dillon County have approved the sales and use tax authorized in Section 4 of this act, the Dillon County Auditor shall levy annually on all taxable property in Dillon County, for taxable years beginning in 2007 and continuing each year so long as principal amounts under the lease-purchase agreement or agreements remain outstanding, millage in the following amounts:
Year Amount
2007 10 mills
2008 11 mills
2009 13.7 mills
2010 13.7 mills
2011 13.7 mills
2012 13.7 mills
2013 15 mills
The Dillon County Auditor shall impose fifteen mills for taxable years beginning in 2014 and continuing each year as long as principal amounts under the lease-purchase agreement or agreements remain outstanding. The Dillon County Treasurer shall use the revenues collected from the imposition of the millage levy and the sales and use tax authorized pursuant to this act to pay the principal of, interest on, and any redemption premium payable pursuant to the lease-purchase agreement or agreements authorized in Section 2 of this act and to replenish any reserve fund established in connection with the agreement or agreements.
SECTION 4. (A) As used in this section:
(1) "Board" means the Dillon County Board of Education and each of the boards of trustees of the three school districts in Dillon County, as the case may be.
(2) "County" means Dillon County, South Carolina.
(3) "County auditor" means the Dillon County Auditor.
(4) "County treasurer" means the Dillon County Treasurer.
(5) "Department" means the South Carolina Department of Revenue.
(B) Subject to the requirements of this section and notwithstanding the limitations provided in Section 4-10-310 of the 1976 Code, the board by resolution may impose a sales and use tax not exceeding two percent within the county for a specified period of time to collect revenues to pay the principal of, interest on, and redemption premium, if any, payable pursuant to a lease-purchase agreement entered into by the board pursuant to Section 2 of this act.
(C)(1) The board by resolution may vote to impose the tax authorized by this section but the tax must not be levied unless the voters approve the question presented in a referendum. The board shall determine the date upon which a referendum may be held. The resolution must:
(a) identify the improvements to be financed through the proceeds of the tax and the priority of such improvements; and
(b) the maximum time, stated in calendar years or calendar quarters, or a combination of them, for which the tax may be imposed.
(2) Upon receipt of the resolution, the election authorities in Dillon County shall conduct a referendum on the question of imposing the optional special sales and use tax in the county. Notice of the election must be provided in the manner provided by the general election law. Expenses of the referendum must be paid by the school districts of the county in proportion to their relative one-hundred-thirty-five-day membership for the 2006-2007 school year.
(3) The question to be voted upon in a referendum must read substantially as follows:
"Must a special sales and use tax in the amount of (specify percent; not exceeding two percent) be imposed in Dillon County for not more than (specify years/quarters) in order to raise revenues which will be applied to payments due pursuant to undertakings of the Dillon County Board of Education, in a principal amount not exceeding (amount; not to exceed $60,000,000), which will provide for the acquisition, construction, renovation, repair, furnishing, and equipping of the following school facilities in Dillon County in the following order of priority: (describe improvements)?
Those voting in favor of the question shall deposit a ballot with a check or cross mark in the square after the word 'Yes', and those voting against the question shall deposit a ballot with a check or cross mark in the square after the word 'No'."
The ballot, in the discretion of the board, may contain a short explanation of the question to be voted upon in a referendum.
(4) Upon receipt of the returns of the referendum, the Dillon County Election Commission shall certify the result and file the certification with the Dillon County Clerk of Court. The certification also must be filed with the department. The certified results of a referendum are not open to question except by a civil action instituted within twenty days of the filing of the certificate with the clerk of court. If a majority of the votes cast is in favor of imposing the tax, then the tax is imposed as provided pursuant to this act; otherwise, the tax is not imposed. A referendum on the imposition of the tax authorized pursuant to this section must not be held more than once in a period of twelve consecutive months. The aggregate percentage rate of the sales and use tax authorized pursuant to this act may be imposed pursuant to one or more referendums held in accordance with the provisions of this act.
(D)(1) If the tax is approved in a referendum, the tax must be imposed beginning on the first day of the month following the termination of the capital-project sales tax imposed in the county pursuant to Article 3, Chapter 10, Title 4 of the 1976 Code or, if later, the first day of the fourth full month following the date of the referendum.
(2) The tax terminates upon the earlier of the:
(a) final day of the maximum time specified for the imposition; or
(b) payment of the final installment of interest of a lease-purchase financing undertaken by the board pursuant to Section 2 of this act.
(E)(1) The tax levied pursuant to this section must be administered and collected by the department in the same manner that other sales and use taxes are collected. The department may prescribe the amounts that may be added to the sales price because of the tax.
(2) The tax authorized by this section is in addition to all other local sales and use tax and applies to the gross proceeds of the sales in the county which are subject to the tax imposed by Chapter 36, Title 12 of the 1976 Code and the enforcement provisions of Chapter 54, Title 12 of the 1976 Code. The gross proceeds of the sale of items subject to a maximum tax in Chapter 36, Title 12 of the 1976 Code are exempt from the tax imposed by this section. The gross proceeds of the sale of unprepared food, which may be purchased with United States Department of Agriculture food coupons, are exempt from the tax imposed by this section. The tax imposed by this section also applies to tangible personal property subject to the use tax in Article 13, Chapter 36, Title 12 of the 1976 Code.
(3) Taxpayers required to remit taxes pursuant to Article 13, Chapter 36, Title 12 of the 1976 Code shall identify the county in which the tangible personal property purchased at retail is stored, used, or consumed in this State.
(4) Utilities are required to report sales in the county in which consumption of the tangible personal property occurs.
(5) A taxpayer subject to the tax imposed by Section 12-36-920 of the 1976 Code who owns or manages rental units in more than one county separately shall report in his sales tax return the total gross proceeds from business done in each county.
(6) The gross proceeds of sales of tangible personal property delivered after the imposition date of the sales and use tax levied pursuant to this section in the 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 section if a verified copy of the contract is filed with the department within six months after the imposition of the sales and use tax.
(7) Notwithstanding the imposition date of the sales and use tax authorized pursuant to this section, regarding services that regularly are billed on a monthly basis, the sales and use tax is imposed beginning on the first day of the billing period beginning on or after the imposition date.
(F) The revenues of the tax collected in the county pursuant to this section must be remitted to the State Treasury and credited to a fund separate and distinct from the general fund of the State. After deducting the amount of refunds made and costs to the department of administering the tax, not to exceed one percent of the revenues, the State Treasurer shall distribute the revenues quarterly to the county treasurer. The county treasurer, on February 15 of each year, shall determine the amount of proceeds of the sales and use tax held by him. Proceeds of the sales and use tax in excess of the amount required to make payments under all lease-purchase agreements entered into by the board pursuant to Section 2 of this act, first shall be applied, within the next following eighteen months and taking into account the receipts of the ad valorem tax imposed pursuant to Section 3 of this act, to replenish any reserve fund established in connection with any lease-purchase agreements and any remaining amount shall be applied to the prepayment or the defeasance of amounts payable under the lease-purchase agreements or to defray the cost of capital improvements for the school districts in Dillon County as directed by the board. The State Treasurer may correct misallocation costs or refunds by adjusting subsequent distributions, but these adjustments must be made in the same fiscal year that the misallocation occurred.
(G) The department shall furnish data to the State Treasurer and to the school districts for the purpose of calculating distributions and estimating revenues. The information that must be supplied to the districts 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 of the 1976 Code. A person violating this section is subject to the penalties provided in Section 12-54-240 of the 1976 Code.
SECTION 5. Act 197 of 2005 is repealed.
SECTION 6. This act takes effect upon approval by the Governor.
This web page was last updated on Monday, June 22, 2009 at 2:49 P.M.