AN ACT TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING SECTION 4-10-470, RELATING TO COUNTIES IN WHICH THE EDUCATION CAPITAL IMPROVEMENTS SALES AND USE TAX MAY BE IMPOSED, SO AS TO PROVIDE ADDITIONAL AUTHORIZATIONS.
Summary
H. 4589 amends South Carolina’s Education Capital Improvements Sales and Use Tax law to expand the circumstances under which counties may impose the tax. Under current law, counties generally must meet certain collection requirements before the tax can be authorized. This bill adds two new pathways: one for a county that is entirely contained within a single school district, has only recently begun imposing the local option sales tax, and has relatively low state accommodations tax collections; and another for a county that contains two school districts and imposes no other taxes under the chapter at the time of the referendum.
For counties qualifying under the new two-school-district provision, the bill requires that 10 percent of tax proceeds be used for property tax relief by offsetting existing debt service millage on general obligation bonds. It also requires that revenue be distributed between districts according to a resolution agreed to by a majority of each district’s board of trustees. Once a county qualifies and imposes the tax under either new pathway, it remains eligible to do so in the future. The act takes effect upon approval by the Governor.
Impact
The bill broadens Section 4-10-470 of the South Carolina Code, which governs which counties may hold a referendum to impose the Education Capital Improvements Sales and Use Tax. It creates additional eligibility categories beyond the existing collection thresholds, potentially allowing more counties to finance school capital projects through a local sales tax. The bill also affects how proceeds are allocated in counties with two school districts by mandating a property tax relief set-aside and requiring district-level agreement on revenue distribution.
Sentiment
The available legislative history suggests generally favorable sentiment toward the bill. The Senate Finance Committee recommended that the bill do pass, and the House passed the bill by a wide margin, 78-17. That voting pattern indicates broad support for expanding local school capital funding options, though not unanimous agreement.
Contention
The main points of contention appear to center on whether counties that do not meet the standard collection requirements should be allowed to access the tax and under what conditions. The bill’s new eligibility rules are tailored to specific county structures and tax histories, which may have raised concerns about fairness, precedent, or preferential treatment. The requirement that 10 percent of proceeds be used for property tax relief and that both school districts approve the distribution resolution may also reflect an effort to address concerns about taxpayer burden and inter-district allocation.
Similar To
A BILL TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING SECTION 4-10-470, RELATING TO COUNTIES IN WHICH THE EDUCATION CAPITAL IMPROVEMENTS SALES AND USE TAX MAY BE IMPOSED, SO AS TO PROVIDE ADDITIONAL AUTHORIZATIONS.