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Committee reports out bill widening which counties may impose education capital-improvement sales tax
Summary
A Senate committee unanimously reported House Bill 4589 to the full Senate. The bill adds two new eligibility pathways for counties to impose the one-cent education capital improvement sales and use tax, naming criteria tied to school district boundaries and a $70,000 accommodations-tax threshold and requiring at least 10% of proceeds for property-tax relief.
House Bill 4589, which would expand the list of counties eligible to impose the one-cent education capital-improvement sales and use tax, was reported favorably by a Senate committee on a unanimous voice vote.
The Chair opened the item and a bill presenter summarized the measure, saying the bill adds two new ways for a county to qualify. Under Item G, a county that is coterminous with a single school district and that collected at least $70,000 in accommodations taxes in the prior fiscal year could become eligible. Under Item H, a county that is entirely encompassed by two school districts that impose no taxes under the chapter at the time of a referendum also could qualify, the presenter said. The presenter identified Union County and Dorchester County as potential examples under the new language.
The presenter also noted that 10% of proceeds under certain versions of the amendment must be used to provide property-tax relief by offsetting existing debt-service millage on general-obligation bonds. The presenter said referendums to adopt the tax remain governed by the underlying code provision and must be held at the time of a general election in even-numbered years.
Committee members questioned how the 10% minimum operates and whether a school district could propose a different split in the referendum. A committee member asked whether the draft limits the rebate to 10% or allows a 50/50 split between tax relief and capital improvements; the presenter replied the bill sets a 10% minimum but does not prohibit a school district from proposing a larger share be returned to taxpayers.
A committee member also asked whether Pickens County would be affected. The presenter said Pickens is already eligible under existing language and would not be constrained by the new 10% rule in the same way as the counties specifically added by this bill.
The committee moved the bill favorably (moved by a committee member, seconded by the Chair) and the Chair called for a voice vote; members indicated unanimous support. The measure will go to the full Senate, with members reserving the right to propose floor amendments if language requires clarification.
What happens next: The bill is reported out to the Senate floor. If no changes are made in the House language before final passage, the committee indicated it expects to request clarifying amendments on issues raised in questions about thresholds and formulaic application of the 10% property-tax relief requirement.
