2009-2010 Bill 182: Tax Research Commission - South Carolina Legislature Online

1 South Carolina General Assembly 2 118th Session, 2009-2010 3 4 S. 182 5 6 STATUS INFORMATION 7 8 General Bill 9 Sponsors: Senators Setzler, Sheheen and Lourie 10 Document Path: l:\s-resmin\drafting\ns\002taxr.tcm.ns.docx 11 12 Introduced in the Senate on January 13, 2009 13 Currently residing in the Senate Committee on Finance 14 15 Summary: Tax Research Commission 16 17 18 HISTORY OF LEGISLATIVE ACTIONS 19 20 Date Body Action Description with journal page number 21 12/17/2008 Senate Prefiled 22 12/17/2008 Senate Referred to Committee on Finance 23 1/13/2009 Senate Introduced and read first time SJ155 24 1/13/2009 Senate Referred to Committee on Finance SJ155 25 1/14/2009 Senate Referred to Subcommittee: O'Dell (ch), Peeler, Reese, Fair, Elliott 26 27 28 VERSIONS OF THIS BILL 29 30 12/17/2008 31 1 2 3 4 5 6 7 8 9 A BILL 10 11 TO AMEND CHAPTER 41, TITLE 2 OF THE 1976 CODE TO 12 DISSOLVE THE JOINT COMMITTEE ON TAXATION AND 13 ESTABLISH A PERMANENT TAX RESEARCH 14 COMMISSION, TO PROVIDE FOR THE COMPOSITION, 15 APPOINTMENT, AND TERM OF OFFICE OF THE MEMBERS 16 OF THE COMMISSION, TO ESTABLISH THE DUTIES AND 17 RESPONSIBILITIES OF THE COMMISSION, TO REQUIRE 18 THE COMPLETION AND DELIVERY OF A REPORT ON 19 SALES TAX EXEMPTIONS NOT LATER THAN DECEMBER 20 15, 2009, AND TO DIRECT THAT THE STATUTORY 21 CHANGES RECOMMENDED IN THE REPORT SHALL 22 BECOME EFFECTIVE JULY 1, 2010, UNLESS 23 DISAPPROVED BY A JOINT RESOLUTION. 24 25 Be it enacted by the General Assembly of the State of South 26 Carolina: 27 28 SECTION 1. Chapter 41, Title 2 of the 1976 Code is amended to 29 read: 30 31 “CHAPTER 41 32 33 Joint Committee on Taxation 34 35 South Carolina Tax Research Commission 36 37 Section 24110. (A) There is established the Joint Committee 38 on Taxation South Carolina Tax Research Commission composed 39 of nine eleven members. The nine members must be appointed as 40 follows: 41 (1) three Senators appointed by the Chairman of the Senate 42 Finance Committee;

[182] 2 1 (2) three members of the House of Representatives appointed 2 by the Chairman of the Ways and Means Committee; and 3 (3) three representatives of the business community, one being 4 a certified public accountant, appointed by the Governor. 5 Members of the Senate and House of Representatives serve 6 exofficio. The committee chairman must be one of the legislative 7 members and the vicechairman must be one of the business 8 community members. Both officers are to be elected by the 9 membership of the committee. The terms of members appointed by 10 the Governor shall be coterminous with the term of the appointing 11 Governor. 12 (1) one member appointed by the President Pro Tempore of 13 the Senate; 14 (2) one member appointed by the Speaker of the House of 15 Representatives; 16 (3) one member appointed by the Chairman of the Senate 17 Finance Committee; 18 (4) one member appointed by the Chairman of the House 19 Ways and Means Committee; 20 (5) one member appointed by the Senate Majority Leader; 21 (6) one member appointed by the Senate Minority Leader; 22 (7) one member appointed by the House of Representatives 23 Majority Leader; 24 (8) one member appointed by the House of Representatives 25 Minority Leader; 26 (9) two members appointed by the Governor with the advice 27 and consent of the Senate, one who must be an elected official 28 serving on a county or municipal governing body and one who 29 must be serving on a school district governing body; and 30 (10) the Director of the Department of Revenue, to serve ex 31 officio. 32 (B) Members of the General Assembly are not eligible to serve 33 on the commission. The members listed in items 18 of subsection 34 A of this section must have substantial academic or professional 35 experience or specialization in one or more of the following areas: 36 (1) public finance; 37 (2) government budgeting and administration; 38 (3) tax administration; 39 (4) economics; 40 (5) accounting; or 41 (6) tax law. 42 (C) The office of Commission Chair is to be elected by the 43 members of the commission for a term of two years. No member

[182] 3 1 may serve more than two consecutive terms as Commission Chair 2 without the unanimous agreement of the membership. The 3 commission may elect such officers as it deems appropriate. 4 Legislative appointees shall serve terms which are coterminous 5 with the term of their respective appointing authority’s term of 6 office. The term of the Director of the Department of Revenue 7 shall be coterminous with the term the Governor by whom he was 8 appointed. The term of the initial appointees of the Governor shall 9 be for two years and must begin on July first of the year of the 10 appointment and expire on June thirtieth of the second year 11 following their appointment. All subsequent appointees of the 12 Governor shall serve terms of four years, which must begin on July 13 first of the year of the appointment and expire on June thirtieth of 14 the fourth year following their appointment. 15 16 Section 24120. The committee must: 17 (1) make a detailed and careful study of the revenue laws of 18 the State, together with all other laws of the State which have a 19 bearing upon the study of the revenue laws, and to make 20 recommendations to the General Assembly; 21 (2) provide for the revision of revenue laws so as to develop a 22 more easily understandable and workable system of revenue laws 23 for the State; 24 (3) recommend changes in the basic tax structure of the State 25 and in the rates of taxation, together with predicted revenue effects 26 of the charges together with proposed alternate sources of revenue, 27 to the end that our revenue system may be stable and equitable, 28 and yet so fair when compared with the tax structures of other 29 states, that business enterprises and persons would be encouraged 30 by the economic impact of the South Carolina revenue laws to 31 move themselves and their business enterprises into the State; 32 (4) recommend study of alternate sources of revenue found in 33 the tax structures of other states, and particularly in the other 34 southeastern states, and to make a report of the economic impact of 35 the South Carolina tax structure upon the business enterprises of 36 various types of industry, as compared with those of other 37 southeastern states; and 38 (5) make recommendations for longrange revenue planning 39 and for future amendments of the revenue laws of South Carolina. 40 (A) The commission must select and employ a staff director 41 and is authorized to select and employ such other staff as may be 42 prudent to assist the commission in the performance of its duties 43 and responsibilities. The staff director shall be chosen solely on

[182] 4 1 the grounds of fitness to perform the duties of the position and 2 must possess: 3 (1) a Masters Degree from an accredited college or 4 university, or a Baccalaureate Degree from an accredited college 5 or university and have obtained professional experience equivalent 6 to a Masters Degree; 7 (2) at least five years of experience in a public, private, or 8 governmental position at the managerial level; and 9 (3) an academic background or substantial career experience 10 in one or more of the following fields: 11 (a) economics; 12 (b) government budgeting and administration; 13 (c) urban and regional economic development; 14 (d) economic forecasting; or 15 (e) state and local public finance. 16 (B) No member of the General Assembly, nor anyone who has 17 been a member of the General Assembly in the three years prior to 18 employment, is eligible to be selected as director. The director 19 shall act as secretary for the commission and shall, with the 20 approval of the commission, have authority to contract for experts, 21 consultants, and such other assistance as may be necessary to carry 22 out the duties of the commission. 23 24 Section 24130. The committee commission may: 25 (1) hold public hearings; 26 (2) receive testimony of any employees of the State or any 27 other witnesses who may assist the committee commission in its 28 duties; and 29 (3) call for assistance in the performance of its duties from any 30 employees or agencies of the State or any of its political 31 subdivisions.; and 32 (4) adopt, by majority vote, rules not inconsistent with this 33 chapter, which it considers necessary with respect to the discharge 34 of its duties under this chapter. 35 36 Section 24140. The committee may adopt by majority vote 37 rules not inconsistent with this chapter it considers proper with 38 respect to matters relating to the discharge of its duties under this 39 chapter. 40 The commission must: 41 (1) conduct a detailed, comprehensive and careful study of the 42 state’s tax structure, to include all revenue laws of the State, 43 together with all other laws of the State which have a bearing upon

[182] 5 1 the study of the revenue laws, with an emphasis on the systemic 2 balance of the state’s revenue structure from the standpoint of 3 adequacy, equity and efficiency and with the goal of maintaining 4 and enhancing South Carolina as an optimum competitor in the 5 effort to attract businesses and individuals making a decision on 6 where to locate and live, work, and invest and report to the General 7 Assembly a comprehensive package of modifications necessary to 8 effectuate the commission’s recommendations; 9 (2) establish uniform content, collection, and reporting 10 requirements for data to be reported to the commission by the 11 various agencies and political subdivisions and maintain a 12 repository of economic and fiscal data necessary and useable for 13 the review, analysis, and assessment of existing and proposed 14 revenue policies; 15 (3) review and analyze any proposed or recommended changes 16 to the basic tax structure of the State or in the rates of taxation, 17 together with predicted revenue effects of the changes or proposed 18 alternate sources of revenue in the context of the goals set forth in 19 item (1) of this section with priority to be given to any proposal 20 referred by the Chairman of the Senate Finance Committee or the 21 House Ways and Means Committee; 22 (4) develop criteria for assessing the effectiveness of the 23 current tax structure, as well as the likely systemic impact of any 24 proposed changes effecting tax revenues and report such criteria to 25 the General Assembly at the earliest possible date; 26 (5) conduct periodic evaluations of enforcement and collection 27 procedures and the administrative efficiency of the tax structure; 28 (6) seek public input and comment on proposals under review 29 by the commission and on commission recommendations 30 regarding changes in the tax structure; 31 (7) make periodic reports on legislative proposals and other 32 matters referred to the commission for review and evaluation and 33 annually report to the Senate Finance and House Ways and Means 34 Committees all findings, recommendations, studies, reviews, 35 analyses, or such papers regarding the status of the state’s tax 36 structure and its ability to maintain and enhance South Carolina’s 37 attractiveness as a place to work, invest, and live in comparison to 38 other locations and any recommendations for changes or the 39 timing of changes to the revenue system; and 40 (8) make all of its data, information resources, reports, and 41 recommendations available, subject to the provisions of Chapter 4 42 of Title 30 of the Code. 43

[182] 6 1 Section 24150. Professional and clerical services for the 2 committee must be made available from the staffs of the General 3 Assembly, the The Budget and Control Board, the Department of 4 Revenue, and other state agencies and institutions , and political 5 subdivisions of the State shall provide the commission with such 6 information, reports, records, and data as it may reasonably require 7 for the conduct of its duties.” 8 9 SECTION 2. Section 24160 of the 1976 Code is repealed. 10 11 SECTION 3. Section 24170 of the 1976 Code is amended to read: 12 13 “Section 24170. The members of the committee commission are 14 entitled to receive the per diem, mileage, and subsistence as is 15 allowed by law for members of boards, committees, and 16 commissions when engaged in the exercise of their duties as 17 members of the committee commission. These The expenses must 18 be paid from approved accounts of their respective appointing 19 authority. All other costs and expenses of the committee must be 20 paid in equal proportion by the Senate, the House of 21 Representatives, and the Office of the Governor, but only after the 22 expenditures have been approved in advance by the President Pro 23 Tempore of the Senate, the Speaker of the House, and the 24 Governor appropriations authorized in the annual general 25 appropriations act.” 26 27 SECTION 4. Chapter 41, Title 2 of the 1976 Code is amended by 28 adding: 29 30 “Section 24180. (A) As soon as practicable after its 31 organization, the commission shall conduct a thorough analysis 32 and examination of the sales tax exemptions and limitations 33 provided for in Article 21, Chapter 36, Title 12 of the Code. 34 (B) Not later than December 15, 2009, the commission must 35 publish and deliver a report and recommendation to the Chairs of 36 the Senate Finance and House Ways and Means Committee setting 37 forth the sales tax exemptions and limitations to be modified or 38 repealed, including the text of an amendment to the provisions of 39 Article 21, Chapter 36, Title 12 of the Code that effectuates the 40 recommendations contained in the commission’s report. The 41 provisions of the amendment to Article 21, Chapter 36 of Title 12 42 must also be delivered to the Code Commissioner who must take 43 steps to prepare the substance of the amendment to be enrolled and

[182] 7 1 engrossed in the Code of Laws with the provisions of such 2 amendment to take effect July 1, 2010, unless, not later than April 3 30, 2010, the amendment is disapproved by enactment of a Joint 4 Resolution which deals exclusively with the single question of the 5 disapproval of the report and the associated amendment. 6 (C) The commission may appoint an advisory committee to 7 assist with the evaluation and consideration of the various 8 exemptions but the final report and recommendation must be the 9 work product of the commission.” 10 11 SECTION 5. This act takes effect upon approval by the 12 Governor. 13 XX

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