Legislative Update

Affordable Housing

House Bill 3718 would require the payment of property taxes by nonprofit housing corporations that provide affordable and low-income housing. It was introduced on March 8th and referred to the House Ways and Means Committee. Because of other exemptions provided by current law, there has been some question as to what types of housing projects would be impacted by this change. For example, research has shown that programs for aging, disabled and faith based would still be afforded the tax break. This legislation was introduced as a result of an out of state corporation that may have availed itself of too many tax breaks. AHCofSC, SC Appleseed Legal Justice Center, SC Fair Share and the Homebuilders Association of SC have been working together during the last three weeks to address the concerns without jeopardizing existing affordable housing programs.

House Bill 3768 was introduced on March 15th and was proposed as tax clean-up legislation for the Department of Revenue. A careful review of the bill found two provisions that would have allowed local governments to charge a fee in lieu of property taxes for up to the amount of the applicable taxes to non-profit housing corporations. The AHCofSC worked with the SC Appleseed Legal Justice Center, the SC Realtors Association and Representative Kirsh from York County to remove this provision for the bill. The House passed our amendment to remove the provision and subsequently passed the bill on April 20th. The bill passed the Senate on May 26th. Thanks also to SC Fair Share and SCANPO for their grassroots support.

House Bill 3474 would require nonprofit housing corporations who own property within a county to pay fees for services rendered by local governments and school districts at a rate of up to 50% of the ad valorem taxes that would have otherwise been charged. The bill has been referred to the House Ways and Means Committee. It is anticipated that no action will be taken on this bill because of the introduction of House Bill 3718.

Charitable Exemptions

House Bill 3019 would require that at least 80% of all gross revenue be used for charitable purposes for an entity to qualify as a charity. Under the proposal charitable purpose includes, without limitation, the gathering and communication of information, the dissemination and propagation of views and ideas, and the advocacy of causes relative to the stated organizational purpose. The bill has been referred to the House Judiciary Committee.

2006 and Beyond

There appears to be growing support in the South Carolina Legislature to address a myriad of tax issues. While this could be good for the people of South Carolina, there can often be unintended consequences. The AHCofSC will continue to monitor and work on issues related to the tax Code and to tax exemptions for affordable housing.

On a local level there is increasing concern about funding projects and the impact affordable housing programs have on the tax base. Often the Legislature will attempt to respond to these local pressures, which could also have a chilling effect on tax matters related to affordable housing. These issues should be of long-term concern to the Coalition.