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Bill would allow fee on county real estate sales

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Other stories by Carol Weir
Published Saturday, April 19th, 2003

BLUFFTON -- State Rep. Bill Herbkersman hopes to get legislation that will allow Beaufort County municipalities to charge a fee on real estate sales through the legislature this year and is working to include the county in his efforts.

"We're very pleased that Bill is introducing the legislation and appreciate his efforts to include the unincorporated parts of the county," Beaufort County Council Chairman Weston Newton said Friday.

County Council on Monday unanimously passed a resolution supporting the legislation.

The bill, as written, applies only to municipalities in Beaufort County. It would allow local governments to impose a 0.25 percent real estate transfer fee if another municipality in the same county was imposing the fee before Jan. 1, 1991.

Hilton Head Island, which adopted its fee in 1990, is the only municipality in the state allowed to collect the fee. That came about largely because Hilton Head had outstanding bonds based on its fee when state lawmakers clamped down on local government taxing authority in 1997.

The fee would provide a revenue source for local governments to preserve green space and buy land to control growth, Herbkersman has said.

Newton said Friday that the county will seek to use the money in conjunction with its existing land-buying program.

Herbkersman said Thursday that if his bill is approved by the state House Ways and Means Committee, he'll amend it to include unincorporated areas of the county. If the committee rejects it, he'll introduce to the Judiciary Committee a second bill that includes the county.

He said he was optimistic a bill could be signed into law by the end of the legislative session in June.

Sen. Scott Richardson, R-Hilton Head Island, said that if the House approves the bill, he'll shepherd it through the Senate.

"This is a model program," Richardson said. "I don't understand why other parts of the state have such a problem with it, but maybe we'll convince them this time."

But Richardson said he was concerned that lawmakers' focus on the issue might jeopardize the program for Hilton Head. The 0.25 percent charge on real estate sales on Hilton Head brings in about $3 million annually. The town has purchased about 1,000 acres on the island -- using a combination of real estate transfer fee revenues and property taxes -- since its land-buying program began.

Last week, Bluffton Mayor Hank Johnston and Beaufort Mayor Bill Rauch traveled to Columbia to urge lawmakers to approve the bill.

"I said that if they'd ever been down here and looked at U.S. 278, they'd understand why we need it," Johnston said Thursday. "We have focused on density reduction through annexation, but we still need the capability to take land out of development."

The mayor said that Bluffton officials haven't estimated yet how much money the real estate transfer fee would generate and haven't defined a list of properties they will seek to acquire. He said that if the law passes, the town will seek to issue bonds against anticipated revenue from the fee and will hold a referendum on the bond issue.

The bill requires municipalities that want to charge the fee to submit a plan for spending the money to the county Legislative Delegation for approval. Herbkersman has said he didn't spell out allowable uses in the bill because they should be specific to an area and not limited or mandated.

If the fee is approved, Johnston said, Bluffton would be guided by Hilton Head's ordinance, which allows the town to use the money to buy land for "public use," including bike paths and public parks, properties with scenic vistas, road buffers and wetlands.

"I think that we should focus on ideas that are going to take trips off the road," Johnston said.

Bluffton also could use the money to partner in "major purchases" with the nonprofit Beaufort County Open Land Trust and Beaufort County's land-buying program, Town Councilman Jacob Preston said Thursday.

Herbkersman said that if the bill becomes law, he and the other members of the Legislative Delegation will hold a series of public workshops this summer to explain the legislation and get people thinking about the properties they'd like to see acquired.

The bill is being opposed by Columbia real estate lobbyists and the Homebuilders Association of South Carolina. The groups say it will hurt home sales and keep first-time buyers from acquiring a home.

But locally real estate professionals generally have supported the real estate transfer fee.

"If the concept is to utilize this to set up a fund where we can purchase open space and green space that can be used by the public, I'm all for it," Bluffton Realtor Annelore Harrell said Thursday.

Contact Carol Weir at 706-8140 or .

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