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Bill

H 3378

Property tax exemption

2025-2026 Regular Session Introduced by Mike Burns and 3 co-sponsors

Eliminates 100% of local property taxes after 2024 and replaces them with fixed-state reimbursements to localities equal to their 2024 property tax collections.

Referred to Committee on Ways and Means
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Bill Summary · H 3378

Summary — H 3378: Property tax exemption (bill text included in packet)

Note: The legislative packet you provided also contains unrelated text for a Massachusetts bill (House No. 3378) about requiring plain-language web content by the Chief Digital Officer. The summary below focuses on the property-tax bill text (South Carolina statute amendments) titled here as a “Property tax exemption,” which appears to be the substantive matter you asked about.

Main purpose and intent

The bill would eliminate ordinary local property taxation on all real and personal property (a 100% exemption), while requiring the state to reimburse local political subdivisions—including school districts—by paying each jurisdiction a fixed dollar amount equal to the property taxes those jurisdictions actually collected in property tax year 2024. The exemption is effective for property tax years beginning after 2024. The stated intent is to remove property taxation at the local level but hold local governments harmless by replacing those revenues with a state reimbursement equal to their 2024 collections.

Key provisions

  • 100% exemption: Effective for property tax years beginning after 2024, “one hundred percent of the property tax value of all property” is exempt from all property taxes, except for millage applied for repayment of general obligation (GO) debt.
  • GO debt exception: Millage imposed to repay general obligation bonded debt remains collectible.
  • Bonding treatment: Property exempted under this provision is nonetheless treated as “taxable property” for purposes of bonded indebtedness under Section 15, Article X of the State Constitution (intended to preserve bond-related calculations/limits).
  • State reimbursement: Each year the state must reimburse and allocate to political subdivisions (including school districts) an amount equal to the property taxes those subdivisions collected in property tax year 2024 on such property. The reimbursement amount is fixed at that 2024 amount and “continues into succeeding years at that fixed amount.”
  • Effective date: The act takes effect upon approval by the Governor; its tax provisions apply to property tax years beginning after 2024.

Who would be affected

  • Property owners: Would no longer pay ordinary property taxes after the effective date, though they could still be subject to millage dedicated to GO debt repayment.
  • Municipalities, counties, school districts, and other local political subdivisions: Would lose the ability to collect property taxes but would receive state reimbursements equal to their 2024 property tax collections on an ongoing fixed basis.
  • State budget: The Commonwealth/state would assume a new, ongoing fiscal obligation to reimburse localities—equal in aggregate to 2024 local property tax collections on all property—on a recurring basis.
  • Bondholders and municipalities issuing GO debt: The bill attempts to preserve treatment of property for bonded indebtedness calculations, but bond markets and legal counsel would assess implications.

Fiscal and policy implications (practical impacts)

  • Large, recurring state obligation: The state would need to pay every year a fixed dollar amount matching 2024 property tax receipts; the obligation does not grow automatically with inflation, new construction, or property value increases.
  • Redistribution and growth effects: Because reimbursements are fixed at 2024 levels, jurisdictions that rely on property-tax growth (new development, rising assessments) may be unable to capture additional revenue—potentially constraining services or requiring local fee/tax changes. Conversely, jurisdictions that saw temporary high collections in 2024 would continue to receive that elevated amount.
  • Local fiscal autonomy: Removes local control over property tax policy and growth; local governments would be dependent on fixed state payments.
  • Budget risk and volatility for the state: The state assumes a major, permanent liability. Future budget pressures could create political conflict over maintaining payments.
  • Administrative issues: Establishing the baseline 2024 allocations, administering ongoing fixed payments, and ensuring alignment with exemptions that already existed could require significant administrative work.
  • Legal and constitutional issues: The bill explicitly addresses bond law treatment, but there could be litigation or legal interpretation questions concerning state vs. local taxing powers, revenue substitution, or other constitutional constraints.

Procedural / timeline notes

  • Effective for property tax years beginning after 2024.
  • The bill text states it “takes effect upon approval by the Governor.”
  • Document timestamps included: prefiled 12/05/2024; legislative action entries in your packet show referrals and scheduling (including hearings). Confirm current committee status and hearing schedules with the legislative clerk for latest dates (the packet shows hearings and referrals across 2024–2025).

Bottom line

This bill would eliminate routine property taxation on all property while substituting a state-funded, fixed-dollar reimbursement to local governments equal to their 2024 property tax collections. It represents a major restructuring of local fiscal systems and shifts ongoing fiscal responsibility from local taxpayers to the state treasury, with substantial administrative, budgetary, and policy consequences.

Compiled from official sources — confirm details with the bill’s official record.

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