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For purposes of those businesses qualifying under Section 4-29-67(D)(4), the five-year period referred to in this subsection is eight years and the seven-year period is ten years.

(3) The annual fee provided by subsection (D)(2) is available for no more than twenty years. For projects which are completed and placed in service during more than one year, each year's investment may be subject to the fee in subsection (D)(2) for twenty years to a maximum total of twenty-seven years for the fee for a single project which has been granted an extension. For those businesses qualifying under subsection (D)(4), the annual fee is available for no more than thirty years and for those projects placed in service in more than one year the annual fee is available for a maximum of thirty-seven years.
(4) Annually, during the time period allowed to meet the minimum investment level, the investor must provide the total amount invested to the appropriate county official.

(D) The inducement agreement must provide for fee payments, to the extent applicable, as follows:

(1)(a) Any property, title to which is transferred to the county, will be subject, before being placed in service, to an annual fee payment as provided in Section 4-29-60.

(b) Any undeveloped land, title to which is transferred to the county, will be subject, before being developed and placed in service, to an annual fee payment as provided in Section 4-29-60. The time during which fee payments are made under Section 4-29-60 will not be considered part of the maximum periods provided in subsections (C)(2) and (C)(3), and no lease shall be considered an `initial lease agreement' for purposes of this section unless and until the first day of the calendar year for which a fee payment is due under subsection (D)(2) in connection with such lease.

(2) After property qualifying under subsection (B) is placed in service, an annual fee payment determined in accordance with one of the following is due:

(a) an annual payment in an amount not less than the property taxes that would be due on the project if it were taxable, but using an assessment ratio of not less than six percent, except as provided in subsection (D)(4), and a fixed millage rate as provided in subsection (G),

(i) for real property using the original income tax basis for South Carolina income tax purposes without regard to depreciation. (provided, However, if real property is constructed for the fee or is purchased in an arm's length transaction, fair market value will be is deemed to equal the original income tax basis, otherwise the Department of Revenue and Taxation will determine fair market value by appraisal); and

(ii) for personal property using the original income tax basis for South Carolina income tax purposes less depreciation allowable for property tax purposes, except that the investor is not entitled to any extraordinary obsolescence.

(b) an annual payment based on any alternative arrangement yielding a net present value of the sum of the fees for the life of the agreement not less than the net present value of the fee schedule as calculated under subsection (D)(2)(a). Net present value calculations performed under this subsection must use a discount rate equivalent to the yield in effect for new or existing United States Treasury bonds of similar maturity as published during the month in which the inducement agreement is executed. If no yield is available for the month in which the inducement agreement is executed, the last published yield for the appropriate maturity must be used. If there are no bonds of appropriate maturity available, bonds of different maturities may be averaged to obtain the appropriate maturity.

(c) an annual payment using a formula that results in a fee not less than the amount required pursuant to subsection (D)(2)(a), except that every fifth year the applicable millage rate is allowed to increase or decrease in step with the average actual millage rate applicable in the district where the project is located based on the preceding five-year period.

(3) At the conclusion of the payments determined pursuant to items (1) and (2) of this subsection, an annual payment equal to the taxes due on the project as if it were taxable. When the property is no longer subject to the fee under subsection (D)(2), the fee or property taxes must be assessed:

(a) with respect to real property, based on the fair market value as of the latest reassessment date for similar taxable property; and

(b) with respect to personal property, based on the then depreciated value applicable to such property under the fee, and thereafter continuing with the South Carolina property tax depreciation schedule.

(iii) in the case of investments totalling at least four hundred million dollars, in a county classified as either least developed or underdeveloped, by a limited liability company and/or one or more of its members or equity holders where the member or equity holder is creating, at the site qualifying for the fee, at least one hundred new full-time jobs with an annual average salary of at least forty thousand dollars within four years of the date of execution of a millage rate agreement.

(b) The new full-time jobs requirement of this item does not apply in the case of a taxpayer which for more than the twenty-five years ending on the date of the agreement paid more than fifty percent of all property taxes actually collected in the county.

(c) In an instance in which the governing body of a county has by contractual agreement provided for a change in fee-in-lieu of taxes arrangements conditioned on a future legislative enactment, any new enactment shall not bind the original parties to the agreement unless the change is ratified by the governing body of the county.

(5) Notwithstanding the use of the term `assessment ratio', a business qualifying under items (2) or (4) of this subsection may negotiate an inducement agreement with a county using differing assessment ratios for different assessment years covered by the agreement. However, the lowest assessment ratio allowed is the lowest ratio for which the business may qualify under this section.

(E) Calculations pursuant to subsection (D)(2) must be made on the basis that the property, if taxable, is allowed all applicable property tax exemptions except the exemption allowed under Section 3(g) of Article X of the Constitution of this State and the exemption allowed pursuant to Section 12-37-220B(32) and (34).

(F) With regard to calculation of the fee provided in subsection (D)(2), the inducement agreement may provide for the disposal of property and the replacement of property subject to the fee as follows:

(1)(a) If an investor disposes of property subject to the fee, the fee must be reduced by the amount of the fee applicable to that property.

(c) If the investor used any method to compute the fee other than that provided in subsection (D)(2)(a), the fee on the property which was disposed of must be recomputed in accordance with subsection (D)(2)(a) and to the extent that the amount which would have been paid under subsection (D)(2)(a) exceeds the fee actually paid by the investor, the investor must pay the difference with the next fee payment due after the property is disposed of. If the investor used the method provided in subsection (D)(2)(c), the millage rate provided in subsection (D)(2)(c) must be used to calculate the amount which would have been paid under subsection (D)(2)(a).

(d) If there is no provision in the agreement dealing with the disposal of property in accordance with this subsection, the fee remains fixed and no adjustment to the fee is allowed for disposed property.

(2) Any property which is placed in service as a replacement for property which is subject to the fee payment may become part of the fee payment as provided in this item:

(a) Replacement property does not have to serve the same function as the property it is replacing. Replacement property qualifies for fee treatment provided in subsection (D)(2) only up to the original income tax basis of fee property which is being disposed of in the same property tax year. More than one piece of property can replace a single piece of property. To the extent that the income tax basis of the replacement property exceeds the original income tax basis of the property which it is replacing, the excess amount is subject to payments as provided in Section 4-29-60. Replacement property is entitled to the fee payment for the period of time remaining on the twenty-year fee period for the property which it is replacing; provided, however, that where a single piece of property replaces two or more pieces of property, such fee period shall be measured from the earliest of the dates on which the replaced pieces of property were placed in service.

(b) The new replacement property which qualifies for the fee provided in subsection (D)(2) is recorded using its income tax basis, and the fee is calculated using the millage rate and assessment ratio provided on the original fee property. The fee payment for replacement property must be based on subsection (D)(2)(a) or (D)(2)(c), if the investor originally used this method, without regard to present value.

(c) In order to qualify as replacement property, title to the replacement property must be held by the county.

(G)(1) The county and the investor may enter into an agreement to establish the millage rate (millage rate agreement) for purposes of calculating payments under subsection (D)(2)(a) and the first five years under subsection (D)(2)(c). This millage rate agreement must be executed on the date of the inducement agreement or anytime thereafter up to and including the date of the initial lease agreement. This millage rate agreement may be a separate agreement or may be made a part of either the inducement agreement or the initial lease agreement.

(2) The millage rate cannot be lower than the cumulative property tax millage rate legally levied by or on behalf of all taxing entities within which the subject property is to be located which is the cumulative rate applicable on the thirtieth day of June preceding the calendar year in which the millage rate agreement is executed. If no millage rate agreement is executed before the date of the initial lease agreement, the millage rate is deemed to be the cumulative property tax millage rate applicable on the thirtieth day of June preceding the calendar year in which the initial lease agreement is executed by the parties.

(H)(1) Upon agreement of the parties, and except as provided in subsection (H)(2), an inducement agreement, a millage rate agreement, or both, may be amended or terminated and replaced with regard to all matters including, but not limited to, the addition or removal of controlled group members; provided, however, that no such amendment or termination and replacement may take place after the initial lease agreement date.

(2) No amendment or replacement of an inducement agreement or millage rate agreement may be used to change the millage rate, or discount rate, assessment ratio, or length of the agreement under any such agreement. However, existing inducement agreements which have not yet been implemented by the execution and delivery of a millage rate agreement or a lease purchase agreement, may be amended up to the date of execution and delivery of a millage rate agreement or a lease purchase agreement in the discretion of the governing body.

(I) Any and all Investment expenditures made or incurred by any investor in connection with a project, (or relevant phase thereof in

(1) after, or within sixty days before, the county takes action reflecting or identifying the project or proposed project or investment including, but not limited to, the adoption of an inducement or similar resolution by county council; and

(2) before the end of the applicable five or seven-year period time period for investments referenced in subsection (C)(2) and (C)(3).

An inducement agreement must be executed within two years after the date on which the county takes action reflecting or identifying the project or proposed project or investment including, but not limited to, the adoption of an inducement or similar resolution by county council; otherwise, only investment expenditures made or incurred by any investor after the date of such inducement agreement in connection with a project shall qualify as expenditures subject to the fee in subsection (D)(2).

(J)(1) Subject to subsection (K), project investment expenditures which are incurred within the applicable time period provided in subsection (I) by an entity whose investments are not being computed in the level of investment for purposes of subsections (B) or (C) shall qualify as investment expenditures subject to the fee in subsection (D)(2) where:

(a) such expenditures are part of the original cost of the property which is transferred, within the applicable time period provided in subsection (I), to one or more other entities which are members of the same controlled group as the transferor entity and whose investments are being computed in the level of investment for purposes of subsections (B) or (C); and

(b) such property would have qualified for the fee in subsection (D)(2) if it had been initially acquired by the transferee entity rather than the transferor entity.

(2) The income tax basis of such property immediately before such transfer must equal the income tax basis of such property immediately after such transfer; provided, however, that to the extent income tax basis of such property immediately after such transfer unintentionally exceeds the income tax basis of such property immediately before such transfer, such excess shall be subject to payments under Section 4-29-60.

(3) The county must agree to any inclusion in the fee of the property described in subsection (J)(1).

(a) Land, excluding improvements thereon, on which a new project will be located may qualify for the fee even if it has previously been subject to South Carolina property taxes;

(b) Property which has been subject to South Carolina property taxes, but which has never been placed in service in South Carolina, may qualify for the fee; and

(c) Property which has been placed in service in South Carolina and subject to South Carolina property taxes which is purchased in a transaction other than between any of the entities specified in Section 267(b) of the Internal Revenue Code, as defined under Chapter 7 6 of Title 12 as of the time of the transfer, may qualify for the fee provided the fee-paying entity invests at least an additional eighty-five forty-five million dollars in the project.

(2) Repairs, alterations, or modifications to real or personal property which are not subject to a fee will not be eligible for a fee, even if they are capitalized expenditures, except for modifications to existing real property improvements which constitute an expansion of such improvements.

(L)(1) For a project not located in an industrial development park as defined in Section 4-1-170, distribution of the fee in lieu of taxes on the project must be made in the same manner and proportion that the millage levied for school and other purposes would be distributed if the property were taxable. For this purpose, the relative proportions must be calculated based on the following procedure: holding constant the millage rate set in subsection (G) and using all tax abatements automatically granted for taxable property, a full schedule of the property taxes that would otherwise have been distributed to each millage-levying entity in the county must be prepared for the life of the agreement, up to twenty years maximum for the maximum time period allowed under (C)(3). These separate schedules must then be reduced to present value using the discount rate provided under subsection (D)(2)(b). The resulting values for each millage-levying entity as a percentage of the present value total for all such entities The property taxes which would have been paid on the property if it was owned by the investor to each millage-levying entity as a percentage of the total of such property taxes for all such entities determines each entity's relative shares of each year's fee payment for all subsequent years of the agreement.

(3) A county or municipality or special purpose district that receives and retains revenues from a payment in lieu of taxes may use a portion of this revenue for the purposes outlined in Section 4-29-68 without the requirement of issuing special source revenue bonds or the requirements of Section 4-29-68(A)(4).

(M) As a directly foreseeable result of negotiating the fee, gross revenue of a school district in which a project is located in any year a fee negotiated pursuant to this section is paid, may not be less than gross revenues of the district in the year before the first year for which a fee in lieu of taxes is paid. In negotiating the fee, the parties shall assume that the formulas for the distribution of state aid at the time of the execution of the inducement agreement must remain unchanged for the duration of the lease agreement.

(N) Projects on which a fee in lieu of taxes is paid pursuant to this section are considered taxable property at the level of the negotiated payments for purposes of bonded indebtedness pursuant to Sections 14 and 15 of Article X of the Constitution of this State, and for purposes of computing the index of taxpaying ability pursuant to Section 59-20-20(3). However, for a project located in an industrial development park as defined in Section 4-1-170, projects are considered taxable property in the manner provided in Section 4-1-170 for purposes of bonded indebtedness pursuant to Sections 14 and 15 of Article X of the Constitution of this State, and for purposes of computing the index of taxpaying ability pursuant to Section 59-20-20(3). Provided, however, that the computation of bonded indebtedness limitation is subject to the requirements of Section 4-29-68(E).

(O)(1)(a) Any corresponding interest in each of an inducement agreement, millage rate agreement, and lease agreement, and property to which the agreement relates, (collectively referred to as a `fee interest'), representing an investment of at least eighty-five million dollars (based on income tax basis without regard to depreciation, and regardless of whether such investment comprises all or part of a project), may be transferred to any other entity at any time. Notwithstanding any other provision of this chapter, any equity interest in any entity with an interest in any inducement agreement, millage rate agreement, or lease agreement may be transferred to any other entity or person at any time. by an entity to any entity, whether or not such transferee entity is a member of the same

(2) Except for transfers pursuant to subsections (P) or (Q), no transfer of a fee interest or entity interest may be undertaken:

(a) until twenty-four months after the project has been placed in service, or relevant portion thereof in the case of a project placed in service in more than one year; or

(b) within twenty-four months after a prior transfer of the fee interest or entity interest to be transferred.

Provided, however, the running of such applicable twenty-four month period shall be suspended for any period during which a transferor's (under subsection (O)(2)(a)) or transferee's (under subsection (O)(2)(b)) risk of loss with respect to the fee interest or entity interest to be transferred is in fact substantially diminished by:

(i) the holding by any entity of a contractual right to require any transfer of such interest by an entity which is not a member of the transferor's (under subsection (O)(2)(a)) or transferee's (under subsection (O)(2)(b)) controlled group;

(ii) the holding by any entity which is not a member of the transferor's (under subsection (O)(2)(a)) or transferee's (under subsection (O)(2)(b)) controlled group of a right to acquire the interest; or

(iii) a short sale or any similar transaction with respect to the interest which is undertaken by the transferor (under subsection (O)(2)(a)) or transferee (under subsection (O)(2)(b)) which is not a member of any such transferee's or transferor's controlled group.

A single entity, or two or more entities which are members of a controlled group, may enter into any lending, financing, security or similar arrangement, or succession of such arrangements, with any financing entity, concerning all or part of a project and may enter into any sale-leaseback arrangement, including without limitation, an assignment,

(3) All transfers undertaken with respect to the project to effect a financing of fee interests or entity interests authorized under subsection (O)(1) must meet the following requirements:

(a) The county must approve such transfer within six months prior to the transfer. The Department of Revenue and Taxation must receive notification in writing within sixty days after the transfer of the identity of each transferee and other information required by the department with the appropriate returns. Failure to meet this notice requirement will not adversely affect the fee, but a penalty may be assessed by the department for late notification for up to ten thousand dollars a year or portion of a year up to a maximum penalty of one hundred twenty thousand dollars.

(b) The Department of Revenue and Taxation must receive notification in writing of the identity of each transferee and other information required by the Department of Revenue and Taxation within thirty days after the transfer becomes effective. The Department of Revenue and Taxation may extend the thirty-day period upon written request. Failure to meet this notice requirement will not adversely the fee, but a penalty may be assessed by the Department of Revenue and Taxation for late notification for up to ten thousand dollars a month or portion of a month, with the total penalty not to exceed one hundred twenty thousand dollars. If the financing entity is the income tax owner of property, either the financing entity is primarily liable for the fee as to that portion of the project to which the transfer relates with the original transferor remaining secondarily liable for the payment of the fee or the original transferor must agree to continue to be primarily liable for the payment of the fee as to that portion of the project to which the transfer relates.

(c) No election under Internal Revenue Code of 1986, as amended, Sections 338 or 754 may be made with respect to the transfer.

(4) All transfers of fee interests authorized under subsection (O)(1) must meet the following additional requirements:

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