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(c) The income tax basis of property interests which are subject to the fee in the hands of the transferee immediately after such transfer (i) cannot exceed the original income tax basis of such property without regard to depreciation) in the hands of the transferor and (ii) cannot be less than the income tax bases of such property (taking depreciation into account) in the hands of the transferor immediately before transfer. The fee to be paid under subsection (D) with respect to such transferred property interests for the remaining term of the fee shall be recomputed using the transferee's income tax basis immediately after the transfer; the same millage rate and discount rate used by the transferor; and the fee payment method provided under subsection (D)(2)(a); provided, however, that if the pre-transfer fee payments were made under subsection (D)(2)(c), then post-transfer fee payments must be made under subsection (D)(2)(c), but without any present value method applicable to such payments. Before an investor may transfer an inducement agreement, millage rate agreement, lease agreement or the assets subject to the lease agreement, it must obtain the approval of the county with which it entered into the original inducement agreement, millage rate agreement, or lease agreement. However, no such approval is required in connection with financing-related transfers.

(5) The present value fee differential shall mean the amount by which the fee that would have been paid under subsection (D)(2)(a) with respect to the transferred fee interest until the time of the transfer exceeds the amount which was paid under subsection (D)(2)(b) or (D)(2)(c) until such time with respect to such fee interest. 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). If subsection (D)(2)(b) is not applicable to such fee interest, or if no present value fee computation was used under subsection (D)(2)(c), no present value fee differential shall be required to be paid on a transfer thereof.

(1) Any interests in an inducement agreement, millage rate agreement, or lease agreement (collectively and individually referred to as a "group fee interest") may be transferred by any entity to:

(a) any corporation which is a member of the same controlled group as the transferring corporation;

(b) any corporation which is a member of the same controlled group as all of the partners comprising the transferring partnership;

(c) any partnership all of the partners of which are members of the same controlled group of which the transferring corporation is a member; and

(d) any partnership all of the partners of which are members of the same controlled group as all of the partners comprising the transferring partnership.

(2) Transfers of group fee interests authorized under subsection (P)(1) must meet the requirements set forth in subsection (O)(3) and (O)(4); provided, however, in connection with subsection (O)(4)(c), to the extent a present value fee payment computation was used by the transferor, the transferee may, if the county agrees, use a fee payment method based on any present value fee payment method provided under subsection (D)(2). In addition, such transfers must involve at least a ten million dollar portion of the project investment or proposed investment (based on income tax basis without regard to depreciation).

(3) Any transfer of an interest in an inducement agreement must include a transfer of a corresponding interest in a millage rate agreement, if any, and lease agreement, if any; any transfer of an interest in a millage rate agreement must include a transfer of a corresponding interest in an inducement agreement, and lease agreement, if any; and any transfer of an interest in a lease agreement must include a transfer of a corresponding interest in an inducement agreement and millage rate agreement.

(4) One or more members of a controlled group, or a partnership all of the partners of which are members of the same controlled group, having an interest in a fee may enter into a sublease, concerning some or all of the project, with any other member of such controlled group, or with any partnership all the partners of which are members of such controlled group, without adversely affecting the fee and without regard to the other provisions of this subsection (P); provided, however, that such sublease may not transfer income tax ownership (as defined under subsection (S)) to the portion of the project which is the subject of the sublease, unless the applicable provisions of subsection (P) have been met.

(1) Any or all equity interests in any partnership, corporation, or other association which properly files its South Carolina income tax returns as a partnership or corporation and which has an interest in an inducement agreement, millage rate agreement, lease agreement, or any or all of the foregoing (such equity interests collectively and individually referred to as a "group entity interest") may be transferred to:

(a) any corporation which is a member of the same controlled group as the corporation in which an interest is being transferred;

(b) any corporation which is a member of the same controlled group as all of the partners comprising the partnership in which an interest is being transferred;

(c) any partnership in which all of the partners are members of the same controlled group as the corporation in which an interest is being transferred; and

(d) any partnership in which all of the partners are members of the same controlled group as all of the partners comprising the partnership in which an interest is being transferred.

(2) Transfers of group entity interests authorized under subsection (Q)(1) must meet the requirements set forth in subsection (O)(3).
(R) For purposes of subsections (O)(1)(a) and (P), and subject to subsection (U), each transferee shall, with respect to a project which is the subject of a transfer, shall be considered to have made amounts of qualified investments represented by the property interest which is subject to the fee and which is transferred, without regard to depreciation.

(S) Reserved.

(1) Notwithstanding anything in subsections (O), (P), and (Q), 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, provided that the income tax ownership of the property which is subject to the fee payment under subsection (D)(2) is held, by the time the fee payments relating to such property begin under subsection (D)(2), by:

(a) the entity, or one or more members of the controlled group, which entered into the inducement agreement with the county;

(b) one or more transferees permitted under subsection (O)(1)(a) or (P); or

(c) one or more of the entities referenced in items (a) and (b).

Without limiting the foregoing, pursuant to any such arrangement or arrangements, the inducement agreement may permit one or more

(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 such thirty-day period upon written request. Failure to meet this notice requirement will not adversely affect the fee, but a penalty may be assessed by the Department of Revenue and

(5) The manner in which an arrangement is reported under generally accepted accounting principles shall not adversely affect the authorization of such an arrangement under this section.

(T) No inducement agreement, millage rate agreement, or lease agreement, nor the rights of any entity pursuant to any such agreement, including without limitation the availability of the subsection (D)(2) fee, shall be adversely affected if the bonds issued pursuant to any such agreement are purchased by one or more of the entities which are or become parties to any such agreement.

(U) Notwithstanding any other provision of this section to the contrary, if at any time following the period provided in subsection (C)(2), the investment based on income tax basis without regard to depreciation falls below the eighty-five million dollar minimum investment to which the fee relates and is held by an entity or controlled group of entities, the fee provided in subsection (D)(2) is no longer available and the investor is

(1) Notwithstanding any other provision of this section, if an investor fails to make the minimum investment required under subsection (D)(2) within the time provided in subsection (C)(2), then if and to the extent allowed pursuant to an applicable agreement between the investor and the county, the investor is entitled to the benefits of Chapter 12 of this title. Otherwise, the fee provided in subsection (D)(2) is no longer available and the investor is required to make the payments which are due under Section 4-29-60 for the remainder of the lease period.

(2) Notwithstanding any other provision of this section, if at any time following the period provided in subsection (C)(2), the investment based income tax basis without regard to depreciation falls below the forty-five million dollar minimum investment to which the fee relates and is held by an entity or controlled group of entities, then if and to the extent allowed pursuant to any applicable agreement between the investor and the county, the investor is entitled to the benefits provided under Chapter 12 of this title. Otherwise, the fee provided in subsection (D)(2) is no longer available and the investor is required to make the payments which are due under Section 4-29-60 for the remainder of the lease period.

B.(1) Section 4-29-67(Z) of the 1976 Code, as added by Act 497 of 1994, is amended to read:

"(Z) Reserved. Notwithstanding any provision of Section 4-29-60 or this section:

(1) If at least two hundred new full-time jobs are created within the time period for qualifying expenditures set forth in subsection (I), the minimum level of investment required in order for property to qualify for the payment in lieu of taxes (fee) as provided in this section is sixty million dollars.

(2) If at least three hundred new full-time jobs are created within the time period for qualifying expenditures set forth in subsection (I), the minimum level of investment required in order for property to qualify for the payment in lieu of taxes (fee) as provided in this section is forty million dollars.

(3) If at least four hundred new full-time jobs are created within the time period for qualifying expenditures set forth in subsection (I), the minimum level of investment required in order for property to qualify for the payment in lieu of taxes (fee) as provided in this section is twenty million dollars.

(5) For purposes of this subsection, the terms `full-time' and `new job' are defined as provided in Section 12-7-1220."

(2) This item is effective January 1, 1996.

C. The amendments to Section 4-29-67 of the 1976 Code contained in this section are effective for inducement resolutions, inducement agreements, millage rate agreements, and lease agreements with regard to projects for which lease agreements are entered into after December 31, 1995. However, the provisions affecting Section 4-29-67(B)(3), (B)(4)(b)(iii), (H), (K)(1)(c), (O), and (U) of the 1976 Code are effective for inducement resolutions, inducement agreements, millage rate agreements, and lease agreements with regard to projects for which lease agreements have been entered into on or before December 31, 1995, if the investor and the county agree to modify the agreement to allow these provisions to apply to their agreement. However, except as provided in Section 4-29-67(H) of the 1976 Code, no amendment to an inducement agreement or millage rate agreement may reduce the millage rate, discount rate, or assessment ratio under such agreements.

SECTION 9. A. Section 12-6-2320(B) of the 1976 Code, as last amended by Act 32 of 1995, is further amended to read:

"(B) (1) For the purposes of this chapter, the department may enter into an agreement with the taxpayer establishing the allocation and apportionment of the taxpayer's income for a period not to exceed five years, if the following conditions are met:

(1) (a) the taxpayer is planning a new facility in this State or an expansion of an existing facility;

(2)(b) the taxpayer asks the department to enter into a contract under this subsection reciting an allocation and apportionment method; and

(3)(c) after reviewing the taxpayer's proposal and planned new facility or expansion, the Advisory Coordinating Council for Economic Development certifies that the new facility or expansion will have a significant beneficial economic effect on the region for which it is planned and that its benefits to the public exceed its costs to the public. It is within the Advisory Coordinating Council for Economic Development's sole discretion to determine whether a new facility or expansion has a significant economic effect on the region for which it is planned.

(2) For the purposes of this subsection the word `taxpayer' includes any one or more of the members of a controlled group of corporations authorized to file a consolidated return under Section 12-6-5020."

SECTION 10. A. Section 12-6-3360 of the 1976 Code, as last amended by an act of 1996 bearing ratification number 234, is further amended to read:

"Section 12-6-3360. (A) Taxpayers that operate manufacturing, tourism, processing, warehousing, distribution, research and development, and corporate office, and qualifying service-related facilities are allowed an annual job tax credit as provided in this section. Credits under this section can may be claimed against income taxes imposed by Sections 12-6-510 or Section 12-6-530, and insurance premium taxes imposed pursuant to Chapter 7 of Title 38, and are limited in use to fifty percent of the taxpayer's South Carolina corporate income tax, or insurance premium tax liability. In computing any tax payable by a taxpayer under Section 38-7-90, the credit allowable under this section must be treated as a premium tax paid under Section 38-7-20.

(B) The department shall rank and designate the state's counties by December thirty-first each year using data from the South Carolina Employment Security Commission and the United States Department of Commerce. The counties are ranked using data from the most recent thirty-six month period with equal weight given to unemployment rate and per capita income as follows:

(1) The sixteen twelve counties with a combination of the highest unemployment rate and lowest per capita income are designated less least developed counties.

(2) The fifteen twelve counties with a combination of the next highest unemployment rate and next lowest per capita income are designated moderately under developed counties.

(3) The fifteen eleven counties with a combination of the lowest next highest unemployment rate and the highest next lowest per capita income are designated moderately developed counties.

(4) The eleven counties with a combination of the lowest unemployment rate and the highest per capita income are designated developed counties. The designation by the department is effective for corporate taxable years which begin after the date of designation.

(5)(a) A county, any portion of which is located within twenty miles of the boundaries of an applicable military installation or applicable federal facility as defined in Section 12-6-3450(1), shall receive the benefits of the next increased credit designation for five years beginning with the year in which the military installation or federal facility became an applicable military installation or applicable federal facility as defined in Section 12-6-3450(1), with the additional requirement that the military installation

(b) For a county in which is located an applicable military installation or applicable federal facility meeting the requirements for the increased credit provided in subitem (a) of this item, the credit allowed is two tiers higher than the credit for which the county would otherwise qualify for five years beginning with the year the installation or facility meets the requirements.

(C) Subject to the conditions provided in subsection (N) of this section, a job tax credit is allowed for five years beginning in year two after the creation of the job for each new full-time job created if the minimum level of new jobs is maintained. The credit is only available to taxpayers that increase employment by ten or more full-time jobs, and no credit is allowed for the year or any subsequent year in which the net employment increase falls below the minimum level of ten. The amount of the initial job credit and the minimum level of new jobs required is as follows:

(1) One Four thousand five hundred dollars for each new full-time job created in less least developed counties. The credit is only available to taxpayers that increase employment by ten or more, and no credit is allowed for the year or any subsequent year in which the net employment increase falls below the minimum level of ten.

(2) Six Three thousand five hundred dollars for each new full-time job created in moderately under developed counties. The credit is only available to taxpayers that increase employment by eighteen or more, and no credit is allowed for the year or any subsequent year in which the net employment increase falls below the minimum level of eighteen.

(3) Three Two thousand five hundred dollars for each new full-time job created in moderately developed counties. The credit is only available to taxpayers that increase employment by fifty or more, and no credit is allowed for the year or any subsequent year in which the net employment increase falls below the minimum level of fifty.

(4) One thousand five hundred dollars for each new full-time job created in developed counties.

(D) If the taxpayer qualifying for the new jobs credit under subsection (C) creates additional new full-time jobs in years two through six, the taxpayer may obtain a credit for those new jobs for five years following the year in which the job is created. The amount of the credit for each new full-time job is the same as provided in subsection (C).

(E) Taxpayers which qualify for the job tax credit provided in subsection (C) and which are located in a business or industrial park

(1) the credit in subsections (B) and (C) based on the location of any county in the group which qualifies for the largest credit regardless of whether the corporation is actually located in another of the participating counties; and

(2) an additional five hundred one thousand dollar credit for each new full-time job created. This additional credit is permitted for five years beginning in the taxable year following the creation of the job.

(F) The number of new and additional new full-time jobs is determined by comparing the monthly average number of full-time employees subject to South Carolina income tax withholding in the applicable county for the taxable year with the monthly average in the prior taxable year. For purposes of calculating the monthly average number of full-time employees in the first year of operation in this State, a taxpayer may use the actual months in operation or a full twelve-month period. If a taxpayer's business is only in operation for less than twelve months a year, the number of new and additional new full-time jobs is determined using the monthly average for the months the business is in operation.

(G) Except for credits carried forward under subsection (H), the credits available under this section are only allowed for the job level that is maintained in the taxable year that the credit is claimed. If the job level for which a credit was claimed decreases, the five-year period for eligibility for the credit continues to run.

(H) A credit claimed under this section but not used in a taxable year may be carried forward fifteen years from the taxable year in which the credit is earned by the taxpayer. Credits which are carried forward must be used in the order earned and before jobs credits claimed in the current year.

(I) The merger, consolidation, or reorganization of a taxpayer where tax attributes survive does not create new eligibility in a succeeding taxpayer, but unused job tax credits may be transferred and continued by the succeeding taxpayer subject to the limitations of Section 12-6-3320. In addition, a taxpayer may assign its rights to its jobs tax credit to another taxpayer if it transfers all, or substantially all, of the assets of the taxpayer or all, or substantially all, of the assets of a trade or business or operating division of a taxpayer related to the generation of the jobs tax credits to that taxpayer if the required number of new jobs is maintained for that amount of credit. No taxpayer is allowed a jobs tax credit if the net employment increase for that taxpayer falls below ten for a less developed county, eighteen for a moderately developed county, or fifty for

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