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COMMITTEE REPORT
May 30, 2001
S. 718
S. Printed 5/30/01--S.
Read the first time May 29, 2001.
To whom was referred a Bill (S. 718) to amend Section 4-29-67, as amended, Code of Laws of South Carolina, 1976, relating to the fee in lieu of property tax allowed certain development projects, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass:
HUGH K. LEATHERMAN, SR. for Committee.
REVENUE IMPACT1
This bill is not expected to have an impact on General Fund revenue in FY 2001-02.
Explanation
Currently, under Section 4-29-67, a county and an investor may enter into an agreement that provides for payment of a fee in lieu of property taxes of not less than an assessment ratio of six percent. Under this provision, an investor has seven years to enter into a lease agreement with a county from the end of the property tax year in which the investor and the county execute an inducement agreement. Then a company has five years to complete its $45 million investment and complete the project. If the company does not expect to complete the project within this five-year period, it may apply to the county before the end of the five-year period for an extension of up to two years to complete the project. If the company does not make the $45 million investment within the required five years, all property covered by the fee will be retroactively subject to a fee equal to the general property tax. Additionally, under Section 4-29-67(C)(2), a company that invests a minimum of $400 million is entitled to a fee-in-lieu of tax rate of not less than four percent, and the five-year period is extended to eight years, and the seven-year period is extended to ten years. Adding the two-year extension period allows a company to take up to twenty years to complete the project. This bill would extend the two-year period to seven years and the seven-year period to fifteen years. This bill would extend the amount of time required for a company to complete a project to thirty years. The county council would have to approve the project before the inducement agreement and the fee-in-lieu tax rate would be applied to the project. This bill would extend the amount of time required for a company that has invested at least $1 billion and employs at least 4,000 people to complete the capital investment project, but would not alter the level of incentives. This bill is not expected to have an impact on general fund revenue in FY 2001-02.
Approved By:
William C. Gillespie
Board of Economic Advisors
1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact, Section 2-7-76 for a local revenue impact, and Section 6-1-85(B) for an estimate of the shift in local property tax incidence.
TO AMEND SECTION 4-29-67, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE FEE IN LIEU OF PROPERTY TAX ALLOWED CERTAIN DEVELOPMENT PROJECTS, SO AS TO PROVIDE ADDITIONAL TIME FOR THE REQUIRED NEW INVESTMENT THRESHOLDS TO BE MET IN THE CASE OF A BUSINESS ELIGIBLE FOR THE FOUR PERCENT ASSESSMENT RATIO IN THE FEE AGREEMENT.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The last paragraph of Section 4-29-67(C)(2) of the 1976 Code, as last amended by Act 462 of 1996, is further amended to read:
"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. However, for those businesses which, after qualifying under Section 4-29-67(D)(4), have more than five hundred million dollars in capital invested in this State and employ more than one thousand people in this State, the five-year period referred to in this subsection is ten years, and the ten-year extended period referred to in the previous sentence is fifteen years."
SECTION 2. Section 4-29-67(C)(3) of the 1976 Code, as last amended by Act 462 of 1996, is further amended to read:
"(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 forty years or, for those businesses qualifying for the fifteen-year extended period, forty-five years."
SECTION 3. This act takes effect upon approval by the Governor.
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