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Indicates Matter Stricken
Indicates New Matter
Indicates Matter Stricken
Indicates New Matter
COMMITTEE AMENDMENT ADOPTED
April 29, 2003
S. 560
Introduced by Senators Leatherman, Ritchie, Knotts, Grooms, Verdin, Giese, Branton, Mescher, McConnell, McGill, J. Verne Smith, Alexander, Martin, Short, Moore, Ravenel, O'Dell, Drummond, Hayes and Setzler
S. Printed 4/29/03--S. [SEC 4/30/03 12:57 PM]
Read the first time April 3, 2003.
TO ENACT THE SOUTH CAROLINA LIFE SCIENCES ACT, BY DEFINING A LIFE SCIENCES FACILITY AND PROVIDING THAT A LIFE SCIENCES FACILITY PROJECT IN WHICH IS INVESTED AT LEAST ONE HUNDRED MILLION DOLLARS AND AT WHICH AT LEAST TWO HUNDRED NEW JOBS ARE CREATED WITH ANNUAL CASH COMPENSATION AT LEAST ONE HUNDRED FIFTY PERCENT OF AVERAGE PER CAPITA INCOME IN THIS STATE IS ELIGIBLE FOR EMPLOYEE RELOCATION EXPENSE REIMBURSEMENT AND THE WAIVER ALLOWED ON THE LIMIT FOR JOB DEVELOPMENT CREDITS FOR PURPOSES OF THE ENTERPRISE ZONE ACT OF 1995, TO ALLOW A TAXPAYER OPERATING A LIFE SCIENCES FACILITY TO ENTER INTO AN AGREEMENT WITH THE DEPARTMENT OF REVENUE NOT TO EXCEED FIFTEEN YEARS DURATION FOR ALLOCATION AND APPORTIONMENT FOR PURPOSES OF CORPORATE INCOME TAX, TO AMEND SECTION 12-37-930, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE DEPRECIATION ALLOWANCE FOR PURPOSES OF THE PROPERTY TAX, SO AS TO INCREASE THE ANNUAL DEPRECIATION ALLOWANCE FOR USE OF CLEAN ROOMS FROM TEN TO FIFTEEN PERCENT AND TO PROVIDE A TWENTY PERCENT ANNUAL DEPRECIATION ALLOWANCE FOR MACHINERY AND EQUIPMENT USED FOR MANUFACTURING IN A LIFE SCIENCES FACILITY AND TO DEFINE "LIFE SCIENCES FACILITY", TO AMEND SECTIONS 11-41-20, 11-41-30, AND 11-41-70, RELATING TO THE STATE GENERAL OBLIGATION ECONOMIC DEVELOPMENT BOND ACT, SO AS TO REVISE ITS FINDINGS, DEFINITIONS, AND NOTICE REQUIREMENTS TO ALLOW SUCH BONDS TO BE USED FOR INFRASTRUCTURE FOR A LIFE SCIENCES FACILITY IN A PROJECT IN WHICH IS INVESTED AT LEAST ONE HUNDRED MILLION DOLLARS AND AT WHICH AT LEAST TWO HUNDRED NEW JOBS ARE CREATED WITH AN ANNUAL CASH COMPENSATION AT LEAST TWICE PER CAPITA INCOME IN THE STATE AND PROVIDE THAT WHILE INFRASTRUCTURE PROVIDED BY THESE BONDS MUST RELATE SPECIFICALLY TO THE PROJECT SUCH INFRASTRUCTURE IS NOT REQUIRED TO BE LOCATED AT THE PROJECT, AND TO AMEND SECTION 11-41-120, RELATING TO FORMALITIES IN THE ISSUING OF THESE BONDS, SO AS TO REVISE THESE REQUIREMENTS.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. (A) This section may be cited as the South Carolina Life Sciences Act.
(B) For purposes of this section, a "life sciences facility" means a business engaged in pharmaceutical, medicine, and related laboratory instrument manufacturing, processing, or research and development. Included in this definition are the following North American Industrial Classification Systems, NAICS Codes published by the Office of Management and Budget of the federal government:
(1) 3254 Pharmaceutical and Medical Manufacturing;
(2) 334516 Analytical Laboratory Instrument Manufacturing.
(C)(1) For all purposes of Chapter 10, Title 12 of the 1976 Code, the Enterprise Zone Act of 1995, including all definitions applicable to that chapter:
(a) Employee relocation expenses that qualify for reimbursement pursuant to Section 12-10-80(C)(3)(f) of the 1976 Code include such expenses associated with a new or expanded life sciences facility investing a minimum of one hundred million dollars in the project, as defined in Section 12-10-30(8) of the 1976 Code, and creating at least two hundred new full-time jobs at the project with an average annual cash compensation of at least one hundred fifty percent of annual per capita income in this State or the county in which the facility is located, whichever is less. Per capita income must be determined using the most recent per capita income data available as of the end of the taxable year in which the jobs are filled.
(b) The waiver that may be approved by the Coordinating Council for Economic Development pursuant to Section 12-10-80(D)(2) of the 1976 Code on maximum job development credits that may be claimed also may be approved for a life sciences facility meeting the requirements of subitem (a) of this subsection. In determining whether to approve a waiver for such a facility, the Coordinating Council for Economic Development shall consider the creditworthiness of the business and economic viability of the project, as defined in Section 12-10-30(8) of the 1976 Code.
(2) The provisions of item (1) of this subsection apply with respect to capital investment made and new jobs created after June 30, 2004, and before July 1, 2008.
(D) In the case of a taxpayer establishing a life sciences facility meeting the requirements of subsection (C)(1)(a) of this section, the South Carolina Department of Revenue, in its discretion, may enter into an agreement with the taxpayer pursuant to Section 12-6-2320 of the 1976 Code for a period not to exceed fifteen years if the facility otherwise meets the requirements of that section.
SECTION 2. A. Section 12-37-930(34) of the 1976 Code, as last amended by Section 3(Q)2, Act 399 of 2000, is further amended to read:
"34. Use of Clean Rooms ......................................... 10% 15%
A manufacturer who uses a Class 100 or better clean room, as that term is defined in Federal Standard 209E, in manufacturing its product may elect an annual allowance for depreciation for property tax purposes of ten fifteen percent on clean room modules and associated mechanical systems, and on process piping, wiring environmental systems, and water purification systems associated with the clean room instead of a depreciation allowance for which the manufacturer otherwise is entitled. Included are waffle flooring, wall and ceiling panels, foundation improvements that isolate the clean room to control vibrations, clean air handling and filtration systems, piping systems for fluids and gases used in the manufacturing process and in the clean room that touch the product during the process, flat panel displays, and liquid crystal displays, process equipment energy control systems, ultra pure water processing and wastewater recycling systems, and safety alarm and monitoring systems.
35. Life sciences.................................................. 20%
Includes machinery and equipment used directly in the manufacturing process by a life sciences facility. For purposes of this item, life sciences facility means a business engaged in pharmaceutical, medicine, and related laboratory instrument manufacturing, processing, or research and development that invests a minimum of one hundred million dollars in the project, as defined in Section 12-10-30(8), and creates at least two hundred new full-time jobs at the project with an average cash compensation level of at least one hundred and fifty percent of the annual per capita income in this State or the county in which the facility is located, whichever is less. Per capita income must be determined using the most recent per capita income data available as of the end of the taxable year in which the jobs are filled. Included in this definition are the following North American Industrial Classification Systems, NAICS Codes published by the Office of Management and Budget of the federal government:
(i) 3254 Pharmaceutical and Medical Manufacturing;
(ii) 334516 Analytical Laboratory Instrument Manufacturing."
B. In the case of machinery and equipment otherwise eligible for the depreciation allowed pursuant to Section 12-37-930 of the 1976 Code, as amended in subsection A of this section, if the project with which the machinery and equipment is associated is the subject of an inducement agreement between the project sponsor and the county, the initial inducement agreement must have been entered into between these parties after September 1, 2003.
SECTION 3. A. Section 11-41-20(3) of the 1976 Code, as added by Act 254 of 2002, is amended to read:
"(3) In order to foster economic development and to encourage the creation of high-paying jobs in the life sciences industry within the State, it is in the best interests of the State that the limitation on general obligation debt imposed by Article X, Section 13(6)(c) be increased to five and one-half percent with the additional debt service capacity available at any time as a consequence of the increase available only for the repayment of general obligation bonds issued to provide infrastructure required for significant economic development projects within the State, including those related to the life sciences industry that create high-paying jobs and meet certain investment criteria."
B. Items (2) and (3) of Section 11-41-30 of the 1976 Code, as added by Act 254 of 2002, are amended to read:
"(2)(a) 'Economic development project' or 'project' means a project in this State as defined in Section 12-44-30(16) in which a total of at least four hundred million dollars is invested in the project by the sponsor and at least four hundred new jobs are created at the project by the sponsor. To qualify as an economic development project for purposes of this chapter, the investment and job creation requirements must be attained no later than the eighth year after the project first begins operations.
(b) 'Project' also includes a life sciences facility in this State defined as a business engaged in pharmaceutical, medicine, and related laboratory instrument manufacturing, processing, or research and development. Included in this definition are the following North American Industrial Classification Systems, NAICS Codes published by the Office of Management and Budget of the federal government:
(i) 3254 Pharmaceutical and Medical Manufacturing;
(ii) 334516 Analytical Laboratory Instrument Manufacturing.
With respect to a life sciences facility, the sponsor must invest in the project at least one hundred million dollars and create at the project at least two hundred new jobs with an average annual cash compensation level of at least twice the annual per capita income in this State. Per capita income must be determined by using the most recent per capita income data available at the time the request for funding is made pursuant to this chapter.
(c) To qualify as an economic development project for purposes of this chapter, the investment and job creation requirements must be attained no later than the eighth year after the project first begins operations.
(3) 'Infrastructure' must relate specifically to, but is not required to be located at, the economic development project and means:
(a) land acquisition;
(b) site preparation;
(c) road and highway improvements;
(d) rail spur construction;
(e) water service;
(f) wastewater treatment;
(g) employee training which may include equipment used for such purpose;
(h) environmental mitigation; and
(i) training and research facilities and the necessary equipment therefor."
C. Section 11-41-70(2) of the 1976 Code, as added by Act 254 of 2002, is amended to read:
"(2) a description of the infrastructure for which the bonds are to be issued, including a certification by the secretary of the department that each the economic development project to benefit from the expenditure of the proceeds of the bonds consists of the following:
(a) an investment in the State at the project of not less than four hundred million dollars and creates creation at the project of no fewer than four hundred new jobs; or
(b) in the case of a life sciences facility, an investment in the project of not less than one hundred million dollars and creation at the project of no fewer than two hundred new jobs with an average cash compensation of at least twice the per capita income in this State. Per capita income must be determined by using the most recent per capita income data available at the time the request for funding is made pursuant to this chapter."
D. Section 11-41-120 of the 1976 Code, as added by Act 254 of 2002, is amended to read:
"Section 11-41-120. All bonds issued under this chapter must be signed by the Governor and the State Treasurer and attested by the Secretary of State. The Governor, and State Treasurer, and Secretary of State may sign these obligations by a facsimile of their signatures. The Great Seal of the State must be affixed to, impressed on, or reproduced upon each of them and each must be attested by the Secretary of State. The delivery of the bonds executed and authenticated, as provided in the resolution, is valid notwithstanding changes in officers or seal occurring after the execution or authentication."
SECTION 4. Beginning January 1, 2005, the Department of Revenue annually shall report to the Joint Committee on Taxation the revenue impact of this act, and the Department of Commerce annually shall report the cost and benefit of this act, together with the job creation and capital investment made by qualifying businesses.
SECTION 5. This act takes effect upon approval by the Governor. .
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