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HOUSE AMENDMENTS AMENDED
May 30, 2007
S. 243
S. Printed 5/30/07--S.
Read the first time January 9, 2007.
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 46 TO TITLE 11 SO AS TO ESTABLISH THE "SOUTH CAROLINA HYDROGEN INFRASTRUCTURE DEVELOPMENT FUND", TO AUTHORIZE THE SOUTH CAROLINA RESEARCH AUTHORITY TO ADMINISTER SUBGRANTS FOR THE PURPOSE OF PROMOTING THE DEVELOPMENT OF HYDROGEN PRODUCTION, TO ALLOW THE FUND TO RECEIVE DONATIONS, GRANTS, AND OTHER FUNDING AS PROVIDED BY LAW, TO ALLOW A TAXPAYER WHO MAKES A CONTRIBUTION TO THE FUND TO RECEIVE A TAX CREDIT SUBJECT TO CERTAIN LIMITATIONS, TO REQUIRE THE GENERAL ASSEMBLY TO APPROPRIATE A SPECIFIC AMOUNT FROM THE GENERAL FUND OF THE STATE TO THE FUND, AND TO REQUIRE STATE AGENCIES TO CONSIDER PURCHASING EQUIPMENT AND MACHINERY OPERATED BY HYDROGEN OR FUEL CELLS OR BOTH OF THEM; BY ADDING SECTION 12-6-3630 SO AS TO ALLOW A CREDIT AGAINST THE INCOME TAX, LICENSE FEES, OR INSURANCE PREMIUM TAXES FOR QUALIFIED CONTRIBUTIONS MADE TO THE FUND; BY AMENDING SECTION 12-36-2120, AS AMENDED, RELATING TO SALES TAX EXEMPTIONS, SO AS TO ALLOW A SALES TAX EXEMPTION FOR EQUIPMENT OR MACHINERY OPERATED BY HYDROGEN OR FUEL CELLS OR USED TO DISTRIBUTE HYDROGEN AND FOR EQUIPMENT AND MACHINERY USED PREDOMINATELY FOR RESEARCH AND DEVELOPMENT INVOLVING HYDROGEN OR FUEL CELL TECHNOLOGIES, AND TO ALLOW A SALES TAX EXEMPTION FOR BUILDING MATERIALS, MACHINERY, OR EQUIPMENT USED TO CONSTRUCT A NEW OR RENOVATED BUILDING LOCATED IN A RESEARCH DISTRICT.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The General Assembly finds that:
(1) South Carolina must encourage a vibrant knowledge-based economy and establish a foundation for research and commercialization activities to create higher paying jobs and benefit all South Carolinians;
(2) continuing to nurture a hydrogen and fuel cell cluster in South Carolina's economy, which has already begun with efforts by the state's research universities, is a public purpose that will help to further the state's goal to encourage a knowledge-based economy;
(3) South Carolina considers hydrogen and fuel cell technology, which is an alternative means of electrical power, to be a "fuel of the future" due to its potential to create high-paying jobs for the citizens of the State, its safe uses for stationary, portable, and automotive devices, and its positive environmental impacts;
(4) hydrogen is a clean fuel that is of benefit to citizens because of its renewable sources, nonpolluting characteristics, nonpetroleum basis, and its potential to limit the country's reliance on foreign sources of oil;
(5) the global demand for hydrogen technology is projected to be more than $2.6 trillion in 2021 and the United States market is expected to exceed one trillion dollars and one million jobs before 2020, while the economic potential for South Carolina and surrounding communities is estimated to be 40,000 jobs and a ten billion dollar capital investment in the State by 2020; and
(6) in order to capitalize on this economic opportunity, it is appropriate that the State create an ideal environment for all users and developers of hydrogen and fuel cell technology, including companies, businesses, and consumers, to further the state's goal to create a thriving hydrogen and fuel cell cluster in South Carolina's economy.
SECTION 2. Title 11 of the 1976 Code is amended by adding:
Section 11-46-10. This chapter may be cited as the 'South Carolina Hydrogen Infrastructure Development Act'.
Section 11-46-20. (A) There is established in the State Treasury a separate and distinct fund known as the 'South Carolina Hydrogen Infrastructure Development Fund'. The revenues of the fund must be distributed in the form of grants by the South Carolina Research Authority (authority) and used for the purpose of promoting the development and deployment of hydrogen production, storage, distribution, and dispensing infrastructure and related products and services that enable the growth of hydrogen and fuel cell technologies in the State, either by the authority or a grantee. Unexpended revenues in this fund carry forward into succeeding fiscal years through June 30, 2012, and earnings in this fund must be credited to it.
(B) The General Assembly must not appropriate more than a total of fifteen million dollars in grants as provided for in Section 11-46-30(B). Grants may not be made after June 30, 2012. Revenues remaining in the fund after that date, regardless of source, lapse to the General Fund of the State.
(C) The authority shall implement and manage the application for grants. The authority shall administer the fund and provide grants for any purpose that furthers the creation of a sustainable foundation upon which a hydrogen economy may develop across the State including, but not limited to, a demonstration project, pilot project, and the purchase of machinery and equipment. The authority may charge an applicant a maximum of three percent of the total amount of the grant for the administrative costs of managing the grant process. The authority, upon consultation with the South Carolina Hydrogen and Fuel Cell Alliance, the University of South Carolina's Fuel Cell Center of Excellence, Clemson University, South Carolina State University's Clyburn Transportation Center, the Savannah River National Laboratory, the Center for Hydrogen Research, the Medical University of South Carolina, and the Columbia Innovation Center, shall establish guidelines for the application for and approval of grants, including specific objectives that an applicant must meet to receive a grant. The executive committee of the authority has the ultimate authority to determine any matter relating to the fund and to the application of fund proceeds including, but not limited to, the approval of grants.
(D) Grants distributed from the fund are subject to the procurement procedures followed by the authority.
(E) Appropriations made to the fund pursuant to Section 11-46-30(B) may be distributed as grants only to the extent that there is a dollar-for-dollar match, in cash or in kind, from a source other than the State. However, the executive committee of the authority, based on the merits of a grant proposal and its projected economic benefit, may reduce or eliminate the matching requirement on a case-by-case basis.
(F) The authority shall make and implement all final decisions concerning any matter provided for in this chapter; however, a grant must not be made to the authority without approval by the Secretary of Commerce.
Section 11-46-30. (A) The South Carolina Hydrogen Infrastructure Development Fund may receive donations, grants, and any other funding as provided by law. A taxpayer making a contribution to the fund is allowed a tax credit provided pursuant to Section 12-6-3630.
(B) The South Carolina Hydrogen Infrastructure Development Fund may receive appropriations from the general fund of the State up to the following amounts in the fiscal years indicated:
(1) seven million dollars for the fiscal year 2007-08;
(2) five million dollars for fiscal year 2008-09;
(3) three million dollars for fiscal year 2009-10.
Section 11-46-40. The South Carolina Research Authority shall submit an annual report to the Governor and the General Assembly containing at a minimum the following:
(1) the total amount of monies placed in the fund in a fiscal year and the total amount of monies granted from the fund in a fiscal year;
(2) a list of the applicants that received grants and the applicant's stated objectives;
(3) an audit of the activities conducted by the applicants;
(4) the monies used by the authority for administration and management, which may not exceed two hundred thousand dollars annually, and the percentage of each grant used for administration and management;
(5) the progress achieved by the authority and the fund in creating a sustainable foundation upon which a hydrogen economy may develop across the State; and
(6) the certified gross profits earned by grant recipients provided pursuant to Section 11-46-60.
Section 11-46-50. Each state agency head shall require the agency's procurement officer, or other state employee authorized to purchase equipment or machinery for the agency, to consider purchasing equipment or machinery operated by hydrogen or fuel cells, or both of them, if available and cost-effective.
Section 11-46-60. Two percent of the gross profits derived from the sale of hydrogen and fuel cell products or services developed from a grant to a grant recipient, organized and operating as a for-profit business entity, must be annually remitted to the fund through June 30, 2012, until the full amount of the original grant has been repaid to the fund. Thereafter, if the full amount of the original grant has not been repaid, two percent of such gross profits must be annually remitted to the State Treasurer and transferred to the general fund of the State until repaid. The Department of Revenue shall promulgate regulations to determine and certify gross profits.
Section 11-46-70. The authority or a nonprofit affiliate designated by the authority may implement the provisions of this chapter. A designated nonprofit affiliate shall establish a separate and distinct fund. Monies provided to the affiliate fund must be subject to the same conditions and requirements provided by law that apply to a fund established by the authority. Grants from the affiliate fund must be made with the consent of the executive committee of the authority. The provisions of this chapter and Section 12-6-3630 apply to the affiliate fund."
SECTION 3. Article 25, Chapter 6, Title 12 of the 1976 Code is amended by adding:
"Section 12-6-3630. (A) For taxable years beginning after 2007, and before 2012, a taxpayer is allowed a credit against the income tax imposed pursuant to Chapter 6 or 11 of this title, license fees imposed pursuant to Chapter 20 of this title, or insurance premium tax imposed pursuant to Chapter 7, Title 38, or a combination of them, for a qualified contribution made by a taxpayer to the South Carolina Hydrogen Infrastructure Development Fund established pursuant to Chapter 46, Title 11. A contribution is not a qualified contribution if it is subject to a condition or limitation regarding the use of the contribution.
(B) The credit is equal to twenty-five percent of a qualified contribution made by a taxpayer to the fund. The credit must be used against the taxpayer's liability on income taxes, premium insurance taxes, or license fees after the application of all other credits applicable to the taxpayer's tax liability. Unused credits may be carried forward for ten years after the tax year in which a qualified contribution was made. The credit is nonrefundable.
(C) A taxpayer who claims a credit for a qualified contribution pursuant to this section may not claim a deduction for the same qualified contribution.
(D) A taxpayer who claims a credit pursuant to this section must attach to his tax return a copy of a form provided by the authority identifying the taxpayer's qualified contribution. The Department of Revenue may require from the taxpayer additional information identifying the taxpayer's qualified contribution as it considers appropriate."
SECTION 4. A. Section 12-36-2120 of the 1976 Code, as last amended by Act 386 of 2006, is further amended by adding appropriately numbered items to read:
"( ) any device, equipment, or machinery operated by hydrogen or fuel cells, any device, equipment, or machinery used to generate, produce, or distribute hydrogen and designated specifically for hydrogen applications or for fuel cell applications, and any device, equipment, or machinery used predominantly for the manufacturing of, or research and development involving hydrogen or fuel cell technologies. For purposes of this item:
(1) 'fuel cells' means a device that directly or indirectly creates electricity using hydrogen (or hydrocarbon-rich fuel) and oxygen through an electro-chemical process; and
(2) 'research and development' means laboratory, scientific, or experimental testing and development of hydrogen or fuel cell technologies. Research and development does not include efficiency surveys, management studies, consumer surveys, economic surveys, advertising, or promotion, or research in connection with literary, historical, or similar projects.
( ) any building materials used to construct a new or renovated building or any machinery or equipment located in a research district. However, the amount of the sales tax that would be assessed without the exemption provided by this section must be invested by the taxpayer in hydrogen or fuel cell machinery or equipment located in the same research district within twenty-four months of the purchase of an exempt item.
'Research district' means land owned by the State, a county, or other public entity that is designated as a research district by the University of South Carolina, Clemson University, the Medical University of South Carolina, South Carolina State University, or the Savannah River National Laboratory."
B. This section takes effect October 1, 2007.
SECTION 5. A. Chapter 14, Title 12 of the 1976 Code is amended by adding:
"Section 12-14-80. (A) There is allowed an economic impact zone tax credit pursuant to Section 12-14-60 for qualifying investments made by a manufacturer which:
(1) is engaged in this State in at least one economic impact zone, as defined in Section 12-14-30(1), in an activity or activities listed under the North American Industry Classification System Manual (NAICS) Section 326;
(2) is employing five thousand or more full-time workers in this State and having a total capital investment in this State of not less than two billion dollars; and
(3) has invested five hundred million dollars in capital investment in this state between January 1, 2006 and July 1, 2011.
(B) A taxpayer that qualifies for the tax credit allowed by this section may claim the credit earned pursuant to this section and credits earned pursuant to Section 12-6-3360 in the manner provided pursuant to Sections 12-6-3360 and 12-14-60, or as a credit in an amount equal to not more than fifty percent of the employee's withholding on the taxpayer's quarterly withholding tax returns. The taxpayer must elect to take the credit either as an income tax or a withholding tax credit but not both. A taxpayer must first take the credits as an income tax credit in a year in which the taxpayer has a corporate income tax liability. The withholding tax credit may be taken only when the taxpayer has used the maximum investment tax credit allowed against the corporate income tax for that year. The withholding credit may only be taken for qualifying investments made or placed in service after July 1, 2007. To claim the credit against the employee's withholding, the taxpayer must be in compliance with its withholding tax and other taxes due to the State."
B. This section takes effect July 1, 2007, and applies for capital investments placed in service outside of an economic impact zone after June 30, 2007, and for quarterly state withholding returns due on and after that date, provided that for the period July 1, 2007 to June 30, 2008, a taxpayer using this section many not reduce its state withholding tax to less than the withholding tax remitted for the period June 30, 2006, to July 1, 2007.
SECTION 6. A. Section 12-36-2120 of the 1976 Code, as last amended by Act 386 of 2006, is further amended by adding an appropriately numbered item at the end to read:
"( ) an amusement park ride and any parts, machinery, and equipment used to assemble, operate, and make up an amusement park ride or performance venue facility located in a qualifying amusement park or theme park and any related or required machinery, equipment, and fixtures located in the same qualifying amusement park or theme park.
(a) To qualify for the exemption, the taxpayer shall meet the investment and job requirements provided in subsubitem (i) of subitem (b) over a five-year period beginning on the date of the taxpayer's first use of this exemption. The taxpayer shall notify the Department of Revenue of its intent to qualify and use this exemption and upon receipt of the notification, the department shall issue an appropriate exemption certificate to the taxpayer to be used for qualifying purposes under this item. Within six months after the fifth anniversary of the taxpayer's first use of this exemption, the taxpayer shall notify the department, in writing, that it has or has not met the investment and job requirements of this item. If the taxpayer fails to meet the investment and job requirements, the taxpayer shall pay to the State the amount of the tax that would have been paid but for this exemption. The running of the periods of limitations for assessment of taxes provided in Section 12-54-85 is suspended for this time period beginning with the taxpayer's first use of this exemption and ending with notice to the department that the taxpayer has or has not met the investment and job requirements of this item.
(b) For purposes of this item:
(i) 'Qualifying amusement park or theme park' means a park that is constructed and operated by a taxpayer who makes a capital investment of at least two hundred fifty million dollars at a single site and creates at least two hundred fifty full-time jobs and five hundred part-time or seasonal jobs.
(ii) 'Related or required machinery, equipment, and fixtures' means an ancillary apparatus used for or in conjunction with an amusement park ride or performance venue facility, or both, including, but not limited to, any foundation, safety fencing and equipment, ticketing, monitoring device, computer equipment, lighting, music equipment, stage, queue area, housing for a ride, electrical equipment, power transformers, and signage.
(iii) 'Performance venue facility' means a facility for a live performance, nonlive performance, including any animatronics and computer-generated performance, and firework, laser, or other pyrotechnic show.
(iv) 'Taxpayer' means a single taxpayer or, collectively, a group of one or more affiliated taxpayers. An 'affiliated taxpayer' means a person or entity related to the taxpayer that is subject to common operating control and that is operated as part of the same system or enterprise. The taxpayer is not required to own a majority of the voting stock of the affiliate."
B. Notwithstanding the general effective date of this act, subsection A. of this section takes effect on the first day of the month succeeding the month in which this act is approved by the Governor.
SECTION 7. Section 13-17-40(B)(1) of the 1976 Code, as last amended by Act 319 of 2006, is further amended to read:
"(1) The President of Clemson University, President of the Medical University of South Carolina, President of the University of South Carolina at Columbia, the Governor or his designee, the Chairman of the House Ways and Means Committee's designee, the Chairman of the Senate Finance Committee's designee, and the chairman of the board of trustees shall serve as the executive committee of the board of trustees. The executive committee has all powers and authority of the board of trustees. The board shall have an advisory role only and shall advise the executive committee of the actions recommended by the board."
SECTION 8. A. Section 11-45-30(10) and (15) of the 1976 Code, as last amended by Act 125 of 2005, is further amended to read:
"(10) 'Lender' means a banking institution subject to the income tax on banks under Chapter 11 of Title 12, an insurance company subject to a state premium tax liability under pursuant to Chapter 7 of Title 38, a captive insurance company regulated under pursuant to Chapter 90 of Title 38, a utility regulated under pursuant to Title 58, or any other person approved by the authority pursuant to guidelines and regulations established by the authority pursuant to Section 11-45-100 a financial institution with proven experience in state-based venture capital transactions, pursuant to guidelines established by the Authority. Both the guidelines and the lender must be approved by the Budget and Control Board.
(15) 'Designated investor group' means any a person who enters into a designated investor contract with the authority pursuant to Section 11-45-50.
(16) 'Interest' means interest on the outstanding balance owed or owing to a lender by a designated investor group under such calculations, terms, or conditions as determined by the authority, provided that the method of calculating interest may be included in the tax credit certificates to the extent that the authority considers the information necessary or appropriate."
B. Section 11-45-50(B)(1) of the 1976 Code, as last amended by Act 125 of 2005, is further amended to read:
"(1) Each designated investor group selected pursuant to subsection (A)(3) of this section shall enter into a designated investor contract with the authority, which designated investor contract shall must contain those any investment guidelines and those other terms and conditions as the authority may deem considers necessary, advisable, or appropriate."
C. Section 11-45-55(B) of the 1976 Code, as last amended by Act 125 of 2005, is further amended to read:
"(B) The authority shall issue tax credit certificates to each lender contemporaneously with each loan made pursuant to this chapter in accordance with any guidelines and regulations established by the authority pursuant to Section 11-45-100. These guidelines and regulations shall relate to and govern, among other things, The tax credit certificates must describe procedures for the issuance, transfer and redemption of the certificates, and related tax credits. These certificates shall state also must describe the amounts, year, and conditions for redemption of the tax credits reflected on the certificates. Once a loan is made by a lender, the certificate issued to the lender shall be binding on the authority and this State and may not be modified, terminated, or rescinded. The form of the tax credit certificate must be approved by the Budget and Control Board."
D. Section 11-45-70(2)(a) of the 1976 Code, as last amended by Act 125 of 2005, is further amended to read:
"(a) While each designated investor group shall give preference to investors, otherwise qualified, that agree to maintain either a headquarters or an office staffed by an investment professional in South Carolina, investments may be made with investors not principally located in South Carolina; provided, that if the investors are otherwise qualified under pursuant to this chapter and, together with related companies, have other venture capital investments in South Carolina or in South Carolina based companies or can provide evidence to the authority of prior investments in South Carolina or South Carolina based companies at least equal to the total amount of monies placed with that investor by the designated investor group."
E. Chapter 45, Title 11 of the 1976 Code is amended by adding:
"Section 11-45-105. Any guideline issued by the authority pursuant to this chapter must be approved by the Budget and Control Board."
SECTION 9. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
SECTION 10. Section 58-5-10(4) of the 1976 Code, as last amended by Act 318 of 2006, is further amended to read:
"(4) The term 'public utility' includes every corporation and person delivering natural gas distributed or transported by pipe, and every corporation and person furnishing or supplying in any manner heat (other than by means of electricity), water, sewerage collection, sewerage disposal, and street railway service, or any of them, to the public, or any portion thereof, for compensation; provided, however, that a corporation or person furnishing, supplying, marketing, and/or selling natural gas at the retail level for use as a fuel in self-propelled vehicles shall is not be considered a public utility by virtue of the furnishing, supplying, marketing, and/or selling of such natural gas and a corporation or person whose only purpose is the furnishing, supplying, marketing, and/or selling of treated effluent for irrigation purposes is not a public utility by virtue of the furnishing, supplying, marketing, and/or selling of treated effluent if the effluent is not permitted for consumption by a regulatory agency."
SECTION 11. A. Title 12 of the 1976 Code is amended by adding:
Section 12-63-10. This chapter may be cited as the 'Energy Freedom and Rural Development Act'.
Section 12-63-20. (A)(1) A sales tax rebate must be applied to a vehicle purchase beginning after June 30, 2008, and ending before July 1, 2013, as follows:
(a) three hundred dollars for an in-state purchase or lease of a Flex-Fuel Vehicle (FFV), which is capable of operating on E85 motor fuel. An eligible vehicle for each model year is a model identified by the manufacturer as being a flexible-fuel vehicle capable of operating on E85 motor fuel. E85 motor fuel is a fuel comprised of eighty-five percent ethanol fuel and fifteen percent gasoline fuel;
(b) three hundred dollars for an in-state purchase or lease of a hydrogen-fueled vehicle and an advanced lean-burn vehicle. A hydrogen-fueled vehicle and an advanced lean-burn vehicle is a vehicle classified by the United States Department of Energy as a hydrogen-fueled vehicle or lean-burn vehicle;
(c) three hundred dollars for an in-state purchase or lease of a hybrid vehicle, an electric vehicle, and a plug-in hybrid vehicle. A hybrid vehicle is defined as a hybrid gasoline-electric vehicle that is partially powered by a large on-board battery. An electric vehicle is defined as having at least three wheels, uses a large on-board battery or electrical storage device, and is rated for more than thirty-five miles per hour and approved for use by the United States Department of Transportation for use on United States Highways (excludes neighborhood electric vehicles (NEVs)). A plug-in hybrid vehicle is a vehicle classified by the United States Department of Energy as a hybrid vehicle capable of being propelled by both a gasoline-fueled internal combustion engine and an electric motor powered by a battery that can be recharged by being plugged into an external source of electricity;
(d) three hundred dollars for the in-state purchase or lease of a high fuel-economy vehicle with a city fuel-economy rating by the United States Environmental Protection Agency (EPA) of thirty miles a gallon or higher; and
(e) not more than five hundred dollars for the purchase of equipment for conversion of a conventional hybrid electric vehicle to a plug-in hybrid electric vehicle or for the in-state purchase of EPA-certified equipment for conversion of conventional vehicles to operate on propane, compressed natural gas, liquefied natural gas, hydrogen, or E85 (eighty-five percent ethanol and fifteen percent gasoline).
(2) The rebates allowed pursuant to this subsection must be in the form of a payment sent to the buyer upon completion of a form created by the Department of Revenue and made available to the public, dealers, and the Department of Motor Vehicles.
(3) The rebates allowed pursuant to this subsection shall be phased in at twenty percent a year until the rebate equals three hundred dollars for subitems (a) through (d) of subsection (A)(1) and five hundred dollars for subitem (e) of subsection (A)(1). The amount of rebate that a person may claim is limited to the amount of rebate in effect for the year in which the vehicle was purchased or converted, whichever is applicable.
(B)(1) An incentive payment for an alternative fuel purchase is provided beginning after June 30, 2009, and ending before July 1, 2012, and shall be provided from the General Fund, excluding revenue derived from the sales and use tax as follows:
(a) five cents to the retailer for each gallon of E70 fuel or greater sold provided that the ethanol-based fuel is subject to the South Carolina motor fuel user fee;
(b) twenty-five cents to the retailer for each gallon of pure biodiesel fuel sold so that the biodiesel in the blend is at least two percent B2 or greater, provided that the qualified biodiesel content fuel is subject to the South Carolina motor fuel user fee. Biodiesel fuel is a fuel for motor vehicle diesel engines comprised of vegetable oils or animal fats and meeting the specifications of the American Society of Testing and Materials (ASTM) D 6751; and
(c) twenty-five cents to the retailer or wholesaler for each gallon of pure biodiesel fuel sold as dyed diesel fuel for 'off-road' uses, so that the biodiesel in the blend is at least two percent B2 or greater.
(2) The payments allowed pursuant to this subsection must be made to the retailer upon compliance with verification procedures set forth by the Department of Agriculture.
(C)(1) An incentive payment for production of electricity or methane gas fuel is provided beginning after June 30, 2008, and ending before July 1, 2018, and shall be provided from the General Fund, excluding revenue derived from the sales and use tax as follows:
(a) One cent per kilowatt-hour (kwh) for electricity produced from biomass resources in a facility not using biomass resources before June 30, 2008, or facilities which produce at least twenty-five percent more electricity from biomass resources than the greatest three-year average before June 30, 2008, up to a maximum of one hundred thousand dollars per year per taxpayer for five years. The rebate is applicable to energy from a qualifying facility placed in service and first producing energy on or after July 1, 2008, and extends for five years, ending on July 1, 2013, or, if later, five years from the date the facility was placed in service and first produced electricity. In no case shall the rebate apply after June 30, 2018.
(b) Nine cents per therm for methane gas fuel produced from biomass resources in a facility not using biomass resources before June 30, 2008, or facilities which produce at least twenty-five percent more methane gas from biomass resources than the greatest three-year average before June 30, 2008, up to a maximum of one hundred thousand dollars per year per taxpayer for five years. The rebate is applicable to energy from a qualifying facility placed in service and first producing energy on or after July 1, 2008, and extends for five years, and ending before July 1, 2013, or, if later, five years from the date the facility was placed in service and first produced electricity. In no case shall the rebate apply after June 30, 2018.
(2) For purposes of this subsection, a biomass resource means wood, wood waste, agricultural waste, animal waste, sewage, landfill gas, and other organic materials.
(D) The Department of Revenue may prescribe forms and procedures, issue policy documents, and distribute funds as necessary to ensure the orderly and timely implementation of the provisions of this section. The Department of Revenue shall coordinate with the Department of Agriculture as necessary.
(E) Notwithstanding the incentive amounts provided pursuant to this section:
(1) For a fiscal year all claims made pursuant to subsection (A)(1)(a) of this section must not exceed 2,050,000 dollars and must apply proportionately to all eligible claimants;
(2) For a fiscal year all claims made pursuant to subitems (b) through (e) of subsection (A)(1) of this section must not exceed 2.1 million dollars and must apply proportionately to all eligible claimants; and
(3) For a fiscal year all claims made pursuant to subsections (B) and (C) of this section must not exceed 2.1 million dollars and must apply proportionately to all eligible claimants.
Section 12-63-30. A state-owned diesel fueling facility shall provide fuel containing at least five percent biodiesel fuel in all diesel pumps."
B. All state-owned diesel fueling facilities must be in compliance with Section 12-63-30 by January 1, 2008.
SECTION 12. Article 25, Chapter 6, Title 12 of the 1976 Code is amended by adding:
"Section 12-6-3376. (A) For taxable years beginning after 2007, and before 2011, a taxpayer is allowed a tax credit against the income tax imposed pursuant to this chapter for the in-state purchase or lease of a plug-in hybrid vehicle. A plug-in hybrid vehicle is a vehicle that shares the same benefits as an internal combustion and electric engine with an all-electric range of no less than nine miles. The credit is equal to two thousand dollars. The credit allowed by this section is nonrefundable and if the amount of the credit exceeds the taxpayer's liability for the applicable taxable year, any unused credit may be carried forward for five years.
(B) Notwithstanding the credit amount allowed pursuant to this section, for a fiscal year all claims made pursuant to this section must not exceed two hundred thousand dollars and must apply proportionately to all eligible claimants."
SECTION 13. Article 25, Chapter 6, Title 12 of the 1976 Code is amended by adding:
"Section 12-6-3630. (A) For taxable years beginning after 2007, and before 2012, a taxpayer is allowed a credit against the income tax imposed pursuant to this chapter for qualified expenditures for research and development.
(B) For purposes of this section:
(1) 'Qualified expenditures for research and development' include expenditures to develop feedstocks and processes for cellulosic ethanol and for algae-derived biodiesel.
(2) 'Cellulosic ethanol' means fuel from ligno-cellulosic materials, including wood chips, corn stover, and switchgrass.
(C) The credit is equal to twenty-five percent of qualified expenditures for research and development. A taxpayer's total credit in all years, for all expenditures allowed pursuant to this section must not exceed one hundred thousand dollars. Unused credits may be carried forward for five years after the tax year in which a qualified expenditure was made. The credit is nonrefundable.
(D) The amount of the credit provided by this section to a taxpayer must be invested by the taxpayer in demonstration projects on or research and development of:
(1) enzymes and catalysts;
(2) best and most cost efficient feedstocks for South Carolina; and
(3) product development.
(E) Expenditures qualifying for a tax credit allowed by this section and investments made by a taxpayer pursuant to subsection (D) must be certified by the State Energy Office, in consultation with the Department of Agriculture and the South Carolina Institute for Energy Studies.
(F) Notwithstanding the credit amount allowed pursuant to this section, for a fiscal year all claims made pursuant to this section must not exceed one hundred thousand dollars and must apply proportionately to all eligible claimants."
SECTION 14. Section 12-6-3587 of the 1976 Code, as added by Act 386 of 2006, is further amended to read:
"Section 12-6-3587. (A) There is allowed as a tax credit against the income tax liability of a taxpayer imposed by this chapter an amount equal to twenty-five percent of the costs incurred by the taxpayer in the purchase and installation of a solar energy system, or both for heating water, space heating, air cooling, or the generation of electricity in or on a facility in South Carolina and owned by the taxpayer. The tax credit allowed by this section must not be claimed before the completion of the installation, and must be claimed for the year that the costs are incurred. The amount of the credit in any year may not exceed three thousand five hundred dollars for each facility or fifty percent of the taxpayer's tax liability for that taxable year, whichever is less. If the amount of the credit exceeds three thousand five hundred dollars for each facility, the taxpayer may carry forward the excess for up to ten years.
(B) 'System' includes all controls, tanks, pumps, heat exchangers, and other equipment used directly and exclusively for the conversion of solar energy for heating or cooling system. The term 'system' does not include any land or structural elements of the building such as walls and roofs or other equipment ordinarily contained in the structure. No credit shall be allowed for a solar system unless the system is certified for performance by the nonprofit Solar Rating and Certification Corporation or a comparable entity endorsed by the South Carolina Energy Office."
SECTION 15. A. Subsections (A), (B), and (C) of Section 12-6-3600 of the 1976 Code, as added by Act 386 of 2006, are further amended to read:
"(A) For taxable years beginning after 2006, and before 2014, there is allowed a credit against the tax imposed pursuant to this chapter for any corn-based ethanol or soy-based biodiesel facility which is in production at the rate of at least twenty-five percent of its name plate design capacity for the production of corn-based ethanol or soy-based biodiesel, before denaturing, on or before December 31, 2009. The facility must be placed in use after 2006. The credit equals twenty cents a gallon of corn-based ethanol or soy-based biodiesel produced and is allowed for sixty months beginning with the first month for which the facility is eligible to receive the credit and ending not later than December 31, 2014. The credit only may be claimed if the corn-based ethanol or soy-based biodiesel facility maintains an average production rate of at least twenty-five percent of its name plate design capacity for at least six months after the first month for which it is eligible to receive the credit.
(B) As used in this section:
(1) "Ethanol facility" means a plant or facility primarily engaged in the production of ethanol or ethyl alcohol derived from grain components, coproducts, or byproducts;
(2) "Biodiesel facility" means a plant or facility primarily engaged in the production of vegetable or animal based fuels used as a substitute for diesel fuel; and
(3) "Name plate design capacity" means the original designed capacity of an ethanol or biodiesel facility. Capacity may be specified as bushels of grain ground or gallons of ethanol or biodiesel produced a year. For taxable years beginning after 2006, and before 2014, there is allowed a credit against the tax imposed pursuant to this chapter for an ethanol facility using a feedstock other than corn or a biodiesel facility using a feedstock other than soy oil which is in production at the minimum rates provided pursuant to this subsection of its name plate design capacity for the production of ethanol or biodiesel, before denaturing, on or before December 31, 2009. The credit equals thirty cents a gallon of noncorn ethanol or nonsoy oil biodiesel produced and is allowed for sixty months beginning with the first month for which the facility is eligible to receive the credit and ending no later than December 31, 2014. The credit is continued only if the ethanol or biodiesel facility maintains the average minimum production rates provided pursuant to this subsection of its name plate design capacity for at least six months after the first month for which it is eligible to receive the credit.
(C) An ethanol or biodiesel facility eligible for a tax credit under subsection (A) of this section also shall receive a credit against the tax imposed pursuant to this chapter the amount of twenty cents a gallon of ethanol or biodiesel produced in excess of the original name plate design capacity which results from expansion of the facility completed after 2006 and before 2009. The tax credit is allowed for sixty months beginning with the first month for which production from the expanded facility is eligible to receive the tax credit and ending not later than 2014. As used in this section:
(1) 'Ethanol facility' means a plant or facility primarily engaged in the production of ethanol or ethyl alcohol derived from renewable and sustainable bioproducts used as a substitute for gasoline fuel.
(2) 'Biodiesel facility' means a plant or facility primarily engaged in the production of plant or animal based fuels used as a substitute for diesel fuel.
(3) 'Name plate design capacity' means the original designed capacity of an ethanol or biodiesel facility. Capacity may be specified as bushels of grain ground or gallons of ethanol or biodiesel produced a year."
B. Section 12-6-3600 of the 1976 Code, as added by Act 386 of 2006, is amended by adding a new subsection at the end to read:
"(H) Notwithstanding the credit amount allowed by this section, for a fiscal year all claims made pursuant to this section must not exceed eight hundred thousand dollars and must apply proportionately to all eligible claimants."
SECTION 16. A. Section 12-6-3610 of the 1976 Code, as added by Act 386 of 2006, is further amended to read:
"Section 12-6-3610. (A) As used in this section, renewal 'renewable fuel' means liquid nonpetroleum based fuels that can be placed in motor vehicle fuel tanks and used as a fuel in a highway vehicle. It includes all forms of fuel commonly or commercially known or sold as biodiesel and ethanol.
(B)(1) A taxpayer that purchases or constructs and installs and places in service in this State a qualified commercial facility property that is used for distribution or dispensing renewable fuel specified in this subsection, at a new or existing commercial fuel distribution or dispensing facility is allowed a credit equal to twenty-five percent of the cost to the taxpayer of purchasing, constructing, and installing the property against the taxpayer's liability for a tax imposed pursuant to this chapter constructing and installing the part of the distribution facility or dispensing facility, including. Eligible property includes pumps, storage tanks, and related equipment that is directly and exclusively used for distribution, dispensing, or storing renewable fuel. A facility taxpayer is qualified for a tax credit provided pursuant to this subsection if the equipment used to store, distribute, or dispense renewable fuel is labeled for this purpose and clearly identified as associated with renewable fuel. The entire credit may not be taken for the taxable year in which the facility property is placed in service but must be taken in three equal annual installments beginning with the taxable year in which the facility property is placed in service. If, in one of the years in which the installment of a credit accrues, the portion of the facility property directly and exclusively used for distributing, dispensing, or storing renewable fuel is disposed of or taken out of service and is not replaced, so that the facility no longer distributes, dispenses, or stores renewable fuel, the credit expires and the taxpayer may not take any remaining installment of the credit. The unused portion of an unexpired credit may be carried forward for not more than ten succeeding taxable years.
(2) For purposes of this subsection, 'renewable fuel' means E70 or greater ethanol fuel dispensed at the retail level for use in motor vehicles and pure ethanol or biodiesel fuel dispensed by a distributor or facility that blends these nonpetroleum liquids with gasoline fuel or diesel fuel for use in motor vehicles.
(C) A taxpayer that constructs and places in service in this State a commercial facility for processing renewable fuel the production of renewable fuel is allowed a credit equal to twenty-five percent of the cost to the taxpayer of constructing or renovating a building and equipping the facility for the purpose of producing renewable fuel. Production of renewable fuel includes intermediate steps such as milling, crushing, and handling of feedstock and the distillation and manufacturing of the final product. The entire credit may not be taken for the taxable year in which the facility is placed in service but must be taken in seven equal annual installments beginning with the taxable year in which the facility is placed in service. If, in one of the years in which the installment of a credit accrues, the facility with respect to which the credit was claimed is disposed of or taken out of service, the credit expires and the taxpayer may not take any remaining installment of the credit. A taxpayer's total credit in all years, for all expenditures allowed pursuant to this subsection, must not exceed one million dollars. The unused portion of an unexpired credit may be carried forward for not more than ten succeeding taxable years.
(D) A taxpayer that claims any other credit allowed under this article with respect to the costs of constructing and installing a facility may not take the credit allowed in this section with respect to the same costs.
(E) Notwithstanding the credit amounts allowed pursuant to this section, for a fiscal year all claims made pursuant to this section must not exceed one hundred fifty thousand dollars and must apply proportionately to all eligible claimants."
B. This SECTION takes effect January 1, 2008.
SECTION 17. Section 12-6-3620 of the 1976 Code, as added by Act 386 of 2006, is further amended to read:
"Section 12-6-3620. (A) For taxable years beginning after 2007, there is allowed a tax credit against the income tax imposed pursuant to Section 12-6-530 or license fees imposed pursuant to Section 12-20-50, or both, for twenty-five percent of the costs incurred by a taxpayer for use of methane gas taken from a landfill to provide power for a manufacturing facility the purchase and installation of equipment used to create heat, power, steam, electricity, or another form of energy for commercial use from a fuel consisting of no less than ninety percent biomass resource. Costs incurred by a taxpayer and qualifying for the credit allowed by this section must be certified by the State Energy Office, in consultation with the Department of Agriculture and the South Carolina Institute for Energy Studies.
(B) A taxpayer's credit utilization in any one year, for all expenditures allowed pursuant to this section, must not exceed six hundred fifty thousand dollars. The tax credit allowed by this section may not exceed fifty percent of the liability of the taxpayer for the tax taxes imposed pursuant to Section Sections 12-6-530 and 12-20-50. Unused credits may be carried forward for ten fifteen years.
(C) For purposes of this section, manufacturing facility is as defined in Section 12-6-3360(M)(5). For purposes of this section:
(1) 'Biomass resource' means wood, wood waste, agricultural waste, animal waste, sewage, landfill gas, and other organic materials.
(2) 'Commercial use' means a use intended for the purpose of generating a profit.
(3) If the facility ceases to use biomass resources as its primary fuel source before the entire credit has been utilized, it is ineligible to utilize any remaining credit until it resumes using biomass resources as its primary fuel source (at least ninety percent). The fifteen-year carry forward period must not be extended due to periods of noncompliance.
(D) Notwithstanding the credit amount allowed pursuant to this section, for a fiscal year all claims made pursuant to this section must not exceed six hundred fifty thousand dollars and must apply proportionately to all eligible claimants."
SECTION 18. Section 12-28-110(70) of the 1976 Code, as last amended by Act 386 of 2006, is further amended to read:
"(70) 'Biodiesel' means a fuel composed of mono-alkyl esters of long chain fatty acids generally derived from vegetable oils or animal fats, commonly known as B100, that is commonly and commercially known or sold as a fuel that is suitable for use in a highway vehicle. The fuel meets this requirement if, without further processing or blending, the fuel is a fluid and has practical and commercial fitness for use in the propulsion of a highway vehicle. 'Biodiesel' means vegetable or animal based fuels used as a substitute for diesel fuel a diesel fuel substitute produced from nonpetroleum renewable resources that meets the registration requirements for fuels and fuel additives established by the United States Environmental Protection Agency pursuant to Section 211 of the Clean Air Act (42 U.S.C. 7545) and that meets the American Society for Testing and Materials D6751-02a Standard Specification for Biodiesel Fuel (B100) Blend Stock for Distillate Fuels."
SECTION 19. Except as otherwise provided elsewhere in this act, this act takes effect upon approval by the Governor.
This web page was last updated on Monday, June 22, 2009 at 2:32 P.M.