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COMMITTEE AMENDMENT AMENDED AND ADOPTED
May 24, 2007
H. 3749
Introduced by Reps. W.D. Smith, Mitchell, Kelly, Littlejohn, Mahaffey, Moss, Phillips, Talley and Walker
S. Printed 5/24/07--S.
Read the first time March 22, 2007.
TO AMEND SECTION 12-10-80, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO JOB DEVELOPMENT CREDITS, SO AS TO ALLOW A TAXPAYER WHO QUALIFIES FOR THE JOB DEVELOPMENT CREDIT AND WHO IS LOCATED IN A MULTI-COUNTY BUSINESS OR INDUSTRIAL PARK TO RECEIVE A CREDIT EQUAL TO THE AMOUNT DESIGNATED TO THE COUNTY WITH THE LOWEST DEVELOPMENT STATUS OF THE COUNTIES CONTAINING THE PARK IN CERTAIN CIRCUMSTANCES.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-10-80 of the 1976 Code, as last amended by Act 386 of 2006, is further amended by adding an appropriately lettered subsection at the end to read:
"( ) A taxpayer who qualifies for the job development credit pursuant to the provisions of this section and who is located in a multi-county business or industrial park jointly established pursuant to Section 13 of Article VIII of the Constitution of this State is allowed a job development credit equal to the amount allowed pursuant to subsection (D) for the designation of the county which has the lowest development status of the counties containing the park if:
(1) the park is developed and established on the geographical boundary of adjacent counties; and
(2) the written agreement, pursuant to Section 4-1-170, requires revenue from the park to be allocated to each county on an equal basis."
SECTION 2. 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 3. A. Section 12-61-6520(14) of the 1976 Code is amended to read:
"(14) "Tourism or recreational facility" also means an aquarium or natural history exhibit or museum located within or directly contiguous to an extraordinary retail establishment as defined below. An extraordinary retail establishment is a single store located in South Carolina within two miles of an interstate highway or in a county with at least three and one-half million visitors a year, and it must be a destination retail establishment which attracts at least two million visitors a year with at least thirty-five percent of those visitors traveling at least fifty miles to the establishment. The extraordinary retail establishment must have a capital investment of at least twenty-five million dollars including land, buildings and site prep preparation costs, and one or more hotels must be built to service the establishments with establishment within three years of occupancy. Only establishments which receive a certificate of occupancy after July 1, 2006 qualify. The Department of Parks, Recreation and Tourism shall determine and annually certify whether a retail establishment meets these criteria and its judgment is conclusive. The extraordinary retail establishment annually must collect and remit at least two million dollars in sales taxes but is not required to collect or remit admission taxes."
B. Section 12-21-6590 of the 1976 Code is amended to read:
"Section 12-21-6590. (A) The Department of Parks, Recreation and Tourism may designate no more than four extraordinary retail establishments as defined in Section 12-21-6520(14), and for purposes of this section, sales taxes must be substituted for admissions taxes wherever admission tax appears in this Tourism Infrastructure Admissions Tax Act. For purposes of this section, additional infrastructure improvements include any aquarium or natural history exhibits or museum located within or directly contiguous to the extraordinary retail establishment which are dedicated to public use and enjoyment under such terms and conditions as may be required by the municipality or county in which they are located. Additional infrastructure improvements shall also include site prep, construction of real or personal property, parking, roadways, ingress and egress, utilities and other expenditures on the extraordinary retail establishment which directly support or service the aquarium or natural history museum or exhibits. The certification application made under this section must be executed by both the extraordinary retail establishment as well as the county or municipality.
(B) Prior to the completion of an extraordinary retail establishment, an entity may request that the county or municipality in which the facility is located provide an application for conditional certification to the Department of Parks, Recreation and Tourism. The Department of Parks, Recreation and Tourism may grant conditional certification to the entity as an extraordinary retail establishment based on reasonable projections that the facility will meet the requirements of Section 12-21-6520(14) within three years of the certificate of occupancy. If the Department of Parks, Recreation and Tourism grants the conditional certification to the entity as an extraordinary retail establishment, it shall forward the approval for conditional certification to the department. The department shall notify the entity and either the county or the municipality, as applicable, of the approval.
An applicant obtaining conditional certification as an extraordinary retail establishment under this section and satisfying the requirements of conditional certification by the dates provided therein, shall be deemed to satisfy all of the requirements of this article pertaining to qualification as an extraordinary retail establishment for the duration of the benefit period. The entity shall be deemed to constitute a major tourism or recreation facility under Section 12-21-6520(12) and shall be entitled to all of the benefits of this article for the duration of the benefit period without any further certification requirements. This subsection shall not be construed to allow an applicant to receive the benefits provided in this article prior to satisfying the requirements of the conditional certification and of Section 12-21-6520(14).
The Department of Parks, Recreation and Tourism shall develop application forms and adopt guidelines governing the conditional certification process.
(C) If an applicant obtains conditional certification and complies with both the conditional certification and Section 12-21-6520(14), then one-half shall be substituted for one-fourth in Section 12-21-6530(A), and no funds will be transferred to the council pursuant to Section 12-21-6540."
SECTION 4. Section 12-21-6540(A) of the 1976 Code is amended to read:
"(A) During the benefit period, in addition to the amount described in Section 12-21-6530, except as otherwise provided in Section 12-21-6590, an additional amount equal to one-fourth of the license tax paid on admissions to an establishment must be transferred by the department to the State Treasurer to be deposited into the fund and distributed pursuant to the approval of the council."
SECTION 5. Section 12-6-3415(A) of the 1976 Code is amended to read:
"Section 12-6-3415. (A) A taxpayer that claims a federal income tax credit pursuant to Section 41 of the Internal Revenue Code for increasing research activities for the taxable year is allowed a credit against any tax due pursuant to Section 12-6-530 this chapter or Section 12-20-50 equal to five percent of the taxpayer's qualified research expenses made in South Carolina. For the purposes of this credit, qualified research expenses has the same meaning as provided for in Section 41 of the Internal Revenue Code."
SECTION 6. Section 12-20-105 of the 1976 Code is amended to read:
"Section 12-20-105. (A) Any company subject to a license tax under Section 12-20-100 may claim a credit against its license tax liability for amounts paid in cash to provide infrastructure for an eligible project.
(B)(1) To be considered an eligible project for purposes of this section, the project must qualify for income tax credits under Chapter 6 of Title 12, withholding tax credit under Chapter 10 of Title 12, income tax credits under Chapter 14 of Title 12, or fees in lieu of property taxes under either Chapter 12 of Title 4, Chapter 29 of Title 4, or Chapter 44 of Title 12.
(2) If a project consists of an office, business, commercial, or industrial park which is owned or constructed by a county or political subdivision of this State when the qualifying improvements are paid for, the project does not have to meet the qualifications of item (1) to be considered an eligible project.
(C) For the purpose of this section, "infrastructure" means improvements for water, sewer, gas, steam, electric energy, and communication services made to a building or land that are considered necessary, suitable, or useful to an eligible project. These improvements include, but are not limited to:
(1) improvements to both public or private water and sewer systems;
(2) improvements to both public or private electric, natural gas, and telecommunications systems including, but not limited to, ones owned or leased by an electric cooperative, electric utility, or electric supplier, as defined in Chapter 27, Title 58;
(3) fixed transportation facilities including highway, road, rail, water, and air;
(4) for a qualifying project under subsection (B)(2), infrastructure improvements include industrial shell buildings and the purchase of land for an office, business, commercial, or industrial park which is owned or constructed by a county or political subdivision of this State. Nothing in this section shall prohibit the county or political subdivision from selling the industrial shell building or industrial park after the company has paid in cash to provide the infrastructure for an eligible project.
(D) A company is not allowed the credit provided by this section for actual expenses it incurs in the construction and operation of any building or infrastructure it owns, leases, manages, or operates.
(E) The maximum aggregate credit that may be claimed in any tax year by a single company is three hundred thousand dollars.
(F) The credits allowed by this section may not reduce the license tax liability of the company below zero. If the applicable credit originally earned during a taxable year exceeds the liability and is otherwise allowable under subsection (D), the amount of the excess may be carried forward to the next taxable year.
(G) For South Carolina income tax and license purposes, a company that claims the credit allowed by this section is ineligible to claim the credit allowed by Section 12-6-3420."
SECTION 7. A. Section 4-1-175 of the 1976 Code, is amended to read:
"Section 4-1-175. A county or municipality receiving revenues from a payment in lieu of taxes pursuant to Section 13 of Article VIII of the Constitution of this State may issue special source revenue bonds secured by and payable from all or a part of that portion of the revenues which the county is entitled to retain pursuant to the agreement required by Section 4-1-170 in the manner and for the purposes set forth in Section 4-29-68. The county or municipality may pledge the revenues for the additional securing of other indebtedness in the manner and for the purposes set forth in Section 4-29-68.
A county or municipality or special purpose district that receives and retains revenues from a payment in lieu of taxes pursuant to Section 13 of Article VIII of the Constitution of this State may use a portion of this revenue for the purposes outlined in Section 4-29-68 without the requirement of issuing the special source revenue bonds or meeting the requirements of Section 4-29-68(A)(4) by providing a credit against or payment derived from the revenues received and retained under Section 13 of Article VIII of the Constitution of this State.
A political subdivision of this State subject to the limitation of either Section 14(7)(a) or Section 15(6) of Article X of the Constitution of this State pledging pursuant to this section all or a portion of the revenues received and retained by that subdivision from a payment in lieu of taxes to the repayment of any bonds shall not include in the assessed value of taxable property located in the political subdivision for the purposes of calculating the limit imposed by those sections of the Constitution any amount representing the value of the property that is the basis of the pledged portion of revenues. If the political subdivision, before pledging revenues pursuant to this section, has included an amount representing the value of a parcel or item of property that is the subject of a payment in lieu of taxes in the assessed value of taxable property located in the political subdivision and has issued general obligation debt within the debt limit calculated on the basis of such assessed value, then it may not pledge pursuant to this section revenues based on the item or parcel of property, to the extent that the amount representing its value is necessary to permit the outstanding general obligation debt within the debt limit of the political subdivision."
B. Section 4-12-30(C), (D), (H) and (K) of the 1976 Code, as last amended by Act 384 of 2006, is further amended to read:
"(C)(1) From the end of the property tax year in which the sponsor and the county execute an inducement agreement, the sponsor has five years in which to enter into an initial lease agreement with the county.
(2) From the end of the property tax year in which the sponsor and the county execute the initial lease agreement, the sponsor has five years in which to complete its investment for purposes of qualifying for this section. If the sponsor does not anticipate completing the project within five years, the sponsor may apply to the county before the end of the five-year period for making the minimum investment for an extension of time to complete the project. If the county agrees to grant the extension, the county must do so in writing, and a copy must be delivered to the department within thirty days of the date the extension was granted. The extension may not exceed five years. If a project receives an extension of less than five years, the sponsor may apply to the county before the end of the extension period for an additional extension of time to complete the project for an aggregate extension of not more than five years. Unless approved as part of the original lease documentation, the county council of the county may approve any extension by resolution, a copy of which must be delivered to the department within thirty days of the date the resolution was adopted. There is no extension allowed for the five-year period in which to meet the minimum level of investment. If the minimum level of investment is not met within five years, all property under the lease agreement or agreements, reverts retroactively to the payments required by Section 4-12-20. The difference between the fee actually paid by the sponsor and the payment which is due under Section 4-12-20 is subject to interest, as provided in Section 12-54-25(D). To the extent necessary to determine if a sponsor or sponsor affiliate has met its investment requirements, any statute of limitations that might apply pursuant to Section 12-54-85 is suspended for all sponsors and sponsor affiliates during the time period allowed to make the required investment and the department or county may seek collection of any amount that may be due pursuant to this subsection. Any property placed in service after the five-year period, or ten-year period in the case of a project which has received an extension, is not part of the fee agreement under subsection (D)(2) and is subject to the payments required by Section 4-12-20 if the county has title to the property, or to ad valorem property taxes, if the sponsor has title to the property. For purposes of those sponsors qualifying under subsection (D)(4), the five-year period referred to in this subsection is eight years.
(3) For those sponsors that, after qualifying pursuant to (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 period for completing the project is fifteen years.
(4) The annual fee provided by subsection (D)(2) is available for no more than twenty years for an applicable piece of property. The sponsor may apply to the county prior to the end of the twenty-year period for an extension of the fee period for up to ten years. The county council of the county shall approve an extension by resolution upon a finding of substantial public benefit. A copy of the resolution shall be delivered to the department within thirty days of the date the resolution was adopted. For projects 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 or, if extended as provided in this subsection up to thirty years, for an aggregate fee period of to a maximum total of thirty up to forty years for the fee for a single project which has been granted an extension. For those sponsors qualifying under subsection (D)(4), the annual fee is available for no more than thirty years for an applicable piece of property and for those projects placed in service in more than one year the annual fee is available for a maximum of an aggregate fee period of up to forty-three years, or for those sponsors qualifying pursuant to subsection (C)(3), forty-five years.
(5) Annually, during the time period allowed to meet the minimum investment level, the sponsor shall 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 is subject to an annual fee payment, as provided in Section 4-12-20.
(b) Any undeveloped land before being developed and placed in service, is subject to an annual fee payment as provided in Section 4-12-20. The time during which fee payments are made under Section 4-12-20 is not considered part of the maximum periods provided in subsections (C)(2) through (C)(4), and a lease is not considered an "initial lease agreement" for purposes of this subsection until the first day of the calendar year for which a fee payment is due under item (2) in connection with the 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, or four percent of those projects qualifying pursuant to subsection (D)(4), a fixed millage rate as provided in subsection (G), and a fair market value estimate determined by the department as follows:
( i) for real property, using the original income tax basis for South Carolina income tax purposes without regard to depreciation, if real property is constructed for the fee or is purchased in an arm's length transaction; otherwise, the property must be reported at its fair market value for ad valorem property tax purposes as determined by appraisal. The fair market value estimate established for the first year of the fee remains the fair market value of the real property for the life of the fee; and
(ii) for personal property, using the original tax basis for South Carolina income tax purposes less depreciation allowable for property tax purposes, except that the sponsor is not entitled to any extraordinary obsolescence.
(b) an annual payment as provided in 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 is 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.
(4)(a) The assessment ratio may not be lower than four percent:
(i) in the case of a single sponsor investing at least one hundred fifty million dollars, resulting in a total investment of at least three hundred million dollars when added to previous investments by a sponsor, and creating at least one hundred twenty-five new full-time jobs at a project in this State;
(ii) in the case of a single sponsor investing at least four hundred million dollars and which is creating at least two hundred new full-time jobs at a project; or
(iii) in the case of a project that satisfies the requirements of Section 11-41-30(2)(a), and for which the Secretary of Commerce has delivered certification pursuant to Section 11-41-70(2)(a). business including a corporation, its subsidiaries, and its limited liability company members, that builds a project consisting of gas-fired combined-cycle power facility and invests at least four hundred million dollars and creates at least twenty-five full-time jobs as defined in Section 12-6-3360(M) at that project; or
(iv) in the case of a project that satisfies the requirements of Section 11-41-30(2)(a), and for which the Secretary of Commerce has delivered certification pursuant to Section 11-41-70(2)(a).
(b) The new full-time jobs requirement of this item does not apply in the case of a sponsor 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 sponsor qualifying for the fee may negotiate an inducement agreement with a county using differing assessment ratios for different assessment years or levels of investment covered by the inducement agreement. However, the lowest assessment ratio allowed is the lowest ratio for which the sponsor may qualify under this section."
"(H)(1) Upon agreement of the parties, and except as provided in item (2) of this subsection, 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 sponsors or sponsor affiliates.
(2) No amendment or replacement of an inducement agreement or millage rate agreement may be used to lower the millage rate, assessment ratio, or, except as provided in Sections 4-12-30(C)(2) and (C)(4), increase the term 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 agreement may be amended up to the date of execution and delivery of a millage rate agreement or a lease agreement in the discretion of the governing body.
(3) An inducement agreement or a lease agreement may provide that a sponsor who has committed to an investment under subsection (D)(4) may continue to receive the benefits of this chapter even if the sponsor fails to make or maintain the required investment or fails to create the jobs required by subsection (D)(4), if the sponsor meets the two and one-half million dollar minimum investment. If the sponsor fails to make or maintain the required investment or create the required number of jobs, the inducement agreement or the lease agreement may not provide for an assessment ratio and an exemption period more favorable than those allowed for the minimum investment. To the extent that the sponsor obtained a four percent assessment ratio under subsection (D)(4), the sponsor must recalculate the fee using a six percent ratio or such other ratio as the inducement agreement or lease agreement may provide for all years in which the four percent assessment ratio was used and pay the county any difference. This difference is subject to interest as provided in Section 12-54-25."
"(K)(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, but without regard to an exemption otherwise available to the project pursuant to Section 12-37-220 for that year.
(2) For a project 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 manner provided for by the agreement establishing the industrial development park.
(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) by providing a credit against or payment derived from the fee due from a sponsor. A direct payment of cash may not be made to the sponsor.
(4) Misallocations of the distribution of the fee in lieu of taxes on the project pursuant to this chapter may be corrected by adjusting later distributions, but these adjustments must be made in the same fiscal year as the misallocations. To the extent distributions are made improperly in previous years, a claim for adjustment must be made within one year of the distribution."
C. Section 4-29-67(C), (D)(4), (H), and (L)(3) of the 1976 Code, as last amended by Act 384 of 2006, is further amended to read:
"(C)(1) From the end of the property tax year in which the sponsor and the county execute an inducement agreement, the sponsor has five years in which to enter into an initial lease agreement with the county.
(2)(a) From the end of the property tax year in which the sponsor and the county execute the initial lease agreement, the sponsor has five years in which to complete its investment for purposes of qualifying for this section. If the sponsor does not anticipate completing the project within five years, the sponsor may apply to the county before the end of the five-year period for making the investment for an extension of time to complete the project. If the county agrees to grant the extension, it must be in writing, and a copy must be delivered to the department within thirty days of the date the extension was granted. The extension may not exceed five years. If a project receives an extension of less than five years, the sponsor may apply to the county before the end of the extension period for an additional extension of time to complete the project for an aggregate extension of not more than five years. Unless approved as part of the original lease documentation, the county council of the county may approve any extension by resolution, a copy of which must be delivered to the department within thirty days of the date the resolution was adopted.
(b) An extension of the five-year period in which to meet the minimum level of investment is not allowed. If the minimum level of investment is not met within five years, all property covered by the lease agreement or agreements reverts retroactively to the payments required by Section 4-29-60. The difference between the fee actually paid by the sponsor and the payment due pursuant to Section 4-29-60 is subject to interest, as provided in Section 12-54-25(D). To the extent necessary to determine if a sponsor or sponsor affiliate has met its investment requirements, any statute of limitation that might apply pursuant to Section 12-54-85 is suspended for all sponsors and sponsor affiliates and the department or the county may seek to collect any amounts that may be due pursuant to this section.
(c) Unless property qualifies as replacement property pursuant to a contract provision enacted pursuant to subsection (F)(2), property placed in service after the five-year period, or the ten-year period in the case of a project which has received an extension, is not part of the fee agreement pursuant to subsection (D)(2) and is subject to the payments required by Section 4-29-60 if the county has title to the property or ad valorem property taxes, if the sponsor has title to the property.
(d) For purposes of those businesses qualifying under subsection (D)(4), the five-year period referred to in this subsection is eight years. For those sponsors which, after qualifying pursuant to subsection (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 period is fifteen years.
(3) The annual fee provided by subsection (D)(2) is available for no more than twenty years for an applicable piece of property. The sponsor may apply to the county prior to the end of the twenty-year period for an extension of the fee period for up to ten years. The county council of the county may approve an extension by resolution upon a finding of substantial public benefit. A copy of the resolution shall be delivered to the department within thirty days of the date the resolution was adopted. 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 or, if extended as provided in this subsection, up to thirty years, for an aggregate maximum fee period of up to forty years to a maximum total of thirty years for the fee for a single project which has been granted an extension. For those sponsors qualifying under subsection (D)(4), the annual fee is available for no more than thirty years for an applicable piece of property and for those projects placed in service in more than one year, the annual fee is available for a maximum of an aggregate fee period of up to forty-three years or, for those sponsors qualifying pursuant to item (2)(d), forty-five years.
(4) During the time period allowed to meet the minimum investment level, the investor annually must inform the appropriate county official of the total amount invested."
"(D)(4)(a) The assessment ratio may not be lower than four percent:
( i) in the case of a single sponsor investing at least one hundred fifty million dollars, resulting in a total investment of at least three hundred million dollars when added to previous investments by a sponsor, and which is creating at least one hundred twenty-five new full-time jobs at the project;
(ii) in the case of a single sponsor investing at least four hundred million dollars and which is creating at least two hundred new full-time jobs at the project in this State;
(iii) in the case of a project that satisfies the requirements of Section 11-41-30(2)(a), and for which the Secretary of Commerce has delivered certification pursuant to Section 11-41-70(2)(a). business including a corporation, its subsidiaries, and its limited liability company members, that builds a project consisting of gas-fired combined-cycle power facility and invests at least four hundred million dollars and creates at least twenty-five full-time jobs as defined in Section 12-6-3360(M) at that project; or
(iv) in the case of a project that satisfies the requirements of Section 11-41-30(2)(a), and for which the Secretary of Commerce has delivered certification pursuant to Section 11-41-70(2)(a).
(b) The new full-time jobs requirement of this item does not apply in the case of a business that paid more than fifty percent of all property taxes actually collected in the county for more than the twenty-five years ending on the date of the lease inducement agreement.
(c) In an instance in which the governing body of a county has provided, by contractual agreement, for a change in fee in lieu of taxes arrangements conditioned on a future legislative enactment, a new enactment does not bind the original parties to the agreement unless the change is ratified by the governing body of the county."
"(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 sponsors or sponsor affiliates.
(2) An amendment or a replacement of an inducement agreement or millage rate agreement may not be used to lower the millage rate, discount rate, assessment ratio, or, except as provided in Sections 4-29-67(C)(2) and (C)(4) increase the term of the agreement; except that an existing inducement agreement that has not been implemented by the execution and delivery of a millage rate agreement or a lease agreement may be amended up to the date of execution and delivery of a millage rate agreement or a lease agreement in the discretion of the governing body."
"(L)(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) by providing a credit against or payment derived from the fee due from the sponsor. A direct payment of cash may not be made to a sponsor pursuant to these provisions."
D. 1. Section 12-36-2120(67) of the 1976 Code, as added by Act 384 of 2006, is amended to read:
"(67) effective July 1, 2011, construction materials used in the construction of a single new or expanded manufacturing and or distribution facility with a capital investment of at least one hundred million in real and personal property at a single site in the State over an eighteen-month period. The taxpayer must provide notice of the exemption, and the Department of Revenue may assess taxes owing in the manner provided in Section 12-36-2120(51)."
2. Notwithstanding the sales and use tax rates imposed pursuant to Chapter 36, Title 12 of the 1976 Code, the rate of tax imposed pursuant to that chapter on the gross proceeds of qualifying construction materials used in the construction of a new or expanded manufacturing or distribution facility, created by this section, is four percent for sales from July 1, 2007, through June 30, 2008, three percent for sales from July 1, 2008, through June 30, 2009, two percent for sales from July 1, 2009, through June 30, 2010, and one percent for sales from July 1, 2010, through June 30, 2011.
E. Section 12-44-10 of the 1976 Code is amended to read:
"Section 12-44-10. This act may be cited as the 'Fee in Lieu of Tax Simplification Act of 1997."
F. Section 12-44-30(7), (13), (14), and (20) of the 1976 Code, as last amended by Act 161 of 2005, is further amended to read:
"(7) 'Enhanced investment' means a project which results in a total investment:
(a) by a single sponsor of at least two hundred million dollars, resulting in a total investment of at least four hundred million dollars when added to the previous investments, and creating at least two hundred investing at least one hundred fifty million dollars and creating at least one hundred twenty-five new full-time jobs at the project; provided that the new full-time jobs requirement of this subsection does not apply to a taxpayer who paid more than fifty percent of all property taxes actually collected in the county for more than twenty-five years, ending on the date of the fee agreement;
(b) by a single sponsor investing at least four hundred million dollars and which is creating at least two hundred new full-time jobs at the project;
(c) by a single sponsor investing at least six hundred million dollars in this State;
(d) at least four hundred million dollars in the building of a project consisting of gas-fired combined-cycle power facility by a sponsor which creates at least twenty-five full-time jobs as defined in Section 12-6-3360(M) at that project and invests an additional five hundred million dollars in this State. The investment must be made by a sponsor which consists of a corporation, its subsidiaries, and its limited liability companies. The new full-time jobs requirement of this subsection does not apply to a taxpayer which paid more than fifty percent of all property taxes actually collected in the county for more than twenty-five years ending on the date of the fee agreement; or
(e) (c) that satisfies the requirements of Section 11-41-30(2)(a), and for which the Secretary of Commerce has delivered certification pursuant to Section 11-41-70(2)(a)."
"(13) 'Investment period' means the period beginning with the first day that economic development property is purchased or acquired and ending five years after the commencement date; except that for a project with an enhanced investment as described above, the period ends eight years after the commencement date. The minimum investment must be completed within five years of the commencement date. For an enhanced investment, the applicable minimum investment and job requirements under Section 12-44-30 (7) must be completed within eight years of the commencement date. For those sponsors that, after qualifying for the enhanced investment, have more than five hundred million dollars in capital invested in this State and employ more than one thousand people in this State, the investment period ends ten years after the commencement date. If the sponsor does not anticipate completing the project within this period these periods, the sponsor may apply to the county before the end of the investment period for an extension of time to complete the project. If the county agrees to an extension, it must do so in writing and furnish a copy of the extension to the department within thirty days of the date the extension was granted. The extension may not exceed five years in which to complete the project. The extension may not exceed five years. If a project receives an extension of less than five years, the sponsor may apply to the county before the end of the extension period for an additional extension of time to complete the project for an aggregate extension of not more than five years. Unless approved as part of the original fee documentation, the county council of the county may approve any extension by resolution, a copy of which must be delivered to the department within thirty days of the date the resolution was adopted. An extension is not allowed for the time period in which the sponsor must meet the minimum investment requirement."
"(14) 'Minimum investment' means a project that results in a total an investment by a sponsor of not less than five in the project of at least two and one-half million dollars within the investment period. If a county has an average annual unemployment rate of at least twice the state average during the last twenty-four month period based on data available on the most recent November first, the minimum investment is one million dollars. The department shall designate these reduced investment counties by December thirty-first of each year using data from the South Carolina Employment Security Commission and the United States Department of Commerce. The designations are effective for a sponsor whose fee agreement is signed in the calendar year following the county designation. For all purposes of this chapter, the minimum investment may include amounts expended by a sponsor or sponsor affiliate as a nonresponsible party in a voluntary cleanup contract on the property pursuant to Article 7, Chapter 56 of Title 44, the Brownfields Voluntary Cleanup Program, if the Department of Health and Environmental Control certifies completion of the cleanup. If the amounts under the Brownfields Voluntary Cleanup Program equal at least one million dollars, the investment threshold requirement of this chapter is deemed to have been met."
"(20) 'Termination date' means the date which is the last day of a property tax year which is the nineteenth year following the first property tax year in which an applicable piece of economic development property is placed in service; provided, however, that the sponsor may apply to the county prior to the termination date for an extension of the termination date beyond the nineteenth year up to ten years. The county council of the county shall approve any extension by resolution upon a finding of substantial public benefit. A copy of the resolution shall be delivered to the department within thirty days of the date the resolution was adopted. With respect to a fee agreement involving an enhanced investment, the termination date is the last day of a property tax year which is the twenty-ninth year following the first property tax year in which an applicable piece of economic development property is placed in service. If the fee agreement is terminated in accordance with Section 12-44-140, the termination date is the date the agreement is terminated."
G. Section 12-44-40(E) and (J) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(E) If a fee agreement is not executed within five years after action by the county identifying or reflecting the project, the inducement resolution is adopted by the county council, the real property or tangible personal property of a sponsor for which expenditures have been incurred by the sponsor with respect to the project do not qualify as economic development property. An action includes an inducement resolution adopted by the county council of the county."
"(J)(1) Upon agreement of the parties, and except as provided in item (2), a fee agreement may be amended or terminated and replaced with regard to all matters, including the addition or removal of sponsors or sponsor affiliates.
(2) An amendment or replacement of a fee agreement may not be used to lower the millage rate, discount rate, assessment ratio, or, except as provided in Sections 12-44-30(13) and (20), increase the term of the agreement."
H. Section 12-44-70 of the 1976 Code, is amended to read:
"Section 12-44-70. (A) If allowed by the fee agreement and subject to any limitations and conditions contained in the fee agreement, a sponsor may take a credit against the fee established in Section 12-44-50(A)(1) and (3) over the term specified in the fee agreement to offset improvement costs, except that a direct payment of cash must not be made to the sponsor:
(1) for a project not located in an industrial development park, to the extent that the cumulative credit taken does not exceed the lesser of:
(a) the improvement costs of the project; or
(b) the county's share of fees distributed from the project under Section 12-44-80(A).
A municipality or special purpose district that would otherwise receive a distribution of fee in lieu of taxes under Section 12-44-80(A), may agree to allow to a sponsor a credit against the fee established in Section 12-44-50(A)(1) or (A)(3) in an amount not exceeding the share of the fee in lieu of taxes that would have been distributed to the municipality or special purpose district with respect to the sponsor's project; or
(2) for a project located within an industrial development park, to the extent that the cumulative credit taken does not exceed the lesser of:
(a) the improvement costs of the project; or
(b) the total amount of fees the county is entitled to retain under the industrial development park agreement.
(B) For purposes of this section, improvement costs include the cost of designing, acquiring, constructing, improving, or expanding:
(1) the infrastructure serving the project; and
(2) improved and unimproved real property, buildings, and structural components of buildings used in the operation of a project in order to enhance economic development.
A county, municipality, or special purpose district that receives and retains revenues from a payment in lieu of taxes may use a portion of the revenues for the purposes outlined in Section 4-29-68 without the requirements of issuing special source revenue bonds or complying with Section 4-29-68(A)(4) by providing a credit against or payment derived from the fee due from a sponsor."
I. 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.
J. The General Assembly finds that the sections presented in this act constitute one subject as required by Article III, Section 17 of the South Carolina Constitution, in particular finding that each change and each topic relates directly to or in conjunction with other sections to the subject of tort and other civil action reform as clearly enumerated in the title.
The General Assembly further finds that a common purpose or relationship exists among the sections, representing a potential plurality but not disunity of topics, notwithstanding that reasonable minds might differ in identifying more than one topic contained in the act.
K. This SECTION takes effect upon approval by the Governor.
SECTION 8. Section 12-6-3360(A) of the 1976 Code is amended to read:
"(A) Taxpayers that operate manufacturing, tourism, processing, warehousing, distribution, research and development, corporate office, qualifying service-related facilities, extraordinary retail establishment, qualifying technology intensive facilities, and banks as defined pursuant to this title are allowed an annual job tax credit as provided in this section. In addition, taxpayers that operate retail facilities and service-related industries qualify for an annual jobs tax credit in counties designated as least developed or distressed, and in counties that are under developed and not traversed by an interstate highway. As used in this section, "corporate office" includes general contractors licensed by the South Carolina Department of Labor, Licensing and Regulation. Credits pursuant to this section may be claimed against income taxes imposed by Section 12-6-510 or 12-6-530, bank taxes imposed pursuant to Chapter 11 of this title, 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 income tax, bank tax, or insurance premium tax liability. In computing a tax payable by a taxpayer pursuant to Section 38-7-90, the credit allowable pursuant to this section must be treated as a premium tax paid pursuant to Section 38-7-20."
SECTION 9. Section 12-37-220 of the 1976 Code is amended by adding an appropriately numbered item at the end to read:
"( ) Real property not subject to property tax, leased by a state agency, county, municipality, other political subdivision, or other state entity to an entity that would not be subject to property tax if the entity owned the property."
SECTION 10. Notwithstanding any other provision of law, a county council by ordinance may delay implementation of values in a countywide assessment and equalization plan scheduled for the current tax year until property tax year 2008. The provisions of this section do not alter the index of taxpaying ability as defined in Section 59-20-20(3).
SECTION 11. This act takes effect upon the approval by the Governor, and is applicable for tax years beginning after 2007, except for SECTION 5, relating to Section 12-6-3415(A), which is applicable for tax years beginning after 2006, and SECTION 6, relating to Section 12-20-105, which is applicable for tax years beginning after 2003.
This web page was last updated on Monday, June 22, 2009 at 2:44 P.M.