| Printed Page 1060, Feb. 28 | Printed Page 1080, Feb. 28 |

Amend the bill, as and if amended, by striking all after the enacting words and inserting:

/SECTION 1. Title 12 of the 1976 Code is amended by adding:

Section 12-10-10. This chapter may be cited as the Enterprise Zone Act of 1995.

Section 12-10-20. The General Assembly finds:

(1) that the economic well-being of the citizens of the State will be enhanced by the increased development and growth of industry within the State and that it is in the best interest of the State to induce the location or expansion of manufacturing, processing, distribution, warehousing, research and development, corporate offices, and certain tourism facilities within the State in order to promote the public purpose of creating new jobs within the State;

(3) the powers to be granted to the Coordinating Council for Economic Development by this chapter and the purposes to be accomplished are proper governmental and public purposes and that the inducement of the location or expansion of manufacturing, processing, distribution, warehousing, research and development, corporate offices, and certain tourism facilities within the State is of paramount importance.

Section 12-10-30. As used in this chapter:

(1) `council' means the Advisory Coordinating Council for Economic Development;

(2) `department' means the South Carolina Department of Revenue and Taxation;

(3) `manufacturing' means engagement primarily in an activity or activities listed under the Standard Industrial Classification (SIC) codes 20 through 39 according to the federal Office of Management and Budget;

(4) `qualifying business' means an employer that meets the requirements of Section 12-10-50 and other applicable requirements of this chapter, and enters into a revitalization agreement with the council to undertake a project under the provisions of this chapter;

(5) `project' means an investment for one or more purposes in Section 12-10-80(B) needed for a qualifying business to locate, remain, or expand in an enterprise zone and otherwise fulfill the requirements of this chapter.

Section 12-10-40. Annually, by December thirty-first, using the most current data available, the council shall designate the enterprise zones within this State as provided in this section. Each enterprise zone must meet one of the following criteria:

(1) consist of a census tract in which either the median household income is eighty percent or less of the state average, or at least twenty percent of households are below the poverty level according to the most recent United States census;

(2) consist of a county classified as less developed pursuant to Section 12-7-1220;

(3) be located in a federal military base or installation which was closed, or designated to be closed or in a federal facility in which the permanent employment was reduced by three thousand or more jobs after December thirty-first, 1990;

(4) consist of a census tract with at least one hundred manufacturing jobs, at least fifty percent of which are textile and apparel jobs; or

Section 12-10-50. To qualify for the benefits provided in this chapter, a business must be located within an enterprise zone and satisfy the following criteria:

(1) it must be primarily engaged in a business of the type identified in Section 12-7-1220;

(2) it shall provide a benefits package to full-time employees which includes health care; and

(3) it shall enter into a revitalization agreement which is approved by the council, except that no revitalization agreement is required for a qualifying business with respect to Sections 12-10-70(2), 12-10-70(3) and 12-10-80(D).

The council shall determine that the available incentives are appropriate for the project, and the council shall certify to the department that the total benefits of the project exceed the costs to the public, and that the qualifying business otherwise fulfills the requirements of this chapter. No provision of this chapter must be construed to allow the council to negotiate a fee-in-lieu of property taxes agreement or approve job training or retraining.

Section 12-10-60. The council shall enter into a revitalization agreement with each qualifying business with respect to the project. The terms and provisions of each revitalization agreement must be determined by negotiations between the council and the qualifying business. The revitalization agreement must set a date by which the qualifying business shall have completed the project. Within three months of the completion date, the qualifying business shall document the actual costs of the project in a manner acceptable to the council.

Section 12-10-70. Qualifying businesses are entitled to the following benefits in addition to all others provided by law:

(1) If at least fifty-one percent of the full-time employees hired for the project either reside in an enterprise zone at the time of employment, have a household income that is eighty percent or less of the median household income for the county prior to employment, or have been a recipient of

(2) The qualifying business is eligible for the benefits provided in Section 4-29-67 if it meets one-half of the quantitative requirements of that section.

(3) The business is eligible to use the special source revenue bonds authorized under Sections 4-29-68 and 4-1-175.

Section 12-10-80. (A) Upon certification by the council to the department of the council's determination that a business is a qualifying business certification for a qualifying business, a qualifying business may require, as a condition of employment, that each person whose job was created as a result of the project, agree to permit the qualifying business to deduct and withhold in an escrow account a job development fee from the gross wages paid to the employee by the qualifying business. Job development fees may not be collected from persons employed by a qualifying business before the entry by the qualifying business into a revitalization agreement. If a qualifying business elects to collect a job development fee, it shall deduct the job development fee from the paycheck of each new employee and shall make its payroll books and records available for inspection by the council or the department at the times the council or the department may request. Each qualifying business collecting a job development fee shall file with the council and the department the information and documentation respecting the imposition and collection of the job development fee according to the revitalization agreement. Each qualifying business collecting a job development fee is allowed a credit against the withholding tax liability provided in Chapter 9 of this title otherwise owed to the State, the credit not to exceed the lesser of the amount of such tax or the aggregate job development fees withheld.

(B) A qualifying business may collect a job development fee under the revitalization agreement for a period not to exceed fifteen years. The qualifying business may expend funds from the escrow account pursuant to the plan revitalization agreement and as provided below for any of the following purposes:

(1) training costs and facilities;

(2) acquiring and improving real estate;

(4) fixed transportation facilities including highway, rail, water, and air; and

(5) construction or improvements of any real property and fixtures constructed or improved primarily for the purpose of complying with local, state, or federal environmental laws or regulations.

(C) The total amount withheld from the new employee's wages and expended by the qualifying business shall not exceed the following gross wages of the employee:

(1) two percent if the gross wages of the employee are equivalent to six dollars or more an hour but less than eight dollars an hour;

(2) three percent if the gross wages of the employee are equivalent to eight dollars or more an hour but less than ten dollars an hour;

(3) four percent if the gross wages of the employee are equivalent to ten dollars or more an hour but less than fifteen dollars an hour; and

(4) five percent if the gross wages of the employee are equivalent to fifteen dollars or more an hour.

The hourly gross wage figures set forth in this section must be adjusted annually by the federal consumer price index, selected by the council, for the most recent calendar year.

(D) Any qualifying business in an enterprise zone may negotiate with the council for the withholding of job development fees of up to five hundred dollars an employee a year for the purpose of retraining production employees, where this retraining is necessary for the qualifying business to remain competitive or to introduce new technologies. This retraining must be approved by and performed by the technical college under the jurisdiction of the State Board for Technical and Comprehensive Education serving the designated enterprise zone. Withholdings and expenditures under this section may not exceed five hundred dollars in a year nor exceed two thousand dollars over five years and the qualifying business must match on a dollar for dollar basis the employee's withholding share which is paid to the local technical college providing the training. The total amount withheld and the matching pursuant to this section must be paid to the technical college that provides the training to defray the cost of the training program. Any training cost in excess of the job development fees and matching funds is the responsibility of the qualifying business based on negotiations with the technical college.

(E) Each employee who has been assessed a job development fee as provided in this section is allowed a credit against the employee's state income taxes in an amount equal to one hundred percent of the job

(F) Any job development fee of a qualifying business permanently lapses upon expiration or termination of the revitalization agreement. In the event of termination, the council shall direct the qualifying business to suspend immediately the assessment of wages or the spending of funds from the escrow account, and the department may direct the transmittal of such funds to the department as withholding taxes.

Section 12-10-90. If a qualifying business fails to achieve the level of capital investment or employment set forth in the revitalization agreement, the department may terminate the revitalization agreement and reduce or suspend all or any part of the incentives until the time the anticipated capital investment and employment levels are met. However, these incentives must not be suspended retroactively. The council will provide in the revitalization agreement entered into in connection with a project for the levels of capital investment and employment expected to be achieved and for the time period in which the levels must be achieved.

Section 12-10-100. (A) The council shall establish criteria for the determination and selection of qualifying businesses and the approval of revitalization agreements. These criteria must give greatest weight to the creditworthiness of the business, the number, type, and quality of new jobs to be provided by the project to residents of this State, and the economic viability of the business. The council may include in its criteria requirements relating to the capital costs of, and projected employment to be produced by, projects eligible for financing under this chapter and requirements relating to the employment of previously unemployed or underemployed persons.

With respect to each business and project, the council shall request the materials and make the inquiries necessary to determine whether the business and its proposed project satisfy the council's announced criteria and to conduct an adequate cost/benefit analysis with respect to the proposed project and the incentives proposed to be granted by the council with respect to the project. After a review of the relevant materials and completion of its inquiries and analysis, the council may by resolution of its members designate an applicant business as a qualifying business and authorize the undertaking of its project according to the revitalization agreement.

(C) The council shall establish an application fee schedule, not to exceed two thousand dollars for each qualifying business, for undertaking the provisions of this chapter. The State Treasurer shall establish an account for these fees which must be expended by the council only for meeting administrative, data collection, credit analysis, costs/benefits analysis, reporting, and any other obligations pursuant to this chapter. This account may retain funds for expenditure in the next fiscal year only for purposes enumerated in this section.

(D) By March first of each year, the council shall prepare a public document that itemizes revitalization agreements concluded during the prior calendar year. The report shall list each agreement, the results of each costs/benefits analysis, and receipts and expenditures of application fees. This document must be forwarded to the State Budget and Control Board, Senate Finance Committee, and House Ways and Means Committee. This document may not contain any proprietary or confidential information that is otherwise exempt under the South Carolina Freedom of Information Act, and nothing in this section must be construed to require the release of such exempt information.

Section 12-10-110. This chapter must be liberally construed in conformity with the findings provided in Section 12-10-20."

SECTION 2. This act takes effect upon approval by the Governor./

Amend title to conform.

Rep. HARRELL explained the amendment.

Rep. HARRELL spoke in favor of the amendment.

The amendment was then adopted.

Reps. WILKINS and HARRELL proposed the following Amendment No. 2 (Doc Name L:\council\legis\amend\JIC\5472HTC.95), which was adopted.

Amend the Report of the Committee on Ways and Means, as and if amended, page 3534-2, line 4, by striking /the/ and inserting /the Advisory/.

Amend title to conform.

Rep. HARRELL explained the amendment.

The amendment was then adopted.

Amend the Report of the Committee on Ways and Means, as and if amended, page 3534-7, by inserting immediately after line 31:

/(E) The council is exempt from Chapter 23 of Title 1 through January 31, 1996./

Amend title to conform.

Rep. HARRELL explained the amendment.

Rep. SHEHEEN spoke against the amendment.

Rep. HARRELL spoke in favor of the amendment and moved to adjourn debate upon the amendment, which was adopted.

Rep. COBB-HUNTER proposed the following Amendment No. 5 (Doc Name L:\council\legis\amend\PFM\7211AC.95).

Amend the bill, as and if amended, SECTION 1, Section 12-10-70(1), Page 3534-4, line 10, by inserting after /employment./:

/A job tax credit granted under this item must be recaptured from the employer if the person for whom the tax credit was granted is not employed by the employer one year after the ending date of the period for which the tax credit was granted. The Department of Revenue and Taxation shall develop regulations to implement this item./

Amend title to conform.

Rep. COBB-HUNTER explained the amendment and moved to adjourn debate upon the amendment, which was adopted.

Rep. COBB-HUNTER proposed the following Amendment No. 6 (Doc Name L:\council\legis\amend\GJK\21489AC.95), which was tabled.

Amend the bill, as and if amended, in Section 12-10-50(2) of the 1976 Code as contained in SECTION 1, page 3534-3, line 20, after /care/ by inserting /with benefits at least equal to those offered to state employees/

Renumber sections to conform.

Amend totals and title to conform.

Rep. COBB-HUNTER explained the amendment.

Rep. HARRELL moved to table the amendment, which was agreed to.

The SPEAKER granted Rep. HINES a leave of absence for the remainder of the day.

Amend the bill, as and if amended, in Section 12-10-50 of the 1976 Code as contained in SECTION 1, on page 3534-3, line 29, after /chapter./ by inserting /In counting benefits, the council may not include the employment of persons who would otherwise be employed in the same or other places of employment. In counting costs, the council must count, in addition to direct costs, all indirect costs of the project including, but not limited to, costs of required new infrastructure, such as roads, schools, water, and sewer systems, required new social services and tax expenditures, such as manufacturer's abatements, and environmental impacts including, but not limited to toxic and hazardous waste management, monitoring storage and cleanup, and the effects or the quality of life of environmental degradation from the project./

Renumber sections to conform.

Amend totals and title to conform.

Rep. COBB-HUNTER explained the amendment.

Rep. HARRELL moved to table the amendment, which was agreed to.

Rep. CAVE proposed the following Amendment No. 8.

Any existing business which has a reduction in force of 10 or more employees within the pass 12 month period shall not be eligible for the tax benefit of this act.

Rep. CAVE explained the amendment and moved to adjourn debate upon the amendment, which was adopted.

Rep. COBB-HUNTER proposed the following Amendment No. 10 (Doc Name L:\council\legis\amend\JIC\5483AC.95), which was tabled.

Amend the bill, as and if amended, in Section 1 by adding at the end of Section 12-10-80(E):

/Each employer who deducts job employment fees annually by February first shall provide to each employee from whose wages the fee has been deducted a statement separately setting forth all deductions and a description of the process for claiming the credit on their state income tax returns and the description must be written at no higher than the sixth grade level./

Amend totals and title to conform.

Rep. COBB-HUNTER explained the amendment.

Rep. COBB-HUNTER spoke in favor of the amendment.

Rep. HARRELL moved to table the amendment, which was agreed to.

Rep. S. WHIPPER proposed the following Amendment No. 11, which was tabled.

That 20 percent of total number of jobs come from the following groups:

All families whose income for the five years prior to employment/job availability meet the national suggested poverty guidelines.

Rep. S. WHIPPER explained the amendment and moved to adjourn debate upon the amendment.

Rep. HARRELL moved to table the amendment, which was agreed to.

Rep. CARNELL proposed the following Amendment No. 12 (Doc Name L:\council\legis\amend\JIC\5485HTC.95), which was adopted.

Amend the Report of the Committee on Ways and Means, as and if amended, page 3534-3, by striking lines 11 through 13 and inserting:

/the tract at the time the layoff occurred. The job loss shall have occurred no more than five years prior to the effective date of this chapter, except in any census tract where a catastrophic loss of one thousand or more jobs from a single employer has occurred since 1980 and fewer than half the job losses have been replaced. Any such tract will remain an enterprise zone until at least half the catastrophic job losses have been replaced. Where a municipality in which the catastrophic job loss occurred is split by census tracts, each tract containing any part of the municipality meets the catastrophic job loss criteria./

Amend title to conform.

Rep. HARRELL explained the amendment.

The amendment was then adopted.

Reps. BOAN, THOMAS and HODGES proposed the following Amendment No. 13, which was tabled.

Add to Section 12-10-40 at page 3534, line 13, the following new subsection (6):

(6) Located in a county without an interstate highway.

Rep. HODGES explained the amendment.

Rep. HARRELL spoke against the amendment.

| Printed Page 1060, Feb. 28 | Printed Page 1080, Feb. 28 |