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(B) The department shall rank and designate the state's counties by December thirty-first each year using data from the South Carolina Employment Security Commission and the United States Department of Commerce. The counties are ranked using data from the most recent thirty-six month period with equal weight given to unemployment rate and per capita income as follows:

(1) The sixteen twelve counties with a combination of the highest unemployment rate and lowest per capita income are designated less least developed counties.

(2) The fifteen twelve counties with a combination of the next highest unemployment rate and next lowest per capita income are designated moderately under developed counties.

(3) The fifteen eleven counties with a combination of the lowest next highest unemployment rate and the highest next lowest per capita income are designated moderately developed counties.

(4) The eleven counties with a combination of the lowest unemployment rate and the highest per capita income are designated developed counties. The designation by the department is effective for corporate taxable years which begin after the date of designation.

(5)(a) A county, any portion of which is located within twenty miles of the boundaries of an applicable military installation or applicable federal facility as defined in Section 12-6-3450(1), shall receive the benefits of the next increased credit designation for five years beginning with the year in which the military installation or federal facility became an applicable military installation or applicable federal facility as defined in Section 12-6-3450(1), with the additional requirement that the military installation must have reduced employment on the installation of at least three thousand employees.

(C) Subject to the conditions provided in subsection (N) of this section, a job tax credit is allowed for five years beginning in year two after the creation of the job for each new full-time job created if the minimum level of new jobs is maintained. The credit is only available to taxpayers that increase employment by ten or more full-time jobs, and no credit is allowed for the year or any subsequent year in which the net employment increase falls below the minimum level of ten. The amount of the initial job credit and the minimum level of new jobs required is as follows:

(1) One Four thousand five hundred dollars for each new full-time job created in less least developed counties. The credit is only available to taxpayers that increase employment by ten or more, and no credit is allowed for the year or any subsequent year in which the net employment increase falls below the minimum level of ten.

(2) Six Three thousand five hundred dollars for each new full-time job created in moderately under developed counties. The credit is only available to taxpayers that increase employment by eighteen or more, and no credit is allowed for the year or any subsequent year in which the net employment increase falls below the minimum level of eighteen.

(3) Three Two thousand five hundred dollars for each new full-time job created in moderately developed counties. The credit is only available to taxpayers that increase employment by fifty or more, and no credit is allowed for the year or any subsequent year in which the net employment increase falls below the minimum level of fifty.

(4) One thousand five hundred dollars for each new full-time job created in developed counties.

(D) If the taxpayer qualifying for the new jobs credit under subsection (C) creates additional new full-time jobs in years two through six, the taxpayer may obtain a credit for those new jobs for five years following the year in which the job is created. The amount of the credit for each new full-time job is the same as provided in subsection (C).

(E) Taxpayers which qualify for the job tax credit provided in subsection (C) and which are located in a business or industrial park jointly established and developed by a group of counties pursuant to Section 13 of Article VIII of the Constitution of this State are allowed:

(2) an additional five hundred one thousand dollar credit for each new full-time job created. This additional credit is permitted for five years beginning in the taxable year following the creation of the job.

(F) The number of new and additional new full-time jobs is determined by comparing the monthly average number of full-time employees subject to South Carolina income tax withholding in the applicable county for the taxable year with the monthly average in the prior taxable year. For purposes of calculating the monthly average number of full-time employees in the first year of operation in this State, a taxpayer may use the actual months in operation or a full twelve-month period. If a taxpayer's business is only in operation for less than twelve months a year, the number of new and additional new full-time jobs is determined using the monthly average for the months the business is in operation.

(G) Except for credits carried forward under subsection (H), the credits available under this section are only allowed for the job level that is maintained in the taxable year that the credit is claimed. If the job level for which a credit was claimed decreases, the five-year period for eligibility for the credit continues to run.

(H) A credit claimed under this section but not used in a taxable year may be carried forward fifteen years from the taxable year in which the credit is earned by the taxpayer. Credits which are carried forward must be used in the order earned and before jobs credits claimed in the current year.

(I) The merger, consolidation, or reorganization of a taxpayer where tax attributes survive does not create new eligibility in a succeeding taxpayer, but unused job tax credits may be transferred and continued by the succeeding taxpayer subject to the limitations of Section 12-6-3320. In addition, a taxpayer may assign its rights to its jobs tax credit to another taxpayer if it transfers all, or substantially all, of the assets of the taxpayer or all, or substantially all, of the assets of a trade or business or operating division of a taxpayer related to the generation of the jobs tax credits to that taxpayer if the required number of new jobs is maintained for that amount of credit. No taxpayer is allowed a jobs tax credit if the net employment increase for that taxpayer falls below ten for a less developed county, eighteen for a moderately developed county, or fifty for a developed county. The appropriate agency shall determine whether or not qualifying net increases or decreases have occurred and may require

(J) For a taxpayer which plans a significant expansion in its labor forces at a location in this State, the appropriate agency shall prescribe certification procedures to ensure that the taxpayer can claim credits in future years even if a particular county is removed from the list of less least developed, under developed or moderately developed counties.

(K) (1) In addition to those credits allowed under subsection (C) of this section a corporation, partnership, or limited liability company that qualifies for a credit under this section as an S corporation, partnership, or limited liability company, entitles each shareholder of the S corporation, partner of the partnership, or member of the limited liability company to a nonrefundable credit against taxes imposed pursuant to Section 12-6-510.

(2) The amount of the credit allowed a shareholder, partner, or owner of a limited liability company by this subsection is equal to the shareholder's percentage of stock ownership, partner's interest in the partnership, or member's interest in the limited liability company for the taxable year multiplied by the amount of the credit the taxpayer would have been entitled to if it were taxed as a corporation.

(3) A credit claimed under this subsection but not used in a taxable year may be carried forward for ten fifteen years from the close of the tax year in which the credit is earned by the S corporation, partnership, or limited liability company. However, the credit established by this section taken in one tax year may not exceed fifty percent of the taxpayer's tax liability under Section 12-6-510.

(L) Notwithstanding any other provision of this section, a county with a population under twenty thousand as determined by the 1990 United States Census shall receive the next increased credit designation is considered a less developed county for purposes of the credit allowed by this section.

(M) As used in this section:

(1) `Taxpayer' means a sole proprietor, partnership, corporation of any classification, limited liability company, or association taxable as a business entity which is subject to South Carolina taxes as contained in Sections 12-6-510 and 12-6-530 and Chapter 7 of Title 38.

(2) `Appropriate agency' means the Department of Revenue and Taxation for corporations subject to tax under Section 12-6-530 and the Department of Insurance for corporations subject to the premium tax under Chapter 7 of Title 38.

(4) `Full-time' means a job requiring a minimum of thirty-five hours of an employee's time a week for the entire normal year of company operations or a job requiring a minimum of thirty-five hours of an employee's time for a week for a year in which the employee was hired initially for or transferred to the South Carolina facility. For the purposes of this section, two half-time jobs are considered one full-time job. A `half-time job' is a job requiring a minimum of twenty hours of an employee's time a week for the entire normal year of the company's operations or a job requiring a minimum of twenty hours of an employee's time a week for a year in which the employee was hired initially for or transferred to the South Carolina facility.

(5) `Manufacturing facility' means an establishment where tangible personal property is produced or assembled.

(6) `Processing facility' means an establishment engaged in services such as manufacturing-related, computer-related, communication-related, energy-related, or transportation-related services, but the term `processing facility' does not include an establishment where retail sales of tangible personal property or services are made to retail customers. The term also includes a business entity engaged in processing agricultural, aquacultural, or maricultural products.

(7) `Warehousing facility' means an establishment where tangible personal property is stored but does not include any establishment where retail sales of tangible personal property are made to retail customers.

(8) `Distribution facility' means an establishment where shipments of tangible personal property are processed for delivery to customers. The term does not include an establishment where retail sales of tangible personal property are made to retail customers except for a facility which processes customer sales orders by mail, telephone, or electronic means,

(9) `Research and development facility' means an establishment engaged in laboratory, scientific, or experimental testing and development related to new products, new uses for existing products, or improving existing products. The term does not include an establishment engaged in efficiency surveys, management studies, consumer surveys, economic surveys, advertising, promotion, or research in connection with literary, historical, or similar projects.

(10) `Corporate office facility' means the location where corporate managerial, professional, technical, and administrative personnel are domiciled, and employed, and where corporate financial, personnel, legal, technical, support services, and other business functions are handled. Support services include, but are not limited to, claims processing, data entry, word processing, sales order processing, and telemarketing. The term does not include an establishment where retail sales of tangible personal property or retail services are made to retail customers except for a facility which processes customer sales orders by mail, telephone, or electronic means, if the facility also processes shipments of tangible personal property to customers and if at least seventy-five percent of the dollar amount of goods sold through the facility are sold to customers outside of this State.

(11) The terms `retail sales' and `tangible personal property' for purposes of this section are defined in Chapter 36 of this title.

(12) `Tourism facility' means an establishment used for a theme park; amusement park; historical, educational, or trade museum; botanical garden; cultural center; theater; motion picture production studio; convention center; arena; auditorium; hotels; motels; or a spectator or participatory sports facility; and similar establishments where entertainment, education, or recreation is provided to the general public. Tourism facility also includes new hotel and motel construction, except that to qualify for the credits allowed by this section and regardless of the county in which the facility is located, the number of new jobs that must be created by the new hotel or motel is twenty or more. It does not include that portion of an establishment where retail merchandise or retail services are sold directly to retail customers.

(13) `Certain health services' means engagement in an activity or activities listed under the Standard Industrial Classification (SIC) Code 80

(N) The maximum aggregate credit that may be claimed in any tax year for a single employee under this section and Section 12-6-3470(A)(1) is five thousand five hundred dollars."

B. The amendments to Section 12-6-3360 of the 1976 Code as amended by this section are effective for taxable years beginning after 1995, and in the case of qualifying jobs created after 1995, these jobs are not subject to a pre-existing revitalization agreement. For the purposes of Section 12-6-3360(B)(5) of the 1976 Code as amended by this section, the five-year period begins at the later of the date specified in Section 12-6-3360(B)(5) or the general effective date of this act.

SECTION 12. A. Section 12-6-3440 of the 1976 Code, as last amended by Act 40 of 1995, is further amended to read:

"Section 12-6-3440. (A) A taxpayer who employs persons who are residents of this State in any capacity may claim as a credit against his state income tax, bank tax, or premium tax liability an amount equal to fifty percent of his capital expenditures in this State but no more than one hundred thousand dollars for costs incurred in establishing a child care program for his employees. A credit claimed under this section, but not used or available for use in a taxable year, may be carried forward for the next ten taxable years from the close of the tax year in which the expenditures are made until the amount of the credit is taken.

(B) For purposes of this section, `expenditures for costs incurred in establishing a child care program' includes, but is not limited to, expenditures, including mortgage or lease payments, for playground and classroom equipment, kitchen appliances, cooking equipment, real property, including improvements in this State, and donations to a nonprofit corporation as defined in Internal Revenue Code Section 501(c)(3) for purposes of establishing a child care program. If credit is taken for donations by a corporation, a deduction to arrive at the net income of the corporation is not allowed. The program and operation of the program must meet the licensing, registration, or certification standards prescribed by law.

(C) The taxpayer under subsection (A) also is allowed as a credit against his state income tax, bank tax, or premium tax liability an amount not exceeding fifty percent of the child care payments incurred by the taxpayer to operate a child care program for his employees in this State, or made directly to licensed or registered independent child care facilities in the name of and for the benefit of an employee in this State of the taxpayer, which employee's children are kept at the facility during the

(E) The credits established by this section taken in any one tax year are also limited to an amount not greater than fifty percent of a taxpayer's state income tax, bank tax, or premium tax liability for that year.
(A)(1) A taxpayer located in this State may claim a credit against state income tax, bank tax, or premium tax liability for all expenditures incurred, acting independently or jointly with others, in establishing a child care program in this State for children of employees in this State.
(2) The amount of the credit is equal to fifty percent of all the expenditures incurred, but may not exceed a maximum of one hundred thousand dollars in total. Any unused credit may be carried forward for ten years.

(B) For purposes of this section, `expenditures incurred in establishing a child care program', include:

(1) payments of mortgage and lease expenses for child care facilities;

(2) payments for playground and classroom equipment;

(3) payments for kitchen appliances and cooking equipment;

(4) payments for real property located in this State, including any improvements thereto that are used to provide child care facilities; and,

(5) donations to a nonprofit corporation as defined in Internal Revenue Code Section 501(c)(3) for purposes of establishing a child care program in this State.

(E) For purposes of the credit allowed by items(C)(1) above, the taxpayer is required to retain information concerning the child care facility's federal identification number, license or registration number, payment amount, and in whose name and for whose benefit the payments were made or reimbursed."

B. This section is effective for tax years beginning after 1995.

SECTION 13. A. Items (1), (2), and (4) of Section 12-6-3450(A) of the 1976 Code, as added by Act 76 of 1995, are amended to read:

"(1)(a) `Applicable federal military installation' means a federal military installation or other facility which is closed or realigned under:

(b)(ii) Title II of the Defense Authorization Amendments and Base Closure and Realignment Act; or

(c)(iii) Section 2687 of Title 10, United States Code.

(b) `Applicable federal facility' means a federal facility that has reduced its permanent employment by three thousand or more jobs after December 31, 1990.

(2) `Economic impact region' means a county or municipality, any portion of which is located within twenty-five miles of the boundaries of an applicable federal military installation or applicable federal facility, and any area not otherwise included as part of the economic impact region if the Division of State Development of the Department of Commerce determines the area to be adversely impacted by the closing or realignment of an applicable federal military installation or applicable federal facility;

(4)(a) `Qualified wages' include, with respect to an individual, only wages attributable to services rendered during the one year beginning with the day the individual first works for an employer after becoming a terminated employee.

(b) Qualified wages for a taxable year may not exceed seven ten thousand dollars.

(c) Qualified wages do not include wages paid for services performed as an employee of the federal government or an agency or instrumentality of the federal government."

B. This section is effective for taxable years beginning after 1995.

SECTION 14. A. Section 12-6-3470 of the 1976 Code, as added by Act 102 of 1995, is amended to read:

"Section 12-6-3470. (A) A taxpayer, who employs a person who within twelve months of becoming employed received Aid to Families with Dependent Children and who continuously has remained employed for twelve months is allowed a credit against taxes due under this chapter for wages paid to the employee in an amount equal to payments within this State for three months before becoming employed is eligible for an income tax credit of:

(1) twenty percent of the wages up to five thousand dollars paid for the first year to the employee for each full month of employment for the first twelve months of employment;

(2) fifteen percent of the wages up to five thousand dollars paid for the second year to the employee for each full month of employment during the second twelve months of employment;

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