| Printed Page 3800, June 26 | Printed Page 3820, June 27 |

There was no objection.

The Senate proceeded to a consideration of the Bill. The question being the third reading of the Bill.

Senator ELLIOTT moved to carry over the Bill.

Senator McCONNELL moved to table the motion to carry over the Bill.

The motion to carry over was laid on the table.

Senator ELLIOTT spoke on the Bill.

There being no further amendments, the Bill was read the third time, passed and ordered returned to the House of Representatives with amendments.

The Senate resumed consideration of H. 5108. The question being the adoption of the Resolution.

Senator McCONNELL spoke on the Resolution.

Senator McCONNELL proposed the following Amendment No. 1 (5108R003.GFM), which was adopted:

Amend the resolution, as and if amended, line 41, by striking / . / and inserting in lieu thereof the following:

/ ; /

Amend the resolution further, as and if amended, after line 41, by adding an appropriately numbered new item to read:

/( ) consideration of H.4861, including the receipt of and action on any conference or free conference reports;

( ) consideration of H.4396, including the receipt of and action on any conference or free conference reports;/

Amend the resolution further, page 2, by striking lines 3 and 4, and inserting in lieu thereof the following:

/die upon the conclusion of the business provided for herein unless further provided for by concurrent resolution adopted by a majority vote of/

Renumber sections to conform.

Senator McCONNELL explained the amendment.

Senator McCONNELL moved that the amendment be adopted.

The amendment was adopted.

H. 5108 was adopted, ordered returned to the House with amendments.

H. 5111 -- Reps. Baxley, Neilson and J. Hines: A CONCURRENT RESOLUTION TO EXPRESS THE SINCERE CONGRATULATIONS OF THE MEMBERS OF THE GENERAL ASSEMBLY OF THE STATE OF SOUTH CAROLINA TO THE TOWN OF HARTSVILLE ON THE OCCASION OF BEING NAMED ONE OF THE TEN WINNERS OF THE 1996 ALL-AMERICA CITY AWARD BY THE NATIONAL CIVIC LEAGUE AND TO EXPRESS GRATITUDE TO THE CITIZENS, TOWN OFFICIALS, AND BUSINESSES OF HARTSVILLE FOR THEIR TIRELESS EFFORTS TO IMPROVE OUR STATE.

The Concurrent Resolution was adopted, ordered returned to the House.

H. 4706 -- Reps. Wilkins, Kennedy, Harrell, Hutson, Neilson, S. Whipper, J. Hines, Harvin, Howard, Askins, White, Fleming, Jennings, Keegan, Anderson, L. Whipper, M. Hines, Cobb-Hunter, Breeland, Neal, Young-Brickell, Easterday, J. Harris, Koon, Meacham, J. Young, Harrison, Clyburn, Herdklotz, Knotts, Inabinett, Wright, Lloyd, Law, Gamble, Delleney, Cave, Govan, H. Brown, Felder, Robinson, Mason, Carnell, D. Smith, Rice, Sharpe, Boan, Fulmer, Chamblee, Stuart, Shissias, Klauber, T. Brown, Spearman, Williams, Kinon, Limbaugh, Scott, Riser, McTeer, McElveen, Hodges and Richardson: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, TO ENACT THE "SOUTH CAROLINA RURAL DEVELOPMENT ACT OF 1996" (ABBREVIATED TITLE)

Senator LEATHERMAN asked unanimous constant to make a motion to take up the Report of the Committee of Conference for immediate consideration.

Senator LEATHERMAN explained the report.

The COMMITTEE OF CONFERENCE, to whom was referred:

H. 4706 -- Reps. Wilkins, Kennedy, Harrell, Hutson, Neilson, S. Whipper, J. Hines, Harvin, Howard, Askins, White, Fleming, Jennings, Keegan, Anderson, L. Whipper, M. Hines, Cobb-Hunter, Breeland, Neal, Young-Brickell, Easterday, J. Harris, Koon, Meacham, J. Young, Harrison, Clyburn, Herdklotz, Knotts, Inabinett, Wright, Lloyd, Law, Gamble, Delleney, Cave, Govan, H. Brown, Felder, Robinson, Mason, Carnell, D. Smith, Rice, Sharpe, Boan, Fulmer, Chamblee, Stuart, Shissias, Klauber, T. Brown, Spearman, Williams, Kinon, Limbaugh, Scott, Riser, McTeer, McElveen, Hodges and Richardson: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, TO ENACT THE "SOUTH CAROLINA RURAL DEVELOPMENT ACT OF 1996" (Abbreviated Title)
Beg leave to report that they have duly and carefully considered the same and recommend:

That the same do pass with the following amendments:

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

/SECTION 1. This act may be cited as the "South Carolina Rural Development Act of 1996".

SECTION 2. The General Assembly finds that:

(1) The state's economy is centrally connected. As we increase the wealth-generating capacity of South Carolina's businesses, the state's per capita income will also increase. Success breeds success, and rural locations in the State which promote positive economic development momentum will tend to multiply their successes;

(2) Rural economies, left to themselves, with little incentives for positive investment will remain with little economic development momentum. On the other hand, rural economies with significant incentives to induce capital investment and job creation will strengthen the state's economy and well-being;

(3) The inducement provided in this act will encourage the creation of jobs which would not otherwise exist and will create sources of tax revenues for the State and its political subdivisions.

"Section 12-10-85. (A) Funds received by the department for the State Rural Infrastructure Fund must be deposited in the State Rural Infrastructure Fund of the Council. The fund must be administered by the council for the purpose of providing financial assistance to local governments for:

(1) training costs and facilities;

(2) improvements to regionally-planned public and private water and sewer systems;

(3) improvements to both public and private electricity, natural gas, and telecommunications systems including, but not limited to, an electric cooperative, electrical utility, or electric supplier described in Chapter 27 of Title 58; or

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

(B) Rural Infrastructure Fund grants must be available to benefit counties designated as `least developed' or `under developed' as defined in Section 12-6-3360 according to guidelines established by the council. However, up to twenty-five percent of the funds annually available in excess of five million dollars must be set aside for grants to areas of moderately developed and developed counties. County governing bodies must apply to the council for these set aside grants stating the reasons that certain areas of their county qualify for these grants because they are comparable to those conditions qualifying a county as `least developed' or `under developed'.

(C) For the purposes of this section, `local government' means a municipality organized pursuant to Chapters 7, 9, 11, and 13 of Title 5 or a county organized pursuant to Section 4-9-20(a), (b), (c), or (d).

(D) The council shall submit a report to the Governor and General Assembly by March fifteenth covering activities for the prior calendar year."

SECTION 4. A. Chapter 10, Title 12 of the 1976 Code is amended by adding:

"Section 12-10-88. (A) Subject to the conditions provided in subsection (B), South Carolina individual income tax withholding equal to five percent of all South Carolina wages paid with respect to employees that are employed by a federal employer at a closed or realigned military installation must be remitted by the department to the redevelopment authority vested with authority under Section 31-12-40(A) to oversee the closed or realigned military installation. The amounts of withholding

(B) The department shall remit the redevelopment fees during the period described in subsection (C) for each calendar quarter for which the redevelopment authority provides the department with a timely statement from the federal employer that employs the employees working at the closed or realigned military installation setting forth the number of employees employed at the installation, the total wages paid to these employees, and the total amount of South Carolina withholding withheld from the employees for each quarter. In order to receive the redevelopment fees for the applicable quarter, the redevelopment authority shall submit the statement within thirty days of the later of the date that the federal employer's South Carolina withholding tax return is due or the date the federal employer files the withholding tax return.

(C) Redevelopment fees may be remitted to the applicable redevelopment authority for a period beginning with the date that the applicable redevelopment authority first submits the information described in subsection (B) to the department and ending on the earlier of fifteen years later or January 1, 2015. If the redevelopment authority fails to provide the department with the required statement within the requisite time limits, no redevelopment fees must be remitted for that quarter.

(D) Neither the federal employer nor the applicable redevelopment authority is required to meet the requirements of Section 12-10-50 for subsection (A) to apply and the restrictions contained in Section 12-10-80(C) do not apply to redevelopment fees.

(E) For purposes of this section `closed or realigned military installation' means a federal military base or installation in which permanent employment was reduced by three thousand or more jobs after December 31, 1990, and which is closed or realigned under:

(1) the Defense Base Closure and Realignment Act of 1990;

(2) Title 11 of the Defense Authorization Amendments and Base Closure and Realignment Act; or

(3) Section 2687 of Title 10, United States Code."

B. This section is effective for tax years beginning after 1996.

SECTION 5. Chapter 27, Title 58 of the 1976 Code is amended by adding:

"Section 58-27-240. No provision of the South Carolina Rural Development Act of 1996 may be construed to alter, modify, amend, or repeal, directly or by implication, any provision of Chapter 27 of Title 58, Chapter 31 of Title 58, Chapter 33 of Title 58, Chapter 23 of Title 6, Chapter 7 of Title 5, and Chapter 31 of Title 5, governing, among other

SECTION 6. A. Section 4-12-30(B)(4)(b)(iv) of the 1976 Code, as added by Act 125 of 1995, is amended to read:

"(iv) for purposes of this section, `controlled group' or `controlled group of corporations' has the meaning provided under Section 1563(a) of the Internal Revenue Code as defined in Chapter 7 6 of Title 12 as of the date of the execution of the inducement agreement without regard to amendments or replacements thereof, and without regard to subsection subsections (a)(4) and (b) of Section 1563."

B. Section 4-12-30(B)(5)(b) of the 1976 Code, as added by Act 125 of 1995, is amended to read:

"(b) The Board of Economic Advisors shall determine that the purposes to be accomplished by the project are proper governmental and public purposes and that the inducement of the location or expansion of projects within the State is of paramount importance and that the benefits of the project are greater than the costs. In addition to the findings required in subsection (B)(5)(a) above, the county council or county councils, with assistance and advice from the Department or the Board of Economic Advisors shall determine that the purposes to be accomplished by the project are proper governmental and public purposes and that the inducement of the location or expansion of the projects within the State is of paramount importance and that the benefits of the project are greater than the cost."

C. Section 4-12-30(C) of the 1976 Code, as added by Act 125 of 1995, is amended to read:

"(C)(1) From the end of the property tax year in which the investor and the county execute an inducement agreement, the investor 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 investor and the county execute the initial lease agreement, the investor has five years in which to complete its investment for purposes of qualifying for this section. If the investor does not anticipate completing the project within five years, the investor may apply to the county before the end of the five-year period 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 two years in which to complete the project. 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

(3) The annual fee provided by subsection (D)(2) is available for no more than twenty years. 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 to a maximum total of twenty-seven years for the fee for a single project which has been granted an extension. For those businesses qualifying under subsection (D)(4), the annual fee is available for no more than thirty years and for those projects placed in service in more than one year the annual fee is available for a maximum of thirty-seven years.

(4) Annually, during the time period allowed to meet the minimum investment level, the investor shall provide the total amount invested to the appropriate county official."

D. Section 4-12-30(D) of the 1976 Code, as added by Act 125 of 1995, is amended to read:

"(D) The inducement agreement must provide for fee payments, to the extent applicable, as follows:

(1)(a) Any property, title to which is transferred to the county before being placed in service, is subject to an annual fee payment as provided in Section 4-12-20.

(b) Any undeveloped land, title to which is transferred to the county, 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) and (C)(3), and no lease is considered an `initial lease agreement' for purposes of this section until the first day of the calendar year for which a fee payment is due under subsection (D)(2) in connection with the lease.

(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, except as provided in item (4) of this subsection, and 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, but if real property is constructed for the fee or is purchased in an arm's length transaction, fair market value is deemed to equal the original income tax basis; otherwise, the department shall determine fair market value by appraisal; 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 investor 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 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 business which is investing at least two hundred million dollars, which when added to the previous investments, results in a total investment of at least four hundred million dollars, and which is creating at least two hundred new full-time jobs at the site qualifying for the fee;

(b) The new full-time jobs requirement of this item does not apply in the case of a taxpayer 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 business qualifying under items (2) or (4) of this subsection may negotiate an inducement agreement with a county using differing assessment ratios for different assessment years covered by the agreement. However, the lowest assessment ratio allowed is the lowest ratio for which the business may qualify under this section."

E. Section 4-12-30(F) of the 1976 Code, as added by Act 125 of 1995, is amended to read:

"(F) (1) If an investor disposes of property subject to the fee, the fee must be reduced by the amount of the fee applicable to that property.

(2) Property is disposed of only when it is scrapped or sold in accordance with the lease agreement.
With regard to calculation of the fee provided in subsection (D)(2), the inducement agreement may provide for the disposal of property and the replacement of property subject to the fee as follows:

(1)(a) If an investor disposes of property subject to the fee, the fee must be reduced by the amount of the fee applicable to that property.

(b) Property is disposed of only when it is scrapped or sold in accordance with the lease agreement.

(c) If there is no provision in the agreement dealing with the disposal of property in accordance with this subsection, the fee remains fixed and no adjustment to the fee is allowed for disposed property.

(d) If there is no provision in the inducement agreement dealing with replacement property, any property placed in service after the time period allowed for investments as provided by subsection (C)(2), is subject to the payments required by Section 4-12-20 if the county has title to the property, or to property taxes as provided in Chapter 37 of Title 12 if the investor has title to the property."

E. Items (1) and (2) of Section 4-12-30(H) of the 1976 Code, as added by Act 125 of 1995, are further amended to read:

"(1) Upon agreement of the parties, and except as provided in subsection (H) 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 controlled group members; but no such amendment or termination and replacement may take place after the initial lease agreement date.

| Printed Page 3800, June 26 | Printed Page 3820, June 27 |

This web page was last updated on Monday, June 29, 2009 at 1:59 P.M.