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A319, R343, H4840
Sponsors: Reps. Harrell, Cooper, Merrill, Ott, Haley, Funderburk, J.R. Smith, Limehouse, Davenport, Bales, Sinclair, Leach, Branham, Kirsh, Bannister, Battle, R. Brown, Cato, Ceips, Clark, Hosey, Littlejohn, Martin, Miller, Neilson, M.A. Pitts, Rivers, D.C. Smith, G.R. Smith, Vaughn, Mitchell, White, Brady and Hodges
Document Path: l:\council\bills\agm\18063mm06.doc
Companion/Similar bill(s): 1336
Introduced in the House on March 15, 2006
Introduced in the Senate on April 27, 2006
Last Amended on May 18, 2006
Passed by the General Assembly on May 25, 2006
Governor's Action: May 31, 2006, Vetoed
Legislative veto action(s): Veto overridden
Summary: Industry Partners Act
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 3/15/2006 House Introduced and read first time HJ-106 3/15/2006 House Referred to Committee on Ways and Means HJ-107 4/6/2006 House Member(s) request name added as sponsor: Mitchell 4/18/2006 House Member(s) request name added as sponsor: White, Brady 4/20/2006 House Committee report: Favorable with amendment Ways and Means HJ-4 4/25/2006 House Member(s) request name added as sponsor: Hodges 4/25/2006 Scrivener's error corrected 4/26/2006 House Amended HJ-26 4/26/2006 House Read second time HJ-34 4/27/2006 House Read third time and sent to Senate HJ-9 4/27/2006 Senate Introduced and read first time SJ-26 4/27/2006 Senate Referred to Committee on Finance SJ-26 5/17/2006 Senate Committee report: Favorable with amendment Finance SJ-16 5/18/2006 Senate Amended SJ-71 5/18/2006 Senate Read second time SJ-71 5/23/2006 Senate Read third time and returned to House with amendments SJ-10 5/25/2006 House Concurred in Senate amendment and enrolled HJ-44 5/25/2006 Ratified R 343 5/31/2006 Vetoed by Governor 6/1/2006 House Veto overridden by originating body Yeas-96 Nays-4 HJ-157 6/1/2006 Senate Veto overridden Yeas-42 Nays-2 SJ-159 6/9/2006 Copies available 6/9/2006 Effective date 06/01/06 6/16/2006 Act No. 319
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VERSIONS OF THIS BILL
(A319, R343, H4840)
AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, SO AS TO ENACT THE "INDUSTRY PARTNERS ACT" BY ADDING SECTION 13-17-88, PROVIDING FOR A TARGET PROGRAM OF EXCELLENCE WITHIN EACH OF THE THREE SOUTH CAROLINA RESEARCH INNOVATION CENTERS AND TO FOCUS ON THE APPLICATION, DEVELOPMENT, AND COMMERCIALIZATION OF THE BASIC RESEARCH BEING UNDERTAKEN BY THE CENTERS, FOR FUNDING OF THE PROGRAMS WITH A VIEW TOWARD ATTRACTING INDUSTRY PARTNERS IN THEIR EFFORTS, FOR AN INDUSTRY PARTNERSHIP FUND OFFERING TAX CREDITS TO CONTRIBUTORS TOWARD THE EFFORTS, AND ADMINISTRATION AND IMPLEMENTATION BY THE SOUTH CAROLINA RESEARCH AUTHORITY; BY ADDING SECTION 12-6-3585 SO AS TO PROVIDE FOR THE PARAMETERS OF THE STATE INCOME TAX, INSURANCE PREMIUM TAX, OR LICENSE FEE CREDIT FOR CONTRIBUTIONS TO THE INDUSTRY PARTNERSHIP FUND; TO AMEND SECTION 13-17-40, AS AMENDED, RELATING TO MEMBERS OF THE BOARD OF THE SOUTH CAROLINA RESEARCH AUTHORITY, SO AS TO ADD THE DIRECTOR OF THE SAVANNAH RIVER NATIONAL LABORATORY TO THE BOARD AND TO PROVIDE FOR AN EXECUTIVE COMMITTEE AND DIRECTOR; TO AMEND SECTION 13-17-83, RELATING TO THE OPERATION OF EXISTING RESEARCH PARKS SO AS TO ALLOW, BUT NOT REQUIRE, THE STATE RESEARCH DIVISION TO OPERATE THEM; AND TO AMEND SECTION 13-17-87, RELATING TO THE ESTABLISHMENT OF THE SOUTH CAROLINA RESEARCH INNOVATION CENTERS, SO AS TO AUTHORIZE THE SCRIC TO FINANCE QUALIFIED COMPANIES, AND TO CLARIFY MATTERS OF LOCATION OF CENTERS AND APPOINTMENT OF DIRECTORS.
Be it enacted by the General Assembly of the State of South Carolina:
Industry Partners Act
SECTION 1. This act may be cited as the "Industry Partners Act".
Target Programs of Excellence; Industry Partnership Fund
SECTION 2. Chapter 17, Title 13 of the 1976 Code is amended by adding:
"Section 13-17-88. (A) There is established within each of the three South Carolina Research Innovation Centers (SCRIC) established in Section 13-17-87 a target program of excellence reflecting the basic research currently undertaken at each center and serving as the focal point of the state's applied research and development in each of the program areas of excellence:
(1) The Upstate Innovation Center associated with Clemson University: Automotive Center of Excellence, an automotive technology development program, in collaboration with the University and International Center for Automotive Research (ICAR);
(2) The Charleston Innovation Center associated with the Medical University of South Carolina: Health Sciences Center of Excellence, a health science technology development program;
(3) The Columbia Innovation Center associated with the University of South Carolina: Fuel Cell Center of Excellence, a fuel cell and hydrogen technology program, in collaboration with Savannah River National Lab (SRNL); and
(4) Other programs necessary or appropriate to fulfill the purposes of this section.
(B) The South Carolina Research Authority (SCRA), through the SCRIC, may implement and manage the specified programs and other programs as the SCRA determines in collaboration with the public and private sectors. Additional programs also shall focus on fields in which the State has demonstrated existing or emerging excellence. Program activities are not required to be performed at a particular location. Programs to be conducted pursuant to this section must be approved by the SCRA Executive Committee.
(C) Each target program must coordinate with basic researchers, both inside and outside this State, and with industry so as to focus on and effect applied research, product development, and commercialization efforts in this State in the targeted field of excellence.
(D) A target program of excellence as provided in Section (A) may undertake the following:
(1) incubation needs for start-ups and spin-offs in the program area;
(2) demonstration projects and related teams charged with conceptualizing, attracting, and executing technology in the program area;
(3) working with industry partners to develop collaborative relationships with national and international trade groups, government agencies, research labs, and other universities;
(4) financing for industry partners conducting activities in furtherance of the program area;
(5) financing for prototype development, clinical trials, and other program related preproduction projects;
(6) support for university researchers to work with industry partners on applied research and commercialization in the program area;
(7) marketing activities including, but not limited to:
(a) building national and international recognition of the program;
(b) recruiting industries and scientific and entrepreneurial talent to the program;
(c) building public awareness;
(d) supporting South Carolina based trade shows in South Carolina that attract national and international audiences;
(8) other activities necessary or appropriate in relation to the programs.
(E) There is established the 'Industry Partnership Fund' at the SCRA or at an SCRA-designated affiliate, or both, for the acceptance of contributions for funding the programs. Financing methods pursuant to this section and Section 13-17-87 include grants, loans, investments, and other incentives. The SCRA may, but is not required to, provide additional funding for the programs. Program funding is authorized for the purposes of this section and related administrative costs. A contributor is eligible for a tax credit against the state income or premium tax or license fee, as provided in Section 12-6-3585.
(F) The South Carolina Research Authority (SCRA) may implement the provisions of this section and Section 13-17-87, pursuant to Section 13-17-180.
(G) The SCRA must consult with Clemson University, The Medical University of South Carolina, or the University of South Carolina in the conduct of a program if the program is conducted by an innovation center associated with that research university.
(H) The SCRA shall submit an annual report to the General Assembly on the programs established pursuant to this section."
Industry Partnership Fund tax credit
SECTION 3. A. Article 25, Chapter 6, Title 12 of the 1976 Code is amended by adding:
"Section 12-6-3585. (A) A taxpayer may claim as a credit against his state income tax imposed by Chapter 6 of Title 12, license fees imposed by Chapter 20 of Title 12, or insurance premiums imposed by Chapter 7 of Title 38, or any combination of them, one hundred percent of an amount contributed to the Industry Partnership Fund at the South Carolina Research Authority, or an SCRA-designated affiliate, or both, pursuant to Section 13-17-88(E), up to a maximum credit of six hundred fifty thousand dollars for an individual taxpayer, not to exceed an aggregate credit of two million dollars for all taxpayers in tax year 2006; up to a maximum credit of one million three hundred thousand dollars for an individual taxpayer, not to exceed an aggregate credit of four million dollars for all taxpayers in tax year 2007; and up to a maximum credit of two million dollars for an individual taxpayer, not to exceed an aggregate credit of six million dollars for all taxpayers for each tax year beginning after December 31, 2007. For purposes of determining a taxpayer's entitlement to the credit for qualified contributions for a given tax year in which more than the applicable aggregate annual limit on the credit is contributed by taxpayers for that year, taxpayers who have made contributions that are intended to be qualified contributions earlier in the applicable tax year than other taxpayers must be given priority entitlement to the credit. The SCRA shall certify to taxpayers who express a bona fide intention of making one or more qualified contributions as to whether the taxpayer is entitled to that priority.
(B) The amount of the credit is equal to one hundred percent of the amount of the taxpayer's qualified contributions to the Industry Partnership Fund, subject to the limitations in this section. The credit is nonrefundable.
(C) The use of the credit is limited to the taxpayer's applicable income or premium tax or license fee liability for the tax year of the taxpayer after the application of all other credits. An unused credit may be carried forward ten tax years of the taxpayer after the end of the tax year of the taxpayer during which the qualified contribution was made.
(D) A contribution is not a qualified contribution if it is subject to conditions or limitations regarding the use of the contribution.
(E) 'Taxpayer' means an individual, corporation, partnership, trust, bank, insurance company, or other entity having a state income or insurance premium tax or license fee liability who has made a qualified contribution.
(F) To claim the credit, the taxpayer shall attach to the return a copy of a form provided by SCRA identifying the taxpayer's qualified contribution.
(G) The Department of Revenue may require information and submissions by the taxpayer as it considers appropriate in relation to a taxpayer's claim of entitlement to the credit.
(H) The merger, consolidation, or reorganization of a corporation where tax attributes survive does not create new eligibility in a succeeding corporation, but unused credits may be transferred and continued by the succeeding corporation. In addition, a corporation or partnership may assign its rights to its unused credit to another corporation or partnership if it transfers all, or substantially all, of the assets of the corporation or partnership or all, or substantially all, of the assets of the trade or business or operating division of the corporation or partnership to another corporation or partnership.
(I) A taxpayer who claims the credit may not take a deduction in relation to the qualified contribution which gives rise to such credit.
B. This section applies to taxable years beginning on or after January 1, 2006.
Members of board
SECTION 4. Section 13-17-40 of the 1976 Code, as last amended by Act 133 of 2005, is further amended to read:
"Section 13-17-40. (A)(1) The SCRA shall consist of a board of twenty-four trustees that includes the following ex officio members: President of the Council of Private Colleges of South Carolina, Chairman of the South Carolina Commission on Higher Education, President of Clemson University, President of the Medical University of South Carolina, President of South Carolina State College, President of the University of South Carolina, Director of Savannah River National Laboratory, President of Francis Marion University, Chairman of the State Board for Technical and Comprehensive Education, Governor of South Carolina or his designee, Chairman of the House Ways and Means Committee's designee, Chairman of the Senate Finance Committee's designee, and the Secretary of Commerce or his designee.
(2) The Governor shall name the chairman who must not be a public official and who serves at the pleasure of the Governor. The remaining ten trustees must be elected by the board of trustees from a list of nominees submitted by an ad hoc committee named by the chairman and composed of the members serving as elected trustees. The original elected trustees must be the same members serving as elected trustees on the board on January 1, 2005. Each of the Congressional Districts of South Carolina has at least one of the ten trustees.
(3) Terms of elected trustees are for four years, and half expire every two years. An elected trustee may not serve more than two consecutive four-year elected terms. Vacancies must be filled for the unexpired term in the manner of original appointment. A vacancy occurs upon the expiration of the term of service, death, resignation, disqualification, or removal of a trustee.
(B)(1) The President of Clemson University, President of the Medical University of South Carolina, President of the University of South Carolina at Columbia, the Governor or his designee, the Chairman of the House Ways and Means Committee's designee, the Chairman of the Senate Finance Committee's designee, and the chairman of the board of trustees shall serve as the executive committee of the board of trustees. The executive committee has all powers and authority of the board of trustees. The board shall advise the executive committee of the actions recommended by the board.
(2) The executive committee shall appoint a business and science advisory board to include representatives from each research university, the venture capital industry, relevant industry leaders, and the Department of Commerce. The purpose of the advisory board is to advise the board of trustees when requested by it. The advisory board shall ensure that the authority has the input of the research and business communities in implementing its programs and services.
(C) A trustee may not receive a salary for his services as a trustee; however, a trustee must be reimbursed for actual expenses incurred in service to the authority.
(D) The board annually shall submit a report to the General Assembly including information on all acts of the board of trustees together with a financial statement and full information as to the work of the authority.
(E) The board shall hire an executive director of the SCRA who has administrative responsibility for the SCRA. The executive director shall maintain, through a designated agent, accurate and complete books and records of account, custody, and responsibility for the property and funds of the authority and control over the authority bank account. The executive director, with the approval of the board, has the power to appoint officers and employees, to prescribe their duties, and to fix their compensation. The board of trustees shall select a reputable certified public accountant to audit the books of account at least once each year.
(F) Regular meetings of the board of trustees must be held at a time and place the chairman may determine. Special meetings of the board of trustees may be called by the chairman when reasonable notice is given."
Operation of research parks
SECTION 5. Section 13-17-83 of the 1976 Code, as added by Act 133 of 2005, is amended to read:
"Section 13-17-83. The South Carolina Research Division (SCRD) may operate existing research parks in cooperation with Clemson University, the Medical University of South Carolina, and the University of South Carolina at Columbia. The authority may establish and operate additional research parks and research, computer and technology-related projects, and facilities as determined by the board of trustees. The authority is responsible for the decisions and operations of a research park, project, or facility established pursuant to this chapter."
Establishment of Research Innovation Centers
SECTION 6. Section 13-17-87(B), (C), and (F) of the 1976 Code, as added by Act 133 of 2005, is amended to read:
"(B) The SCRIC shall operate in conjunction with the three research universities in South Carolina. One innovation center must be located in each of the following areas; except that an innovation center and its activities are not otherwise required to be at a particular location:
(1) Charleston, to be associated with the Medical University of South Carolina;
(2) Columbia, to be associated with the University of South Carolina; and
(3) the Upstate, to be associated with Clemson University.
(C) Each of the three innovation centers may have a center director appointed or removed with the advice and consent of the president of the research university associated with the respective center. Staff for innovation centers should encompass a variety of specialty areas, which may include market research, intellectual property protection, finance, management and business practices, relevant science and technology, industry research partner recruitment, and other specific skills as required to advise and assist start-up companies, pre-company initiatives, or launch new products. Consulting services may be obtained for specialized needs not otherwise met by existing staff personnel.
(F) The SCRIC may:
(1) admit qualified companies including, but not limited to, start-up companies, new product initiatives, and pre-company initiatives into a center and grant these companies up to two hundred thousand dollars each as well as physical and staff resources;
(2) solicit grants and other financial support from federal, local, and private sources and fees, royalties, and other resources from innovation center users, which ultimately should enable the innovation centers to become self-sufficient;
(3) allow a company to remain in an innovation center for up to four years or until exceeding one million dollars in annual commercial revenue;
(4) allow rent and fees for services initially to be waived; and
(5) provide financing to qualified companies."
SECTION 7. This act takes effect upon approval by the Governor.
Ratified the 25th day of May, 2006.
Vetoed by the Governor -- 5/31/06.
Veto overridden by House -- 6/1/06.
Veto overridden by Senate -- 6/1/06.
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