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H. 3200
STATUS INFORMATION
General Bill
Sponsors: Reps. Talley, W.D. Smith and Mitchell
Document Path: l:\council\bills\dka\3000ssp07.doc
Introduced in the House on January 9, 2007
Currently residing in the House Committee on Ways and Means
Summary: Property or income tax credit
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number
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1/9/2007 House Introduced and read first time HJ-101
1/9/2007 House Referred to Committee on Ways and Means HJ-101
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 31-10-170 SO AS TO PROVIDE A PROPERTY TAX CREDIT OR AN INCOME TAX CREDIT FOR REDEVELOPMENT EXPENSES INCURRED IN CONNECTION WITH A REDEVELOPMENT PROJECT AND TO PROVIDE FOR THE DURATION OF THESE CREDITS; AND TO AMEND SECTION 31-10-20, RELATING TO DEFINITIONS FOR PURPOSES OF THE COMMUNITY DEVELOPMENT LAW, SO AS TO DEFINE THE TERMS "LOCAL TAXING ENTITY", "LOCAL TAXING ENTITY RATIO", AND "REDEVELOPMENT EXPENSES".
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 10, Title 31 of the 1976 Code is amended by adding:
"Section 31-10-170. (A) Subject to the terms and conditions of this chapter, a redeveloper who undertakes and completes a redevelopment project is eligible for one of the following two tax credits:
(1) a credit against real property taxes levied by a local taxing entity equal to twenty-five percent of the redevelopment expenses incurred in connection with the redevelopment project times the local taxing entity ratio of each local taxing entity that consents to the tax credit pursuant to subsection (B); or
(2) a credit against state income taxes imposed equal to ten percent of the redevelopment expenses.
(B) If the taxpayer elects to receive the credit against local property taxes pursuant to subsection (A)(1), the following provisions apply:
(1) The municipality or, if the redevelopment area is located in an unincorporated area, the county shall determine first by resolution the eligibility of the redevelopment area and the eligibility of the proposed redevelopment project seeking the credit. A proposed project beginning after July 1, 2007, must be approved by a majority vote of the local governing body. Those determinations and the municipality's or county's approval of the redevelopment area and proposed redevelopment project must be by ordinance and pursuant to public hearing. The ordinance must provide for the credit to be taken as a credit against up to seventy-five percent of the real property taxes due on the redevelopment area each year not to exceed eight years. Before determining the eligibility of the proposed redevelopment project, the municipality or county shall make a finding that the credit does not violate a covenant, representation, or warranty in its tax increment financing transactions.
(2) Not less than forty-five days before holding the public hearing contemplated in subsection (B)(1), the governing body of the municipality or county shall give notice to all local taxing entities in which the redevelopment project is located of its intention to grant a tax credit for a redevelopment project and the amount of the tax credit proposed to be granted. If a local taxing entity does not file an objection to the tax credit with the municipality or county on or before the date of the public hearing, the local taxing entity is considered to consent to the tax credit if the actual tax credit granted is equal to or less than the tax credit stated in the notice of public hearing.
(3) The tax credit vests in the taxpayer in the tax year in which the redevelopment project is completed and may be carried forward, in whole or in part, for up to eight years following that date.
(C) If the taxpayer elects to receive the credit against state income taxes pursuant to subsection (A)(2), the following provisions apply:
(1) The credit may be taken only in equal installments over an eight-year period beginning with the year in which the project is completed. An unused portion of a credit installment may be carried forward for the succeeding five years.
(2) The credit earned pursuant to this subsection by an 'S' corporation owing corporate level income tax must be used first at the entity level. A remaining credit passes through to each shareholder in a percentage equal to that shareholder's percentage of stock ownership.
(3) The credit earned pursuant to this subsection by a general partnership, limited partnership, limited liability company, or another entity taxed as a partnership pursuant to Subchapter K of the Internal Revenue Code must be passed through to its partners and may be allocated among its partners including, without limitation, an allocation of the entire credit to one partner, in a manner agreed by the partners. As used in this item, the term 'partner' means a partner, member, or owner of an interest in the pass-through entity, as applicable.
(4) The credit earned pursuant to this subsection is in addition to and does not offset the state historic credit if the redevelopment project also is eligible for the state historic credit.
(5) The South Carolina Department of Revenue shall promulgate regulations to verify the eligibility of the redevelopment area and the redevelopment project pursuant to this chapter.
(D) The taxpayer shall elect the mode of credit pursuant to subsection (A)(1) or subsection (A)(2) by providing written notification of his intent to the South Carolina Department of Revenue before the date the redevelopment project is completed. If the taxpayer did not obtain the approvals required in subsection (B) or fails affirmatively to make the election prescribed in this subsection before the date the redevelopment project is completed, the taxpayer is considered to have elected to receive the credit provided in subsection (A)(2).
(E) The owner of the redevelopment area may transfer, devise, or distribute unused credit to the tenant of the redevelopment area upon the department's receipt of written notification and its approval of the transfer, devise, or distribution."
SECTION 2. Section 31-10-20 of the 1976 Code is amended to read:
"Section 31-10-20. The following terms where used in this chapter, shall have the following meanings, except where unless the context clearly indicates a different meaning:
(1) 'Area of operation' means the area within the territorial boundaries of the municipality or municipalities for which a particular commission is created.
(2) 'Blighted area' means any improved area or vacant area where if improved, industrial, commercial, and residential buildings or improvements, because of a combination of five or more of the following factors: age; dilapidation; obsolescence; deterioration; illegal use of individual structures; presence of structures below minimum code standards; excessive vacancies; overcrowding of structures and community facilities; lack of ventilation, light, or sanitary facilities; inadequate utilities; excessive land coverage; deleterious land use or layout; depreciation of physical maintenance; lack of community planning, are detrimental to the public safety, health, morals, or welfare or, if vacant, the sound growth is impaired by (a) a combination of two or more of the following factors: obsolete platting of the vacant land; diversity of ownership of such land; tax and special assessment delinquencies on such land; deterioration of structures or site improvements in neighboring areas adjacent to the vacant land; or (b) the area immediately prior to becoming vacant qualified as a blighted area. within the boundaries of a redevelopment area located within the territorial limits of the area of operation in which:
(a) if an improved area, the industrial, commercial, and residential buildings or other improvements are detrimental to the public safety, health, morals, or welfare because of a combination of five or more of the following factors: age; dilapidation; obsolescence; deterioration; illegal use of individual structures; presence of structures below minimum code standards; excessive vacancies; overcrowding of structures and community facilities; lack of necessary transportation infrastructure; presence of or potential environmental hazards; lack of water or wastewater services; inadequate electric, natural gas or other energy services; lack of modern communications infrastructure; lack of ventilation, light, sanitary or storm drainage facilities; inadequate utilities; excessive land coverage; deleterious land use or layout; depreciation of physical maintenance; lack of community planning; and static or declining land values; or
(b) if a vacant area, the sound growth is impaired by:
(i) a combination of two or more of the following factors: obsolete platting of the vacant land; diversity of ownership of such land; tax and special assessment delinquencies on such land; deterioration of structures or site improvements in neighboring areas adjacent to the vacant land; overcrowding of structures and community facilities in neighboring areas adjacent to the vacant land; lack of necessary transportation infrastructure; presence of or potential environmental hazard; lack of water, or wastewater; lack of storm drainage facilities; inadequate electric and natural gas energy services; and lack of modern communications infrastructure; or
(ii) the area immediately before becoming vacant qualified as a blighted area.
(3) 'Bonds' means any bonds, interim certificates, notes, debentures, or other obligations of a commission issued pursuant to this chapter.
(4) 'Commission' means a public body and a body corporate and politic created and organized in accordance with pursuant to the provisions of this chapter.
(5) 'Conservation area' means any an improved area that is not yet a blighted area but, is detrimental to the public safety, health, morals, or welfare and may become a blighted area because of a combination of three or more of the following factors: dilapidation; obsolescence; deterioration; illegal use of structures; presence of structures below minimum code standards; abandonment; excessive vacancies; overcrowding of structures and community facilities; lack of ventilation, light, or sanitary facilities; inadequate utilities; excessive land coverage; depreciation of physical maintenance; or lack of community planning, is detrimental to the public safety, health, morals, or welfare and may become a blighted area.
(6) 'Governing body' means in the legislative body of a municipality.
(7) 'Government' means the state and federal governments or any subdivision, agency, or instrumentality, corporate or otherwise, of either of them.
(8) 'Local taxing entity' means a county, municipality, school district, special purpose district, and another entity or district with the power to levy ad valorem taxes against the redevelopment area.
(9) 'Local taxing entity ratio' means the percentage computed by dividing the millage rate of each local taxing entity by the total millage rate for the redevelopment area.
(10) 'Municipality' means any a county or an incorporated city or town or any county.
(9)(11) 'Obligee of the commission' or 'obligee' means any a bondholder, or trustee or trustees for any bondholders, any a lessor demising property to a commission used in connection with a redevelopment project, or any assignees an assignee of such the lessor's interest, or any a part thereof of it, and the federal government, when it is a party to any a contract with a commission.
(10)(12) 'Parent municipality' means the municipality or municipalities creating a commission.
(11)(13) 'Redeveloper' means any an individual, a partnership, or a public or private corporation that shall enter enters or propose proposes to enter into a contract with a commission for the redevelopment of all or any part of a redevelopment area under the provisions of pursuant to this chapter.
(12)(14) 'Redevelopment' means the acquisition, replanning, clearance, rehabilitation or rebuilding of an area for residential, recreational, commercial, industrial or other purposes, including the provision of streets, utilities, parks, recreational areas and other open spaces; provided, without limiting the generality thereof,. The term 'redevelopment' may include a program of repair and rehabilitation of buildings and other improvements, and may include the exercise of any powers under pursuant to this chapter with respect to the area for which such the program is undertaken.
(13)(15) 'Redevelopment area' means any an area that a commission may find finds to be a blighted area, a conservation area, or any a combination thereof of both, so as to require redevelopment under the provisions of pursuant to this chapter.
(14)(16) 'Redevelopment contract' means a contract between a commission and a redeveloper for redevelopment under the provisions of pursuant to this chapter.
(15)(17) 'Redevelopment expenses' means the expenses incurred in the completion of the redevelopment project, excluding the cost of acquiring the redevelopment area or the cost of personal property maintained at the redevelopment area.
(18) 'Redevelopment plan' means a plan for the redevelopment of a redevelopment area made by a commission in accordance with the provisions of pursuant to this chapter.
(16)(19) 'Redevelopment project' means any work or undertaking to:
(a) to acquire blighted or conservation redevelopment areas, including lands, structures, or improvements, the acquisition of which is necessary or incidental to the proper clearance, development, or redevelopment of such the areas or to the prevention of the spread or recurrence of conditions of blight;
(b) to clear any such redevelopment areas by demolition or removal of existing buildings, structures, streets, utilities, or other improvements thereon and to install, construct, or reconstruct streets, utilities, and site improvements essential to the preparation of sites for uses in accordance with the redevelopment plan;
(c) to sell land in such redevelopment areas for residential, recreational, commercial, industrial, or other use or for the public use to the highest bidder set out by the provisions of pursuant to this chapter or to retain such the land for public use, in accordance with the redevelopment plan;
(d) to carry out plans for a program of repair, rehabilitation, or reconditioning of buildings or other improvements in such redevelopment areas, including the making of loans;
(e) to engage in programs of assistance and financing, including the making of loans for rehabilitation, repair, construction, acquisition, or reconditioning of residential units in a redevelopment area.;
(f) The term 'redevelopment project' may also include the preparation of prepare a redevelopment plan, including the planning, survey, and other work incident to a redevelopment project, and the preparation of all to prepare plans and arrangements for carrying out a redevelopment project."
SECTION 3. Upon approval of the Governor, this act takes effect July 1, 2007, and applies to redevelopment expenses incurred, without regard to the date these expenses were incurred, for redevelopment projects completed after June 30, 2007.
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