H 3625 Session 112 (1997-1998)
H 3625 General Bill, By Harrell
A BILL TO AMEND SECTION 12-6-3420, CODE OF LAWS OF SOUTH CAROLINA, 1976,
RELATING TO CORPORATE INCOME TAX CREDIT FOR CONSTRUCTION OF OR IMPROVEMENT TO
AN INFRASTRUCTURE PROJECT, SO AS TO REDEFINE "INFRASTRUCTURE PROJECT", TO
CLARIFY THE MEANING OF "QUALIFIED PRIVATE ENTITY", TO DEFINE "RELATED
TAXPAYER", TO PROHIBIT A CLAIM FOR THE CREDIT BEFORE DEDICATION OR CONVEYANCE
OF THE PROJECT, TO PROVIDE FOR PAYMENT OF TAX DUE ON A ROAD THAT IS LATER
REMOVED FROM THE INFRASTRUCTURE PROJECT, AND TO DELETE ALLOWANCE OF THE TAX
CREDIT TO CORPORATIONS ON A CONSOLIDATED BASIS.
03/11/97 House Introduced and read first time HJ-6
03/11/97 House Referred to Committee on Ways and Means HJ-7
04/22/97 House Committee report: Favorable Ways and Means HJ-4
04/29/97 House Read second time HJ-49
04/30/97 House Read third time and sent to Senate HJ-18
05/01/97 Senate Introduced and read first time SJ-11
05/01/97 Senate Referred to Committee on Finance SJ-11
05/21/97 Senate Committee report: Favorable Finance SJ-25
Indicates Matter Stricken
Indicates New Matter
COMMITTEE REPORT
May 21, 1997
H. 3625
Introduced by Rep. Harrell
S. Printed 5/21/97--S.
Read the first time May 1, 1997.
THE COMMITTEE ON FINANCE
To whom was referred a Bill (H. 3625), to amend Section
12-6-3420, Code of Laws of South Carolina, 1976, relating to
corporate income tax credit for construction of or improvement to an
infrastructure project, etc., respectfully
REPORT:
That they have duly and carefully considered the same, and
recommend that the same do pass:
JOHN DRUMMOND, for Committee.
A BILL
TO AMEND SECTION 12-6-3420, CODE OF LAWS OF SOUTH
CAROLINA, 1976, RELATING TO CORPORATE INCOME TAX
CREDIT FOR CONSTRUCTION OF OR IMPROVEMENT TO AN
INFRASTRUCTURE PROJECT, SO AS TO REDEFINE
"INFRASTRUCTURE PROJECT", TO CLARIFY THE MEANING
OF "QUALIFIED PRIVATE ENTITY", TO DEFINE "RELATED
TAXPAYER", TO PROHIBIT A CLAIM FOR THE CREDIT
BEFORE DEDICATION OR CONVEYANCE OF THE PROJECT,
TO PROVIDE FOR PAYMENT OF TAX DUE ON A ROAD THAT
IS LATER REMOVED FROM THE INFRASTRUCTURE
PROJECT, AND TO DELETE ALLOWANCE OF THE TAX
CREDIT TO CORPORATIONS ON A CONSOLIDATED BASIS.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Section 12-6-3420 of the 1976 Code, as added by
Act 76 of 1995, is amended to read:
"Section 12-6-3420. (A) A corporation may claim a credit
against taxes due under Section 12-6-530 for the
construction of or improvement of to an
infrastructure project against taxes due under Section 12-6-530
for benefiting a single development or enterprise. The credit
is allowed for:
(1) expenses paid or accrued by the taxpayer;
(2) contributions made to a governmental entity; or
(3) contributions made to a qualified private entity in the case
of water or sewer lines and their related facilities in areas
served by a private water and sewer company; provided that the
expenses or contributions are used solely to fund an infrastructure
project.
(B) For expenses paid or accrued by the taxpayer in building
or improving any one infrastructure project:
(1) the The credit is equal to fifty
percent of the expenses or contributions; made for the
infrastructure project and is
(2) the credit is limited to a total credit
of ten thousand dollars annually; and for each
infrastructure project.
(3) any Any unused credit, up to a total
amount of thirty thousand dollars, for each infrastructure
project, may be carried forward three years.
(C) For purposes of this section:
(1) An infrastructure project includes water lines or sewer
lines, their related facilities, and roads that:
(a) do not exclusively benefit the taxpayer;
(b) are built to applicable standards; and
(c) are dedicated to public use or, in the case
of water and sewer lines and their related facilities in areas served by
a private water and sewer company, the water and sewer lines are
deeded to a qualified private entity Each infrastructure
project means water lines, sewer lines, roads, and related facilities, to
the extent they do not directly or indirectly benefit the taxpayer, are
built to applicable standards, and are dedicated to public use. In the
case of water and sewer lines and related facilities in areas served by
a private water and sewer company, the water and sewer lines may be
deeded to a qualified private entity instead of being dedicated to
public use. For purposes of this section, a direct or indirect benefit
to the taxpayer (a) includes the increase in value of property the
taxpayer or a person related to the taxpayer intends to sell; and (b)
does not include an increase in the business of the taxpayer or a
person related to the taxpayer generated solely because of the
increase in population or business in an area attributable to the
infrastructure project.
(2) A Qualified private entity means is
an entity holding the required permits, certifications, and licenses
from the South Carolina Department of Health and Environmental
Control, the South Carolina Public Service Commission, and
any other state agencies, departments, or
commissions, from which approvals must be obtained in
order to operate as a utility furnishing water supply services or
sewage collection or treatment services, or both, to the public,
and which is not owned, leased, or operated by the taxpayer or a
person related to the taxpayer.
(D) If an infrastructure project benefits more than the taxpayer,
the expenses of the taxpayer must be allocated to the various
beneficiaries and only those expenses not allocated to the taxpayer's
benefit qualify for the credit A person or entity will be
considered as related to the taxpayer if it would be considered a
related taxpayer under Section 267 of the Internal Revenue
Code.
(E) The credit may not be claimed before dedication or
conveyance if the taxpayer submits with its tax return a letter of
intent signed by the chief operating officer of the appropriate
governmental entity or qualified private entity stating that upon
completion the governmental entity or qualified private entity shall
accept the infrastructure project for the appropriate use of the
infrastructure project.
(F) A qualifying private entity is not allowed the credit provided
by this section for expenses it incurs in building or improving
facilities it owns, manages, or operates.
(G) If, within ten years of claiming the credit, a road
that is part of the infrastructure project qualifying for the
credit is subsequently removed or planned to be
removed from the state highway or public road system, the
amount of the credit allowed for the construction of the road must be
added to any corporate income tax due from the taxpayer in
the first taxable year following the removal of the road from public
use. The department may implement the provisions of this subsection
by rules or regulation.
(H) A corporation which files or is required to file a
consolidated return is entitled to the income tax credit allowed by this
section on a consolidated basis. The tax credit may be determined on
a consolidated basis regardless of whether or not the corporation
entitled to the credit contributed to the tax liability of the
consolidated group.
(I) 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 A corporation may assign its rights to
its unused credit to another corporation if it transfers all, or
substantially all, of the assets of the corporation or all, or
substantially all, of the assets of a trade or business or operating
division of a corporation to another corporation."
SECTION 2. This act takes effect taxable years beginning after
1997.
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