H 3896 General Bill, By Kirsh
 A BILL TO AMEND SECTION 4-12-30, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA,
 1976, RELATING TO FEE IN LIEU OF PROPERTY TAXES, SO AS TO ALLOW AN APPLICABLE
 PIECE OF PROPERTY TO QUALIFY FOR THE ANNUAL FEE IN LIEU OF PROPERTY TAXES FOR
 AN ADDITIONAL TEN YEARS BY RESOLUTION OF THE COUNTY, TO EXTEND THE MAXIMUM
 TIME A PROJECT QUALIFIES FOR A FEE FROM THIRTY YEARS TO FORTY YEARS, TO DELETE
 THE REQUIREMENTS TO QUALIFY FOR A FOUR PERCENT ASSESSMENT RATIO THAT A SPONSOR
 MUST INVEST A TOTAL OF THREE HUNDRED MILLION DOLLARS WHEN ADDED TO PREVIOUS
 INVESTMENTS AND THAT A SPONSOR MUST INVEST AT LEAST FOUR HUNDRED MILLION
 DOLLARS AND CREATE TWO HUNDRED FULL-TIME JOBS AT A PROJECT, TO ALLOW ONLY A
 COUNTY TO RETAIN REVENUES FROM A FEE IN LIEU OF PROPERTY TAXES, TO ALLOW THE
 COUNTY TO USE THESE REVENUES TO OFFSET IMPROVEMENT COSTS, TO PROHIBIT A DIRECT
 PAYMENT OF CASH FOR A PROJECT EITHER IN OR NOT IN AN INDUSTRIAL DEVELOPMENT
 PARK FOR SPECIFIED AMOUNTS, AND TO DEFINE IMPROVEMENT COSTS; TO AMEND SECTION
 4-29-67, AS AMENDED, RELATING TO INDUSTRIAL DEVELOPMENT PARKS, SO AS TO DELETE
 THE REQUIREMENTS TO QUALIFY FOR A FOUR PERCENT ASSESSMENT RATIO THAT A SPONSOR
 MUST INVEST A TOTAL OF THREE HUNDRED MILLION DOLLARS WHEN ADDED TO PREVIOUS
 INVESTMENTS AND THAT A SPONSOR MUST INVEST AT LEAST FOUR HUNDRED MILLION
 DOLLARS AND CREATE TWO HUNDRED FULL-TIME JOBS AT A PROJECT; TO AMEND SECTION
 12-6-3620, RELATING TO INCOME TAX CREDITS FOR USING METHANE GAS, SO AS TO
 CLARIFY CERTAIN LANGUAGE; TO AMEND SECTION 12-36-2120, AS AMENDED, RELATING TO
 SALES TAX EXEMPTIONS FOR CONSTRUCTION MATERIALS, SO AS TO CLARIFY CERTAIN
 LANGUAGE; TO AMEND SECTION 12-43-220, AS AMENDED, RELATING TO PROPERTY TAX
 CLASSIFICATIONS FOR REAL PROPERTY, SO AS TO ALLOW ANY WAREHOUSING OR WHOLESALE
 DISTRIBUTION REAL PROPERTY TO BE EXEMPT FROM THE TEN AND ONE-HALF PERCENT
 CLASSIFICATION FOR MANUFACTURING PROPERTY; TO AMEND SECTION 12-44-10, RELATING
 TO THE TITLE OF THE CHAPTER, SO AS TO DELETE THE DATE; TO AMEND SECTION
 12-44-30, AS AMENDED, RELATING TO DEFINITIONS, SO AS TO LOWER THE REQUIREMENTS
 FOR AN ENHANCED INVESTMENT THAT A SPONSOR INVEST AT LEAST TWO HUNDRED MILLION
 DOLLARS AND CREATE TWO HUNDRED FULL-TIME JOBS TO ONE HUNDRED FIFTY MILLION
 DOLLARS AND ONE HUNDRED TWENTY-FIVE JOBS, TO ALLOW A SPONSOR TO BE EXEMPT FROM
 THE NEW FULL-TIME JOBS REQUIREMENT IN CERTAIN CIRCUMSTANCES, TO LOWER THE
 LEVEL OF INVESTMENT REQUIRED FOR A MINIMUM INVESTMENT FROM FIVE MILLION
 DOLLARS TO TWO AND ONE-HALF MILLION DOLLARS, AND TO ALLOW A COUNTY BY
 RESOLUTION TO EXTEND THE TERMINATION DATE OF A FEE AGREEMENT UP TO AN
 ADDITIONAL TEN YEARS; AND TO AMEND SECTION 12-44-40, AS AMENDED, RELATING TO
 FEE AGREEMENTS, SO AS TO CLARIFY CERTAIN LANGUAGE.

   04/17/07  House  Introduced and read first time HJ-13
   04/17/07  House  Referred to Committee on Ways and Means HJ-14

TO AMEND SECTION 4-12-30, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO FEE IN LIEU OF PROPERTY TAXES, SO AS TO ALLOW AN APPLICABLE PIECE OF PROPERTY TO QUALIFY FOR THE ANNUAL FEE IN LIEU OF PROPERTY TAXES FOR AN ADDITIONAL TEN YEARS BY RESOLUTION OF THE COUNTY, TO EXTEND THE MAXIMUM TIME A PROJECT QUALIFIES FOR A FEE FROM THIRTY YEARS TO FORTY YEARS, TO DELETE THE REQUIREMENTS TO QUALIFY FOR A FOUR PERCENT ASSESSMENT RATIO THAT A SPONSOR MUST INVEST A TOTAL OF THREE HUNDRED MILLION DOLLARS WHEN ADDED TO PREVIOUS INVESTMENTS AND THAT A SPONSOR MUST INVEST AT LEAST FOUR HUNDRED MILLION DOLLARS AND CREATE TWO HUNDRED FULL-TIME JOBS AT A PROJECT, TO ALLOW ONLY A COUNTY TO RETAIN REVENUES FROM A FEE IN LIEU OF PROPERTY TAXES, TO ALLOW THE COUNTY TO USE THESE REVENUES TO OFFSET IMPROVEMENT COSTS, TO PROHIBIT A DIRECT PAYMENT OF CASH FOR A PROJECT EITHER IN OR NOT IN AN INDUSTRIAL DEVELOPMENT PARK FOR SPECIFIED AMOUNTS, AND TO DEFINE IMPROVEMENT COSTS; TO AMEND SECTION 4-29-67, AS AMENDED, RELATING TO INDUSTRIAL DEVELOPMENT PARKS, SO AS TO DELETE THE REQUIREMENTS TO QUALIFY FOR A FOUR PERCENT ASSESSMENT RATIO THAT A SPONSOR MUST INVEST A TOTAL OF THREE HUNDRED MILLION DOLLARS WHEN ADDED TO PREVIOUS INVESTMENTS AND THAT A SPONSOR MUST INVEST AT LEAST FOUR HUNDRED MILLION DOLLARS AND CREATE TWO HUNDRED FULL-TIME JOBS AT A PROJECT; TO AMEND SECTION 12-6-3620, RELATING TO INCOME TAX CREDITS FOR USING METHANE GAS, SO AS TO CLARIFY CERTAIN LANGUAGE; TO AMEND SECTION 12-36-2120, AS AMENDED, RELATING TO SALES TAX EXEMPTIONS FOR CONSTRUCTION MATERIALS, SO AS TO CLARIFY CERTAIN LANGUAGE; TO AMEND SECTION 12-43-220, AS AMENDED, RELATING TO PROPERTY TAX CLASSIFICATIONS FOR REAL PROPERTY, SO AS TO ALLOW ANY WAREHOUSING OR WHOLESALE DISTRIBUTION REAL PROPERTY TO BE EXEMPT FROM THE TEN AND ONE-HALF PERCENT CLASSIFICATION FOR MANUFACTURING PROPERTY; TO AMEND SECTION 12-44-10, RELATING TO THE TITLE OF THE CHAPTER, SO AS TO DELETE THE DATE; TO AMEND SECTION 12-44-30, AS AMENDED, RELATING TO DEFINITIONS, SO AS TO LOWER THE REQUIREMENTS FOR AN ENHANCED INVESTMENT THAT A SPONSOR INVEST AT LEAST TWO HUNDRED MILLION DOLLARS AND CREATE TWO HUNDRED FULL-TIME JOBS TO ONE HUNDRED FIFTY MILLION DOLLARS AND ONE HUNDRED TWENTY-FIVE JOBS, TO ALLOW A SPONSOR TO BE EXEMPT FROM THE NEW FULL-TIME JOBS REQUIREMENT IN CERTAIN CIRCUMSTANCES, TO LOWER THE LEVEL OF INVESTMENT REQUIRED FOR A MINIMUM INVESTMENT FROM FIVE MILLION DOLLARS TO TWO AND ONE-HALF MILLION DOLLARS, AND TO ALLOW A COUNTY BY RESOLUTION TO EXTEND THE TERMINATION DATE OF A FEE AGREEMENT UP TO AN ADDITIONAL TEN YEARS; AND TO AMEND SECTION 12-44-40, AS AMENDED, RELATING TO FEE AGREEMENTS, SO AS TO CLARIFY CERTAIN LANGUAGE.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION    1.    Section 4-12-30(C)(4), (D)(4)(a), and (K)(3) of the 1976 Code, as last amended by Act 384 of 2006, is further amended to read:

"(4)    The annual fee provided by subsection (D)(2) is available for no more than twenty years for an applicable piece of property, unless extended for up to an additional ten years by resolution of the county. For projects 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, unless extended for up to an additional ten years as provided in this item, to a maximum total of thirty forty years for the fee for a single project which has been granted an extension. For those sponsors qualifying under subsection (D)(4), the annual fee is available for no more than thirty years for an applicable piece of property and for those projects placed in service in more than one year the annual fee is available for a maximum of forty years, or for those sponsors qualifying pursuant to subsection (C)(3), forty-five years.

(a)    The assessment ratio may not be lower than four percent:

( i)    in the case of a single sponsor investing at least one hundred fifty million dollars, resulting in a total investment of at least three hundred million dollars when added to previous investments by a sponsor, and creating at least one hundred twenty-five new full-time jobs at a project;

(ii)    in the case of a single sponsor investing at least four hundred million dollars and which is creating at least two hundred new full-time jobs at a project;

(iii)    in the case of a business including a corporation, its subsidiaries, and its limited liability company members, that builds a project consisting of gas-fired combined-cycle power facility and invests at least four hundred million dollars and creates at least twenty-five full-time jobs as defined in Section 12-6-3360(M) at that project; or

(iv) (iii)    in the case of a project that satisfies the requirements of Section 11-41-30(2)(a), and for which the Secretary of Commerce has delivered certification pursuant to Section 11-41-70(2)(a).

(3)(a)    A county or municipality or special purpose district that receives and retains revenues from a payment in lieu of taxes may use a portion of this revenue for the purposes outlined in Section 4-29-68 without the requirement of issuing special source revenue bonds or the requirements of Section 4-29-68(A)(4) to offset improvement costs by providing a credit against the fee due from a sponsor. A direct payment of cash may not be made to the sponsor:

( i)    for a project not located in an industrial development park, to the extent that the cumulative credit taken does not exceed the lesser of:

A.    the improvement costs of the project; or

B.    the county's share of fees distributed from the project pursuant to Section 4-12-30(B);

(ii)    for a project located within an industrial development park, to the extent that the cumulative credit taken does not exceed the lesser or:

A.    the improvement costs of the project; or

B.    the total amount of fees the county is entitled to retain pursuant to the industrial development park agreement.

(b)    For purposes of item (3), improvement costs include the cost of designing, acquiring, constructing, improving, or expanding:

( i)    the infrastructure serving the project; and

(ii)    improved and unimproved real property, buildings, and structural components of buildings used in the operation of a project in order to enhance economic development."

SECTION    2.    Section 4-29-67(D)(4)(a) of the 1976 Code, as last amended by Act 384 of 2006, is further amended to read:

"(a)    The assessment ratio may not be lower than four percent:

( i)    in the case of a single sponsor investing at least one hundred fifty million dollars, resulting in a total investment of at least three hundred million dollars when added to previous investments by a sponsor, and which is creating at least one hundred twenty-five new full-time jobs at the project;

(ii)    in the case of a single sponsor investing at least four hundred million dollars and which is creating at least two hundred new full-time jobs at the project;

(iii)    in the case of a business including a corporation, its subsidiaries, and its limited liability company members, that builds a project consisting of gas-fired combined-cycle power facility and invests at least four hundred million dollars and creates at least twenty-five full-time jobs as defined in Section 12-6-3360(M) at that project; or

(iv)(iii)     in the case of a project that satisfies the requirements of Section 11-41-30(2)(a), and for which the Secretary of Commerce has delivered certification pursuant to Section 11-41-70(2)(a)."

SECTION    3.    Section 12-6-3620(A) of the 1976 Code, as added by Act 386 of 2006, is amended to read:

"(A)    For taxable years beginning after 2006, there is allowed a tax credit against the tax imposed pursuant to Section 12-6-530 for twenty-five percent of the costs incurred by a taxpayer for use of methane gas taken from a landfill to provide power energy for a manufacturing facility."

SECTION    4.    A.    Section 12-36-2120(67) of the 1976 Code, as added by Act 384 of 2006, is amended to read:

"(67)    effective July 1, 2011, construction materials used in the construction of a single new or expanded manufacturing and or distribution facility with a capital investment of at least one hundred million in real and personal property at a single site in the State over an eighteen-month period. The taxpayer must provide notice of the exemption, and the Department of Revenue may assess taxes owing in the manner provided in Section 12-36-2120(51)."

B.    Notwithstanding the sales and use tax rates imposed pursuant to Chapter 36, Title 12 of the 1976 Code, the rate of tax imposed pursuant to that chapter on the gross proceeds of qualifying construction materials used in the construction of a new or expanded manufacturing or distribution facility, created by this section, is four percent for sales from July 1, 2007, through June 30, 2008, three percent for sales from July 1, 2008, through June 30, 2009, two percent for sales from July 1, 2009, through June 30, 2010, and one percent for sales from July 1, 2010, through June 30, 2011.

SECTION    5.    Section 12-43-220(a) of the 1976 Code is amended to read:

"(a)    All real and personal property owned by or leased to manufacturers and utilities and used by the manufacturer or utility in the conduct of the business must be taxed on an assessment equal to ten and one-half percent of the fair market value of the property.

(1)    Real property owned by or leased to a manufacturer and used primarily for research and development is not considered used by a manufacturer in the conduct of the business of the manufacturer for purposes of classification of property under item (a) of this section. The term "research and development" means basic and applied research in the sciences and engineering and the design and development of prototypes and processes.

(2)    Real property owned by or leased to a manufacturer and used primarily as an office building is not considered used by a manufacturer in the conduct of the business of the manufacturer for purposes of classification of property under item (a) of this section if the office building is not located on the premises of or contiguous to the plant site of the manufacturer.

(3)    Real property owned by or leased to a manufacturer and used primarily for warehousing and wholesale distribution of clothing and wearing apparel is not considered used by a manufacturer in the conduct of the business of the manufacturer for purposes of classification of property under item (a) of this section if the property is not located on the premises of or contiguous to the manufacturing site of the manufacturer."

SECTION    6.    A.    Section 12-44-10 of the 1976 Code is amended to read:

"Section 12-44-10.    This act may be cited as the 'Fee in Lieu of Tax Simplification Act of 1997."

B.    Section 12-44-30(7), (14), and (20) of the 1976 Code, as last amended by Act 161 of 2005, is further amended to read:

"(7)(a)    'Enhanced investment' means a project which results in a total investment:

(a)( i)    by a single sponsor of at least two hundred million dollars, resulting in a total investment of at least four hundred million dollars when added to the previous investments, and creating at least two hundred investing at least one hundred fifty million dollars and creating at least one hundred twenty-five new full-time jobs at the project;

(b    )(ii)    by a single sponsor investing at least four hundred million dollars and which is creating at least two hundred new full-time jobs at the project;

(c)    by a single sponsor investing at least six hundred million dollars in this State;

(d)(iii)    at least four hundred million dollars in the building of a project consisting of gas-fired combined-cycle power facility by a sponsor which creates at least twenty-five full-time jobs as defined in Section 12-6-3360(M) at that project and invests an additional five hundred million dollars in this State. The investment must be made by a sponsor which consists of a corporation, its subsidiaries, and its limited liability companies. The new full-time jobs requirement of this subsection does not apply to a taxpayer which paid more than fifty percent of all property taxes actually collected in the county for more than twenty-five years ending on the date of the fee agreement; or

(e)(iv)    that satisfies the requirements of Section 11-41-30(2)(a), and for which the Secretary of Commerce has delivered certification pursuant to Section 11-41-70(2)(a).

(b)    The new full-time jobs requirement of this item does not apply in the case of a sponsor which, for more than the twenty-five years ending on the date of the fee agreement, paid more than fifty percent of all property taxes actually collected in the county.

(14)    'Minimum investment' means a project that results in a total level of investment by a sponsor of not less than five in the project of at least two and one-half million dollars that must be invested within the investment period. If a county has an average annual unemployment rate of at least twice the state average during the last twenty-four month period based on data available on the most recent November first, the minimum investment is one million dollars. The department shall designate these reduced investment counties by December thirty-first of each year using data from the South Carolina Employment Security Commission and the United States Department of Commerce. The designations are effective for a sponsor whose fee agreement is signed in the calendar year following the county designation. For all purposes of this chapter, the minimum investment may include amounts expended by a sponsor or sponsor affiliate as a nonresponsible party in a voluntary cleanup contract on the property pursuant to Article 7, Chapter 56 of Title 44, the Brownfields Voluntary Cleanup Program, if the Department of Health and Environmental Control certifies completion of the cleanup. If the amounts under the Brownfields Voluntary Cleanup Program equal at least one million dollars, the investment threshold requirement of this chapter is deemed to have been met.

(20)    'Termination date' means the date which is the last day of a property tax year which is the nineteenth year following the first property tax year in which an applicable piece of economic development property is placed in service, unless otherwise extended for up to an additional ten years by resolution of the county. With respect to a fee agreement involving an enhanced investment, the termination date is the last day of a property tax year which is the twenty-ninth year following the first property tax year in which an applicable piece of economic development property is placed in service. If the fee agreement is terminated in accordance with Section 12-44-140, the termination date is the date the agreement is terminated."

C.    Section 12-44-40(E) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:

"(E)    If a fee agreement is not executed within five years after the inducement resolution agreement is adopted executed by the sponsor and the county council, the real property or tangible personal property of a sponsor for which expenditures have been incurred by the sponsor with respect to the project do not qualify as economic development property."

SECTION    7.    This act takes effect upon approval by the Governor.