S 1226 Session 117 (2007-2008) S 1226 General Bill, By O'Dell
TO AMEND SECTION 12-6-3360, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE CREDIT AGAINST THE STATE'S INCOME, BANK, OR INSURANCE PREMIUM TAX FOR THE CREATION OF NEW FULL-TIME JOBS, SO AS TO PROVIDE FOR AN ENHANCED CREDIT FOR HEADQUARTERS GENERALLY AND SPECIFICALLY FOR COMPANIES WHO CREATE FEWER JOBS BUT AT A HIGHER RATE OF COMPENSATION; TO AMEND SECTION 12-6-3410, AS AMENDED, RELATING TO THE TAX CREDIT FOR ESTABLISHING OR EXPANDING HEADQUARTERS IN THIS STATE, SO AS TO CHANGE "CORPORATION" TO "TAXPAYER" REFLECTING THAT THE QUALIFYING HEADQUARTERS DO NOT HAVE TO BE CORPORATE, AND TO DEFINE "TAXPAYER"; TO AMEND SECTION 12-10-80, AS AMENDED, RELATING TO THE ENTERPRISE ZONE ACT OF 1995, SO AS TO DELETE THE REFERENCE TO "CORPORATE" IN CONNECTION WITH HEADQUARTERS; TO AMEND SECTION 12-20-105, AS AMENDED, RELATING TO TAX CREDITS FOR UTILITIES INFRASTRUCTURES, SO AS TO CLARIFY THAT THE CREDITS MAY BE USED ONLY IN CONNECTION WITH INDUSTRIAL OR COMMERCIAL PARKS, OR BOTH, USED FOR ECONOMIC DEVELOPMENT, TO CLARIFY THAT WASTEWATER AND ENVIRONMENTAL COSTS ARE PART OF THE INFRASTRUCTURE, AND TO RAISE THE AGGREGATE AMOUNT OF THE CREDIT; TO AMEND SECTIONS 12-44-30, 4-12-10, AND 4-29-67, ALL AS AMENDED, ALL RELATING TO DEFINITIONS IN CONNECTION WITH VARIOUS FEES IN LIEU OF TAX PROVISIONS, ALL SO AS TO INCLUDE IN THE DEFINITION OF "PROJECT" AN AIRPLANE HANGERED OR USING AN AIRPORT IN A COUNTY, IF THE COUNTY CONSENTS; AND TO AMEND SECTIONS 12-44-120, 4-12-30, AND 4-29-67, ALL AS AMENDED, ALL RELATING TO A COUNTY'S PRIOR APPROVAL OR LATER RATIFICATION OF TRANSFER OF ITS AGREEMENTS IN CONNECTION WITH A FEE IN LIEU OF TAXES TRANSACTION, SO AS TO PROVIDE THREE DIFFERENT METHODS FOR EVIDENCING ITS APPROVAL OR RATIFICATION. Be it enacted by the General Assembly of the State of South Carolina: SECTION 1. Section 12-6-3360(M)(13) of the 1976 Code, as last amended by Act 394 of 2006, is further amended to read: "(13) 'Qualifying service-related facility' means: (a) an establishment engaged in an activity or activities listed under the North American Industry Classification System Manual (NAICS) Section 62, subsectors 621, 622, and 623; or (b) a business, other than a business engaged in legal, accounting, banking, or investment services or retail sales, which has a net increase of at least:
(i) two hundred
(ii) one hundred twenty-five jobs at a single location and the jobs have an average cash compensation level of more than one and one-
(iii) seventy-five jobs at a single location and the jobs have an average cash compensation level of more than
(iv) thirty jobs at a single location and the jobs have an average cash compensation level of more than two (v) fifteen jobs at a single location and the jobs have an average cash compensation level of more than two and one-half times the lower of the state per capita income or per capita income of the county in which the jobs are located. A taxpayer shall use the most recent per capita income data available as of the end of the taxable year in which the jobs are filled. Determination of the required number of jobs is in accordance with the monthly average described in subsection (F)." SECTION 2. Section 12-6-3410 of the 1976 Code, as last amended by Act 386 of 2006, is further amended to read:
"Section 12-6-3410. (A) A
(B)
(1) The qualifying real property costs of the
(a) costs incurred in the design, preparation, and development of establishing, expanding, or adding to a
(b)(i) direct construction costs
(ii) with respect to leased facilities, direct lease costs during the first five years of operations for the (2) The headquarters establishment, expansion, or addition must result in the creation of:
(a) at least forty new jobs performing headquarters-related functions and services or research and development-related functions and services. These jobs must be permanent, full-time positions located in this State
(b) at least twenty of the (C) The amount of the credit is equal to twenty percent of the qualifying real property costs listed in subsection (B)(1).
(D) A headquarters establishment, expansion, or addition (1) the personal property is: (a) capitalized as personal property for income tax purposes under the Internal Revenue Code; and
(b) purchased for the establishment, expansion, or addition of a
(c) used for
(2) The establishment, expansion, or addition of a (a) the creation of at least seventy-five new full-time jobs performing either: (i) headquarters related functions and services; or (ii) research and development related functions and services.
(b) The seventy-five jobs must have an average cash compensation level of more than one and one-half times the per capita income of this State based on the most recent per capita income data available as of the end of the taxpayer's taxable year in which the jobs are filled
(E)(1)(a) For facilities
(b)
(2) The
(F) The credit provided in this section is nonrefundable, but an unused credit may be carried forward for ten years. An unused credit may be carried forward fifteen years if the criteria
(G) If a fee-in-lieu arrangement
(H) To the extent that this credit applies to the cost of certain property, the basis of the property for South Carolina income tax purposes must be reduced by the amount of the credit claimed with respect to the property. This basis reduction does not reduce the basis or limit or disallow any depreciation allowable under the law of this State for other than income tax purposes, even if the depreciation is based upon or otherwise relates to income tax depreciation including, without limitation, basis or depreciation which is allowable
(I) The amount of a credit allowed (J) As used in this section:
(1) '
(a) National
(b) Regional (i) at least five states, including this State; or
(ii) two or more states, including this State, if the entire business operations of the
(c) A 'company business unit' is an organizational unit of a (2) 'New job' means a job created by an employer in this State at the time a new facility, expansion, or addition is initially staffed, but does not include a job created when an employee is shifted from an existing location in this State to work in a new or expanded facility. An employee may be employed at a temporary location in this State pending completion of the new facility, expansion, or addition.
(3) 'Full-time' means a job requiring a minimum of thirty-five hours of an employee's time a week for the entire normal year of (4) 'Headquarters-related functions and services' are those functions involving financial, personnel, administrative, legal, planning, information technology, or similar business functions. (5) 'Headquarters staff employees' means executive, administrative, or professional workers performing headquarters-related functions and services.
(a) An executive employee is a full-time employee
(b) An administrative employee is a full-time employee who is not involved in manual work and whose work is directly related to management policies or general headquarters operations. An administrative employee
(c) A professional employee is an employee whose primary duty is work requiring knowledge of an advanced type in a field of science or learning. This knowledge is characterized by a prolonged course of specialized study. The work must be original and creative in nature, and the work
(6) 'Research and development' means laboratory, scientific, or experimental testing and development related to new products, new uses for existing products, or improving existing products (7) 'Research and development facility' means the building or buildings or portion of a building where research and development functions and services are physically located.
(8) 'Direct lease costs' are cash lease payments. The term does not include
(9) SECTION 3.A. Section 12-10-80(C)(3)(f) of the 1976 Code, as last amended by Act 384 of 2006, is further amended to read:
"(f) employee relocation expenses associated with new or expanded qualifying service-related facilities as defined in Section 12-6-3360(M)(13) or new or expanded technology intensive facilities as defined in Section 12-6-3360(M)(14) or relocation expenses associated with new national, regional, or global B. Section 12-10-80 of the 1976 Code, as last amended by Act 384 of 2006, is amended by adding an appropriately lettered subsection at the end to read: "( ) Where the qualifying business that creates new jobs under this section is a qualifying service-related facility as defined in Section 12-6-3360(M)(13), the determination of the number of jobs created must be based on the total number of new jobs created within five years of the effective date of the revitalization agreement, without regard to monthly or other averaging." SECTION 4. Section 12-20-105(B)-(E) of the 1976 Code, as last amended by Act 116 of 2007, is further amended to read: "(B)(1) To be considered an eligible project for purposes of this section, the project must qualify for income tax credits under Chapter 6, Title 12, withholding tax credit under Chapter 10, Title 12, income tax credits under Chapter 14, Title 12, or fees in lieu of property taxes under either Chapter 12, Title 4, Chapter 29, Title 4, or Chapter 44, Title 12.
(2) If a project consists of (C) For the purpose of this section, 'infrastructure' means improvements for water, wastewater, sewer, gas, steam, electric energy, and communication services made to a building or land that are considered necessary, suitable, or useful to an eligible project. These improvements include, but are not limited to: (1) improvements to both public or private water and sewer systems; (2) improvements to both public or private electric, natural gas, and telecommunications systems including, but not limited to, ones owned or leased by an electric cooperative, electric utility, or electric supplier, as defined in Chapter 27, Title 58; (3) fixed transportation facilities including highway, road, rail, water, and air;
(4) for a qualifying project under subsection (B)(2), infrastructure improvements include (5) for a qualifying project pursuant to subsection (B)(2), infrastructure improvements also include due diligence expenditures relating to environmental conditions made by a county or political subdivision after it has acquired contractual rights to an industrial park. Due diligence expenditures include such items as Phase I and II studies and environmental or archeological studies required by state or federal statutes or guidelines or similar lender requirements. Contractual rights include options to purchase real property or other similar contractual rights acquired before the county or political subdivision files a deed to the property with the Register of Mense Conveyances. (D) A company is not allowed the credit provided by this section for actual expenses it incurs in the construction and operation of any building or infrastructure it owns, leases, manages, or operates.
(E) The maximum aggregate credit that may be claimed in any tax year by a single company is SECTION 5. Section 12-44-30(16) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read: "(16) 'Project' means land, buildings, and other improvements on the land, including water, sewage treatment and disposal facilities, air pollution control facilities, and all other machinery, apparatus, equipment, office facilities, and furnishings which are considered necessary, suitable, or useful by a sponsor. 'Project' also may consist of or include aircraft hangered or utilizing an airport in a county so long as the county expressly consents to its inclusion. Aircraft previously subject to taxation in South Carolina qualify pursuant to this provision." SECTION 6. Section 12-44-120(D) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read: "(D) A sponsor may transfer a fee agreement, or substantially all the economic development property to which the fee agreement relates, if it obtains the prior approval, or subsequent ratification, of the county with which it entered into the fee agreement. The county's prior approval or subsequent ratification may be evidenced by any one of the following, in the absolute and sole discretion of the county providing the approval or ratification: (i) a letter or other writing executed by an authorized county representative as designated in the respective fee agreement; (ii) a resolution passed by the County Council; or (iii) an ordinance passed by the County Council following three readings and a public hearing. That approval is not required in connection with transfers to sponsor affiliates or other financing-related transfers." SECTION 7. Section 4-12-10(2) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read: "(2) 'Project' means land, buildings and other improvements on the land including water, sewage treatment and disposal facilities, air pollution control facilities, and all other machinery, apparatus, equipment, office facilities, and furnishings which are considered necessary, suitable, or useful by a sponsor. 'Project' also may consist of or include aircraft hangered or utilizing an airport in a county so long as the county expressly consents to its inclusion. Aircraft previously subject to taxation in South Carolina qualify pursuant to this provision." SECTION 8. Section 4-12-30(M)(4) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(4) A sponsor may transfer an inducement agreement, millage rate agreement, lease agreement, or the assets subject to the lease agreement, if it obtains the prior approval, or subsequent ratification, of the county with whom it entered into the original inducement agreement, millage rate agreement, or lease agreement. The county's prior approval or subsequent ratification may be evidenced by any one of the following, in the absolute and sole discretion of the county providing the approval or ratification: (i) a letter or other writing executed by an authorized county representative as designated in the respective inducement, millage rate, or lease agreement; (ii) a resolution passed by the County Council; or (iii) an ordinance passed by the County Council following three readings and a public hearing. SECTION 9. Section 4-29-67(A)(1)(c) and (O)(4) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read: "(c) 'Project' means land, buildings and other improvements on the land including water, sewage treatment and disposal facilities, air pollution control facilities, and all other machinery apparatus, equipment, office facilities, and furnishings which are considered necessary, suitable, or useful by a sponsor. 'Project' also may consist of or include aircraft hangered or utilizing an airport in a county so long as the county expressly consents to its inclusion. Aircraft previously subject to taxation in South Carolina qualify pursuant to this provision. (4) A sponsor may transfer an inducement agreement, millage rate agreement, lease agreement, or the assets subject to the lease agreement, if it obtains the prior approval, or subsequent ratification, of the county with which it entered into the original agreement. The county's prior approval or subsequent ratification may be evidenced by any one of the following, in the absolute and sole discretion of the county providing the approval or ratification: (i) a letter or other writing executed by an authorized county representative as designated in the respective inducement, millage rate, or lease agreement; (ii) a resolution passed by the County Council; or (iii) an ordinance passed by the County Council following three readings and a public hearing. That approval is not required in connection with transfers to sponsor affiliates or other financing-related transfers." SECTION 10. This act takes effect upon approval by the Governor and applies to property tax years beginning in 2008.
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