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H*3008 Session 117 (2007-2008) H*3008(Rat #0368, Act #0352 of 2008) General Bill, By Ballentine, Haskins, Cotty and Lowe AN ACT TO AMEND SECTION 12-37-220, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PROPERTY TAX EXEMPTIONS, SO AS TO EXEMPT REAL PROPERTY OWNED BY A CHARITABLE ORGANIZATION WHICH IS NOT USED FOR THE ORGANIZATION'S MEETINGS OR THE ORGANIZATION'S TAX EXEMPT PURPOSES BUT WHICH IS HELD FOR FUTURE USE BY THE ORGANIZATION IN PURSUIT OF ITS EXEMPT PURPOSES OR WHICH IS HELD BY THE ORGANIZATION FOR INVESTMENT IN PURSUIT OF THE ORGANIZATION'S EXEMPT PURPOSES IF THIS REAL PROPERTY WHILE HELD IS NOT RENTED OR LEASED FOR A PURPOSE UNRELATED TO THE ORGANIZATION'S EXEMPT PURPOSES AND THE USE OF THE REAL PROPERTY DOES NOT INURE TO THE BENEFIT OF ANY PRIVATE STOCKHOLDER OR INDIVIDUAL, TO LIMIT THIS EXEMPTION TO THREE YEARS, AND PROVIDE FOR RECAPTURE OF AMOUNTS EXEMPTED IF THE PROPERTY IS TRANSFERRED; TO AMEND SECTION 12-6-3310, AS AMENDED, RELATING TO THE APPLICATION OF TAX CREDITS, SO AS TO PROVIDE FOR THE APPLICATION OF TAX CREDITS WHEN EARNED BY CERTAIN LIMITED LIABILITY COMPANIES; TO AMEND SECTION 12-6-3410, AS AMENDED, RELATING TO THE CORPORATE HEADQUARTERS INCOME TAX CREDIT, SO AS TO REVISE REQUIREMENTS WITH RESPECT TO THIS CREDIT; TO AMEND SECTION 12-6-3520, AS AMENDED, RELATING TO THE INCOME CREDIT FOR HABITAT MANAGEMENT, SO AS TO PROVIDE FOR THE APPLICATION OF THIS CREDIT FOR PASS THROUGH ENTITIES; TO AMEND SECTION 12-10-30, AS AMENDED, RELATING TO DEFINITIONS FOR PURPOSES OF THE ENTERPRISE ZONE ACT OF 1995, SO AS TO ADD A DEFINITION FOR A "SIGNIFICANT BUSINESS"; TO AMEND SECTION 12-10-80, AS AMENDED, RELATING TO JOB DEVELOPMENT CREDITS, SO AS TO REVISE ELIGIBILITY FOR WAIVER LIMITS OF A SIGNIFICANT BUSINESS AND REVISE OTHER ELIGIBILITY REQUIREMENTS FOR THIS CREDIT; AND TO AMEND SECTIONS 12-44-30, 4-29-67, AND 4-12-30, ALL AS AMENDED, RELATING RESPECTIVELY TO DEFINITIONS FOR PURPOSES OF THE FEE IN LIEU OF TAX SIMPLIFICATION ACT AND RELATING TO FEES IN LIEU OF TAXES, SO AS TO PROVIDE FOR THAT INVESTMENT ATTRIBUTED TO A SPONSOR. - ratified title 12/13/06 House Prefiled 12/13/06 House Referred to Committee on Ways and Means 01/09/07 House Introduced and read first time VERSIONS OF THIS BILL
12/13/2006 5/15/2007 5/16/2007 5/17/2007 5/18/2007 5/28/2008 5/29/2008 6/4/2008 (A352, R368, H3008) AN ACT TO AMEND SECTION 12-37-220, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PROPERTY TAX EXEMPTIONS, SO AS TO EXEMPT REAL PROPERTY OWNED BY A CHARITABLE ORGANIZATION WHICH IS NOT USED FOR THE ORGANIZATION'S MEETINGS OR THE ORGANIZATION'S TAX EXEMPT PURPOSES BUT WHICH IS HELD FOR FUTURE USE BY THE ORGANIZATION IN PURSUIT OF ITS EXEMPT PURPOSES OR WHICH IS HELD BY THE ORGANIZATION FOR INVESTMENT IN PURSUIT OF THE ORGANIZATION'S EXEMPT PURPOSES IF THIS REAL PROPERTY WHILE HELD IS NOT RENTED OR LEASED FOR A PURPOSE UNRELATED TO THE ORGANIZATION'S EXEMPT PURPOSES AND THE USE OF THE REAL PROPERTY DOES NOT INURE TO THE BENEFIT OF ANY PRIVATE STOCKHOLDER OR INDIVIDUAL, TO LIMIT THIS EXEMPTION TO THREE YEARS, AND PROVIDE FOR RECAPTURE OF AMOUNTS EXEMPTED IF THE PROPERTY IS TRANSFERRED; TO AMEND SECTION 12-6-3310, AS AMENDED, RELATING TO THE APPLICATION OF TAX CREDITS, SO AS TO PROVIDE FOR THE APPLICATION OF TAX CREDITS WHEN EARNED BY CERTAIN LIMITED LIABILITY COMPANIES; TO AMEND SECTION 12-6-3410, AS AMENDED, RELATING TO THE CORPORATE HEADQUARTERS INCOME TAX CREDIT, SO AS TO REVISE REQUIREMENTS WITH RESPECT TO THIS CREDIT; TO AMEND SECTION 12-6-3520, AS AMENDED, RELATING TO THE INCOME CREDIT FOR HABITAT MANAGEMENT, SO AS TO PROVIDE FOR THE APPLICATION OF THIS CREDIT FOR PASS THROUGH ENTITIES; TO AMEND SECTION 12-10-30, AS AMENDED, RELATING TO DEFINITIONS FOR PURPOSES OF THE ENTERPRISE ZONE ACT OF 1995, SO AS TO ADD A DEFINITION FOR A "SIGNIFICANT BUSINESS"; TO AMEND SECTION 12-10-80, AS AMENDED, RELATING TO JOB DEVELOPMENT CREDITS, SO AS TO REVISE ELIGIBILITY FOR WAIVER LIMITS OF A SIGNIFICANT BUSINESS AND REVISE OTHER ELIGIBILITY REQUIREMENTS FOR THIS CREDIT; AND TO AMEND SECTIONS 12-44-30, 4-29-67, AND 4-12-30, ALL AS AMENDED, RELATING RESPECTIVELY TO DEFINITIONS FOR PURPOSES OF THE FEE IN LIEU OF TAX SIMPLIFICATION ACT AND RELATING TO FEES IN LIEU OF TAXES, SO AS TO PROVIDE FOR THAT INVESTMENT ATTRIBUTED TO A SPONSOR. Be it enacted by the General Assembly of the State of South Carolina: Property tax exemption SECTION 1. Section 12-37-220(B)(16) of the 1976 Code is amended by adding a new subitem at the end to read: "(c) The exemption allowed pursuant to subitem (a) of this item extends to real property owned by an organization described in subitem (a) and which qualifies as a tax exempt organization pursuant to Internal Revenue Code Section 501(c)(3), when the real property is held for a future use by the organization that would qualify for the exemption allowed pursuant to subitem (a) of this item or held for investment by the organization in sole pursuit of the organization's exempt purposes and while held this real property is not rented or leased for a purpose unrelated to the exempt purposes of the organization and the use of the real property does not inure to the benefit of any private stockholder or individual. Real property donated to the organization which receives the exemption allowed pursuant to this subitem is allowed the exemption for no more than three consecutive property tax years. If real property acquired by the organization by purchase receives the exemption allowed pursuant to this subitem and is subsequently sold without ever having been put to the exempt use, the exemption allowed pursuant to this subitem is deemed terminated as of December thirty-first preceding the year of sale and the property is subject to property tax for the year of sale to which must be added a recapture amount equal to the property tax that would have been due on the real property for not more than the four preceding years in which the real property received the exemption allowed pursuant to this subitem. The recapture amount is deemed property tax for all purposes for payment and collection." Miscellaneous tax provisions SECTION 2. A. Section 12-6-3310 of the 1976 Code, as last amended by Act 69 of 2003, is further amended by adding a new subsection at the end to read: "(C) A limited liability company not organized as a legal entity which is a taxpayer, a corporation, or other form of business entity expressly specified as qualifying for the credits allowed pursuant to this article nevertheless qualifies for such credits in a manner consistent with Section 12-2-25 as follows: (1) Limited liability companies taxed for South Carolina income tax purposes as partnerships shall apply the credits as provided in subsection (B). If a member is an individual, the limited liability company may earn and pass through any credits allowed by this article to be applied against income tax imposed pursuant to Section 12-6-510. If a member is a corporation, the limited liability company may earn and pass through any credits allowed by this article to be applied against income tax imposed pursuant to Section 12-6-530. (2) Limited liability companies taxed for South Carolina income tax purposes as corporations are entitled to all credits otherwise applicable to corporations. (3) With respect to single members of limited liability companies which are not regarded as a separate entity from its owner, members who are individuals may claim any credits allowed by this article to be applied against income tax imposed pursuant to Section 12-6-510 and members which are corporations may claim any credits allowed by this article to be applied against income tax imposed pursuant to Section 12-6-530. (4) For limited liability companies owned by limited liability companies or other pass through entities described in subsection (B), items (1) through (3) are applied at each successive stage of ownership until the credit is applied against the tax imposed pursuant to either Section 12-6-510 or Section 12-6-530, as applicable. B. 1. Section 12-6-3410(D)(2) of the 1976 Code is amended to read:
"(2) The establishment, expansion, or addition of a corporate headquarters or research and development facility must result in the creation of at least seventy-five new full- (a) headquarters related functions and services; or (b) research and development related functions and services. The seventy-five required jobs must have an average cash compensation level of more than twice 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." 2. Section 12-6-3410(J) of the 1976 Code, as last amended by Act 384 of 2006, is further amended by deleting item (9) which reads: "(9) 'corporation', 'corporate', 'company', and 'taxpayer' for purposes of this section also include a limited liability company which is subject to regulation under the Federal Power Act (16 U.S.C. Section 791(a)) and which is formed to operate or to take functional control of electric transmission assets as defined in the Federal Power Act regardless of whether the limited liability company is treated as a partnership or as a corporation for South Carolina income tax purposes. If treated as a partnership, a limited liability company that qualifies for a credit under this section passes the credit through to its members in proportion to their interests in the limited liability company. Each member's share of the credit is nonrefundable but is allowed as a credit against any tax under Section 12-6-530 or Section 12-20-50 and bank taxes imposed pursuant to Chapter 11 of this title. Each member may carry any unused credit forward as provided in subsection (F). The limited liability company may not carry forward a credit that passes through to its members." C. Section 12-6-3520 of the 1976 Code, as last amended by Act 89 of 2001, is further amended by deleting subsection (E) which reads: "(E)(1) An 'S' corporation, limited liability company, or partnership that qualifies for the credit pursuant to this section may pass through the credit earned to each shareholder of the 'S' corporation, member of the limited liability company, or partner of the partnership. (2) The amount of the credit allowed a shareholder, member, or partner pursuant to this section is equal to the shareholder's percentage of stock ownership, the member's interest in the limited liability company, or the partner's interest in the partnership for the taxable year, multiplied by the amount of the credit earned by the entity. Credit earned by an 'S' corporation owing corporate level income tax must be used first at the entity level. Only the remaining credit passes through to the shareholders of the 'S' corporation. (3) For purposes of this subsection, 'limited liability company' means a limited liability company taxed like a partnership." D. Section 12-10-30 of the 1976 Code, as last amended by Act 89 of 2001, is further amended by adding a new item at the end to read: "(18) 'Significant business' means a qualifying business making a significant capital investment as defined in Section 12-44-30(7)." E. Section 12-10-80(D)(2), as last amended by Act 386 of 2006, is further amended to read: "(2) The amount that may be claimed as a job development credit by a qualifying business is limited by this subsection and by the revitalization agreement. The council may approve a waiver of ninety-five percent of the limits provided in item (1) for: (a) a significant business; and (b) a related person to a significant business if the related person is located at the project site of the significant business and qualifies for job development credits pursuant to this chapter. For purposes of this item, a related person includes any entity or person that bears a relationship to a significant business as provided in Internal Revenue Code Section 267 and includes, without limitation, a limited liability company of which more than fifty percent of the capital interest or profits is owned directly or indirectly by a significant business or by a person or entity, or group of persons or entities which owns, more than fifty percent of the capital interest or profits in the significant business." F. Section 12-44-30(7) of the 1976 Code, as last amended by Act 116 of 2007, is further amended by adding a new paragraph at the end to read: "For purposes of this item, if a single sponsor enters into a financing arrangement of the type described in Section 12-44-120(B), the investment in or financing of the property by a developer, lessor, financing entity, or other third party in accordance with this arrangement is considered investment by the sponsor. Investment by a related person to the sponsor, as described in Section 12-10-80(D)(2), is considered investment by the sponsor." G. Section 4-29-67(D)(4)(a) of the 1976 Code, as last amended by Act 116 of 2007, is further amended by adding a new paragraph at the end to read: "For purposes of this item, if a single sponsor enters into a financing arrangement of the type described in Section 4-29-67(O)(2), the investment in or financing of the property by a developer, lessor, financing entity, or other third party in accordance with this arrangement is considered investment by the sponsor. Investment by a related person to the sponsor, as described in Section 12-10-80(D)(2), is considered investment by the sponsor." H. Section 4-12-30(D)(4)(a) of the 1976 Code, as last amended by Act 116 of 2007, is further amended by adding a new paragraph at the end to read: "For purposes of this item, if a single sponsor enters into a financing arrangement of the type described in Section 4-12-30(M)(2), the investment in or financing of the property by a developer, lessor, financing entity, or other third party in accordance with this arrangement is considered investment by the sponsor. Investment by a related person to the sponsor, as described in Section 12-10-80(D)(2), is considered investment by the sponsor." Severability SECTION 3. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective. SECTION 4. This act takes effect upon approval by the Governor. Ratified the 5th day of June, 2008. Became law without the signature of the Governor -- 6/12/08.
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