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April 13, 2000
S. Printed 4/13/00--S. [SEC 4/18/00 9:47 AM]
Read the first time March 21, 2000.
This bill is not expected to reduce state general fund revenue in FY2000-01.
This bill would provide for an alternative method in determining the fair market value of property of a pharmaceutical company that has invested more than $400 million in a single county for the fee-in-lieu of property taxes. According to the Department of Commerce, Roche Carolina, Inc. in Florence County has invested $540 million in pharmaceutical research and development activities through 1999. The fee would be calculated as either the lower of the fair market value using the original tax basis as determined by the Department of Revenue, or as determined by the county in which the investment is located using the original tax basis and also permitting an allowance for any cost overruns and capitalized interest overruns. This bill would not have any impact on state revenues. This bill could cause a shift in tax incidence for local governments, depending on the value of cost overruns and interest costs.
William C. Gillespie
Board of Economic Advisors
1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact, Section 2-7-76 for a local revenue impact, and Section 6-1-85(B) for an estimate of the shift in local property tax incidence.
TO AMEND SECTION 4-29-67, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE FEE IN LIEU OF PROPERTY TAXES ALLOWED FOR CERTAIN INDUSTRIAL DEVELOPMENT PROJECTS, SO AS TO PROVIDE AN ALTERNATIVE METHOD FOR DETERMINING THE FAIR MARKET VALUE OF A PHARMACEUTICAL COMPANY PROJECT WITH MORE THAN A FOUR HUNDRED MILLION DOLLAR INVESTMENT.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 4-29-67 of the 1976 Code, as last amended by Act 114 of 1999, is further amended by adding a new subsection at the end to read:
"(BB) Notwithstanding any other provision of this section, the fair market value of property of a pharmaceutical company investing more than four hundred million dollars in one county in this State is the lower of the fair market value estimate (1) as determined pursuant to subsection (D)(2)(a)(i), or (2) as determined by the county in which the investment is located as follows:
(a) for real property, using the original income tax basis for South Carolina income tax purposes without regard to depreciation, less any such basis amount attributable to cost overruns, including capitalized interest overruns; and
(b) for personal property, using the original income tax basis for South Carolina income tax purposes, less any such basis amount attributable to cost overruns, including capitalized interest overruns, and less depreciation allowable for property tax purposes, except that the investor is not entitled to any extraordinary obsolescence.
This subsection applies only to property placed in service before January 1, 2000."
SECTION 2. This act takes effect upon approval by the Governor and applies to fee payments due after June 30, 2000.
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