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Bill 3834

Indicates Matter Stricken

Indicates New Matter

AMENDED--NOT PRINTED IN THE SENATE

Amt. No. 4 (Doc. No. DKA\3584MM99.doc)

June 2, 1999

H. 3834

S. Printed 6/1/99--S.

Read the first time April 29, 1999.

TO AMEND SECTION 2-7-76, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO FISCAL IMPACT STATEMENTS FOR PROPOSED LEGISLATION AFFECTING COUNTIES OR MUNICIPALITIES, SO AS TO REQUIRE THE ACQUISITION OF A FISCAL IMPACT STATEMENT FROM THE "BOARD OF ECONOMIC ADVISORS" INSTEAD OF FROM THE "DEPARTMENT OF REVENUE" AND TO MAKE TECHNICAL CORRECTIONS; TO AMEND SECTION 12-6-40, AS AMENDED, RELATING TO APPLICATION OF THE INTERNAL REVENUE CODE TO STATE TAX LAWS, SO AS TO ADOPT APPLICATION OF THE INTERNAL REVENUE CODE AS AMENDED THROUGH TAXABLE YEAR 1998; TO AMEND SECTION 12-6-1120, AS AMENDED, RELATING TO COMPUTATION OF GROSS INCOME FOR STATE TAX PURPOSES, SO AS TO MAKE TECHNICAL CHANGES; TO AMEND SECTION 12-6-3410, RELATING TO INCOME TAX CREDIT FOR CORPORATE HEADQUARTERS, SO AS TO PROVIDE FOR DETERMINING THE PER CAPITA INCOME FOR PURPOSES OF CALCULATING ADDITIONAL TAX CREDIT FOR CREATION OF NEW HEADQUARTERS JOBS BY USING THE MOST RECENT PER CAPITA INCOME DATA AVAILABLE AT THE END OF THE TAXABLE YEAR THE JOBS ARE FILLED; TO AMEND SECTION 12-6-3465, RELATING TO RECYCLING FACILITY TAX CREDITS, SO AS TO UPDATE CODE CROSS REFERENCES; TO AMEND SECTION 12-16-20, RELATING TO DEFINITIONS FOR PURPOSES OF THE ESTATE TAX, SO AS TO DEFINE THE INTERNAL REVENUE CODE AS AMENDED THROUGH 1998; TO AMEND SECTION 12-20-20, RELATING TO FILING OF A CORPORATE ANNUAL REPORT, SO AS TO UPDATE A CROSS REFERENCE; TO AMEND SECTION 12-36-510, AS AMENDED, RELATING TO RETAIL LICENSE REQUIREMENTS, SO AS TO DELETE THE REQUIREMENT THAT A FESTIVAL BE LISTED AS A SPECIAL EVENT WITH THE DEPARTMENT OF PARKS, RECREATION, AND TOURISM; TO AMEND SECTION 12-37-251, AS AMENDED, RELATING TO THE HOMESTEAD EXEMPTION, SO AS TO PROVIDE THAT THE BOARD OF ECONOMIC ADVISORS, INSTEAD OF THE DEPARTMENT OF REVENUE, ESTIMATE THE TOTAL SCHOOL TAX REVENUE LOSS FROM THE EXEMPTION; AND TO AMEND SECTION 12-54-85, AS AMENDED, RELATING TO TIME LIMITATIONS FOR ASSESSMENT OF TAXES, SO AS TO INCREASE FROM THIRTY TO NINETY THE NUMBER OF DAYS A CORPORATION HAS TO FILE A CLAIM FOR REFUND AFTER AN ADJUSTMENT TO ITS TAXABLE INCOME IS MADE BY THE INTERNAL REVENUE SERVICE.

Amend Title To Conform

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

SECTION 1. Section 2-7-76 of the 1976 Code, as last amended by Section 115, Part II, Act 497 of 1994, is further amended to read:

"Section 2-7-76. (A) Whenever The chairman of the legislative committee to which a bill or resolution was referred shall direct the Budget Division or the Economic Research Section of the Budget and Control Board, as appropriate, to prepare and affix to it a statement of the estimated fiscal or revenue impact and cost to the counties and municipalities of the proposed legislation before the legislation is reported out of that committee if a bill or resolution:

(1) requires a county or municipality to expend funds allocated to the county or municipality under pursuant to Chapter 27 of Title 6, or whenever a bill or resolution;

(2) is introduced in the General Assembly to require the expenditure of funds by a county or municipality, or whenever a bill or resolution;

(3) requires the use of county or municipal personnel, facilities, or equipment to implement a general law or regulations promulgated pursuant to a general law,; or whenever a bill

(4) relates to taxes imposed by political subdivisions, the chairman of the legislative committee to which the bill or resolution was referred shall direct the Budget Division or the Department of Revenue, as appropriate, to prepare and affix to it a statement of the estimated fiscal or revenue impact and cost to the counties and municipalities of the proposed legislation prior to the legislation being reported out of that committee.

(B) A revised estimated fiscal or revenue impact and cost statement must be prepared at the direction of the presiding officer of the House of Representatives or the Senate by the Budget Division or Department of Revenue prior to Economic Research Section of the Budget and Control Board before third reading of the bill or resolution, if there is a significant amendment to the bill or resolution.

(C) For purposes of this section, political subdivision means a county, municipality, school district, special purpose district, public service district, or consolidated political subdivision."

SECTION 2. Section 12-6-40(A) of the 1976 Code, as last amended by Act 268 of 1998, is further amended to read:

"(A) 'Internal Revenue Code' means the Internal Revenue Code of 1986 as amended through December 31, 1997 1998, and includes the effective date provisions contained therein."

SECTION 3. Section 12-6-1120(8) of the 1976 Code, as added by Act 76 of 1995, is amended to read:

"(8) Each partner in the Palmetto Seed Capital Fund Limited Partnership (Fund) established under pursuant to Section 41-44-60 shall exclude from South Carolina gross income, seventy-five percent of the partner's proportionate share of income that the fund derives from a South Carolina business which is either:

( i) established and operated in a less least developed county as defined in Section 12-6-3360,; or

(ii) invested in agriculture, aquaculture, or a related business or in a business created by a socially or economically disadvantaged individual as defined in 13 Code of Federal Regulations, Sections 124.105(A) and 124.106 (1987)."

SECTION 4. Section 12-6-3410(D)(2) of the 1976 Code, as added by Act 76 of 1995, is amended to read:

"(2) The establishment, expansion, or addition of a corporate headquarters or research and development facility must result in:

(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 which.

The jobs must have an average cash compensation level of more than one and one-half times the per capita income of this State at the time the jobs are filled 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; and

(b) an average South Carolina employee cash compensation level for all employees in this State of more than twice the per capita income in the State at the time the newly created jobs are filled 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."

SECTION 5. Section 12-6-3465 of the 1976 Code, as added by Act 32 of 1995, is amended to read:

"Section 12-6-3465. A taxpayer who is constructing or operating a qualified recycling facility as defined in Section 12-7-1275 12-6-3460 shall be is entitled to credits in the amount of all funds collected as permitted in Section 12-10-80, which credits can be used to reduce the taxpayer's corporate income tax imposed by Section 12-7-230 12-6-530, sales or use tax imposed by the State or any political subdivision of the State, corporate license fees imposed by Section 12-19-70 12-20-50 or any tax similar to these taxes. Any unused credits may be carried forward to subsequent taxable years until such credits are exhausted."

SECTION 6. Section 12-16-20(5) of the 1976 Code, as last amended by Act 361 of 1992, is further amended to read:

"(5) 'Internal Revenue Code' means the Internal Revenue Code of 1986, as amended through December 31, 1991 1998."

SECTION 7. Section 12-20-20(A) of the 1976 Code, as added by Act 76 of 1995, is amended to read:

"(A) Except for those corporations described in Section 12-20-110, every domestic corporation, every foreign corporation qualified to do business in this State, and any other corporation required by Section 12-6-530 12-6-4910 to file income tax returns shall file an annual report with the department."

SECTION 8. The third paragraph of Section 12-36-510(C) of the 1976 Code, as last amended by Act 383 of 1994, is further amended to read:

" 'Special event' means a promotional show, trade show, fair, festival, or carnival for which an admissions fee is required for entering the event or, in the case of a festival, if the festival is listed as a special event in the calendar of events provided by the South Carolina Department of Parks, Recreation and Tourism. In addition, the event must be operated for a period of less than twelve consecutive days."

SECTION 9. Section 12-37-251(F) of the 1976 Code, as last amended by Section 29C, Part II, Act 419 of 1998, is further amended to read:

"(F) The exemption allowed by this section is conditional on full funding of the Education Finance Act and on an appropriation by the General Assembly each year reimbursing school districts an amount equal to the Department of Revenue's Economic Research Section of the Budget and Control Board estimate of total school tax revenue loss resulting from the exemption in the next fiscal year."

SECTION 10. The second paragraph of Section 12-54-85(D) of the 1976 Code, as added by Act 60 of 1995, is amended to read:

"Notwithstanding any restrictions on filing a claim for refund provided in subsection (F) below, a corporation may file a claim for refund resulting from an overpayment due to changes in taxable income made by the Internal Revenue Service within thirty ninety days from the date the Internal Revenue Service changes the taxable income."

SECTION 11. A. Section 12-56-20(1) of the 1976 Code, as last amended by Section 55A, Part II, Act 419 of 1998, is further amended to read:

"(1) 'Claimant agency' means a state agency, board, committee, commission, public institution of higher learning, political subdivision, South Carolina Student Loan Corporation, housing authorities established pursuant to Articles 5, 7, and 9 of Chapter 3 of Title 31, and the Internal Revenue Service. It also includes a private institution of higher learning for the purpose of collecting debts related to default on authorized educational loans made pursuant to Chapters 111, 113, or 115 of Title 59. 'Political subdivision' includes the Municipal Association of South Carolina and the South Carolina Association of Counties when these organizations submit claims on behalf of their members, or other political subdivisions, or other claimant agencies as defined in this item. A political subdivision who submits a claim through an association is a claimant agency for the purpose of the notice and appeal provisions and other requirements of this chapter."

B. Section 12-56-60 of the 1976 Code, as added by Act 76 of 1995, is amended to read:

"Section 12-56-60. (A) A claimant agency seeking to attempt collection of a delinquent debt through setoff shall notify the department in writing and supply information the department determines necessary to identify the debtor whose refund is sought to be set off. A request for setoff may be made only after the claimant agency has notified the debtor of its intention to cause the debtor's refund to be set off not less than thirty days before the claimant agency's request to the department. This notice must be given in person, left at the dwelling or usual place of business of the debtor, or sent by certified or registered mail to the debtor's last known address no less than thirty days before the claimant agency's request to the department. The notice shall include a statement which sets forth administrative appeal procedures available to the debtor and alternatives available to the debtor which could prevent setoff. The claimant agency promptly shall notify the debtor when the liability out of which the setoff arises is satisfied. Notification to the department and the furnishing of identifying information must occur on or before a date specified by the department in the year preceding the calendar year during which the refund would be paid. Additionally, subject to the notification deadline specified above, the notification is effective only to initiate setoff for claims against refunds that would be made in the calendar year subsequent to the year in which notification is made to the department.

(B) Upon receiving the certification of the claimant agency of the amount of the delinquent debt, the department shall determine if the debtor is due a refund. If the debtor is due a refund of more than twenty-five dollars, the department shall set off the delinquent debt against the amount of the refund in excess of twenty-five dollars and transfer the amount set off to the claimant agency. The department may retain an amount not to exceed twenty-five dollars of each refund set off to defray its administrative expenses. No apportionment is required in cases of refunds resulting from filing joint returns. A person has no property right or property interest in a refund until all amounts due the State and claimant agencies are paid. The department shall consider any certified delinquent debt and debtor list provided by a claimant agency as correct and the department is not liable for a wrongful or improper setoff. Reviews of refund setoffs are with the claimant agency. If, after appropriate review the claimant agency determines that the setoff amount is excessive, it shall refund the appropriate amount to the taxpayer. If, after appropriate review, the claimant agency determines that it is entitled to no part of the amount set off, it shall refund the entire amount plus the administrative fee retained by the department. That portion of the refund reflecting the administrative fee must be paid from claimant agency funds. If a refund has been retained in error, the claimant agency shall pay interest to the taxpayer calculated as provided in Section 12-54-20 from the date provided by law after which interest is paid on refunds until the appeal is final except that no interest accrues when the claimant agency is the Office of Child Support Services of the South Carolina Department of Social Services."

C. Chapter 56 of Title 12 of the 1976 Code is amended by adding:

"Section 12-56-62. The notice of intention to set off must be given by mailing the notice, with postage prepaid, addressed to the debtor at the address provided to the claimant agency when the debt was incurred or at the debtor's last known address. The giving of the notice by mail is complete upon the expiration of thirty days after deposit of the notice in the mail. A certification by the claimant agency that the notice has been sent as required by this section is presumptive proof that the requirements as to notice are met, even if the notice actually has not been received by the debtor. The notice must include a statement of appeal procedures available to the debtor, substantially as follows:

'According to our records, you owe the (claimant agency) a debt in the amount of (amount of the debt) for (type of debt) . You are hereby notified of the (claimant agency's) intention to submit this debt to the South Carolina Department of Revenue to be set off against your individual income tax refund. Pursuant to the Setoff Debt Collection Act, this amount, plus all costs, will be deducted from your South Carolina individual income tax refund unless you file a written protest within thirty days of the date of this notice. If you file a joint return with your spouse, this amount will be deducted from the total joint refund without regard to which spouse incurred the debt or actually withheld the taxes. The protest must contain the following information:

(1) your name;

(2) your address;

(3) your social security number;

(4) the type of debt in dispute; and

(5) a detailed statement of all the reasons you disagree or dispute the debt.

The original written protest must be mailed to the (claimant agency) at the following address:

(address of the entity requesting the setoff) .'

Section 12-56-63. (A) A debtor who protests the debt shall file a written protest with the claimant agency at the address provided in the claimant agency's notification of intention to set off. The protest must be filed within thirty days of the date of the notice of intention to set off and must contain the debtor's name, address, and social security number, identify the type of debt in dispute, and give a detailed statement of all the reasons which support the protest. The requirements of this section are jurisdictional.

(B) An association defined as a political subdivision in Section 12-56-20(1) may contract with another political subdivision for the processing of debts to be submitted to the department. These services may be funded through an administrative fee. The association is exempt from the notice and appeal procedures of this chapter. The entity responsible for the notice and hearing requirements of this chapter is the political subdivision which has submitted its claim through the association or governmental entity which has submitted it directly to the department.

Section 12-56-65. (A) Before submitting a debt to the department, the claimant agency shall appoint a hearing officer to hear a protest of a debtor. This hearing officer is vested with the authority to decide a protest in favor of either the debtor or the claimant agency. The claimant agency shall certify to the department, on a form prescribed by the department, that a hearing officer has been appointed and shall inform the department of the name, address, and telephone number of the hearing officer. If this hearing officer is unable to serve at any time, the claimant agency shall appoint another hearing officer.

(B) Upon receipt of a notice of protest, the claimant agency shall notify the department that a protest has been received and shall hold an informal hearing at which the debtor may present evidence, documents, and testimony to dispute the debt. The claimant agency shall notify the debtor of the date, time, and location of the informal hearing. At the conclusion of the informal hearing, the hearing officer shall render his determination. Upon receipt of a sworn certification from the hearing officer that he held an informal hearing and ruled in favor of the claimant agency, the department may proceed with the setoff, regardless of a subsequent appeal by the debtor.

(C) A debtor may seek relief from the hearing officer's determination by requesting, within thirty days of the determination, a contested case hearing before the Administrative Law Judge Division. A request for a hearing before the Administrative Law Judge Division must be made in accordance with its rules.

(D) If a setoff is made and the determination of the hearing officer in favor of the claimant agency is later reversed, the claimant agency shall refund the appropriate amount to the taxpayer. If the claimant agency is found to be entitled to no part of the amount set off, it shall refund the entire amount plus the administrative fee retained by the department. That portion of the refund reflecting the administrative fee must be paid from claimant agency funds. If the claimant agency is found to be entitled to a portion of the amount set off, it is not required to refund the administrative fee retained by the department.

(E) If a refund is retained in error, the claimant agency shall pay to the taxpayer interest calculated as provided in Section 12-54-20 from the date provided by law after which interest is paid on refunds until the appeal is final, except that interest does not accrue when the claimant agency is the Office of Child Support Services of the South Carolina Department of Social Services.

(F) If the claimant agency determines that money has been erroneously or illegally set off, the claimant agency, in its discretion, may refund the amount of the setoff, even if the debtor does not file a protest.

(G) A setoff may not be contested more than one year after the date the setoff was made. The date of the setoff must be conclusively determined by the department. This provision must be construed as a statute of repose and not as a statute of limitation.

Section 12-56-67. This section does not create a right to jury trial where one does not already exist. Where a debtor otherwise is entitled to have a jury determine the issue of indebtedness, that right is preserved specifically. If a right to a jury trial already exists and the debtor wishes to exercise that right, the debtor is not required to request a contested case hearing before the Administrative Law Judge Division but instead must file a summons and complaint in the Court of Common Pleas and serve the pleadings on the claimant agency within thirty days from the date of the hearing officer's determination. The summons and complaint must name the claimant agency as a defendant and the allegations of the complaint must contest the debt and any potential setoff.

Section 12-56-120. The department is exempt from the notice and appeal procedures of this chapter. The appeal procedures for the setoff of any debt owed to the department is governed by the provisions of Chapter 60 of Title 12 which provides the sole and exclusive remedy for these procedures."

D. Section 12-56-110 of the 1976 Code, as added by Act 76 of 1995, is amended to read:

"Section 12-56-110. The department shall may promulgate regulations and prescribe forms and procedures necessary to implement this chapter."

E. All liabilities incurred and rights accrued before the effective date of this section are unaffected by the provisions of this section.

F. Upon approval by the Governor, this section applies to a liability incurred or a right accrued on and after that date.

SECTION 12. A. Section 12-20-105(C) of the 1976 Code, as last amended by Act 151 of 1997, is further amended to read:

"(C) For the purpose of this section, 'infrastructure' means improvements for water, sewer, gas, steam, electric energy, and communication services made to a building or land which 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 telecommunication 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 industrial shell buildings and the purchase of land for an office, business, commercial, or industrial park which is constructed by a county or political subdivision of this State."

B. Section 12-36-2120 of the 1976 Code, as last amended by Act 419 of 1998, is further amended by adding an appropriately numbered item at the end to read:

"( ) clothing and other attire required for working in a Class 100 or better as defined in Federal Standard 209E clean room environment."

C. Section 12-37-930(6)(c) of the 1976 Code, as added by Act 32 of 1995, is amended to read:

"(c) Electronic Interconnection Component Assembly Devices for Computers and Computer Peripherals; semiconductors and semiconductor devices; substrates; flat panel displays; and liquid crystal displays......................................30%

Includes the manufacture of interconnection component assemblies and devices, semiconductors and semiconductor devices, flat panel displays, and liquid crystal displays which are incorporated in computers or computer peripherals, or other electronic control applications, and telecommunications devices. Computer peripherals include tape drives, compact disk read-only memory systems, hard disks, drivers, tape streamers, monitors, printers, routers, servers, and power supplies."

D. The schedule in Section 12-37-930 of the 1976 Code, as last amended by Act 231 of 1996, is further amended by adding an appropriately numbered item at the end to read:

"( ) Class 100 or better as defined in Federal Standard 209E Clean Room Modules and Associated Mechanical Systems, Process Piping, Wiring, Environmental Systems, and Water Purification Systems..........................10%

Includes waffle flooring, wall and ceiling panels; foundation improvements that isolate the clean room to control vibrations; clean air handling and filtration systems; piping systems for fluids and gases used in the manufacturing process and that touch the product during the fabrication of semiconductors, flat panel displays, and liquid crystal displays; process equipment energy control systems; ultra pure water processing and waste water recycling systems; and safety alarm and monitoring systems."

E. Notwithstanding any other effective date provided in this act, subsection A. of this section takes effect upon approval by the Governor, and the remaining subsections take effect upon approval by the Governor and apply for taxable years beginning after 1998.

SECTION 13. Section 2-7-71 of the 1976 Code, as last amended by Act 82 of 1997, is further amended to read:

"Section 2-7-71. When a bill relating to state taxes is reported out of a standing committee of the Senate or House of Representatives for consideration, there must be attached and printed as a part of the committee report a statement of the estimated revenue impact of the bill on the finances of the State certified by the Board of Economic Research Section of the State Budget and Control Board Advisors. As used in this section, 'statement of estimated revenue impact' means the consensus of the persons executing the required statement as to the increase or decrease in the net tax revenue to the State if the bill concerned is enacted by the General Assembly. In preparing a statement, the Board of Economic Research Section Advisors may request technical advice of the Department of Revenue."

SECTION 14. A. Chapter 10 of Title 12 of the 1976 Code is amended by adding:

"Section 12-10-81. (A) A business may claim a job development credit as determined by this section if the:

(1) council approves the use of this section for the business;

(2) business qualifies pursuant to Section 12-10-50; and

(3) business is a tire manufacturer which has more than four hundred twenty-five million dollars in capital invested in this State and employs more than one thousand employees in this State and which commits within a period of five years from the date of a revitalization agreement, to invest an additional three hundred fifty million dollars and create an additional three hundred fifty jobs in this State qualifying for job development fees or credits pursuant to current or future revitalization agreements. The council, in its discretion, may extend the five-year period for two additional years if the business has made a commitment to the additional three hundred-fifty million dollars and makes substantial progress toward satisfying the goal before the end of the initial five-year period. A business that represents to the council its intent to qualify pursuant to this section and is approved by the council may put job development fees computed pursuant to this section into an escrow account until the date the business satisfies the capital and job requirements of this section. The business may withdraw funds from the escrow account or claim job development credits pursuant to this section before satisfying the capital and job requirements, so long as the business agrees to return the funds, with interest, to the escrow account or to repay the job development credits, with interest, if the capital and job requirements are not satisfied.

(B)(1) A business qualifying pursuant to this section may claim its job development credit against its withholding on its quarterly state withholding tax return for the amount of job development credit allowable. Job development credits allowed under subsection (C)(1)(a) through (d) of this section apply only to withholding on jobs created pursuant to a revitalization agreement adopted under this section and to the amounts withheld on wages and salaries on those jobs. The credit must be claimed on a quarterly basis. To claim a job development credit, the business must be current with respect to its withholding tax and other tax due and owing the State, and must have maintained its minimum employment requirement for the entire quarter.

(2) To be eligible to apply to the council to claim a job development credit pursuant to this section, a qualifying business must create at least ten new, full-time jobs at the South Carolina facility or facilities described in the revitalization agreement.

(3) To the extent a return of an overpayment of withholding that results from claiming job development credits is not used as permitted by subsection (D), it must be treated as misappropriated employee withholding.

(4) If a qualifying business claims job development credits pursuant to this section, it must make its payroll books and records available for inspection by the council and the department at the times the council and the department request. Each qualifying business claiming job development credits pursuant to this section must file the job development credit and the use of any overpayment of withholding resulting from the claiming of a job development credit according to the revitalization agreement that the council or department requests. Each qualifying business must furnish an audited report prepared by an independent certified public accountant which itemizes the sources and uses of the funds. The audited report must be filed with the council and the department no later than June thirtieth following the calendar year in which the job development credits are claimed. An employer may not claim an amount that results in an employee receiving a smaller amount of wages on either a weekly or on an annual basis than the employee would otherwise receive in the absence of this chapter.

(C)(1) The maximum job development credit a qualifying business may claim for new employees is determined by the sum of the following amounts:

(a) two percent of the gross wages of each new employee who earns $6.34 or more an hour but less than $8.45 an hour;

(b) three percent of the gross wages of each new employee who earns $8.45 or more an hour but less than $10.57 an hour;

(c) four percent of the gross wages of each new employee who earns $10.57 or more an hour but less than $15.85 an hour;

(d) five percent of the gross wages of each new employee who earns $15.85 or more an hour; and

(e) the increase in the state sales and use tax of the business from the year of the effective date of its revitalization agreement pursuant to this section and subsequent years, over its state sales and use tax for the first of the three years preceding the effective date of this revitalization agreement.

(2) The hourly gross wages in item (1) must be adjusted annually by the inflation factor determined by the State Budget and Control Board for the purposes of Section 12-10-80(3). The amount which may be claimed by a qualifying business is limited by the revitalization agreement. The business may proceed by using either the job development fee escrow procedure available pursuant to revitalization agreements with effective dates before 1997, or the job development credit, or a combination of the two. For a business qualifying pursuant to this section, the council also may approve or waive sections of a revitalization agreement and the council's rules as needed, in the council's discretion, to assist the business.

(D) To claim a job development credit, the qualifying business must incur expenditures at the facility or for utility or transportation improvements that serve the facility. The expenditures must be incurred during the term of the revitalization agreement or within sixty days before the execution of a revitalization agreement including a preliminary revitalization agreement authorized by the revitalization agreement, and used for:

(1) training costs and facilities;

(2) acquiring and improving real estate whether constructed or acquired by purchase, or in cases approved by the council, acquired by lease or otherwise;

(3) improvements to both public and private utility systems including water, sewer, electricity, natural gas, and telecommunication;

(4) fixed transportation facilities including highway, rail, water, and air; or

(5) construction or improvements of real property and fixtures constructed or improved primarily for the purpose of complying with local, state, or federal environmental laws or regulations.

(E) A job development credit of a qualifying business permanently lapses upon expiration or termination of the revitalization agreement. If an employee is terminated, the qualifying business immediately must cease to claim job development credits.

(F) The statute of limitations provided by Section 12-54-85 is suspended until the end of the five-year or seven-year period described in item (3) of subsection (A) with respect to state withholding taxes under this section for a business subject to this section."

B. This section applies to taxable years beginning after 1998. Notwithstanding any provision to the contrary in this section, no business shall be entitled to any benefits under a revitalization agreement entered into under this section before July 1, 2000.

SECTION 15. Sections 11-27-40 and 11-27-50 of the 1976 Code are amended to read:

"Section 11-27-40. The governing body of each of the political subdivisions of the State shall be empowered to incur general obligation debt for their respective political subdivisions as permitted by Section 14 of New Article X and in accordance with its provisions and limitations. All laws shall continue in force and effect after the ratification date, but each of such laws is amended as follows:

1. If no election be prescribed in such law and an election is required by New Article X, then in every such instance, a majority vote of the qualified electors of the political subdivision voting in the referendum herein authorized is declared a condition precedent to the issuance of bonds pursuant to such law. The governing body of each of the political subdivisions shall be empowered to order any such referendum as is required by New Article X or any other provision of the Constitution, to prescribe the notice thereof and to conduct or cause such referendum to be conducted in the manner prescribed by Title 7, Code of Laws of South Carolina, 1976.

2. If an election be prescribed by the provisions of such law, but is not required by the provisions of New Article X, then in every such instance, no election need be held (notwithstanding the requirement therefor in such law) and the remaining provisions of such law shall constitute a full and complete authorization to issue bond in accordance with such remaining provisions.

3. If a statutory debt limitation be prescribed by any such law, then in lieu thereof, the debt limitation shall be that resulting from the provisions of Section 14 of New Article X.

4. Notwithstanding any contrary provision in any law, any issue of general obligation bonds maturing not later than eight ten years from their date of issuance and in the amount of not exceeding one million five hundred thousand dollars may be sold at private sale and without advertisement, if not less than ten seven days prior to their delivery, notice of intention to sell such bonds at private sale shall be given by publication in a newspaper of general circulation in such political subdivision. Such notice shall set forth the purchaser, the purchase price, interest rates, and maturity schedule of such bonds.

5. As permitted by paragraph 8 of Section 14 of New Article X, all political subdivisions are authorized and empowered to incur general obligation debt in anticipation of the collection of ad valorem taxes or licenses (tax anticipation notes). Tax anticipation notes shall be expressed to mature not later than ninety days from the date on which such taxes or license fees may be paid without penalty. In the case of counties and incorporated municipalities, tax anticipation notes shall be issued pursuant to an ordinance adopted in the manner provided by law. In the case of any special purpose district, tax anticipation notes may be authorized by a resolution of its governing body but such action shall be authorized, approved, or ratified by an ordinance of the governing body or governing bodies (as the case may be) of the county or counties wherein such special purpose district is situate. The provisions of this item shall take effect upon May 30, 1977.

6. The provisions of Chapter 17 of Title 11, relating to the issuance of bond anticipation notes, shall continue in force and effect after the ratification with respect to all political subdivisions and the governing body of each political subdivision is hereby authorized and empowered to issue bond anticipation notes pursuant to and in accordance with the provisions of that chapter and the limitations imposed by paragraph 9 of Section 14 of New Article X.

7. All laws now in force permitting any political subdivisions to incur indebtedness (and to issue bonds or other evidences of debt) which shall be payable solely from a revenue-producing project or from a special source, which source does not involve revenues from any tax or license, shall continue in force and effect after the ratification date. Evidences of such indebtedness shall contain a statement on the face thereof specifying the sources from which payment is to be made and shall state that the full faith, credit, and taxing powers of the issuer are not pledged therefor.

Any law containing any provisions inconsistent herewith (including Chapter 19 of Title 11, as amended) is herewith amended by the removal therefrom of such inconsistent provisions.

8. The initiative and referendum provisions contained in Article 13, Chapter 9 of Title 4 and Chapter 17 of Title 5 of the 1976 Code, shall not be applicable to any other ordinance authorizing the issuance of general obligation bonds unless a notice, signed by not less than five qualified electors, of the intention to seek a referendum, be filed both in the office of the clerk of court of the county wherein such political subdivision is situate and with the clerk or other recording officer of the political subdivision. Such notices of intention to seek a referendum shall be so filed within twenty days following the publication by the governing body of the political subdivision of notice in a newspaper of general circulation in such political subdivision of the adoption of such ordinance.

9. Notwithstanding any other provision of law, a political subdivision may issue general obligation bonds in accordance with one or more of the following provisions:

(a) The principal amount of the bonds maturing in a given year shall be in an amount as prescribed by the governing body of the political subdivision. The first maturing bonds of an issue shall mature within five years from the date on which they are issued; and no bond shall mature later than thirty years from the date on which it is issued.

(b) The bonds shall be sold at public sale, after advertisement of the sale in a newspaper having general circulation in the State or in a financial publication published in the City of New York. The advertisement must appear not less than seven days prior to the date set for the sale. The advertisement may set as a sale date a fixed date not less than seven days following publication, or the advertisement may advise that the sale date will be at least seven days following the date of publication. If a fixed date of sale is not set forth in the notice of sale published in accordance with this subitem, the date selected for the receipt of bids must be disseminated via an electronic information service at least forty-eight hours prior to the time set for the receipt of bids. If a fixed date of sale is set forth in the notice of sale, it may be modified by notice disseminated via an electronic information service at least forty-eight hours prior to the time set for the receipt of bids on the modified date of sale. No bonds may be sold pursuant to this subitem on a date that is more than sixty days after the date of the most recent publication of the notice of sale. Bids for the purchase of bonds may be received in such form as determined by the governing body of the issuer.

(c) The bonds may be disposed of at private sale if there are no bids received or if all bids are rejected. The provisions of this section shall not prevent a sale at private sale to the United States of America or any agency thereof.

(d) Bonds issued pursuant to this section may be issued with a provision for their redemption prior to their maturity at par and accrued interest, plus such redemption premium as may be prescribed by the governing body of the issuer, but no bond shall be redeemable before maturity unless it contains a statement to that effect. In the proceedings authorizing the issuance of the bonds, provisions shall be made specifying the manner of call and the notice that must be given.

Section 11-27-50. The board of trustees or other governing body (the governing body) of each of the school districts of the State shall be empowered to incur general obligation debt for their respective school districts as permitted by Section 15 of New Article X and in accordance with its provisions and limitations. All laws relating to such matters shall continue in force and effect after the ratification date, but all such laws are amended as follows:

1. If no election be prescribed in such law and an election is required by New Article X, then in every such instance, a majority vote of the qualified electors of the school district voting in the referendum herein authorized is declared a condition precedent to the issuance of bonds pursuant to such law. The governing body of each of the school districts shall be empowered to order any such referendum as is required by New Article X or any other provisions of the Constitution, to prescribe the notice thereof and to conduct or cause to be conducted such referendum in the manner prescribed by Article 1, Chapter 71, Title 59, Code of Laws of South Carolina, 1976.

2. If an election be prescribed by the provisions of such law, but is not required by the provisions of New Article X, then in every such instance, no election need be held and the remaining provisions of such law shall constitute a full and complete authorization to issue bonds in accordance with such remaining provisions; provided, however, in no event shall the consent of any other body be required as a condition to the issuance of any general obligation bonds of a school district.

3. If a statutory debt limitation be prescribed by any such law, then in lieu thereof, the debt limitation shall be that resulting from the provisions of Section 15 of New Article X.

4. As permitted by paragraph 7 of Section 15 of New Article X, all school districts are authorized and empowered to incur general obligation debt in anticipation of the collection of ad valorem taxes (tax anticipation notes). Tax anticipation notes shall be expressed to mature not later than ninety days from the date as of which such taxes may be paid without penalty. Tax anticipation notes shall be issued pursuant to a resolution adopted by the governing body.

5. The provisions of Chapter 17 of Title 11, relating to the issuance of bond anticipation notes, shall continue in force and effect after the ratification date with respect to all school districts and the governing body of each school district is hereby authorized and empowered to issue bond anticipation notes pursuant to and in accordance with the provisions of Chapter 17 of Title 11 and the limitations imposed by paragraph 8 of Section 15 of New Article X.

6. Notwithstanding provision of law to the contrary, an issue of general obligation bonds maturing not later than ten years from their date of issuance and in the amount of not exceeding one million five hundred thousand dollars may be sold at private sale and without advertisement, if not less than seven days prior to their delivery, notice of intention to sell such bonds at private sale is given by publication in a newspaper of general circulation in the school district. Such notice shall set forth the purchaser, the purchase price, interest rates, and maturity schedule of such bonds.

7. Notwithstanding any other provision of law, a school district may issue general obligation bonds in accordance with one or more of the following provisions:

(a) The principal amount of the bonds maturing in a given year shall be in an amount as prescribed by the governing body. The first maturing bonds of an issue shall mature within five years from the date on which they are issued; and no bond shall mature later than thirty years from the date on which it is issued.

(b) The bonds shall be sold at public sale, after advertisement of the sale in a newspaper having general circulation in the State or in a financial publication published in the City of New York or, in the discretion of the authorities, in both publications. The advertisement must appear not less than seven days prior to the date set as a sale date for the sale. The advertisement may set a fixed date not less than seven days following publication, or the advertisement may advise that the sale date will be at least seven days following the date of publication. If a fixed date of sale is not set forth in the notice of sale published in accordance with this subitem, the date selected for the receipt of bids must be disseminated via an electronic information service at least forty-eight hours prior to the time set for the receipt of bids. If a fixed date of sale is set forth in this notice of sale, it may be modified by notice disseminated via an electronic information service at least forty-eight hours prior to the time set for the receipt of bids on the modified date of sale. No bonds may be sold pursuant to this section on a date that is more than sixty days after the date of the most recent publication of the notice of sale. Bids for the purchase of bonds may be received in such form as determined by the governing body of the issuer.

(c) The bonds may be disposed of at private sale if there are no bids received or if all bids are rejected. The provisions of this section shall not prevent a sale at private sale to the United States of America or any agency thereof.

(d) Any bonds issued pursuant to this section may be issued with a provision for their redemption prior to their maturity at par and accrued interest, plus such redemption premium as may be prescribed by the governing body of the issuer, but no bond shall be redeemable before maturity unless it contains a statement to that effect. In the proceedings authorizing the issuance of the bonds, provisions shall be made specifying the manner of call and the notice that must be given."

SECTION 16. Section 11-15-440 of the 1976 Code is amended to read:

"Section 11-15-440. The governing body of any issuer may issue general obligation bonds of such issuer to such extent as such issuer shall be indebted by way of principal, interest, and redemption premium upon any outstanding general obligation or revenue bonds, maturing or called for redemption, less all sinking funds and other moneys on hand applicable thereto. The issuer may utilize the provisions of Sections 11-27-40 and 11-27-50 in connection with the issuance of such refunding bonds."

SECTION 17. Chapter 37, Title 5 of the 1976 Code is amended to read:

Section 5-37-10. This chapter may be referred to as 'the 'Municipal Improvement Act of 1973 1999,'', and any municipal corporation of this State is hereby authorized to exercise the powers and provisions hereof.

Section 5-37-20. As used in this chapter, the following terms shall have the following meanings:

(1) `Assessment' means a charge against the real property of an owner within an improvement district created pursuant to this chapter which is based either on assessed value, front footage, area, per parcel basis, the value of improvements to be constructed within the district, or any combination of them, as the basis is determined by the governing body of the municipality. In the event the governing body of a municipality determines that another basis for assessment is appropriate or a more equitable allocation of costs among property owners is appropriate, it may substitute such method for any of the foregoing. An assessment imposed upon real property under this chapter remains valid and enforceable in accordance with the provisions of this chapter even if there is a later subdivision and transfer of the property or a part of it. An improvement plan may provide for a change in the basis of assessment upon the subdivision and transfer of real property or upon such other event as the governing body of a municipality considers appropriate.

(2) `Improvements' include open or covered malls, parkways, parks and playgrounds, recreation facilities, athletic facilities, pedestrian facilities, parking facilities, parking garages, and underground parking facilities, and facade redevelopment, the widening and dredging of existing channels, canals, and waterways used specifically for recreational or other purposes, the relocation, construction, widening, and paving of streets, roads, and bridges, including demolition of them, underground utilities, all activities authorized by Chapter 1 of Title 31 (State Housing Law), any building or other facilities for public use, any public works eligible for financing under the provisions of Section 6-21-50, and all things incidental to the improvements, including planning, engineering, administration, managing, promotion, marketing, and acquisition of necessary easements and land, and may include facilities for lease or use by a private person, firm, or corporation. However, improvements as defined in this chapter must comply with all applicable state and federal laws and regulations governing these activities. Any such improvements may be designated by the governing body as public works eligible for revenue bond financing pursuant to Section 6-21-50, and such improvements, taken in the aggregate, may be designated by the governing body as a `system' of related projects within the meaning of Section 6-21-40. The governing body of a municipality, after due investigation and study, may determine that improvements located outside the boundaries of an improvement district confer a benefit upon property inside an improvement district or are necessary to make improvements within the improvement district effective for the benefit of property inside the improvement district.

(3) `Improvement district' means any area within the municipality designated by the governing body pursuant to the provisions of this chapter and within which an improvement plan is to be accomplished. No special improvement district may include the grounds of the State House in the City of Columbia.

(4) `Improvement plan' means an overall plan by which the governing body proposes to effect improvements within an improvement district to preserve property values, prevent deterioration of urban areas, and preserve the tax base of the municipality, and includes an overall plan by which the governing body proposes to effect improvements within an improvement district in order to encourage and promote private or public development within the improvement district.

(5) `Governing body' shall mean means the municipal council or other governing body in which the general governing powers of the municipality are vested.

(6) `Owner' is defined as any person twenty-one years of age, or older, or the proper legal representative for any person younger than twenty-one years of age, and any firm or corporation, who or which owns legal title to a present possessory interest in real estate equal to a life estate or greater (expressly excluding leaseholds, easements, equitable interests, inchoate rights, dower rights, and future interest) and who owns, at the date of the petition or written consent, at least an undivided one-tenth interest in a single tract and whose name appears on the county tax records as an owner of real estate, and any duly organized group whose total interest is at least equal to a one-tenth interest in a single tract.

It is provided, however, that, if any firm or person has a leasehold interest requiring it or him to pay all municipal taxes, such agreement shall not be applicable to charges of the assessment of the district as only the owner has the right to petition on the assessment charge for the improvement district.

Section 5-37-25. A municipality must obtain the consent of the county governing body and any other municipality where the improvement is located to use revenue collected pursuant to this chapter for improvements located outside the municipal boundaries in which the improvement district is located.

Section 5-37-30. The governing body is authorized, within the corporate limits of the city, to acquire, own, construct, establish, install, enlarge, improve, expand, operate, maintain and repair, and sell, lease, and otherwise dispose of any improvement and to finance such acquisition, construction, establishment, installation, enlargement, improvement, expansion, operation, maintenance, and repair, in whole or in part, by the imposition of assessments in accordance with this chapter, by special district bonds, by general obligation bonds of the municipality, or revenue bonds of the municipality from general revenues from any source not restricted from such use by law, or by any combination of such funding sources. In addition to any other authorization provided herein or by other law, the governing body of a municipality may issue its special district bonds or revenue bonds of the municipality under such terms and conditions as the governing body may determine by ordinance subject to the following: such bonds may be sold at public or private sale for such price as is determined by the governing body; such bonds may be secured by a pledge of and be payable from the assessments authorized herein or any other source of funds not constituting a general tax as may be available and authorized by the governing body; such bonds may be issued pursuant to and secured under the terms of a trust agreement or indenture with a corporate trustee and the ordinance authorizing such bonds or trust agreement or indenture pertaining thereto may contain provisions for the establishment of a reserve fund, and such other funds or accounts as are determined by the governing body to be appropriate to be held by the governing body or the trustee. The proceeds of any bonds may be applied to the payment of the costs of any improvements, including expenses associated with the issuance and sale of the bonds and any costs for planning and designing the improvements or planning or arranging for the financing and any engineering, architectural, surveying, testing, or similar costs or expenses necessary or appropriate for the planning, designing, and construction or implementation of any plan in connection with the improvements.

Section 5-37-40. (A) If the governing body finds that:

(1) improvements would be beneficial within a designated improvement district;

(2) the improvements would preserve or increase property values within the district;

(3) in the absence of the improvements, property values within the area would be likely to depreciate, or that the proposed improvements would be likely to encourage development in the improvement district;

(4) the general welfare and tax base of the city would be maintained or likely improved by creation of an improvement district in the city; and

(5) it would be fair and equitable to finance all or part of the cost of the improvements by an assessment upon the real property within the district, the governing body may establish the area as an improvement district and implement and finance, in whole or in part, an improvement plan in the district in accordance with the provisions of this chapter. However, no residential property shall be included as part of an improvement district unless the owner of the residential property gives the governing body written permission to include his property within the district.

(B) If an improvement district is located in a redevelopment project area created under Title 31, Chapter 6, the improvement district being created under the provisions of this chapter must be considered to satisfy items (1) through (5) of subsection (A). The ordinance creating an improvement district may be adopted by a majority of council after a public hearing at which the plan is presented, including the proposed basis and amount of assessment, or upon written petition signed by a majority in number of the owners of real property within the district which is not exempt from ad valorem taxation as provided by law. However, no residential property shall be included as part of an improvement district unless the owner of the residential property gives the governing body written permission to include his property within the district.

Section 5-37-45. The governing body may include within an improvement district an area within the municipality in which the proposed improvements have been constructed or are under construction at the time of the establishment of the improvement district. Before the commencement of the construction of these improvements, a written agreement with the owner of the area to be improved is entered into by the municipality authorizing the construction of the improvements in anticipation of the inclusion of the area which is improved in the improvement district upon such terms and conditions as the governing body agrees, including the reimbursement, as a cost of constructing improvements under this chapter, of any monies expended for the construction before and subsequent to the establishment of the improvement district. Any agreement providing for the construction of the improvements before the establishment of the improvement district must be authorized by an ordinance of the governing body, notice of which must be given by publication in a newspaper of general circulation within the municipality, appearing at least seven days before the final adoption of the ordinance. Any agreements entered into in accordance with the foregoing conditions before the effective date of this section are ratified and confirmed and the area improved declared eligible for inclusion in the improvement district as proposed in the agreement.

Section 5-37-50. The governing body shall, by resolution duly adopted, describe the improvement district and the improvement plan to be effected therein, including any property within the improvement district to be acquired and improved, the projected time schedule for the accomplishment of the improvement plan, the estimated cost thereof and the amount of such cost to be derived from assessments, bonds, or other general funds, together with the proposed basis and rates of any assessments to be imposed within the improvement district. However, no residential property shall be included as part of an improvement district unless the owner of the residential property gives the governing body written permission to include his property within the district. Such resolution shall also establish the time and place of a public hearing to be held within the municipality not sooner than twenty days nor more than forty days following the adoption of such resolution at which any interested person may attend and be heard either in person or by attorney on any matter in connection therewith.

Section 5-37-60. A resolution providing for an improvement district, when adopted, shall be published once a week for two successive weeks in a newspaper of general circulation within the incorporated municipality and the final publication shall be at least ten days prior to the date of the scheduled public hearing. At the public hearing and at any adjournment thereof, all interested persons may be heard either in person or by attorney.

Section 5-37-70. The governing body may provide by the resolution for the payment of the cost of the improvements and facilities to be constructed within the improvement district by assessments on the property therein as defined in Section 5-37-20, or by the issuance of special district bonds, or by general obligation bonds of the municipality, or from general municipal revenues from any source not restricted from such use by law, or from any combination of such financing sources as may be provided in the improvement plan.

Section 5-37-80. The financing of improvements by assessments, bonds, or other revenues, and the proportions thereof, shall be in the discretion of the governing body; and the rates of assessments upon property owners within the improvement district need not be uniform but may vary in proportion to improvements made immediately adjacent to or abutting upon the property of each owner therein, as well as other bases as provided in Section 5-37-20.

Section 5-37-90. The improvements as defined in Section 5-37-20 are to be or become the property of the municipality, State, or other public entity and may at any time be removed, altered, changed, or added to, as the governing body may in its discretion determine; provided, that during the continuance or maintenance of the improvements, the special assessments on property therein may be utilized for the preservation, operation, and maintenance of the improvements and facilities provided in the improvement plan, and for the management and operation of the improvement district as provided in the improvement plan, and for payment of indebtedness incurred therefor.

Section 5-37-100. Not sooner than ten days nor more than one hundred twenty days following the conclusion of the public hearing provided in Section 5-37-50, the governing body may, by ordinance, provide for the creation of the improvement district as originally proposed or with such changes and modifications therein as the governing body may determine, and provide for the financing thereof by assessment, bonds, or other revenues as herein provided. However, no residential property shall be included as part of an improvement district unless the owner of the residential property gives the governing body written permission to include his property within the district. Such ordinance shall not become effective until at least seven days after it has been published in a newspaper of general circulation in the municipality. Such ordinance may incorporate by reference plats and engineering reports and other data on file in the offices of the municipality; provided, that the place of filing and reasonable hours for inspection are made available to all interested persons.

Section 5-37-110. In the event all or any part of improvements and facilities within the district are to be financed by assessments on property therein, the governing body shall prepare an assessment roll in which there shall be entered the names of the persons whose properties are to be assessed and the amount assessed against their respective properties with a brief description of the lots or parcels of land assessed. Immediately after such assessment roll has been completed the governing body shall cause one copy thereof to be deposited in the offices of the municipality for inspection by interested parties, and shall cause to be published at least once in a newspaper of general circulation within the municipality a notice of completion of the assessment roll setting forth a description in general terms of the improvements and providing at least ten days' notice of the time fixed for hearing of objections in respect to such assessments. The time for hearing such objections shall be at least thirty days, and hearings may be conducted by one or more members of the governing body of the municipality, but the final decision on each such objection shall be made by vote of the whole governing body at a public session thereof.

Section 5-37-120. As soon as practicable after the completion of the assessment roll and prior to the publication of the notice provided in Section 5-37-110, the governing body shall mail by registered or certified mail, return receipt requested, to the owner or owners of each lot or parcel of land against which an assessment is to be levied, at the address appearing on the records of the city or county treasurer, a notice stating the nature of the improvement, the total proposed cost thereof, the amount to be assessed against the particular property and the basis upon which the assessment is made, together with the terms and conditions upon which the assessment may be paid. The notice shall contain a brief description of the particular property involved, together with a statement that the amount assessed shall constitute a lien against the property superior to all other liens except property taxes. The notice shall also state the time and place fixed for the hearing of objections in respect to the assessment. Any property owner who fails to file with the municipal council a written objection to the assessment against his property within the time provided for hearing such objections shall be deemed to have consented to such assessment, and the published and written notices prescribed in this chapter shall so state. If all of the owners of property upon which an assessment is to be levied consent in writing to the imposition of such assessment, the provisions of this section shall be deemed satisfied.

Section 5-37-130. The governing body shall hear the objections as provided herein of all persons who have filed written notice of objection within the time prescribed and who may appear and make proof in relation thereto either in person or by their attorney. The governing body, at the sessions held to make final decisions on objections, may thereupon make such corrections in the assessment roll as it may deem proper and confirm the same, or set it aside and provide for a new assessment. Whenever the governing body shall confirm an assessment, either as originally prepared or as thereafter corrected, a copy thereof certified by the clerk of the municipality shall be filed in the office of the clerk of court of the county in which the municipality is situate, and from the time of such filing the assessment impressed in the assessment roll shall constitute and be a lien on the real property against which it is assessed superior to all other liens and encumbrances, except the lien for property taxes, and shall be annually assessed and collected with the property taxes thereon.

Section 5-37-140. Upon the confirmation of an assessment, if any, the governing body shall mail a written notice to all persons who have filed written objections as hereinabove provided of the amount of the assessment finally confirmed. Such property owner may appeal such assessment only if he shall, within twenty days after the mailing of the notice to him confirming the assessment, give written notice to the governing body of his intent to appeal his assessment to the court of common pleas of the county in which the property is situate; but no such appeal shall delay or stay the construction of improvements or affect the validity of the assessments confirmed and not appealed. Appeals shall be heard and determined on the record, in the manner of appeals from administrative bodies in this State.

Section 5-37-150. Nothing contained herein shall be construed to limit or restrict the powers of any incorporated municipality, but the authorizations herein contained shall be in addition to any such powers.

Section 5-37-160. Any written petition or consent signed by a property owner prior to July 18, 1974, requesting or consenting to an assessment in an improvement district shall be effective and binding upon said property and property owner and all acts of any municipality taken under any other law shall be effective and binding upon all property owners in an improvement district.

Section 5-37-170. No street in the State highway system shall be included in a mall development without prior written approval of the South Carolina Highway Commission.

Section 5-37-180. No street which is located in front of the county courthouse and adjacent thereto shall be included in the mall development without prior written approval of the governing body having jurisdiction over such public property. Likewise, no street which shall in effect block the entrance to the courthouse square shall be included in the mall complex without prior written approval of same governing body."

SECTION 18. Title 12 of the 1976 Code is amended by adding:

Section 12-46-10. This chapter may be cited as the 'Tax Increment Financing Act for Counties'.

Section 12-46-20. (A) The General Assembly finds that:

(1) Section 14(10) of Article X of the Constitution of South Carolina provides that the General Assembly may authorize by general law that indebtedness for the purpose of redevelopment within counties may be incurred and that the debt service of such indebtedness be provided from the added increments of tax revenues to result from the project.

(2) An increasing demand for public services must be provided from a limited tax base. Incentives must be provided for redevelopment in areas which are, or threaten to become, predominantly slum or blighted.

(3) There exist in many counties of this State blighted, conservation, and sprawl areas; the sprawl and conservation areas are rapidly deteriorating and declining and may soon become blighted areas if their decline is not checked; the stable economic and physical development of the blighted areas, conservation areas, and sprawl areas are endangered by the presence of blighting factors as manifested by progressive and advanced deterioration of structures, by the overuse of housing and other facilities, by a lack of physical maintenance of existing structures, by obsolete and inadequate community facilities, and a lack of sound community planning, by obsolete platting, diversity of ownership, excessive tax, and special assessment delinquencies, or by a combination of these factors; that as a result of the existence of blighted areas, areas requiring conservation, and sprawl areas, there is an excessive and disproportionate expenditure of public funds, inadequate public and private investment, unmarketability of property, growth in delinquencies and crime, and housing and zoning law violations in such areas together with an abnormal exodus of families and businesses so that the decline of these areas impairs the value of private investments and threatens the sound growth and the tax base of taxing districts in such areas, and threatens the health, safety, morals, and welfare of the public.

(4) In order to promote and protect the health, safety, morals, and welfare of the public, blighted conditions need to be eradicated and conservation measures instituted, sprawl areas controlled, and redevelopment of such areas undertaken; to remove and alleviate adverse conditions it is necessary to encourage private investment and restore and enhance the tax base of the taxing districts in such areas by the redevelopment of project areas. The eradication of blighted areas and treatment and improvement of sprawl areas and conservation areas by redevelopment projects is declared to be essential to the public interest.

(5) The use of incremental tax revenues derived from the tax rates of various taxing districts in redevelopment project areas for the payment of redevelopment project costs is of benefit to the taxing districts because taxing districts located in redevelopment project areas would not derive the benefits of an increased assessment base without the benefits of tax increment financing, all surplus tax revenues are turned over to the taxing districts in redevelopment project areas, and all taxing districts benefit from the removal of blighted conditions, the eradication of conditions requiring conservation measures, and control of sprawl conditions.

(B) The General Assembly intends to implement the authorization granted in Article X, Section 14 of the Constitution of this State. The authorization in this chapter provides for this State an essential method for financing redevelopment. The governing bodies of the counties are vested with all powers consistent with the Constitution necessary, useful, and desirable to enable them to accomplish redevelopment in areas which are or threaten to become blighted and to sufficiently meet all constitutional requirements pertaining to incurring indebtedness for the purpose of redevelopment and funding the debt service of such indebtedness from the added increment of tax revenues to result from such redevelopment as provided in Section 14(10) of Article X of the Constitution of this State. The indebtedness incurred pursuant to Section 14(10) of Article X of the Constitution is exempt from all debt limitations imposed by Article X. The powers granted in this chapter must be in all respects exercised for the benefit of the inhabitants of the State, for the increase of its commerce, and for the promotion of its welfare and prosperity.

(C) All action taken by any county in carrying out the purposes of this chapter shall perform essential governmental functions.

(D) Pursuant to the authorization granted in Article VIII, Section 13, of the Constitution of this State, if a redevelopment project area is located in more than one county, the powers granted herein may be exercised jointly.

Section 12-46-30. Unless the context clearly indicates otherwise:

(1) 'Blighted area' means any improved or vacant area within the boundaries of a redevelopment project area located within the territorial limits of a county where:

(a) if improved, industrial, commercial, and residential buildings or improvements, because of a combination of five or more of the following factors: age; dilapidation; obsolescence; deterioration; illegal use of individual structures; presence of structures below minimum code standards; excessive vacancies; overcrowding of structures and community facilities; lack of ventilation, light, or sanitary facilities; inadequate utilities; excessive land coverage; deleterious land use or layout; depreciation of physical maintenance; lack of community planning, are detrimental to the public safety, health, morals, or welfare or;

(b) if vacant, the sound growth is impaired by:

(i) a combination of two or more of the following factors: obsolete platting of the vacant land; diversity of ownership of such land; tax and special assessment delinquencies on such land; deterioration of structures or site improvements in neighboring areas adjacent to the vacant land; or

(ii) the area immediately prior to becoming vacant qualified as a blighted area. Any area within a redevelopment plan established by Chapter 10 of Title 31 is deemed to be a blighted area.

(2) 'Conservation area' means any vacant or improved area within the boundaries of a redevelopment project area located within the territorial limits of a county that is not yet a blighted area but, because of a combination of three or more of the following factors: dilapidation; obsolescence; deterioration; illegal use of structures; presence of structures below minimum code standards; abandonment; excessive vacancies; overcrowding of structures and community facilities; lack of ventilation, light, or sanitary facilities; inadequate utilities; excessive land coverage; depreciation of physical maintenance; or lack of community planning, is detrimental to the public safety, health, morals, or welfare and may become a blighted area.

(3) 'Sprawl area' means a vacant or improved area within the boundaries of a redevelopment project area located within the territorial limits of the unincorporated area of a county that is not yet a blighted area nor a conservation area but, because of the existence of one or more of the following conditions, has the potential to become blighted or in need of conservation:

(a) The sprawl area is an unincorporated urban zone, UUZ, which is an area within the unincorporated portion of the county issuing the finding and has a population density equal to or greater than the average population density of the incorporated municipalities within the territorial limits of the county issuing the finding.

(b) The sprawl area is a linear service zone, LSZ, which is an area within the unincorporated portion of the county issuing the finding which is or is likely to become an area no more than two miles wide at its widest point and no less than three miles in length and which, due to development within the zone, represents an impediment to vehicular and pedestrian traffic so that the county finds its existence a detriment to the:

( i) economic health and well-being of the county;

( ii) health or safety of the persons living, working, or traveling through the zone; or

(iii) efficient provision of governmental services both within and without the zone.

(c) The sprawl area is a rural redevelopment zone, RRZ, which is an area within the unincorporated portion of the county issuing the finding which consists primarily of vacant land which, if provided with certain environmental, energy, transportation, or communications infrastructure, could be developed as a planned community consisting of a minimum of one thousand contiguous acres of land, inclusive of flooded land.

(4) 'Municipality means an incorporated municipality of this State.

(5) 'Obligations' means bonds, notes, or other evidence of indebtedness issued by the county to carry out a redevelopment project or to refund outstanding obligations.

(6) 'Redevelopment plan' means the comprehensive program of the county for redevelopment intended by the payment of redevelopment costs to reduce or eliminate those conditions which qualified the redevelopment project area as a blighted area, conservation area, or sprawl area, or combination of two or three of them, and to enhance the tax bases of the taxing districts which extend into the project redevelopment area. Each redevelopment plan shall set forth in writing the program to be undertaken to accomplish the objectives and shall include, but not be limited to, estimated redevelopment project costs, the anticipated sources of funds to pay costs, the nature and term of any obligations to be issued, the most recent equalized assessed valuation of the project area, an estimate as to the equalized assessed valuation after redevelopment, and the general land uses to apply in the redevelopment project area. A redevelopment plan established by Chapter 10 of Title 31 is deemed a redevelopment plan for purposes of this paragraph.

(7) 'Redevelopment project' means any buildings, improvements, including street improvements, water, sewer and storm drainage facilities, parking facilities, and recreational facilities. Any project or undertaking authorized under Section 6-21-50 may also qualify as a redevelopment project under this chapter. All such projects are to be publicly owned.

(8) 'Redevelopment project area' means an area designated by the county, which is not less in the aggregate than one and one-half acres and in respect to which the county has made a finding that there exist conditions that cause the area to be classified as a blighted area, a conservation area, or a sprawl area, or a combination of two or three of them. The total aggregate amount of all redevelopment project areas of any one county may not exceed five percent of the total acreage of the county.

(9) 'Redevelopment project costs' means and includes the sum total of all reasonable or necessary costs incurred or estimated to be incurred and any costs incidental to a redevelopment project. The costs include, without limitation:

(a) costs of studies and surveys, plans, and specifications; professional service costs including, but not limited to, architectural, engineering, legal, marketing, financial, planning, or special services;

(b) property assembly costs including, but not limited to, acquisition of land and other property, real or personal, or rights or interest therein, demolition of buildings, and the clearing and grading of land;

(c) costs of rehabilitation, reconstruction, repair, or remodeling of a redevelopment project;

(d) costs of the construction of a redevelopment project;

(e) financing costs including, but not limited to, all necessary and incidental expenses related to the issuance of obligations and which may include payment of interest on any obligations issued under the provisions of this chapter accruing during the estimated period of construction of any redevelopment project for which the obligations are issued and including reasonable reserves related thereto;

(f) relocation costs to the extent that a county determines that relocation costs must be paid or required by federal or state law.

(10) 'Taxing districts' means counties, incorporated municipalities, schools, special purpose districts, and public and any other municipal corporations or districts with the power to levy taxes. Taxing districts include school districts which have taxes levied on their behalf.

(11) 'Vacant land' means any parcel or combination of parcels of real property without industrial, commercial, and residential buildings.

(12) 'County' means any county in the State.

Section 12-46-40. Obligations secured by the special tax allocation fund set forth in Section 12-46-70 for the redevelopment project area may be issued to provide for redevelopment project costs. The obligations, when so issued, must be retired in the manner provided in the ordinance authorizing the issuance of the obligations by the receipts of taxes levied as specified in Section 12-46-110 against the taxable property included in the area and other revenue as specified in Section 12-46-110 designated by the county which source does not involve revenues from any tax or license. In the ordinance the county may pledge all or any part of the funds in and to be deposited in the special tax allocation fund created pursuant to Section 12-46-70 to the payment of the redevelopment project costs and obligations. Any pledge of funds in the special tax allocation fund must provide for distribution to the taxing districts of monies not required for payment and securing of the obligations and the excess funds are surplus funds. In the event a county only pledges a portion of the monies in the special tax allocation fund for the payment of redevelopment project costs or obligations, any funds remaining in the special tax allocation fund after complying with the requirements of the pledge are also considered surplus funds. All surplus funds must be distributed annually to the taxing districts in the redevelopment project area by being paid by the county to the county treasurer. The county treasurer shall immediately thereafter make distribution to the respective taxing districts in the same manner and proportion as the most recent distribution by the county treasurer to the affected districts of real property taxes from real property in the redevelopment project area. In addition to obligations secured by the special tax allocation fund, the county may pledge for a period not greater than the term of the obligations toward payment of the obligations any part of the revenues remaining after payment of operation and maintenance, of all or part of any redevelopment project. The obligations may be issued in one or more series, may bear such date or dates, may mature at such time or times not exceeding thirty years from their respective dates, may bear such rate or rates of interest as the governing body shall determine, may be in such denomination or denominations, may be in such form, either coupon or registered, may carry such registration and conversion privileges, may be executed in such manner, may be payable in such medium of payment, at such place or places, may be subject to such terms of redemption, with or without premium, may be declared or become due before the maturity date thereof, may provide for the replacement of mutilated, destroyed, stolen, or lost bonds, may be authenticated in such manner and upon compliance with such conditions, and may contain such other terms and covenants, as may be provided by the governing body of the county. If the governing body determines to sell any obligations the obligations must be sold at public or private sale in such manner and upon such terms as the governing body considers best for the interest of the county.

A certified copy of the ordinance authorizing the issuance of the obligations must be filed with the treasurer of each county in which any portion of a redevelopment project is situated and shall constitute the authority for the extension and collection of the taxes to be deposited in the special tax allocation fund.

A county also may issue its obligations to refund in whole or in part obligations previously issued by the county under the authority of this chapter, whether at or prior to maturity, and all references in this chapter to 'obligations' are considered to include these refunding obligations. The debt incurred by a county pursuant to this chapter is exclusive of any statutory limitation upon the indebtedness a taxing district may incur. All obligations issued pursuant to this chapter shall contain a statement on the face of the obligation specifying the sources from which payment is to be made and shall state that the full faith, credit, and taxing powers are not pledged for the obligations.

The trustee or depositary under any indenture may be such persons or corporations as the governing body designates, or they may be nonresidents of South Carolina or incorporated under the laws of the United States or the laws of other states of the United States.

Section 12-46-50. The proceeds from obligations issued under authority of this chapter must be applied only for the purpose for which they were issued. Any premium and accrued interest received in any such sale must be applied to the payment of the principal of or the interest on the obligations sold. Any portion of the proceeds not needed for redevelopment project costs must be applied to the payment of the principal of or the interest on the obligations.

Section 12-46-60. The obligations authorized by this chapter and the income from the obligations and all security agreements and indentures executed as security for the obligations made pursuant to the provisions of this chapter and the revenue derived from the obligations are exempt from all taxation in the State of South Carolina except for inheritance, estate, or transfer taxes and all security agreements and indentures made pursuant to the provisions of this chapter are exempt from all state stamp and transfer taxes.

Section 12-46-70. A county, within five years after the date of adoption of an ordinance providing for approval of a redevelopment plan pursuant to Section 12-46-80, may issue obligations under this chapter to finance the redevelopment project upon adoption of an ordinance providing that:

(1) after the issuance of the obligations; and

(2) after the total equalized assessed valuation of the taxable real property in a redevelopment project area exceeds the certified 'total initial equalized assessed value' established in accordance with Section 12-46-100(B) of all taxable real property in the project area, the ad valorem taxes, if any, arising from the levies upon taxable real property in the project area by taxing districts and tax rates determined in the manner provided in Section 12-46-100(B) each year after the obligations have been issued until obligations issued under this chapter have been retired and redevelopment project costs have been paid must be divided as follows:

(a) that portion of taxes levied upon each taxable lot, block, tract, or parcel of real property which is attributable to the total initial equalized assessed value of all taxable real property in the redevelopment project area must be allocated to and when collected must be paid by the county treasurer to the respective affected taxing districts in the manner required by law in the absence of the adoption of the redevelopment plan; and

(b) that portion, if any, of taxes which is attributable to the increase in the current total equalized assessed valuation of all taxable real property in the redevelopment project area over and above the total initial equalized assessed value of taxable real property in the redevelopment project area must be allocated to and when collected must be paid to the county which shall deposit the taxes into a special fund called the special tax allocation fund of the county for the purpose of paying redevelopment project costs and obligations incurred in the payment of the costs and obligations. The county may pledge in the ordinance the funds in and to be deposited in the special tax allocation fund for the payment of the costs and obligations.

Any ordinance adopted based on acts of the county occurring before the effective date of this chapter must incorporate by reference and adopt those prior acts undertaken in accordance with the procedures of this chapter as if they had been undertaken pursuant to this chapter.

When obligations issued under this chapter have been retired and redevelopment project costs incurred under this chapter have been paid or budgeted pursuant to the redevelopment plan, as evidenced by resolution of the governing body of the county, all surplus funds then remaining in the special tax allocation fund must be paid by the county treasurer immediately to the taxing districts in the redevelopment project area in the same manner and proportion as the most recent distribution by the treasurer to the affected districts of real property taxes from real property in the redevelopment project area.

Upon the payment of all redevelopment project costs, retirement of all obligations of a county issued under this chapter, and the distribution of any surplus monies pursuant to this section, the county shall adopt an ordinance dissolving the tax allocation fund for the project redevelopment area and terminating the designation of the redevelopment project area as a redevelopment project area for purposes of this chapter. Thereafter, the rates of the taxing districts must be extended and taxes levied, collected, and distributed in the manner applicable in the absence of the adoption of a redevelopment plan and the issuance of obligations under this chapter.

If five years have passed from the time a redevelopment project area is designated and the county has not issued obligations under this chapter to finance the redevelopment project, upon the expiration of the five-year term, the county shall adopt an ordinance terminating the designation of the redevelopment project area.

Section 12-46-75. If a municipality annexes a tract of property located in a redevelopment project area, the value of each parcel of real property therein for purposes of the ad valorem taxes of the municipality shall be that which is attributable to its initial equalized assessed value before the redevelopment project and not to the increase in its equalized assessed value due to the redevelopment project.

Section 12-46-80. (A) Prior to the issuance of any obligations under this chapter, the county shall set forth by way of ordinance the following:

(1) a copy of the redevelopment plan containing a statement of the objectives of a county with regard to the plan;

(2) a statement indicating the need for and proposed use of the proceeds of the obligations in relationship to the redevelopment plan;

(3) a statement containing the cost estimates of the redevelopment plan and redevelopment project and the projected sources of revenue to be used to meet the costs including estimates of tax increments and the total amount of indebtedness to be incurred;

(4) a list of all real property in the redevelopment project area;

(5) the duration of the redevelopment plan;

(6) a statement of the estimated impact of the redevelopment plan upon the revenues of all taxing districts in which a redevelopment project area is located and, if residential development is included in the plan, the estimated impact on public school enrollment;

(7) findings that:

(a) the redevelopment project area is a blighted, conservation, or sprawl area and that private initiatives are unlikely to alleviate these conditions without substantial public assistance,

(b) property values in the area would remain static or decline without public intervention, and

(c) redevelopment is in the interest of the health, safety, and general welfare of the citizens of the county.

(B) Before approving any redevelopment plan under this chapter, the governing body of the county must hold a public hearing on the redevelopment plan after published notice in a newspaper of general circulation in the county in which the county and any taxing district affected by the redevelopment plan is located not less than fifteen days and not more than thirty days prior to the hearing. The notice shall include:

(1) the time and place of the public hearing;

(2) the boundaries of the proposed redevelopment project area;

(3) a notification that all interested persons will be given an opportunity to be heard at the public hearing;

(4) a description of the redevelopment plan and redevelopment project; and

(5) the maximum estimated term of obligations to be issued under the redevelopment plan.

Not less than forty-five days prior to the date set for the public hearing, the county shall give notice to all taxing districts of which taxable property is included in the redevelopment project area, and in addition to the other requirements of the notice set forth in the section, the notice shall request each taxing district to submit comments to the county concerning the subject matter of the hearing prior to the date of the public hearing.

(C) If a taxing district does not file an objection to the redevelopment plan at or prior to the date of the public hearing, the taxing district is considered to have consented to the redevelopment plan and the issuance of obligations under this chapter to finance the redevelopment project, provided that the actual term of obligations issued is equal to or less than the term stated in the notice of public hearing. The county may issue obligations to finance the redevelopment project to the extent that each affected taxing district consents to the redevelopment plan. The tax increment for a taxing district that does not consent to the redevelopment plan must not be included in the special tax allocation fund.

(D) If the redevelopment plan includes residential development, then to the extent that the findings pursuant to subsection (A)(6) demonstrate increased public school enrollment because of this development, then an amount of the increment equal to the average property tax collected per pupil in the district multiplied by the estimated increased enrollment is not credited to the special tax allocation fund but is instead allocated to the affected school district as other school tax revenue.

(E) Prior to the adoption of an ordinance approving a redevelopment plan pursuant to Section 12-46-80, changes may be made in the redevelopment plan which do not alter the exterior boundaries or do not substantially affect the general land use established in the plan or substantially change the nature of the redevelopment project, without further hearing or notice, provided that notice of the changes is given by mail to each affected taxing district and by publication in a newspaper or newspapers of general circulation within the taxing districts not less than ten days prior to the adoption of the changes by ordinance. Notice of the adoption of the ordinance must be published by the county in a newspaper having general circulation in the affected taxing districts. Any interested party may, within twenty days after the date of publication of the notice of adoption of the redevelopment plan, but not afterwards, challenge the validity of such adoption by action de novo in the court of common pleas in the county in which the redevelopment plan is located.

(F) After adoption of an ordinance approving a redevelopment plan, any alteration in the exterior boundaries, general land uses established pursuant to the redevelopment plan, maximum term of maturity of obligations to be issued under the plan, or the redevelopment project must be approved by resolution of each affected taxing district in accordance with the procedures provided in this chapter for the initial approval of a redevelopment project and designation of a redevelopment project area.

Section 12-46-90. When there are any persons residing in the area covered by the redevelopment plan:

(1) the redevelopment plan shall include:

(a) an assessment of the displacement impact of the redevelopment project and provisions for the relocation of all persons who would be displaced by the project, provided that no residents may be displaced by a redevelopment project unless housing is made available to them pursuant to the terms of this section;

(b) provisions for the creation of housing opportunities to the extent feasible to enable a substantial number of the displaced persons to relocate within or in close proximity to the area covered by the redevelopment plan.

(2) Prior to authorizing the demolition of any residential units in connection with a tax increment financing plan, the governing body of the county must ensure that the redevelopment plan complies with the requirements of this section and further that standard housing is made available to all persons to be displaced.

(3) Persons displaced by a redevelopment plan are entitled to the benefits and protections available under Section 28-11-10. The costs of the relocation are proper expenditures for the proceeds of any obligations issued under this chapter.

Section 12-46-100. (A) If a county by ordinance approves a redevelopment plan pursuant to Section 12-46-80, the auditor of the county, immediately after adoption of the ordinance pursuant to Section 12-46-80, upon request of the county, must determine and certify:

(1) the most recently ascertained equalized assessed value of all taxable real property within the redevelopment project area, as of the date of adoption of the ordinance adopted pursuant to Section 12-46-80, which value is the 'initial equalized assessed value' of the property; and

(2) the total equalized assessed value of all taxable real property within the redevelopment project area and certifying the amount as the 'total initial equalized assessed value' of the taxable real property within the redevelopment project area.

(B) After the county auditor has certified the total initial equalized assessed value of the taxable real property in the area, then in respect to every taxing district containing a redevelopment project area, the county auditor or any other official required by law to ascertain the amount of the equalized assessed value of all taxable property within the district for the purpose of computing the rate percent of tax to be extended upon taxable property within such district, shall in every year that obligations are outstanding for redevelopment projects in the redevelopment area ascertain the amount of value of taxable property in a project redevelopment area by including in the amount the certified total initial equalized assessed value of all taxable real property in the area in lieu of the equalized assessed value of all taxable real property in the area. The rate percent of tax determined must be extended to the current equalized assessed value of all property in the redevelopment project area in the same manner as the rate percent of tax is extended to all other taxable property in the taxing district. The method of extending taxes established under this section terminates when the county adopts an ordinance dissolving the special tax allocation fund for the redevelopment project.

Section 12-46-110. Revenues received by the county from any property, building, or facility owned by the county or any agency or authority established by the county in the redevelopment project area may be used to pay redevelopment project costs or reduce outstanding obligations of the county incurred under this chapter for redevelopment project costs. If the obligations are used to finance the extension or expansion of a system as defined in Section 6-21-40 in the redevelopment project area, all or a portion of the revenues of the system, whether or not located entirely within the redevelopment project area, including the revenues of the redevelopment project, may be pledged to secure the obligations issued under this chapter. The county is fully empowered to use any of the powers granted by either or both of the provisions of Chapter 17 of Title 6 (The Revenue Bond Refinancing Act of 1937) or the provisions of Chapter 21 of Title 6 (Revenue Bond Act for Utilities). In exercising the powers conferred by the provisions, the county may make any pledges and covenants authorized by any provision of those chapters. The county may place the revenues in the special tax allocation fund or a separate fund which must be held by the county or financial institution designated by the county. Revenue received by the county from the sale or other disposition of real property acquired by the county with the proceeds of obligations issued under the provisions of this chapter must be deposited by the county in the special tax allocation fund or a separate fund which must be held by the county or financial institution designated by the county. Proceeds of grants may be pledged by the county and deposited in the special tax allocation fund or a separate fund.

Section 12-46-120. Counties and municipalities may jointly adopt redevelopment plans and authorize obligations as provided under the provisions of this chapter and Chapter 6 of Title 31."

SECTION 19. Items (6) and (9) of Section 31-6-30 of the 1976 Code are amended to read:

"(6) 'Redevelopment project' means any buildings, improvements, including street improvements, water, sewer and storm drainage facilities, parking facilities, and recreational facilities. Any project or undertaking authorized under Section 6-21-50 may also qualify as a redevelopment project under this chapter. All such projects are to be owned by the municipality publicly owned.

(9) 'Taxing districts' means counties, incorporated municipalities, schools, special purpose districts, and public and any other municipal corporations or districts with the power to levy taxes. Taxing districts include school districts which have taxes levied on their behalf."

SECTION 20. The third and fifth undesignated paragraphs of Section 31-6-80 of the 1976 Code are amended to read:

"If a taxing district does not file an objection to the redevelopment plan at or prior to the date of the public hearing, the taxing district is considered to have consented to the redevelopment plan and the issuance of obligations under this chapter to finance the redevelopment project, provided that the actual term of obligations issued is equal to or less than the term stated in the notice of public hearing. The municipality may issue obligations to finance the redevelopment project if less than all taxing districts consent to the extent that each affected taxing district consents to the redevelopment plan. The tax increment for a taxing district that does not consent to the redevelopment plan must not be included in the special tax allocation fund after the first fifteen years after the initial issuance of obligations to finance such plan. No consent is required of any taxing district if the term of the proposed initial obligations is fifteen years or less or, in the case of any additional or refunding obligations, if the term of the obligations is not greater than the later of (a) fifteen years from the date of issuance of the initial or refunded obligations or (b) the remaining term of the initial or refunded obligations.

After adoption of an ordinance approving a redevelopment plan, any alteration in the exterior boundaries, general land uses established pursuant to the redevelopment plan, maximum term of maturity of obligations to be issued under the plan, or nature of the redevelopment project must be approved by ordinance resolution of the municipality each affected taxing district in accordance with the procedures provided in this chapter for the initial approval of a redevelopment project and designation of a redevelopment project area."

SECTION 21. Section 4-35-150 of the 1976 Code, as added by Act 99 of 1993, is amended to read:

"Section 4-35-150. The improvements as defined in Section 4-35-30 are the sole and unrestricted property of the county must be owned by the county, the State, or another public entity for the benefit of the citizens and residents of the improvement district or the entity owning the improvement, and may at any time may be removed, altered, changed, or added to, as the governing body of the owner may determine if except that during the continuance or maintenance of the improvements, the special assessments on property may be utilized for the preservation, operation, and maintenance of the improvements and facilities provided in the improvement plan, for the management and operation of the improvement district as provided in the improvement plan, and for payment of indebtedness incurred."

SECTION 22. A. The General Assembly finds that:

(1) Many of South Carolina's urban and rural communities face critical social and economic problems arising in part from people living in poverty because of the lack of economic growth, employment, and other opportunities.

(2) The restoration and maintenance of these communities requires increased access to credit and capital for development activities, including investment in businesses, housing, human development, and other activities that promote the long-term economic and social viability of the community.

(3) Access to credit and capital is essential to unleash the untapped entrepreneurial energy of South Carolina's poorest communities and to empower individuals and communities to become self-sufficient.

(4) Community development financial institutions have the proven ability to identify and respond to community needs for capital, credit, and development services in the absence of, or as a complement to, services provided by other lenders.

(5) Community development corporations have a proven ability to identify and respond to community needs and manage community assets for the purpose of community and economic development on a local level.

(6) For the above reasons, it has determined to enact the provisions of this act as being consistent with public policy objectives of our State, including economic growth, higher employment, and community development.

B. Title 34 of the 1976 Code is amended by adding:

Section 34-43-10. (A) There is created a South Carolina Community Economic Development Commission. The commission shall exist for the purpose of certifying entities as community development financial institutions, as defined in Section 34-43-40, and as community development corporations, as defined in Section 34-43-50. The commission also may make grants to community development financial institutions and community development corporations from grant funds made available to it by the General Assembly or from other available funds. The General Assembly may appropriate funds to the commission to be used to make grants to community development financial institutions and community development corporations as authorized in this chapter. The General Assembly also may provide funds in the annual general appropriation act to pay salaries, employee benefits, and administrative expenses of the commission.

(B) In addition to other powers provided for in this chapter, the commission may:

(1) promulgate regulations necessary to carry out its functions;

(2) contract for and accept, for use in carrying out the provisions of this chapter, any grant or contribution of funds from a political subdivision of the State or from another source, and comply, subject to the provisions of this chapter, with the terms and conditions of those contracts; and

(3) do anything necessary or convenient to carry out its powers and functions.

(C) The commission may receive funds from, among other sources, state appropriations and private contributions.

Section 34-43-20. (A) The governing body of the commission consists of the following seven members which must represent the diverse ethnic population of the State:

(1) a chairman, representing a federally-chartered or state-chartered financial institution doing business in this State, who must be appointed by the Governor, with the advice and consent of the Senate;

(2) the Secretary of Commerce, or his designee;

(3) three members from the community economic development field appointed by the Governor, with the advice and consent of the Senate; and

(4) two members representing federally-chartered or state-chartered financial institutions or other business entities doing business in this State, other than the institution represented by the chairman, who must be appointed by the Governor, with the advice and consent of the Senate.

(B) A commission member serves a term of four years and until his successor is appointed and qualifies.

(C) A member who is appointed to fill a vacancy on the commission serves only for the remainder of the unexpired term and until a successor is appointed and qualifies.

(D) The commission ceases to exist on July 1, 2004, unless further authorized by the General Assembly.

Section 34-43-30. (A) Four appointed members of the commission are a quorum. However, the commission may not act on a matter unless at least four members in attendance concur.

(B) The commission determines the times and places of its meetings.

(C) Members of the commission, while serving on business of the commission, shall receive, to the extent funding is available, per diem, mileage, and subsistence as provided by law for members of state boards, committees, and commissions.

(D) The commission, to the extent funding is available, may employ or contract for staff and consultants it considers necessary to assist in carrying out its duties and responsibilities pursuant to this chapter.

(E) In its internal functions, the commission shall keep proper records of its accounts and follow the procedures of this State governing the purchase of office space, supplies, facilities, materials, equipment, and professional services. The commission must be audited by the State Auditor as provided in Chapter 7 of Title 11.

(F) The commission shall make an annual report on its condition and operations to the General Assembly and the Governor, including the information required to be reported by Section 34-43-80.

Section 34-43-40. (A) The commission may certify an entity as a community development financial institution if it meets the definition provided in subsection (B).

(B) For purposes of this section:

(1) 'Community development financial institution' means an organization that:

(a) has a primary mission of promoting community development through the provision of credit, capital, or development services to small businesses including, but not limited to, the provision of capital access programs, microlending, franchise financing, and guaranty performance bonds;

(b) provides service delivery throughout the State;

(c) maintains, through representation on its governing board, accountability to persons in need of the institution's services;

(d) is not an agent or instrumentality of the United States, or of a state or political subdivision of a state or maintains an affiliate relationship with none of them;

(e) maintains a goal of providing a majority of its services to low-income individuals, minorities, females, or rural areas;

(f) provides capital and technical assistance to small and micro businesses;

(g) does not provide credit, capital, or other assistance in an amount greater than two hundred fifty thousand dollars at one time or in one transaction. That dollar amount must be adjusted in the manner provided in Section 37-1-109; and

(h) has been certified or recertified previously as a community development financial institution as provided in this chapter.

(2) 'Low-income' means individuals whose income level falls within the eightieth percentile of the mean income for a family of four within this State.

(3) The term 'invest' includes any advance of funds to a community development financial institution whether by purchase of stock or other equity interest or by charitable contribution.

(C) Banks and financial institutions chartered by the State of South Carolina are authorized to invest in community development financial institutions incorporated under the laws of this State, up to a maximum of ten percent of a chartered bank or financial institution's total capital and surplus.

(D) A federally-chartered or state-chartered financial institution holding company may qualify as a community development financial institution only if the holding company and the subsidiaries and affiliates of the holding company collectively satisfy the requirements of subsection (B).

(E) A community development financial institution is not subject to taxes based upon or measured by income which are levied now or may be levied later by the State.

Section 34-43-50. (A) The commission may certify an entity as a community development corporation if it meets the definition provided in subsection (B).

(B) 'Community development corporation' means a nonprofit corporation that:

(1) is chartered pursuant to Chapter 31, Title 33;

(2) is tax-exempt pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986;

(3) has a primary mission of developing and improving low-income communities and neighborhoods through economic and related development;

(4) has activities and decisions initiated, managed, and controlled by the constituents of those local communities;

(5) has a primary function of developing projects and activities designed to enhance the economic opportunities of the people in the community served, including efforts to enable them to become owners and managers of small businesses and producers of affordable housing and jobs in the community served; and

(6) does not provide credit, capital, or other assistance in an amount greater than twenty-five thousand dollars at any time or in one transaction. The commission must adjust that dollar amount as provided in Section 37-1-109.

(7) is not a nonprofit organization which has the sole purpose of providing housing to neighborhoods or technical assistance to other nonprofit organizations.

(C) The commission shall establish and implement criteria for grants made to community development corporations pursuant to Section 34-43-10. The criteria must require that the applicant has demonstrated a capacity to engage in community development projects and has sufficient organizational structure to ensure proper management. However, if the applicant is created after the effective date of this section, the applicant shall present a strategic plan for community development projects and shall show evidence of developing an organizational structure which ensures proper management.

(D) The commission may provide, or contract with an appropriate entity to provide, technical support to assist community development corporations to be successful in developing their organizational capacity and implementing their projects.

(E) The commission shall make an annual report to the General Assembly regarding grants made pursuant to this section. The report required by this subsection may be included with the report required by Section 34-43-30.

Section 34-43-60. (A) Application for certification must be in writing, under oath and in the form prescribed by the commission, and must contain information as the commission may require, including the names and addresses of the partners, officers, directors or trustees, and those principal owners or members as will provide the basis for investigations and findings contemplated by subsection (B). At the time of making the application, the applicant shall pay to the commission a fee for investigating the application, as prescribed by the commission, which will yield sufficient revenue to defray the commission's costs of investigating the applicant.

(B) Upon the filing of the application and payment of the fees, the commission shall investigate the facts concerning the application and the requirements provided for in either Section 34-43-40 or in Section 34-43-50.

Section 34-43-70. (A) Certification of a community development financial institution or a community development corporation expires two years from the date of certification.

(B) Certification of a community development financial institution or a community development corporation may be renewed for additional two-year periods upon application by the institution or corporation and approval by the commission.

(C) The commission may not renew certification of an institution or corporation absent continuous compliance with the provisions of Section 34-43-40 or Section 34-43-50.

(D) The commission may revoke the certification of an institution or corporation upon a finding that the institution or corporation does not comply with the provisions of Section 34-43-40 or Section 34-43-50.

(E) The commission shall serve a notice of intent not to grant certification, intent not to renew certification, or intent to revoke certification upon the institution or corporation with a brief statement of the reasons alleged. The institution or corporation may request a hearing within thirty days of receiving notice by filing a request for a hearing with the commission. The hearing must be held in accordance with Article 3, Chapter 23, Title 1, the Administrative Procedures Act.

(F) A taxpayer may not claim the tax credit provided for in Section 12-6-3520 unless the institution or corporation in which the investment is made is certified by the commission at the time the investment is made. A taxpayer who invested in good faith in a certified institution or corporation may claim the credit provided in Section 12-6-3520 notwithstanding the fact that the certification is subsequently revoked or not renewed by the commission.

Section 34-43-80. A community development financial institution shall file with the commission, on or before the anniversary date of its certification, an annual report for the preceding calendar year. The report must give information about the financial condition of the institution, and must include balance sheets at the beginning and end of the accounting period, a statement of income and expenses for the period, a reconciliation of surplus with the balance sheets, a schedule of assets used by and useful to the institution to conduct its business, an analysis of charges, size and type of loans, and other activities described in Section 34-43-40(B)(1)(a), and other relevant information in form and detail as prescribed by the commission. The report must be made under oath and be in the form prescribed by the commission. The commission shall make and publish annually an analysis and recapitulation of the reports for inclusion in its annual report to the Governor and General Assembly as provided in Section 34-43-30(F)."

C. Article 25, Chapter 6, Title 12 of the 1976 Code is amended by adding:

"Section 12-6-3520. (A) A taxpayer may claim as a credit against his state income tax, bank tax, or premium tax liability fifty percent of all amounts invested in a community development financial institution, as defined in Section 34-43-40, or in a community development corporation, as defined in Section 34-43-50.

To qualify for this credit the taxpayer must obtain a certificate from the South Carolina Community Economic Development Commission certifying that the entity into which the funds are invested is a community development financial institution within the meaning of Section 34-43-40 or a community development corporation within the meaning of Section 34-43-50 and certifying that the credit taken or available to that taxpayer will not exceed the aggregate fourteen million dollar limitation of all those credits as provided in subsection (B) when added to the credits previously taken or available to other taxpayers making similar investments.

(B) The total amount of credits allowed pursuant to this section may not exceed, in the aggregate, fourteen million dollars for all taxpayers and all taxable years. The total amount of credits allowed for investments in community development financial institutions may not exceed, in the aggregate, ten million dollars for all taxpayers and all taxable years. The total amount of credits allowed for investments in community development corporations may not exceed, in the aggregate, four million dollars for all taxpayers and all taxable years. The credit must be allowed to taxpayers in the order of the time of the making of the qualified investments in community development financial institutions and community development corporations.

The commission shall monitor the investments made by taxpayers in community development financial institutions and community development corporations as permitted by this section and shall perform the functions as provided for in subsection (A).

(C) If the amount of the credit determined under subsection (A) exceeds the taxpayer's state tax liability for the applicable taxable year, the taxpayer may carry over the excess to the immediately succeeding taxable years. However, the credit carryover may not be used for any taxable year that begins on or after ten years from the date of the qualified investment. The amount of the credit carryover from a taxable year must be reduced to the extent that the carryover is used by the taxpayer to obtain a credit pursuant to this chapter for a subsequent taxable year.

(D) Notwithstanding the provisions of subsections (A), (B), and (C), if on April 1, 1999, or as soon after that as the commission is able to determine, the total amount of tax credits which may be claimed by all taxpayers exceeds the total amount of tax credits authorized by this section, the credits must be determined on a pro rata basis. For purposes of this subsection, a community development financial institution or community development corporation for which an investment may be claimed as a tax credit pursuant to this section must report all investments made before April 1, 1999, to the commission by April 1, 1999, which shall inform, as soon as reasonably possible, all community development financial institutions and community development corporations of the total of all investments in all institutions and corporations as of April 1, 1999.

(E) If a qualified investment which is the basis for a credit pursuant to this section is redeemed by a taxpayer within five years of the date it is purchased, the credit provided by this section for the qualified investment is disallowed, and a credit previously claimed and allowed with respect to the redeemed qualified investment must be paid to the Department of Revenue with the appropriate return of the taxpayer covering the period in which the redemption occurred. When payments are made to the Department of Revenue pursuant to this section, the amount collected must be handled in the same manner as if no credit had been allowed.

(F) To receive the credit provided by this section, a taxpayer shall:

(1) claim the credit on the taxpayer's annual state income or premium tax return in the manner prescribed by the Department of Revenue; and

(2) file with the Department of Revenue and with the taxpayer's annual state income or premium tax return a copy of the form, described in subsection (G), issued by the commission as to the qualified investment by the taxpayer, including an undertaking by the taxpayer to report to the Department of Revenue a redemption of the qualified investment.

(G)(1) The commission shall complete forms prescribed by the Department of Revenue, showing as to each qualified investment in a community development financial institution or a community development corporation:

(a) the name, address, and identification number of the taxpayer who purchased a qualified investment; and

(b) the nature of the qualified investment purchased by the taxpayer and the amount paid for it.

(2) These forms must be filed with the Department of Revenue on or before the fifteenth day of the third month following the month in which the qualified investment is purchased. Copies of the forms to be provided to the Department of Revenue must be mailed to the taxpayer on or before the fifteenth day of the second month following the month in which the qualified investment is purchased.

(H) A taxpayer may not claim the tax credit provided in this section unless the community development financial institution or community development corporation in which the investment is made has been certified at the time the investment is made. A taxpayer who invested in good faith in a certified institution or corporation may claim the credit provided in this section, notwithstanding the fact that the certification is subsequently revoked or not renewed by the commission.

(I) An investor in a qualified community development corporation or a community development financial institution may transfer or assign the tax credit provided in this section, except that for purposes of a time period within which an act must occur pursuant to this section, the transfer or assignment must relate back to the time of original investment made by the transferor or assignor.

(J) If the community development financial institution in which the investment is made is a tax-exempt nonprofit corporation, the tax credit provided in this section may not be allowed if the taxpayer claims the investment as a deduction pursuant to Section 170 of the Internal Revenue Code.

(K) The total amount of credits which may be allowed by the Department of Revenue may not exceed two million dollars in a community development corporation for fiscal year 1999-2000 and each fiscal year thereafter until the total aggregate amount of four million dollars is reached. The total amount of credits allowed by the Department of Revenue may not exceed five million five hundred thousand dollars in a community development financial institution for fiscal year 1999-2000 and each fiscal year after that until the total aggregate amount of ten million dollars is reached. A credit which is disallowed because of this subsection may be carried forward as provided in this section."

D. This Section takes effect upon approval of the Governor, except that subsection C applies to tax years beginning after 1998.

SECTION 23. This act takes effect upon approval by the Governor, except Sections 2, 3, 4, 5, 6, 7, and 10 are effective for taxable years after 1998, and Section 9 is effective for property tax years beginning after 1998.

This web page was last updated on Friday, June 26, 2009 at 3:02 P.M.