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TO AMEND SECTION 12-6-3360, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE TARGETED JOBS TAX CREDIT, SO AS TO REVISE THE CREDIT BY REDUCING THE CLASSIFICATIONS FROM FOUR TO THREE AND REVISING THE CREDIT AMOUNTS, ELIMINATE SPECIAL DESIGNATIONS FOR CREDITS AND REQUIRE A VOTE OF AT LEAST EIGHTY PERCENT OF THE MEMBERS OF EACH HOUSE OF THE GENERAL ASSEMBLY TO SHIFT A COUNTY FROM ONE TIER TO ANOTHER, TO DELETE SPECIAL SMALL BUSINESS PROVISIONS, REDUCE THE JOB INCREASE REQUIREMENT FROM TEN TO FIVE, TO REVISE THE DEFINITION OF "NEW JOB" SO AS TO REQUIRE A TAXPAYER'S STATEWIDE JOB LOSSES TO BE CONSIDERED IN THE MAINTENANCE OF NEW JOBS FOR PURPOSES OF CLAIMING THE CREDIT, TO REVISE THE MANNER IN WHICH A PURCHASE OUT OF BANKRUPTCY GIVES RISE TO NEW JOBS AND PROVIDE THAT NEW JOBS ARE CREATED AFTER A BUSINESS HAS BEEN CLOSED FOR AT LEAST NINETY DAYS AND IS REACQUIRED AND REOPENED, TO DELETE INCREASED COUNTY DESIGNATIONS FOR COUNTIES IN WHICH A CLOSED OR REALIGNED MILITARY INSTALLATION OR FEDERAL FACILITY IS LOCATED OR WHICH ARE LOCATED WITHIN TWENTY-FIVE MILES OF AN INSTALLATION OR FACILITY, AND TO DELETE "EXTRAORDINARY RETAIL ESTABLISHMENTS" AS BEING ELIGIBLE FOR THE CREDIT; TO AMEND SECTION 12-6-3410, AS AMENDED, RELATING TO A CORPORATE INCOME TAX CREDIT FOR CORPORATE HEADQUARTERS, SO AS TO RAISE THE AMOUNT OF THE CREDIT, TO DELETE A REQUIREMENT CONCERNING WAGES WHICH MUST BE PAID TO SOUTH CAROLINA EMPLOYEES TO QUALIFY FOR THE CREDIT, TO DELETE A "COMPANY BUSINESS UNIT" AS AN ORGANIZATIONAL UNIT WHICH COMES WITHIN THE MEANING OF CORPORATE HEADQUARTERS FOR PURPOSES OF THE CREDIT, AND TO DELETE THE APPLICABILITY OF THE CREDIT TO A LIMITED LIABILITY COMPANY REGULATED UNDER THE FEDERAL POWER ACT; TO AMEND SECTION 12-6-3420, AS AMENDED, RELATING TO TAX CREDITS FOR THE CONSTRUCTION OR IMPROVEMENT OF AN INFRASTRUCTURE PROJECT, SO AS TO MAKE THE CREDIT APPLICABLE TO INDIVIDUAL INCOME TAXES, TO RAISE THE AMOUNT OF THE CREDIT AND THE AMOUNT AND TIME IT MAY BE CARRIED FORWARD, AND TO PROVIDE THAT THIS CREDIT IS ONLY AVAILABLE FOR THAT PORTION OF THE INFRASTRUCTURE WHICH IS ON PUBLIC PROPERTY THAT IS NOT OWNED OR LEASED BY THE TAXPAYER AND THAT IS NOT LOCATED ON THE SITE OF THE TAXPAYER'S FACILITY; BY ADDING SECTION 12-6-3475 SO AS TO ENACT THE "BASIC SKILLS EDUCATION TAX CREDIT ACT" WHICH PROVIDES AN INCOME TAX CREDIT FOR EMPLOYERS WHO SPONSOR OR PROVIDE APPROVED BASIC SKILLS EDUCATION TO ENHANCE READING, WRITING, AND MATHEMATICAL SKILLS OF EDUCATIONALLY CHALLENGED EMPLOYEES, AND TO PERMIT THE STATE DEPARTMENT OF EDUCATION AND THE DEPARTMENT OF REVENUE TO PROMULGATE REGULATIONS TO ADMINISTER THIS PROGRAM AND THE TAX CREDIT UNDER THE PROGRAM; TO AMEND SECTION 12-6-3530, AS AMENDED, RELATING TO COMMUNITY DEVELOPMENT TAX CREDITS, SO AS TO DEFINE THE TERM "INVESTMENTS" IN REGARD TO AMOUNTS INVESTED BY A TAXPAYER IN ORDER TO CLAIM THE CREDIT; TO AMEND SECTION 12-10-80, AS AMENDED, RELATING TO JOB DEVELOPMENT CREDITS, SO AS TO REVISE THE TYPE OF EXPENDITURES WHICH QUALIFIES FOR THE CREDITS AND THE AMOUNT OF CREDITS A QUALIFYING BUSINESS MAY CLAIM BASED ON THE DESIGNATION OF THE COUNTY IN WHICH THE EXPENDITURES WERE MADE; TO AMEND SECTION 12-10-81, AS AMENDED, RELATING TO OTHER JOB DEVELOPMENT TAX CREDITS, SO AS TO REVISE THE AMOUNT OF CREDITS A QUALIFYING BUSINESS MAY CLAIM BASED ON THE DESIGNATION OF THE COUNTY IN WHICH THE EXPENDITURES WERE MADE, AND TO DELETE THE QUALIFICATION OF CERTAIN TIRE MANUFACTURERS FOR THE CREDIT; BY ADDING SECTION 12-10-83 SO AS TO PROVIDE THAT A BUSINESS CLAIMING A JOB DEVELOPMENT CREDIT AFTER THE EFFECTIVE DATE OF THIS SECTION MUST REMAIN IN THIS STATE AND MAINTAIN THE REQUIRED FACILITY AND JOBS FOR ONE HUNDRED FIFTY PERCENT OF THE TIME FOR WHICH IT IS ALLOWED TO CLAIM THE CREDIT OR FIFTY PERCENT OF THE AMOUNT OF THE CREDIT MUST BE RETURNED TO THE STATE GENERAL FUND WITHIN NINETY DAYS FOLLOWING THE ELIMINATION OF THE QUALIFYING FACILITY AND JOBS; TO AMEND SECTIONS 12-21-6520 AND 12-21-6540, BOTH AS AMENDED, RELATING TO THE TOURISM INFRASTRUCTURE ADMISSIONS TAX ACT, SO AS TO DELETE "EXTRAORDINARY RETAIL ESTABLISHMENTS" FROM THE TYPES OF ENTITIES AND FACILITIES ELIGIBLE FOR THE BENEFITS UNDER THESE PROVISIONS; BY ADDING SECTION 59-103-210 SO AS TO ENACT THE "SOUTH CAROLINA STUDENT LOAN REIMBURSEMENT ACT" WHICH PROVIDES A GRANT FOR TAXPAYERS WHO EARN DEGREES IN ENGINEERING, AND TO PERMIT THE STATE COMMISSION ON HIGHER EDUCATION TO PROMULGATE REGULATIONS TO ADMINISTER THE PROGRAM; TO PROVIDE THAT ALL INVESTMENTS OF THE PALMETTO SEED CAPITAL CORPORATION AND THE PALMETTO SEED CAPITAL FUND LIMITED LIABILITY PARTNERSHIP MADE BY PRIVATE SECTOR INVESTORS OR PRIVATE SECTOR LIMITED PARTNERS MUST BE TRANSFERRED TO THE SOUTH CAROLINA VENTURE CAPITAL FUND; TO AMEND ACT 187 OF 2004, RELATING IN PART TO THE CONTINGENT REPEAL OF CHAPTER 44 OF TITLE 41, SO AS TO DELETE THIS PROVISION RELATING TO THE PALMETTO SEED CAPITAL FUND; AND TO REPEAL CHAPTER 44 OF TITLE 41 AND SECTION 12-6-3430 RELATING TO THE PALMETTO SEED CAPITAL FUND AND TAX CREDITS FOR INVESTMENTS IN THE FUND, SECTION 12-6-3362 RELATING TO A SPECIAL METHOD TO DETERMINE ELIGIBILITY FOR THE JOB TAX CREDIT, SECTION 12-6-3450 RELATING TO THE CREDIT AGAINST THE STATE INCOME TAX FOR PERSONS TERMINATED FROM EMPLOYMENT AS A RESULT OF A CLOSING OR REALIGNMENT OF A FEDERAL MILITARY INSTALLATION, SECTION 12-10-45 RELATING TO THE DESIGNATION BY A TIRE MANUFACTURER OF CERTAIN CENSUS TRACTS AS AN ENTERPRISE ZONE, SECTION 12-10-88, RELATING TO REDEVELOPMENT FEES FUNDED BY EMPLOYEE WITHHOLDING TAX AND PAYABLE TO AUTHORITIES RESPONSIBLE FOR OVERSEEING CLOSED OR REALIGNED MILITARY INSTALLATIONS, CHAPTER 14 OF TITLE 12, THE ECONOMIC IMPACT ZONE COMMUNITY DEVELOPMENT ACT OF 1995 RELATING TO INVESTMENT TAX CREDITS AND INCOME TAX DEDUCTIONS IN CONNECTION WITH FORMATION OF NEW BUSINESSES IN AREAS AFFECTED BY BASE CLOSING AND REALIGNMENTS, AND SECTION 12-21-6590 RELATING TO THE DESIGNATION OF EXTRAORDINARY RETAIL ESTABLISHMENTS FOR PURPOSES OF THE TOURISM INFRASTRUCTURE ADMISSIONS TAX ACT.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The General Assembly, by this act, intends to revise, amend, or delete current tax incentives or tax credits offered to businesses, corporations, and investors for the purpose of creating jobs and enhancing economic development in this State. Many of these incentives or credits have become somewhat obsolete or are in need of modification given limited use. The General Assembly declares under Article III, Section 17 of the Constitution of this State the subject of this act is the revision of tax incentives and tax credits offered in this State for the purpose of economic development and these statutory changes should be included in one enactment since many are interrelated and for clarity, consistency, and ease of understanding need to be included in the same act.
SECTION 2. Section 12-6-3360 of the 1976 Code, as last amended by Act 116 of 2007, is further amended to read:
"Section 12-6-3360. (A) Taxpayers that operate manufacturing, tourism, processing, warehousing, distribution, research and development, corporate office, qualifying service-related facilities, extraordinary retail establishment, qualifying technology intensive facilities, and banks as defined pursuant to this title are allowed an annual jobs tax credit as provided in this section. In addition, taxpayers that operate retail facilities and service-related industries qualify for an annual jobs tax credit in counties designated as least developed or distressed, and in counties that are under developed and not traversed by an interstate highway tier 1. As used in this section, 'corporate office' includes general contractors licensed by the South Carolina Department of Labor, Licensing and Regulation. Credits pursuant to this section may be claimed against income taxes imposed by Section 12-6-510 or 12-6-530, bank taxes imposed pursuant to Chapter 11 of this title, and insurance premium taxes imposed pursuant to Chapter 7 of Title 38, and are limited in use to fifty percent of the taxpayer's South Carolina income tax, bank tax, or insurance premium tax liability. In computing a tax payable by a taxpayer pursuant to Section 38-7-90, the credit allowable pursuant to this section must be treated as a premium tax paid pursuant to Section 38-7-20.
(B) The department shall rank and designate the state's counties by December thirty-first each year using data from the South Carolina Employment Security Commission and the United States Department of Commerce. The county designations are effective for taxable years that begin in the following calendar year. A county's designation may not be lowered in credit amount more than one tier in the following calendar year. The counties are ranked using the last three completed calendar years of per capita income data and the last thirty-six months of unemployment rate data that are available on November first, with equal weight given to unemployment rate and per capita income as follows:
(1)(a) The twelvefifteen counties with a combination of the highest unemployment rate and lowest per capita income are designated distressedtier 1 counties. Notwithstanding any other provision of law, no more than twelve counties may be designated or classified as distressed and notwithstanding any other provision of this section, a county may be designated as distressed only by virtue of the criteria provided in this subitem.
(b) A category with the same criteria as provided in subitem (a) of this item is designated least developed county which consists of underdeveloped counties otherwise eligible for this category.
(2) The twelvefifteen counties with a combination of the next highest unemployment rate and next lowest per capita income are designated underdevelopedtier 2 counties.
(3) The eleven counties with a combination of the next highest unemployment rate and the next lowest per capita income are designated moderately developed counties.
(4) The elevensixteen counties with a combination of the lowest unemployment rate and the highest per capita income are designated developedtier 3 counties.
(5)(a) A county, any portion of which is located within twenty-five miles of the boundaries of an applicable military installation or applicable federal facility as defined in Section 12-6-3450(1), shall receive the next increased credit designation for five years beginning with the year in which the military installation or federal facility became an applicable military installation or applicable federal facility as defined in Section 12-6-3450(1), with the additional requirement that the military installation must have reduced employment on the installation of at least three thousand employees.
(b) In addition to the designation in subitem (a), a county in which an applicable military installation or applicable federal facility is located is allowed an additional increased credit designation for five years beginning with the year the installation or facility meets the requirements.
(c) Notwithstanding the designations in Section 12-6-3360, Laurens, Cherokee, and Union Counties shall qualify for the next increased credit designation.
(d) In a county where less than five percent of the work force is in manufacturing, the credit allowed is one tier higher than the credit for which the county would otherwise qualify.
(e) For a job created in a county that is not traversed by an interstate highway, the credit allowed is one tier higher than the credit for which jobs created in the county would otherwise qualify. This subitem does not apply to a job created in a county eligible for a higher tier pursuant to another provision of this item.
(f) In a county in which one employer has lost at least 1,500 jobs in a calendar year, the credit allowed is one tier higher than the credit for which the county would otherwise qualify. The one-tier-higher credit allowed by this subsection is allowed for five taxable years for jobs created in 2006, 2007, and 2008. This subsection does not apply to a job created in a county eligible for a higher tier pursuant to another provision of this section.
(g) In a county which is at least one thousand square miles in size and which has had an unemployment rate greater than the state average for the past ten years and an average per capita income lower than the average state per capita income for the past ten years, and which is not included in any of the county classifications contained in subitems (a) through (f) of this item, the credit allowed is two tiers higher than the credit for which the county otherwise would qualify.
(h) In a county in which one employer has lost at least 1,500 jobs in calendar year 2006, the credit allowed is three tiers higher than the credit for which the county would otherwise qualify. The three-tier-higher credit allowed by this subsection is allowed for five taxable years for jobs created in 2007 and 2008. This subsection does not apply to a job created in a county eligible for a higher tier pursuant to another provision of this section.
(4) Moving a county from one tier to another other than by the annual application of the criteria required pursuant to item (1) of this section may be accomplished only by means of separate legislation enacted specifically for that purpose which must receive a majority vote of at least eighty percent of the entire membership of each house of the General Assembly.
(C)(1) Subject to the conditions provided in subsection (N) of this section, a job tax credit is allowed for five years beginning in year two after the creation of the job for each new full-time job created if the minimum level of new jobs is maintained. The credit is available to taxpayers that increase employment by tenfive or more full-time jobs, and no credit is allowed for the year or any subsequent year in which the net employment increase falls below the minimum level of tenfive. The amount of the initial job credit is as follows:
(a) Eightseven thousand dollars for each new full-time job created in distressedtier 1 counties.;
(b) Fourfour thousand five hundred dollars for each new full-time job created in least developedtier 2 counties.; and
(c) Three thousand five hundred dollars for each new full-time job created in under developed counties.
(d) Two thousand five hundred dollars for each new full-time job created in moderately developed counties.
(e) Onetwo thousand five hundred dollars for each new full-time job created in developedtier 3 counties.
(2)(a) Subject to the conditions provided in subsection (N) of this section, a job tax credit is allowed for five years beginning in year two after the creation of the job for each new full-time job created if the minimum level of new jobs is maintained. The credit is available to taxpayers with ninety-nine or fewer employees that increase employment by two or more full-time jobs, and may be received only if the gross wages of the full-time jobs created pursuant to this section amount to a minimum of one hundred twenty percent of the county's or state's average per capita income, whichever is lower. No credit is allowed for the year or any subsequent year in which the net employment increase falls below the minimum level of two. The amount of the initial job credit is as described in (C)(1).
(b) If the taxpayer with ninety-nine or fewer employees increases employment by two or more full-time jobs but the gross wages do not amount to a minimum one hundred twenty percent of the county's or state's average per capita income, whichever is lower, then the amount of the initial job credit is as follows:
( i) Four thousand dollars for each new full-time job created in distressed counties.
(ii) Two thousand two hundred fifty dollars for each new full-time job created in least developed counties.
(iii) One thousand seven hundred fifty dollars for each new full-time job created in under developed counties.
(iv) One thousand two hundred fifty dollars for each new full-time job created in moderately developed counties.
(v) Seven hundred fifty dollars for each new full-time job created in developed counties.
(D) If the taxpayer qualifying for the new jobs credit under subsection (C) creates additional new full-time jobs in years two through six, the taxpayer may obtain a credit for those new jobs for five years following the year in which the job is created. The amount of the credit for each new full-time job is the same as provided in subsection (C).
(E)(1) Taxpayers which qualify for the job tax credit provided in subsection (C) and which are located in a business or industrial park jointly established and developed by a group of counties pursuant to Section 13 of Article VIII of the Constitution of this State are allowed an additional one thousand dollar credit for each new full-time job created. This additional credit is permitted for five years beginning in the taxable year following the creation of the job.
(2) Taxpayers which otherwise qualify for the job tax credit provided in subsection (C) and which are located and the qualifying jobs are located on property where a response action has been completed pursuant to a nonresponsible party voluntary cleanup contract pursuant to Article 7, Chapter 56 of Title 44, the Brownfields Voluntary Cleanup Program, are allowed an additional one thousand dollar credit for each new full-time job created. This additional credit is permitted for five years beginning in the taxable year following the creation of the job. No credit under this item is allowed a taxpayer that is a 'responsible party' as defined in that article.
(F)(1) The number of new and additional new full-time jobs is determined by comparing the monthly average number of the taxpayer's full-time employees subject to South Carolina income tax withholding in the applicable countythis State for the taxable year with the monthly average of such employees in the prior taxable year. For purposes of calculating the monthly average number of full-time employees in the first year of operation in this State, a taxpayer may use the actual months in operation or a full twelve-month period. If a taxpayer's business is in operation for less than twelve months a year, the number of new and additional new full-time jobs is determined using the monthly average for the months the business is in operation.
(2)(a) A taxpayer who makes a capital investment of at least fifty million dollars at a single site within a three-year period may elect to have the number of new and additional new full-time jobs determined by comparing the monthly average number of full-time jobs subject to South Carolina income tax withholding at the site for the taxable year with the monthly average for the prior taxable year.
(b) For purposes of this item, "single site" means a stand-alone building whether or not several stand-alone buildings are located in one geographical location.
(c) The calculation of new and additional jobs provided for in this item is allowed for only a five-year period commencing in the year in which the fifty million dollars of capital investment is completed.
(d) For purposes of this subsection a "new job" does not include a job transferred from one site to another site by the taxpayer or a related person. A related person includes any entity or person that bears a relationship to the taxpayer as set forth in Section 267 of the Internal Revenue Code. However, this exclusion of a new job created by a job transferred from one site to another site does not extend to a job created at a new or expanded facility located in a county in which is located an "applicable federal facility" as defined in Section 12-6-3450(A)(1)(b).
(G) Except for credits carried forward under subsection (H), the credits available under this section are only allowed for the job level that is maintained in the taxable year that the credit is claimed. If the job level for which a credit was claimed decreases, the five-year period for eligibility for the credit continues to run.
(H) A credit claimed pursuant to this section but not used in a taxable year may be carried forward for fifteen years from the taxable year in which the credit is earned by the taxpayer. Credits that are carried forward must be used in the order earned and before jobs credits claimed in the current year. A taxpayer who earns credits allowed by this section and who also is eligible for the moratorium provided in Section 12-6-3367 may claim the credits and may carry forward unused credits beginning after the moratorium period expires.
(I) The merger, consolidation, or reorganization of a taxpayer, where tax attributes survive, does not create new eligibility in a succeeding taxpayer, but unused job tax credits may be transferred and continued by the succeeding taxpayer subject to the limitations of Section 12-6-3320. In addition, a taxpayer may assign its rights to its jobs tax credit to another taxpayer if it transfers all or substantially all of the assets of the taxpayer or all or substantially all of the assets of a trade or business or operating division of a taxpayer related to the generation of the jobs tax credits to that taxpayer if the required number of new jobs is maintained for that amount of credit. A taxpayer is not allowed a jobs tax credit if the net employment increase for that taxpayer falls below twofive. The appropriate agency shall determine if qualifying net increases or decreases have occurred and may require reports, adopt rules or promulgate regulations, and hold hearings needed for substantiation and qualification.
(J) For a taxpayer which plans a significant expansion in its labor forces at a location in this State, the appropriate agency shall prescribe certification procedures to ensure that the taxpayer can claim credits in future years even if a particular county is removed from the list of distressed, least developed, under developed, or moderately developedtier 1, tier 2, or tier 3 counties.
(K)(1) An S corporation, limited liability company taxed as a partnership, or partnership that qualifies for a credit under this section may pass through the credit earned to each shareholder of the S corporation, partner of the partnership, or member of the limited liability company. For purposes of this subsection, limited liability company means a limited liability company taxed as a partnership.
(2)(a) The amount of the credit allowed a shareholder, partner, or member by this subsection is equal to the shareholder's percentage of stock ownership, partner's interest in the partnership, or member's interest in the limited liability company for the taxable year multiplied by the amount of the credit earned by the entity. This nonrefundable credit is allowed against taxes due under Section 12-6-510 or 12-6-530 and bank taxes imposed pursuant to Chapter 11 of this title and may not exceed fifty percent of the shareholder's, partner's, or member's tax liability under Section 12-6-510 or 12-6-530 or bank tax liability imposed pursuant to Chapter 11 of this title.
(b) Notwithstanding subitem (a), the credit earned pursuant to this section by an S corporation owing corporate level income tax must be used first at the entity level. Only the remaining credit passes through to each shareholder.
(3) A credit claimed pursuant to this subsection but not used in a taxable year may be carried forward by each shareholder, partner, or member for fifteen years from the close of the tax year in which the credit is earned by the S corporation, partnership, or limited liability company. The entity earning the credit may not carry over credit that passes through to its shareholders, partners, or members.
(L) Notwithstanding any other provision of this section, a county with a population under twenty-five thousand as determined by the most recent United States Census shall receive the next increased credit designation for purposes of the credit allowed by this section. RESERVED
(M) As used in this section:
(1) 'Taxpayer' means a sole proprietor, partnership, corporation of any classification, limited liability company, or association taxable as a business entity that is subject to South Carolina taxes as contained in Section 12-6-510, Section 12-6-530, Chapter 11 of Title 12, or Chapter 7 of Title 38.
(2) 'Appropriate agency' means the Department of Revenue, except that for taxpayers subject to the premium tax imposed by Chapter 7 of Title 38, it means the Department of Insurance.
(3)(a) 'New job' means a job created in this State at the time a new facility or an expansion is initially staffed which is calculated on a statewide basis as provided in subsection (F) of this section and which must be aggregated to include employees of. Except as otherwise provided in this item, the term does not include a job created when an employee is shifted from an existing location in this State to a new or expanded facility whether the transferred job is from, or to, a facility of the taxpayer or a related person. A related person includes any entity or person that bears a relationship to the taxpayer as described in Section 267 of the Internal Revenue Code Section 267. However, this exclusion of a new job created by employee shifting does not extend to a job created at a new or expanded facility located in a county in which is located an "applicable federal facility" as defined in Section 12-6-3450(A)(1)(b). The term 'new job' also includes an existing job at a facility of an employer which is reinstated after the employer has rebuilt the facility due to:
(a)(i) its destruction by accidental fire, natural disaster, or act of God;
(b)(ii) involuntary conversion as a result of condemnation or exercise of eminent domain by the State or any of its political subdivisions or by the federal government.
Destruction for purposes of this provision means that more than fifty percent of the facility was destroyed. For purposes of this section, involuntary conversion as a result of condemnation or exercise of eminent domain includes a legally binding agreement for the purchase of a facility of an employer entered into between an employer and the State of South Carolina or a political subdivision of the State under threat of exercise of eminent domain by the State or its political subdivision.
The year of reinstatement is the year of creation of the job. All reinstated jobs qualify for the credit pursuant to this section, and a comparison is not required to be made between the number of full-time jobs of the employer in the taxable year and the number of full-time jobs of the employer with the corresponding period of the prior taxable year.
Notwithstanding another provision of law,
(b) Subject to all other requirements of this section, 'new job' also includes:
( i) jobs created by a taxpayer when the taxpayer hires more than five hundred full-time individuals who:
(a) at a manufacturing facility located in a county classified as distressed;
(b) immediately before their employment by the taxpayer, the individuals were employed by a company operating, as of the effective date of this paragraph, under pursuant to Chapter 11 of the United States Bankruptcy Code; and
(c) the taxpayer, as an unrelated entity, acquires as of March 12, 2004, substantially all of the assets of the company operating under Chapter 11 of the United States Bankruptcy Code;
(ii) jobs created by a taxpayer acquiring substantially all of the assets of the prior taxpayer if the former taxpayer has been out of operation for at least ninety days and the acquiring taxpayer is an unrelated entity as defined in Internal Revenue Code Section 267.
(4) 'Full-time' means a job requiring a minimum of thirty-five hours of an employee's time a week for the entire normal year of company operations or a job requiring a minimum of thirty-five hours of an employee's time for a week for a year in which the employee was hired initially for or transferred to the South Carolina facility. For the purposes of this section, two half-time jobs are considered one full-time job. A 'half-time job' is a job requiring a minimum of twenty hours of an employee's time a week for the entire normal year of the company's operations or a job requiring a minimum of twenty hours of an employee's time a week for a year in which the employee was hired initially for or transferred to the South Carolina facility.
(5) 'Manufacturing facility' means an establishment where tangible personal property is produced or assembled.
(6) 'Processing facility' means an establishment that prepares, treats, or converts tangible personal property into finished goods or another form of tangible personal property. The term includes a business engaged in processing agricultural, aquacultural, or maricultural products. It does not include an establishment in which retail sales of tangible personal property are made to retail customers.
(7) 'Warehousing facility' means an establishment where tangible personal property is stored but does not include any establishment where retail sales of tangible personal property are made to retail customers.
(8) 'Distribution facility' means an establishment where shipments of tangible personal property are processed for delivery to customers. The term does not include an establishment where retail sales of tangible personal property are made to retail customers on more than twelve days a year except for a facility which processes customer sales orders by mail, telephone, or electronic means, if the facility also processes shipments of tangible personal property to customers and if at least seventy-five percent of the dollar amount of goods sold through the facility are sold to customers outside of South Carolina. Retail sales made inside the facility to employees working at the facility are not considered for purposes of the twelve-day and seventy-five percent limitation. For purposes of this definition, 'retail sale' and 'tangible personal property' have the meaning provided in Chapter 36 of this title.
(9) 'Research and development facility' means an establishment engaged in laboratory, scientific, or experimental testing and development related to new products, new uses for existing products, or improving existing products. The term does not include an establishment engaged in efficiency surveys, management studies, consumer surveys, economic surveys, advertising, promotion, banking, or research in connection with literary, historical, or similar projects.
(10) 'Corporate office facility' means a corporate headquarters that meets the definition of a 'corporate headquarters' contained in Section 12-6-3410(J)(1). The corporate headquarters of a general contractor licensed by the South Carolina Department of Labor, Licensing and Regulation qualifies even if it is not a regional or national headquarters as those terms are defined in Section 12-6-3410(J)(1).
(11) The terms 'retail sales' and 'tangible personal property' for purposes of this section are defined in Chapter 36 of this title.
(12) 'Tourism facility' means an establishment used for a theme park; amusement park; historical, educational, or trade museum; botanical garden; cultural center; theater; motion picture production studio; convention center; arena; auditorium; or a spectator or participatory sports facility; and similar establishments where entertainment, education, or recreation is provided to the general public. Tourism facility also includes new hotel and motel construction, except that to qualify for the credits allowed by this section and regardless of the county in which the facility is located, the number of new jobs that must be created by the new hotel or motel is twenty or more. It does not include that portion of an establishment where retail merchandise or retail services are sold directly to retail customers.
(13) 'Qualifying service-related facility' means:
(a) an establishment engaged in an activity or activities listed under the North American Industry Classification System Manual (NAICS) Section 62, subsectors 621, 622, and 623; or
(b) a business, other than a business engaged in legal, accounting, banking, or investment services or retail sales, which has a net increase of at least:
( i) two hundred fifty jobs at a single location;
(ii) one hundred twenty-five jobs at a single location and the jobs have an average cash compensation level of more than one and one-half times the lower of state per capita income or per capita income in the county where the jobs are located;
(iii) seventy-five jobs at a single location and the jobs have an average cash compensation level of more than twice the lower of state per capita income or per capita income in the county where the jobs are located; or
(iv) thirty jobs at a single location and the jobs have an average cash compensation level of more than two and one-half times the lower of state per capita income or per capita income in the county where the jobs are located.
A taxpayer shall use the most recent per capita income data available as of the end of the taxable year in which the jobs are filled. Determination of the required number of jobs is in accordance with the monthly average described in subsection (F).
(14) 'Technology intensive facility' means:
(a) a facility at which a firm engages in the design, development, and introduction of new products or innovative manufacturing processes, or both, through the systematic application of scientific and technical knowledge. Included in this definition are the following North American Industrial Classification Systems, NAICS, codes published by the Office of the Management and Budget of the federal government:
( i) 5114 database and directory publishers;
(ii) 5112 software publishers;
(iii) 54151 computer systems design and related services;
(iv) 541511 custom computer programming services;
( v) 541512 computer systems design services;
(vi) 541710 scientific research and development services;
(vii) 9271 space research and technology; or
(b) a facility primarily used for one or more activities listed under the 2002 version of the NAICS Codes 51811 (Internet Service Providers and Web Search Portals).
(15) 'Extraordinary retail establishment' as defined in Sections 12-21-6520 and 12-21-6590.
(N) Except for employees employed in distressedtier 1 counties, the maximum aggregate credit that may be claimed in any tax year for a single employee pursuant to this section and Section 12-6-3470(A) is five thousand five hundred dollars."
SECTION 3. Section 12-6-3410 of the 1976 Code, as last amended by Act 386 of 2006, is further amended to read:
"Section 12-6-3410. (A) A corporation establishing a corporate headquarters in this State, or expanding or adding to an existing corporate headquarters, is allowed a credit against any tax due pursuant to Section 12-6-530, Section 12-11-20, or Section 12-20-50 as set forth in this section.
(B) In order to qualify for this credit, each of the following criteria must be satisfied:
(1) The qualifying real property costs of the corporate headquarters establishment, expansion, or addition must be at least fifty thousand dollars. Qualifying real property costs are:
(a) costs incurred in the design, preparation, and development of establishing, expanding, or adding to a corporate headquarters,; and
(b)(i) direct construction costs,; or
( ii) with respect to leased facilities, direct lease costs during the first five years of operations for the corporate headquarters.
(2) The headquarters establishment, expansion, or addition must result in the creation of:
(a) at least forty new jobs performing headquarters related functions and services or research and development related functions and services. These jobs must be permanent, full-time positions located in this State,; and
(b) at least twenty of the above-referenced new jobs must be classified as headquarters staff employees.
(C) The amount of the credit is equal to twenty fifty percent of the qualifying real property costs listed in subsection (B)(1).
(D) A headquarters establishment, expansion, or addition which meets the criteria of subsection (B) of this section is entitled to an additional credit equal to twenty fifty percent of cost for tangible personal property if the following conditions are met:
(1) the personal property is:
(a) capitalized as personal property for income tax purposes under the Internal Revenue Code; and
(b) purchased for the establishment, expansion, or addition of a corporate headquarters, or for the establishment, expansion, or addition of a research and development facility which is part of the same corporate project as the headquarters establishment, addition, or expansion; and
(c) used for corporate headquarters related functions and services or research and development related functions and services in South Carolina.
(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)(a) headquarters related functions and services; or
( ii)(b) research and development related functions and services.
The jobs must have an average cash compensation level of more than one and one-half times the per capita income of this State based on the most recent per capita income data available as of the end of the taxpayer's taxable year in which the jobs are filled; 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 based on the most recent per capita income data available as of the end of the taxpayer's taxable year in which the jobs are filled.
(E)(1)(a) For facilities which are constructed, the credit can only be claimed for the taxable year when the headquarters establishment, expansion, or addition, and the research and development facility establishment, expansion, or addition, in the case of corporations qualifying under subsection (D), is placed in service for federal income tax purposes. For construction projects completed in phases and placed in service for federal income tax purposes in more than one taxable year, the corporation can claim the credit on the South Carolina income tax return for the taxable year in which property, which qualifies for the credit, is placed in service. Credits cannot be obtained for costs incurred more than three taxable years after the taxable year in which the first property for which the credit is claimed is placed in service. Notwithstanding any other provisions of this subsection, if the entire project is not completed by the end of the three taxable years, the corporation may claim the credit for all property placed in service within the time limitation set forth in the preceding sentence. The credit may not be claimed for personal property which is replacing personal property for which the credit can be claimed. The department may for good cause extend the time for incurring additional costs and for claiming the credit if the project is not completed within the time period allowed by this subsection. For purposes of this subsection the term 'property' includes qualifying real property and, where the conditions of subsection (D) are met, personal property.
(b) for leased real property the credit must be claimed in the taxable year in which the first direct lease costs are incurred.
(2) The corporation must meet the staffing requirements of subsections (B)(2) and, if applicable, (D)(2), by the end of the second taxable year following the last taxable year for which the credit is claimed. The corporation must have documented plans to meet the initial staffing requirements at the time the credit is claimed. If the corporation fails to meet the staffing requirements within the time required by this subsection, the corporation must increase its tax liability for the current taxable year by an amount equal to the amount of credit, or any portion of the credit for which the corporation would not qualify, which was used to reduce tax in the earlier years.
(F) The credit provided in this section is nonrefundable, but an unused credit may be carried forward for ten years. An unused credit may be carried forward fifteen years if the criteria set forth in subsection (D)(2) are met. In addition, a taxpayer may assign its rights to the unused credit to a succeeding taxpayer if the taxpayer transfers all or substantially all of the assets of the taxpayer or all or substantially all of the assets of a trade, business, or operating division of a taxpayer to the succeeding taxpayer, and the succeeding taxpayer maintains the corporate headquarters of the taxpayer. No credit may be claimed for a taxable year during which the taxpayer or succeeding taxpayer fails to meet the qualifying employment requirements provided in this section and the carry forward period is not extended for any year in which the credit may not be claimed for failure to meet the employment requirements. The credit may be claimed for a taxable year in the unextended carry forward period if the taxpayer or succeeding taxpayer requalifies for the credit by meeting the employment requirements during that taxable year.
(G) If a fee-in-lieu arrangement under Section 4-29-67 is entered into with respect to all or part of property involving a corporate headquarters, and the corporation claiming the credit provided under this section is treated as the owner of the property for federal income tax purposes, then the corporation must be treated as the owner of the property for purposes of the credit provided by this section.
(H) To the extent that this credit applies to the cost of certain property, the basis of the property for South Carolina income tax purposes must be reduced by the amount of the credit claimed with respect to the property. This basis reduction does not reduce the basis or limit or disallow any depreciation allowable under the law of this State for other than income tax purposes, even if the depreciation is based upon or otherwise relates to income tax depreciation including, without limitation, basis or depreciation which is allowable under this title for property tax purposes. If the corporation fails to meet the staffing requirements of subsection (E)(2), the corporation may increase the basis of the property by the amount of the original basis reduction with regard to that property in the year in which the credit is recaptured.
(I) The amount of a credit allowed under this section must be reduced by the amount of any past-due debt owed this State by the taxpayer.
(J) As used in this section:
(1) 'Corporate headquarters' means the facility or portion of a facility where corporate staff employees are physically employed, and where the majority of the company's or company business unit's financial, personnel, legal, planning, information technology, or other headquarters-related functions are handled either on a regional, national, or global basis. A corporate headquarters must be a regional corporate headquarters, a national corporate headquarters, or global corporate headquarters as defined below; provided, however, for taxpayers which are subject to tax under Chapter 11 of Title 12, a corporate headquarters must be a regional corporate headquarters:
(a) National corporate headquarters must be the sole corporate headquarters in the nation and handle headquarters-related functions at least on a national basis. A national headquarters is considered to handle headquarters-related functions on a national basis from this State if the corporation has a facility in this State from which the corporation engages in interstate commerce by providing goods or services for customers outside of this State in return for compensation.
(b) Regional corporate headquarters must be the sole corporate headquarters within the region and must handle headquarters-related functions on a regional basis. For purposes of this section, 'region' or 'regional' means a geographic area comprised of either:
( i) at least five states, including this State; or
( ii) two or more states, including this State, if the entire business operations of the corporation are performed within fewer than five states; provided, however, that with respect to taxpayers which are subject to tax under Chapter 11 of Title 12, the requirement that 'the entire business operations of the corporation are performed within fewer than five states', is replaced with 'if all branches of the taxpayer, as defined below, are physically located in fewer than five states'. For taxpayers which are subject to tax under Chapter 11 of Title 12, such taxpayer must have two or more branches, as that term is defined in Section 34-25-10(8), in each state within its region.
(c) A 'company business unit' is an organizational unit of a corporation or bank and is defined by the particular product or category of products it sells.
(2) 'New job' means a job created by an employer in this State at the time a new facility, expansion, or addition is initially staffed, but does not include a job created when an employee is shifted from an existing location in this State to work in a new or expanded facility. An employee may be employed at a temporary location in this State pending completion of the new facility, expansion, or addition.
(3) 'Full-time' means a job requiring a minimum of thirty-five hours of an employee's time a week for the entire normal year of corporate operations or a job requiring a minimum of thirty-five hours of an employee's time for a week for a year in which the employee was initially hired for or transferred to the corporate headquarters or research and development facility in this State.
(4) 'Headquarters-related functions and services' are those functions involving financial, personnel, administrative, legal, planning, information technology, or similar business functions.
(5) 'Headquarters staff employees' means executive, administrative, or professional workers performing headquarters related functions and services.
(a) An executive employee is a full-time employee in which at least eighty percent of his business functions involve the management of the enterprise and directing the work of at least two employees. An executive employee has the authority to hire and fire or has the authority to make recommendations related to hiring, firing, advancement, and promotion decisions, and an executive employee must customarily exercise discretionary powers.
(b) An administrative employee is a full-time employee who is not involved in manual work and whose work is directly related to management policies or general headquarters operations. An administrative employee must customarily exercise discretion and independent judgment.
(c) A professional employee is an employee whose primary duty is work requiring knowledge of an advanced type in a field of science or learning. This knowledge is characterized by a prolonged course of specialized study. The work must be original and creative in nature, and the work cannot be standardized over a specific period of time. The work must require consistent exercise of discretion and the employee must spend at least eighty percent of the time performing headquarters related functions and services.
(6) 'Research and development' means laboratory, scientific, or experimental testing and development related to new products, new uses for existing products, or improving existing products, but 'research and development' does not include efficiency surveys, management studies, consumer surveys, economic surveys, advertising, promotion, banking, or research in connection with literary, historical, or similar projects.
(7) 'Research and development facility' means the building or buildings or portion of a building where research and development functions and services are physically located.
(8) 'Direct lease costs' are cash lease payments. The term does not include any accrued, but unpaid, costs.
(9) 'corporation', 'corporate', 'company', and 'taxpayer' for purposes of this section also include a limited liability company which is subject to regulation under the Federal Power Act (16 U.S.C. Section 791(a)) and which is formed to operate or to take functional control of electric transmission assets as defined in the Federal Power Act regardless of whether the limited liability company is treated as a partnership or as a corporation for South Carolina income tax purposes. If treated as a partnership, a limited liability company that qualifies for a credit under this section passes the credit through to its members in proportion to their interests in the limited liability company. Each member's share of the credit is nonrefundable but is allowed as a credit against any tax under Section 12-6-530 or Section 12-20-50 and bank taxes imposed pursuant to Chapter 11 of this title. Each member may carry any unused credit forward as provided in subsection (F). The limited liability company may not carry forward a credit that passes through to its members."
SECTION 4. Section 12-6-3420 of the 1976 Code, as last amended by Act 335 of 2006, is further amended to read:
"Section 12-6-3420. (A) A An individual or a corporation may claim a credit for the construction or improvement of an infrastructure project against taxes due under Section 12-6-510, Section 12-6-530, or Section 12-11-20 for:
(1) expenses paid or accrued by the taxpayer;
(2) contributions made to a governmental entity; or
(3) contributions made to a qualified private entity in the case of water or sewer lines and their related facilities in areas served by a private water and sewer company.
(B) For expenses paid or accrued by the taxpayer in building or improving any one infrastructure project:
(1) the credit is equal to fifty percent of the expenses or contributions;
(2) the credit is limited to ten fifty thousand dollars annually; and
(3) any unused credit, up to a total amount of thirty two hundred fifty thousand dollars, may be carried forward three five years.
(C) For purposes of this section:
(1) An infrastructure project includes water lines or sewer lines, their related facilities, and roads that:
(a) do not exclusively benefit the taxpayer;
(b) are built to applicable standards; and
(c) are dedicated to public use or, in the case of water and sewer lines and their related facilities in areas served by a private water and sewer company, the water and sewer lines are deeded to a qualified private entity.
(2) A qualified private entity is an entity holding the required permits, certifications, and licenses from the South Carolina Department of Health and Environmental Control, the South Carolina Public Service Commission, and any other state agencies, departments, or commissions, from which approvals must be obtained in order to operate as a utility furnishing water supply services or sewage collection or treatment services, or both, to the public.
(D) If an infrastructure project benefits more than the taxpayer, the expenses of the taxpayer must be allocated to the various beneficiaries and only those expenses not allocated to the taxpayer's benefit qualify for the credit.
(E) The credit may be claimed before dedication or conveyance if the taxpayer submits with its tax return a letter of intent signed by the chief operating officer of the appropriate governmental entity or qualified private entity stating that upon completion the governmental entity or qualified private entity shall accept the infrastructure project for the appropriate use.
(F) A qualifying private entity is not allowed the credit provided by this section for expenses it incurs in building or improving facilities it owns, manages, or operates.
(G) If a road qualifying for the credit is subsequently removed from the state highway or public road system, the amount of the credit allowed for the construction of the road must be added to any corporate income tax due from the taxpayer in the first taxable year following the removal of the road from public use. The department may implement the provisions of this subsection by rules or regulation.
(H) A corporation taxpayer which files or is required to file a consolidated return is entitled to the income tax credit allowed by this section on a consolidated basis. The tax credit may be determined on a consolidated basis regardless of whether or not the corporation taxpayer entitled to the credit contributed to the tax liability of the consolidated group.
(I) The merger, consolidation, or reorganization of a corporation taxpayer where tax attributes survive does not create new eligibility in a succeeding corporation taxpayer but unused credits may be transferred and continued by the succeeding corporation taxpayer. In addition, a corporation taxpayer may assign its rights to its unused credit to another corporation taxpayer if it transfers all, or substantially all, of the assets of the corporation taxpayer or all, or substantially all, of the assets of a trade or business or operating division of a corporation taxpayer to another corporation taxpayer.
(J) After the effective date of this subsection, the credit permitted by this section is only available for that portion of the infrastructure which is on public property that is not owned or leased by the taxpayer and that is not located on the site of the taxpayer's facility."
SECTION 5. A. This section may be cited as the "South Carolina Basic Skills Education Tax Credit Act".
B. Article 26, Chapter 6, Title 12 of the 1976 Code is amended by adding:
"Section 12-6-3475. (A) For purposes of this section:
(1) 'Approved basic skills education' means employer-provided or employer-sponsored education that meets the following conditions:
(a) it enhances reading, writing, or mathematical skills up to and including the twelfth-grade level for employees who are otherwise unable to function effectively on the job due to deficiencies in those areas or who would otherwise be displaced because such skills deficiencies would inhibit their training for new technology;
(b) it is approved and certified by the State Department of Education; and
(c) the employer does not require the employee to make any payment for the education, either directly or indirectly, through use of forfeiture of leave time, vacation time, or other compensable time.
(2) 'Cost of education' means direct instructional costs as defined by the department, including instructor salaries, materials, supplies, and textbooks but specifically excluding costs associated with renting or otherwise securing space.
(3) 'Employee' means an employee resident in this state who is employed for at least twenty-four hours per week and who has been continuously employed by the employer for at least sixteen weeks.
(4) 'Employer' means an employer upon whom an income tax is imposed by this chapter.
(5) 'Employer-provided' means approved basic skills education offered on the premises of an employer or on a premises approved by the department, instructors hired, or employed by the employer.
(6) 'Employer-sponsored' means a contractual arrangement with a school, university, college, or other instructional facility that offers approved basic skills education that is paid for by the employer.
(B) An employer who provides or sponsors an approved basic skills education program is eligible for an income tax credit equal to one third of the costs of education per full-time equivalent student, or one hundred fifty dollars per full-time equivalent student, whichever is less, for each employee who has successfully completed an approved basic skills education program. No employer shall receive a credit if the employer requires that the employee reimburse or pay the employer for the cost of education.
(C) Unused credit may be carried forward to the five succeeding taxable years.
(D) In order to claim this credit, the employer must certify to the department the name of the employee, the course work successfully completed by the employee, the name of the approved basic skills education provider, and such other information as may be required by the department to ensure that credits are only granted to employers who provide or sponsor approved basic skills education. The department shall adopt regulations to implement this credit program.
(E) The department shall establish standards as necessary in approving employer-provided and employer-sponsored basic skills education programs. In adopting standards, the department shall establish required hours of classroom instruction, required courses, certification of teachers or instructors, and progressive levels of instruction and standardized measures of employee evaluation to determine successful completion of a course of study. The Department of Revenue may promulgate regulations to administer the tax credit."
SECTION 6. Section 12-6-3530 of the 1976 Code, as last amended by Act 89 of 2001, is further amended by adding a new subsection at the end to read:
"( ) 'Investments' or 'amounts invested' in a community development corporation or in a community development financial institution, for purposes of this section, include cash, other real or personal property, and the amount of forgivable or redeemable loans or lines of credit."
SECTION 7. Section 12-10-80 of the 1976 Code, as last amended by Act 116 of 2007, is further amended to read:
"Section 12-10-80. (A) A business that qualifies pursuant to Section 12-10-50(A) and has certified to the council that the business has met the minimum job requirement and minimum capital investment provided for in the revitalization agreement may claim job development credits as determined by this section.
(1) A business may claim job development credits against its withholding on its quarterly state withholding tax return for the amount of job development credits allowable pursuant to this section.
(2) A business that is current with respect to its withholding tax and other tax due and owing the State and that has maintained its minimum employment and investment levels identified in the revitalization agreement may claim the credit on a quarterly basis beginning with the first quarter after the council's certification to the department that the minimum employment and capital investment levels were met for the entire quarter. If a qualifying business is not current as to all taxes due and owing to the State as of the date of the return on which the credit would be claimed, without regard to extensions, the business may claim the credit only in an amount reduced by the amount of taxes due and owing to the State as of the date of the return on which the credit is claimed.
(3) A qualifying business may claim its initial job development credit only after the council has certified to the department that the qualifying business has met the required minimum employment and capital investment levels.
(4) To be eligible to apply to the council to claim a job development credit, a qualifying business shall create at least ten new, full-time jobs, as defined in Section 12-6-3360(M), at the project described in the revitalization agreement within five years of the effective date of the agreement.
(5) A qualifying business is eligible to claim a job development credit pursuant to the revitalization agreement for not more than fifteen years.
(6) To the extent any return of an overpayment of withholding that results from claiming job development credits is not used as permitted by subsection (C) or by Section 12-10-95, it must be treated as misappropriated employee withholding.
(7) Job development credits may not be claimed for purposes of this section with regard to an employee whose job was created in this State before the taxable year of the qualifying business in which it enters into a preliminary revitalization agreement.
(8) If a qualifying business claims job development credits pursuant to this section, it shall 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 shall file with the council and the department the information and documentation requested by the council or department respecting employee withholding, 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.
(9) Each qualifying business claiming in excess of ten thousand dollars in a calendar year must furnish to the council and to the department a report that itemizes the sources and uses of the funds. The 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, except when a qualifying business obtains the written approval by the council for an extension of that date. Extensions may be granted only for good cause shown. The department shall impose a penalty pursuant to Section 12-54-210 for all reports filed after June thirtieth or the approved extension date, whichever is later. The department shall audit each qualifying business with claims in excess of ten thousand dollars in a calendar year at least once every three years to verify proper sources and uses of the funds.
(10) Each qualifying business claiming ten thousand dollars or less in any calendar year must furnish a report prepared by the company that itemizes the sources and uses of the funds. This 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, except when a qualifying business obtains the written approval by the council for an extension of that date. Extensions may be granted only for good cause shown. The department shall impose a penalty pursuant to Section 12-54-210 for all reports filed after June thirtieth or the approved extension date, whichever is later.
(11) An employer may not claim an amount that results in an employee's receiving a smaller amount of wages on either a weekly or on an annual basis than the employee would receive otherwise in the absence of this chapter.
(B)(1) The maximum job development credit a qualifying business may claim for new employees is limited to the lesser of withholding tax paid to the State on a quarterly basis or the sum of the following amounts:
(a) two percent of the gross wages of each new employee who earns $6.95 or more an hour but less than $9.27 an hour;
(b) three percent of the gross wages of each new employee who earns $9.27 or more an hour but less than $11.58 an hour;
(c) four percent of the gross wages of each new employee who earns $11.58 or more an hour but less than $17.38 an hour; and
(d) five percent of the gross wages of each new employee who earns $17.38 or more an hour.
(2) The hourly gross wage figures in item (1) must be adjusted annually by an inflation factor determined by the State Budget and Control Board.
(C) To claim a job development credit, the qualifying business must incur qualified expenditures at the project or for utility or transportation improvements that serve the project. To be qualified, the expenditures must be:
(1) incurred during the term of the revitalization agreement, including a preliminary revitalization agreement, or within sixty days before council's receipt of an application for benefits pursuant to this section;
(2) authorized by the revitalization agreement; and
(3) used for any of the following purposes:
(a) training costs and facilities;
(b) acquiring and improving real estate whether constructed or acquired by purchase, or in cases approved by the council, acquired by lease or otherwise;
(c) improvements to both public and private utility systems including water, sewer, electricity, natural gas, and telecommunications;
(d) fixed transportation facilities including highway, rail, water, and air;
(e) 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;
(f) employee relocation expenses associated with new or expanded technology intensive facilities as defined in Section 12-6-3360(M)(14) or relocation expenses associated with new national, regional, or global corporate headquarters as defined in Section 12-6-3410(J)(1)(a) that qualify for the enhanced corporate income tax credit pursuant to Section 12-6-3410(D) or relocation expenses associated with an expanded research and development facility to include personnel and laboratory research and development equipment;
(g) financing the costs of a purpose described in items (a) through (f).
(h) training for all relevant employees that enable a company to export or increase a company's ability to export its products, including training for logistics, regulatory, and administrative areas connected to the company's export process and other export process training that allows a qualified company to maintain or expand its business in this State;
(i) apprenticeship programs.
(j) (h) quality improvement programs of the South Carolina Quality Forum."
(D)(1) The amount of job development credits a qualifying business may claim for its use for qualifying expenditures is limited according to the designation of the county as defined in Section 12-6-3360(B) as follows:
(a) one hundred percent of the maximum job development credits may be claimed by businesses located in counties designated as distressed or least developed tier 1 counties;
(b) eighty-five seventy-five percent of the maximum job development credits may be claimed by businesses located in counties designated as "underdeveloped" tier 2 counties; or
(c) seventy percent of the maximum job development credits may be claimed by businesses located in counties designated as "moderately developed"; or
(d) fifty-five percent of the maximum job development credits may be claimed by businesses located in counties designated as "developed" tier 3 counties.
(2) The amount that may be claimed as a job development credit by a qualifying business is limited by this subsection and by the revitalization agreement. The council may approve a waiver of ninety-five percent of the limits provided in item (1) for a qualifying business making a significant capital investment as defined in Section 12-44-30(7).
(3) The county designation of the county in which the project is located on the date the application for job development credit incentives is received in the Office of the Coordinating Council remains in effect for the entire period of the revitalization agreement, except as to additional jobs created pursuant to an amendment to a revitalization agreement entered into before June 1, 1997, as provided in Section 12-10-60. In that case the county designation on the date of the amendment remains in effect for the remaining period of the revitalization agreement as to any additional jobs created after the effective date of the amendment. This item does not apply to a business whose application for job development fees or credits pursuant to Section 12-10-81 has been approved by council before the effective date of this act.
(E) The council shall certify to the department the maximum job development credit for each qualifying business. After receiving certification, the department shall remit an amount equal to the difference between the maximum job development credit and the job development credit actually claimed to the State Rural Infrastructure Fund as defined and provided in Section 12-10-85.
(F) Any 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 as to that employee.
(G) For purposes of the job development credit allowed by this section, an employee is a person whose job was created in this State.
(H) Job development credits may not be claimed by a governmental employer who employs persons at a closed or realigned military installation as defined in Section 12-10-88(E).
(I) A taxpayer who qualifies for the job development credit pursuant to the provisions of this section and who is located in a multicounty business or industrial park jointly established pursuant to Section 13 of Article VIII of the Constitution of this State is allowed a job development credit equal to the amount allowed pursuant to subsection (D) for the designation of the county which has the lowest development status of the counties containing the park if:
(1) the park is developed and established on the geographical boundary of adjacent counties; and
(2) the written agreement, pursuant to Section 4-1-170, requires revenue from the park to be allocated to each county on an equal basis."
SECTION 8. A. Section 12-10-81(A) of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:
"(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; and
(2) business qualifies pursuant to Section 12-10-50; and
(3) business is a tire manufacturer that 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 that 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; except that the business must certify to the council that the business has satisfied all minimum capital investment and job requirements identified in the revitalization agreements but not certified by the council to the department before July 1, 2001. 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 certifies to the council that the business has satisfied the capital and job requirements of this section."
B. Section 12-10-81(E) of the 1976 Code, as last amended by Act 332 of 2002, is further amended to read:
"(E)(1) For purposes of subsection (C)(1)(a) through (d), the amount of job development credits a qualifying business may claim for its use for qualifying expenditures is limited according to the designation of the county as defined in Section 12-6-3360(B) as follows:
(a) one hundred percent of the maximum job development credits may be claimed by businesses located in counties designated as distressed or least developed tier 1 counties;
(b) eighty-five seventy-five percent of the maximum job development credits may be claimed by businesses located in counties designated as "underdeveloped" tier 2 counties; or
(c) seventy percent of the maximum job development credits may be claimed by businesses located in counties designated as "moderately developed"; or
(d) fifty-five percent of the maximum job development credits may be claimed by businesses located in counties designated as "developed" tier 3 counties.
(2) For purposes of this subsection, the county designation of the county in which the project is located at the time the qualifying business enters into a preliminary revitalization agreement with the council remains in effect for the entire period of the revitalization agreement.
(3) The amount claimed by a qualifying business is limited by this subsection and the terms of the revitalization agreements. The business may use either the job development escrow procedure 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 rules of the council, in the council's discretion, to assist the business.
(4) The council shall certify to the department the maximum job development credit for each qualifying business. After receiving certification, the department shall remit an amount equal to the difference between the maximum job development credit and the job development credit actually claimed to the State Rural Infrastructure Fund as defined and provided in Section 12-10-85."
SECTION 9. Chapter 10, Title 12 of the 1976 Code is amended by adding:
"Section 12-10-83. A business claiming a job development credit pursuant to this chapter after the effective date of this section must remain in this State and maintain the required facility and jobs for one hundred fifty percent of the time for which it is allowed to claim the job development credit or fifty percent of the amount of the credit must be returned to the state general fund within ninety days following the elimination of the qualifying facility and jobs."
SECTION 10. Section 12-21-6520 of the 1976 Code is amended by deleting item (14), as last amended by Act 116 of 2007, which reads:
"(14) 'Tourism or recreational facility" also means an aquarium or natural history exhibit or museum located within or directly contiguous to an extraordinary retail establishment as defined below. An extraordinary retail establishment is a single store located in South Carolina within two miles of an interstate highway or in a county with at least three and one-half million visitors a year, and it must be a destination retail establishment which attracts at least two million visitors a year with at least thirty-five percent of those visitors traveling at least fifty miles to the establishment. The extraordinary retail establishment must have a capital investment of at least twenty-five million dollars including land, buildings and site preparation costs, and one or more hotels must be built to service the establishment within three years of occupancy. Only establishments which receive a certificate of occupancy after July 1, 2006, qualify. The Department of Parks, Recreation and Tourism shall determine and annually certify whether a retail establishment meets these criteria and its judgment is conclusive. The extraordinary retail establishment annually must collect and remit at least two million dollars in sales taxes but is not required to collect or remit admission taxes."
SECTION 11. Section 12-21-6540(A) of the 1976 Code, as last amended by Act 116 of 2007, is further amended to read:
"(A) During the benefit period, in addition to the amount described in Section 12-21-6530, except as otherwise provided in Section 12-21-6590, an additional amount equal to one-fourth of the license tax paid on admissions to an establishment must be transferred by the department to the State Treasurer to be deposited into the fund and distributed pursuant to the approval of the council."
SECTION 12. A. This section may be cited as the "South Carolina Student Loan Reimbursement Act".
B. Article 2, Chapter 103, Title 59 of the 1976 Code is amended by adding:
"Section 59-103-210. (A) A student loan reimbursement grant is allowed with respect to each taxpayer who has graduated from an institution of higher education with an undergraduate or graduate degree in engineering.
(B) Within available appropriations, the program shall provide student loan reimbursement grants for persons who:
(1) attended an institution of higher education;
(2) have been awarded an undergraduate or graduate degree in engineering; and
(3) are newly employed in South Carolina on or after January 1, 2009, as engineers.
(C) Persons who qualify under section (B) must be reimbursed on an annual basis for qualifying student loan payments in amounts as determined by the State Commission on Higher Education, but shall only be reimbursed for loan payments made while the person is employed in the state as an engineer.
(D) The commission shall develop eligibility requirements for recipients of the grant, which may include income guidelines."
SECTION 13. (A) All investments of the Palmetto Seed Capital Corporation and the Palmetto Seed Capital Fund Limited Liability Partnership made by private sector investors or private sector limited partners under Chapter 44 of Title 41, must be transferred to the South Carolina Venture Capital Fund established under Chapter 45 of Title 41; provided that all income tax or other credits arising from these investments pursuant to Chapter 44 of Title 41, shall continue in full force and effect.
(B) Section 6 of Act 187 of 2004 is repealed.
(C) Chapter 44 of Title 41 of the 1976 Code is repealed.
(D) Section 12-6-3430 of the 1976 Code is repealed.
SECTION 14. Sections 12-6-3362, 12-6-3450, 12-10-45, 12-10-88, and Chapter 14 of Title 12, and Section 12-21-6590 of the 1976 Code are hereby repealed.
SECTION 15. This act takes effect July 1, 2008, and the provisions of this act modifying or revising existing tax incentives or tax credits apply prospectively only to qualified businesses, recipients, taxpayers, or investors, and do not impair any contracts or agreements made before the effective date of this act.
This web page was last updated on Monday, June 22, 2009 at 2:58 P.M.