1 South Carolina General Assembly 2 117th Session, 2007-2008 3 4 H. 4912 5 6 STATUS INFORMATION 7 8 General Bill 9 Sponsors: Rep. W.D. Smith 10 Document Path: l:\council\bills\agm\19168mm08.doc 11 Companion/Similar bill(s): 1217 12 13 Introduced in the House on April 1, 2008 14 Currently residing in the House Committee on Ways and Means 15 16 Summary: Job tax credit 17 18 19 HISTORY OF LEGISLATIVE ACTIONS 20 21 Date Body Action Description with journal page number 22 4/1/2008 House Introduced and read first time HJ-7 23 4/1/2008 House Referred to Committee on Ways and Means HJ-8 24 25 26 VERSIONS OF THIS BILL 27 28 4/1/2008 29 1 2 3 4 5 6 7 8 9 A BILL 10 11 TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 12 1976, BY ADDING SECTION 12-6-3685 SO AS TO 13 ESTABLISH A TAX CREDIT AGAINST THE STATE’S 14 INCOME TAX FOR AN EMPLOYER WHO PROVIDES OR 15 SPONSORS A BASIC SKILLS EDUCATION PROGRAM, 16 PROVIDE FOR QUALIFICATIONS FOR THE PROGRAM 17 AND ELIGIBILITY FOR THE CREDIT, AS DETERMINED BY 18 THE DEPARTMENT OF COMMERCE, THE PROCESS FOR 19 CLAIMING THE CREDIT, AND DEFINITIONS; TO AMEND 20 SECTION 12-6-3360, AS AMENDED, RELATING TO 21 TAXPAYERS WHO QUALIFY FOR AN ANNUAL JOB TAX 22 CREDIT AGAINST THE STATE’S INCOME TAX, BANK 23 TAX, OR INSURANCE PREMIUM TAX, SO AS TO PROVIDE 24 FOR DESIGNATION OF EACH COUNTY BY THE 25 DEPARTMENT OF COMMERCE AS A TIER ONE, TIER 26 TWO, OR TIER THREE COUNTY PURSUANT TO ITS 27 DEVELOPMENT FACTOR, TO DESCRIBE AND DEFINE A 28 QUALIFYING FACILITY, TO MODIFY THE AMOUNTS OF 29 THE CREDITS FOR JOB CREATION, TO SPECIFY 30 MAINTENANCE OF STATEWIDE EMPLOYMENT, TO 31 FURTHER DEFINE TERMS, AND TO DESCRIBE NEW 32 ELIGIBILITY FOR THE JOB TAX CREDIT; TO AMEND 33 SECTION 12-6-3367, RELATING TO THE MORATORIUM ON 34 TAXES FOR CERTAIN COMPANIES CREATING NEW JOBS 35 IN THE STATE, AND SECTION 12-6-3470, AS AMENDED, 36 RELATING TO THE EMPLOYER INCOME TAX CREDIT FOR 37 HIRING A PERSON RECEIVING FAMILY INDEPENDENCE 38 PAYMENTS, BOTH SO AS TO CONFORM TO THE NEW 39 COUNTY DESIGNATIONS; TO AMEND SECTION 12-6-3530, 40 AS AMENDED, RELATING TO CREDIT AGAINST THE 41 STATE INCOME, BANK, OR INSURANCE PREMIUM TAX, 42 SO AS TO REDEFINE QUALIFICATIONS AND PROCESSES

1 [4912] 1 1 FOR CLAIMING THE CREDIT FOR AMOUNTS DONATED 2 TO A COMMUNITY DEVELOPMENT CORPORATION AND 3 TO LIMIT THE AGGREGATE AMOUNT OF THE CREDITS; 4 TO AMEND SECTIONS 12-10-60, 12-10-80, 12-10-81, 12-10-85, 5 ALL AS AMENDED, AND 12-10-90, ALL RELATING TO THE 6 ENTERPRISE ZONE ACT OF 1995 PROVIDING FOR A JOB 7 DEVELOPMENT TAX CREDIT AVAILABLE TO A 8 QUALIFYING BUSINESS IN CONNECTION WITH JOB 9 CREATION AND MINIMUM INVESTMENT IN 10 ACCORDANCE WITH A REVITALIZATION AGREEMENT 11 WITH THE SOUTH CAROLINA COORDINATING COUNCIL, 12 SO AS TO CONFORM THE PROVISIONS TO THE NEW 13 COUNTY DESIGNATIONS; AND TO REPEAL CHAPTER 14 14 OF TITLE 12 RELATING TO THE ECONOMIC IMPACT 15 ZONE COMMUNITY DEVELOPMENT ACT OF 1995 AND A 16 TAX CREDIT FOR CERTAIN MANUFACTURERS MAKING 17 QUALIFIED INVESTMENTS. 18 19 Be it enacted by the General Assembly of the State of South 20 Carolina: 21 22 SECTION 1.A. Article 25, Chapter 6, Title 12 of the 1976 Code, 23 is amended by adding: 24 25 “Section 12-6-3685. (A) As used in this section: 26 (1) ‘Approved basic skills education’ means 27 employer-provided or employer-sponsored education that: 28 (a) enhances reading, writing, or mathematical skills up to 29 and including the twelfth-grade level for employees whose basic 30 skills deficiencies affect their job performance and ability to be 31 trained in new technologies; 32 (b) is approved and certified by the Department of 33 Commerce; and 34 (c) is offered to the employee at no cost. For purposes of 35 this subitem (c), ‘cost’ includes forfeiture of leave time, vacation 36 time, or other compensable time. 37 (2) ‘Cost of education’ means direct instructional costs as 38 defined by the Department of Commerce including instructor 39 salaries, materials, supplies, and textbooks but specifically 40 excluding costs associated with renting or otherwise securing or 41 upfitting premises to conduct the training pursuant to this section. 42

1 [4912] 2 1 (3) ‘Employee’ means an individual who is a resident in this 2 State, is employed for at least twenty-four hours a week, and has 3 been employed by the employer for at least sixteen consecutive 4 weeks. 5 (4) ‘Employer’ means a lawfully organized entity subject to 6 income tax pursuant to this chapter. 7 (5) ‘Employer-provided’ means approved basic skills 8 education offered by an employer on the employer’s premises or 9 on premises approved by the Department of Commerce using 10 qualified instructors engaged or employed by the employer. 11 (6) ‘Employer-sponsored’ means approved basic skills 12 education offered by an employer pursuant to a contractual 13 arrangement with a school, university, college, or other 14 instructional facility. 15 (B) A tax credit is granted to an employer who provides or 16 sponsors an approved basic skills education program. The amount 17 of the tax credit is equal to one-half of the costs of education for 18 each full-time equivalent student or five hundred dollars for 19 full-time equivalent student, whichever is less, for each employee 20 who successfully completes an approved basic skills education 21 program. 22 (C) Credits pursuant to this section may be claimed against 23 income taxes imposed by Section 12-6-510 or 12-6-530. The 24 credit taken in any one taxable year pursuant to this section may 25 not exceed fifty percent of the taxpayer’s remaining tax liability 26 after all other credits have been applied and may not exceed one 27 million six hundred thousand dollars for credits for all taxpayers in 28 one year. If the claims for credits exceed that amount in one year, 29 the credits must be awarded to all claimants on a pro rata basis. A 30 credit claimed pursuant to this section but not used in a taxable 31 year may be carried forward for ten years from the taxable year in 32 which the credit is earned by the taxpayer. 33 (D) To be eligible to claim the credit granted in this section, the 34 employer must certify to the Department of Commerce the name 35 of the employee, the course work successfully completed by the 36 employee, the name of the approved basic skills education 37 provider, and other information as may be required by the 38 Department of Commerce to ensure that credits are granted only to 39 employers who provide or sponsor approved basic skills education 40 pursuant to this section and that the credits are granted only to 41 employers with respect to employees who successfully complete 42 the approved basic skills education. The Department of Commerce 43 shall develop guidelines and documentation necessary to

1 [4912] 3 1 implement this credit program. The Department of Revenue shall 2 work with the Department of Commerce to ensure the proper 3 granting of credits pursuant to this section. 4 (E) The Department of Commerce shall establish standards it 5 considers necessary and convenient in approving 6 employer-provided and employer-sponsored basic skills education 7 programs. In establishing standards, the Department of Commerce 8 shall establish required hours of classroom instruction, required 9 courses, certification of teachers or instructors, and progressive 10 levels of instruction and standardized measures of employee 11 evaluation to determine successful completion of a course of 12 study.” 13 14 B. This section takes effect upon approval by the Governor and 15 applies to tax years beginning after December 31, 2009. 16 17 SECTION 2. Section 12-6-3360 of the 1976 Code, as last 18 amended by Act 116 of 2007, is further amended to read: 19 20 “Section 12-6-3360. (A) Taxpayers that operate 21 manufacturing, tourism, processing, warehousing, distribution, 22 research and development, corporate office, qualifying 23 service-related facilities technology intensive, extraordinary retail 24 establishment, qualifying technology intensive facilities and 25 qualifying service - related facilities, and banks as defined pursuant 26 to this title are allowed an annual jobs job tax credit as provided in 27 this section. In addition, taxpayers that operate retail facilities and 28 service-related industries qualify for an annual jobs tax credit in 29 tier one counties designated as least developed or distressed, and in 30 counties that are under developed and not traversed by an interstate 31 highway. As used in this section, ‘corporate office’ includes 32 general contractors licensed by the South Carolina Department of 33 Labor, Licensing and Regulation qualify for an annual job tax 34 credit. Credits pursuant to this section may be claimed against 35 income taxes imposed by Section 12-6-510 or 12-6-530 this 36 chapter, bank taxes imposed pursuant to Chapter 11 of this title, 37 and insurance premium taxes imposed pursuant to Chapter 7 of 38 Title 38, and are limited in use to fifty percent of the taxpayer’s 39 South Carolina income tax, bank tax, or insurance premium tax 40 liability. In computing a tax payable by a taxpayer pursuant to 41 Section 38-7-90, the credit allowable pursuant to this section must 42 be treated as a premium tax paid pursuant to Section 38-7-20.

1 [4912] 4 1 (B) The department Department of Commerce shall rank and 2 designate the state’s counties by December thirty-first each year 3 using data from the South Carolina Employment Security 4 Commission and the United States Department of Commerce in 5 accordance with this subsection and submit the county 6 designations to the department for publication. The county 7 designations are effective for taxable years that begin in the 8 following calendar year. A county’s designation may not be 9 lowered in credit amount more than one tier in the following 10 calendar year. The counties are ranked using the last three 11 completed calendar years of per capita income data and the last 12 thirty-six months of unemployment rate data that are available on 13 November first, with equal weight given to unemployment rate and 14 per capita income as follows: 15 (1)(a) The twelve counties with a combination of the highest 16 unemployment rate and lowest per capita income are designated 17 distressed counties. Notwithstanding any other provision of law, 18 no more than twelve counties may be designated or classified as 19 distressed and notwithstanding any other provision of this section, 20 a county may be designated as distressed only by virtue of the 21 criteria provided in this subitem. 22 (b) A category with the same criteria as provided in 23 subitem (a) of this item is designated least developed county which 24 consists of underdeveloped counties otherwise eligible for this 25 category. 26 (2) The twelve counties with a combination of the next 27 highest unemployment rate and next lowest per capita income are 28 designated underdeveloped counties. 29 (3) The eleven counties with a combination of the next 30 highest unemployment rate and the next lowest per capita income 31 are designated moderately developed counties. 32 (4) The eleven counties with a combination of the lowest 33 unemployment rate and the highest per capita income are 34 designated developed counties. 35 (5)(a) A county, any portion of which is located within 36 twenty-five miles of the boundaries of an applicable military 37 installation or applicable federal facility as defined in Section 38 12-6-3450(1), shall receive the next increased credit designation 39 for five years beginning with the year in which the military 40 installation or federal facility became an applicable military 41 installation or applicable federal facility as defined in Section 42 12-6-3450(1), with the additional requirement that the military

1 [4912] 5 1 installation must have reduced employment on the installation of at 2 least three thousand employees. 3 (b) In addition to the designation in subitem (a), a county 4 in which an applicable military installation or applicable federal 5 facility is located is allowed an additional increased credit 6 designation for five years beginning with the year the installation 7 or facility meets the requirements. 8 (c) Notwithstanding the designations in Section 9 12-6-3360, Laurens, Cherokee, and Union Counties shall qualify 10 for the next increased credit designation. 11 (d) In a county where less than five percent of the work 12 force is in manufacturing, the credit allowed is one tier higher than 13 the credit for which the county would otherwise qualify. 14 (e) For a job created in a county that is not traversed by an 15 interstate highway, the credit allowed is one tier higher than the 16 credit for which jobs created in the county would otherwise 17 qualify. This subitem does not apply to a job created in a county 18 eligible for a higher tier pursuant to another provision of this item. 19 (f) In a county in which one employer has lost at least 20 1,500 jobs in a calendar year, the credit allowed is one tier higher 21 than the credit for which the county would otherwise qualify. The 22 one-tier-higher credit allowed by this subsection is allowed for five 23 taxable years for jobs created in 2006, 2007, and 2008. This 24 subsection does not apply to a job created in a county eligible for a 25 higher tier pursuant to another provision of this section. 26 (g) In a county which is at least one thousand square miles 27 in size and which has had an unemployment rate greater than the 28 state average for the past ten years and an average per capita 29 income lower than the average state per capita income for the past 30 ten years, and which is not included in any of the county 31 classifications contained in subitems (a) through (f) of this item, 32 the credit allowed is two tiers higher than the credit for which the 33 county otherwise would qualify. 34 (h) In a county in which one employer has lost at least 35 1,500 jobs in calendar year 2006, the credit allowed is three tiers 36 higher than the credit for which the county would otherwise 37 qualify. The three-tier-higher credit allowed by this subsection is 38 allowed for five taxable years for jobs created in 2007 and 2008. 39 This subsection does not apply to a job created in a county eligible 40 for a higher tier pursuant to another provision of this section. 41 (1) Each county must be assigned a development factor that 42 is the sum of the following ranks:

1 [4912] 6 1 (a) its rank in a ranking of counties by percentage or 2 residents whose incomes are below poverty level from lowest to 3 highest, for the most recent twelve months for which data are 4 available by November first and published by the United States 5 Census Bureau; 6 (b) its rank in a ranking of counties by median household 7 income from highest to lowest, for the most recent twelve months 8 for which data are available by November first and published by 9 the United States Census Bureau; 10 (c) its rank in a ranking of counties by percentage growth 11 in population from highest to lowest, for the most recent thirty - six 12 months for which data are available by November first and 13 published by the United States Census Bureau; 14 (d) its rank in a ranking of counties by adjusted assessed 15 property value per capita from highest to lowest, for the most 16 recent twelve months for which data are available by November 17 first and published by the department; and 18 (e) its rank in a ranking of counties by yearly average of 19 unemployment claims filed as a percentage of the total population 20 within the county from lowest to highest, for the most recent 21 twelve months for which data are available by November first and 22 published by the South Carolina Employment Security 23 Commission. 24 (2) After computing the development factor as provided in 25 this subsection, each county must be ranked according to its 26 development factor from highest to lowest and designated as 27 follows: 28 (a) A county whose ranking is one of the sixteen highest 29 in the State must be designated a tier one county. 30 (b) A county whose ranking is one of the next sixteen 31 highest in the State must be designated a tier two county. 32 (c) A county that is not in a lower - numbered development 33 tier must be designated a tier three county. 34 (3) In the case of a tie that would place tied counties in two 35 different tiers, the tie must be broken in the following manner: the 36 county with the highest yearly average of unemployment claims 37 filed as a percentage of the total population within the county must 38 be in the lower tier. If the counties are tied on the highest yearly 39 average of unemployment claims filed as a percentage of the total 40 population within the county, the county with the lowest median 41 household income must be in the lower tier. If the counties are 42 tied on both yearly average of unemployment claims field as a 43 percentage of the total population within the county and median

1 [4912] 7 1 household income, the county with the highest percentage of 2 residents whose incomes are below poverty level must be in the 3 lower tier. If the counties are tied on all three categories, then all 4 remaining tied counties must be in the lower tier. 5 (C)(1) Subject to the conditions provided in subsection (N) of 6 this section, Taxpayers that meet the qualifications of this section 7 are allowed a job tax credit is allowed for five years beginning in 8 year two after the creation of the job for each new full-time job 9 created at the qualifying facility described in subsection (A) and 10 defined in subsection (M) if the minimum level of new jobs is 11 maintained. The credit is available to taxpayers that increase 12 employment by ten or more full-time jobs at the qualifying facility, 13 and no credit is allowed for the year or any subsequent year in 14 which the net employment increase falls below the minimum level 15 of ten. The amount of the initial job credit is as follows: 16 (a) Eight Seven thousand six hundred fifty dollars for 17 each new full-time job created in distressed counties at the 18 qualifying facility in a tier one county. 19 (b) Four thousand five one hundred fifty dollars for each 20 new full-time job created in least developed counties. at the 21 qualifying facility in a tier two county; and 22 (c) Three thousand five hundred dollars for each new 23 full-time job created in under developed counties. 24 (d) Two thousand five hundred dollars for each new 25 full-time job created in moderately developed counties. 26 (e) One thousand five seven hundred fifty dollars for each 27 new full-time job created in developed counties at the qualifying 28 facility in a tier three county. 29 (2)(a) Subject to the conditions provided in subsection (N) of 30 this section, Taxpayers that meet the qualifications of this section 31 are allowed a job tax credit is allowed for five years beginning in 32 year two after the creation of the job for each new full-time job 33 created at the qualifying facility described in subsection (A) and 34 defined in subsection (M) if the minimum level of new jobs is 35 maintained. The credit is available to taxpayers with ninety-nine 36 or fewer employees that increase employment by two or more 37 full-time jobs at the qualifying facility, and may be received only if 38 the gross wages of the full-time jobs created pursuant to this 39 section amount to a minimum of one hundred twenty percent of 40 the county’s or state’s average per capita income, whichever is 41 lower. No credit is allowed for the year or any subsequent year in 42 which the net employment increase falls below the minimum level

1 [4912] 8 1 of two. The amount of the initial job credit is as described in (C) 2 (1). 3 (b) If the taxpayer with ninety-nine or fewer employees 4 increases employment by two or more full-time jobs but the gross 5 wages do not amount to a minimum one hundred twenty percent of 6 the county’s or state’s average per capita income, whichever is 7 lower, then the amount of the initial job credit is as follows: 8 (i) Four Three thousand eight hundred twenty - five 9 dollars for each new full-time job created in distressed counties a 10 tier one county. 11 (ii) Two thousand two hundred fifty seventy - five 12 dollars for each new full-time job created in least developed 13 counties a tier two county. 14 (iii) One thousand seven hundred fifty dollars for each 15 new full-time job created in under developed counties. 16 (iv) One thousand two hundred fifty dollars for each 17 new full-time job created in moderately developed counties. 18 (v) Seven Eight hundred fifty seventy - five dollars for 19 each new full-time job created in developed counties a tier three 20 county. 21 (D) If the taxpayer qualifying Taxpayers that qualify for the 22 new jobs credit under in subsection (C) creates and create 23 additional new full-time jobs at the qualifying facility in years two 24 through six, the taxpayer may obtain a credit for those new jobs for 25 five years following the year in which the job is created. The 26 amount of the credit for each new full-time job is the same as 27 provided in subsection (C). 28 (E)(1) Taxpayers which that qualify for the jobs tax credit 29 provided in subsection (C) and which are whose qualifying facility 30 is located in a business or industrial park jointly established and 31 developed by a group of counties pursuant to Section 13 of Article 32 VIII of the Constitution of this State are allowed an additional one 33 thousand dollar credit each year for each new full-time job created. 34 This additional credit is permitted for five years beginning in the 35 taxable year following the creation of the job as provided in this 36 section. 37 (2) Taxpayers which that otherwise qualify for the jobs tax 38 credit provided in subsection (C) and which are whose qualifying 39 facility is located and the qualifying jobs are located on property 40 where a response action has been completed pursuant to a 41 nonresponsible party voluntary cleanup contract pursuant to 42 Article 7, Chapter 56 of Title 44, the Brownfields Voluntary 43 Cleanup Program, are allowed an additional one thousand dollar

1 [4912] 9 1 credit each year for each new full-time job created. This additional 2 credit is permitted for five years beginning in the taxable year 3 following the creation of the job. No credit under this item is 4 allowed a taxpayer that is a ‘responsible party’ as defined in that 5 article. 6 (F)(1) The number of new and additional new full-time jobs is 7 determined by comparing the monthly average number of full-time 8 employees employed by the taxpayer at a qualifying facility and 9 subject to South Carolina income tax withholding in the applicable 10 county for the taxable year with the monthly average in the prior 11 taxable year. For purposes of calculating the monthly average 12 number of full-time employees in the first year of operation in this 13 State, a taxpayer may use the actual months in operation or a full 14 twelve-month period. If a taxpayer’s business qualifying facility is 15 in operation for less fewer than twelve months a year, the number 16 of new and additional new full-time jobs is determined using the 17 monthly average for the months the business is in operation. 18 (2)(a) A taxpayer who makes a capital investment of at least 19 fifty million dollars at a single site within a three-year period may 20 elect to have the number of new and additional new full-time jobs 21 determined by comparing the monthly average number of full-time 22 jobs subject to South Carolina income tax withholding at the site 23 for the taxable year with the monthly average for the prior taxable 24 year. 25 (b) For purposes of this item, ‘single site’ means a 26 stand-alone building whether or not several stand-alone buildings 27 are located in one geographical location. 28 (c) The calculation of new and additional jobs provided 29 for in this item is allowed for only a five-year period commencing 30 in the year in which the fifty million dollars of capital investment 31 is completed. In addition to creating, as applicable, ten or two new 32 full - time jobs at the qualifying facility in accordance with 33 subsection (F)(1) above, a taxpayer must maintain employment 34 statewide to claim the job tax credit. A taxpayer has maintained 35 employment statewide if the monthly average number of full - time 36 employees employed by the taxpayer and subject to South 37 Carolina income tax withholding in the State for the taxable year 38 compared with the monthly average for the prior taxable year 39 results in a net increase of, as applicable, ten or two employees 40 statewide. 41 (b) This requirement that employment be maintained 42 statewide does not apply if the new full - time jobs are at a 43 qualifying facility located in a Tier One County.

1 [4912] 10 1 (d) (3) For purposes of this subsection a ‘new job’ does not 2 include a job an employee transferred from one site a job at one 3 facility to another site a job at another facility by the taxpayer or a 4 related person. A related person includes any entity or person that 5 bears a relationship to the taxpayer as set forth in Section 267 of 6 the Internal Revenue Code. However, this exclusion of a new job 7 created by a job transferred from one site to another site does not 8 extend to a job created at a new or expanded facility located in a 9 county in which is located an ‘applicable federal facility’ as 10 defined in Section 12-6-3450(A)(1)(b) A ‘new job’ does not 11 include an employee at the qualifying facility for whom the 12 taxpayer is not liable for withholding taxes. 13 (G) Except for credits carried forward under pursuant to 14 subsection (H), the credits available under pursuant to this section 15 are only allowed only for the job level that is maintained in the 16 taxable year that the credit is claimed. If the job level for which a 17 credit was claimed decreases below ten or two, as applicable, the 18 five-year period for eligibility for the credit continues to run. 19 (H) A credit claimed pursuant to this section but not used in a 20 taxable year may be carried forward for fifteen years from the 21 taxable year in which the credit is earned by the taxpayer. Credits 22 that are carried forward must be used in the order earned and 23 before jobs credits claimed in the current year. A taxpayer who 24 earns credits allowed by this section and who also is eligible for 25 the moratorium provided in Section 12-6-3367 may claim the 26 credits and may carry forward unused credits beginning after the 27 moratorium period expires. 28 (I) Except for employees in tier one counties, the maximum 29 aggregate credit that may be claimed in any tax year for a single 30 employee pursuant to this section and Section 12 - 6 - 3470(A) is five 31 thousand one hundred fifty dollars. 32 (J) The merger, consolidation, or reorganization of a taxpayer, 33 where tax attributes survive, does not create new eligibility in a 34 succeeding taxpayer, but unused jobs tax credits may be 35 transferred and continued by the succeeding taxpayer subject to the 36 limitations of Section 12-6-3320. In addition, a taxpayer may 37 assign its rights to its jobs any remaining job tax credit, including 38 any carryforwards to another taxpayer if it transfers all or 39 substantially all of the its assets of the taxpayer or all or 40 substantially all of the assets of a trade or business or operating 41 division of a taxpayer related to the generation of the jobs tax 42 credits to that taxpayer if the required number of new jobs is 43 maintained for that amount of credit. A taxpayer is not allowed a

1 [4912] 11 1 jobs tax credit if the net employment increase for that taxpayer 2 falls below two. The appropriate agency shall determine if 3 qualifying net increases or decreases have occurred and may 4 require reports, adopt rules or promulgate regulations, and hold 5 hearings needed for substantiation and qualification the qualifying 6 facility to that taxpayer. 7 (K) A taxpayer is considered to have new eligibility for the 8 credit allowed pursuant to this section and any employees hired or 9 retained at the qualifying facility are considered new full - time jobs 10 if: 11 (1) the taxpayer acquires an existing facility that has been 12 closed for business for three months; 13 (2) a taxpayer that owns a qualifying facility has filed for 14 Chapter 11 bankruptcy and the new taxpayer acquires the 15 qualifying facility out of bankruptcy; 16 (3) a taxpayer that owned the qualifying facility was 17 required to file a notice of plant closing or mass layoff under the 18 federal Worker Adjustment and Retraining Notification Act, 29 19 USC Section 2101 for the facility before it was acquired by the 20 new taxpayer; 21 (4) the qualifying facility is destroyed or damaged by 22 accidental fire, natural disaster, or act of God. ‘Destroyed or 23 damaged’ for purposes of this item means that more than fifty 24 percent of the qualifying facility was destroyed; or 25 (5) the qualifying facility suffers an involuntary conversion 26 as a result of condemnation or exercise of eminent domain by the 27 State or any of its political subdivisions or by the federal 28 government. For purposes of the item, ‘involuntary conversion as 29 a result of condemnation or exercise of eminent domain’ includes a 30 legally binding agreement for the purchase of a facility of an 31 employer entered into between an employer and the State of South 32 Carolina or a political subdivision of the State under threat of 33 exercise of eminent domain by the State or its political 34 subdivision. 35 (J) (L) For a taxpayer which that plans a significant expansion 36 in its labor forces at a location in this State, the appropriate agency 37 shall prescribe certification procedures to ensure that the taxpayer 38 can claim credits in future years even if a particular county is 39 removed from the list of distressed, least developed, under 40 developed, or moderately developed tier one or tier two counties. 41 (K)(1) An S corporation, limited liability company taxed as a 42 partnership, or partnership that qualifies for a credit under this 43 section may pass through the credit earned to each shareholder of

1 [4912] 12 1 the S corporation, partner of the partnership, or member of the 2 limited liability company. For purposes of this subsection, limited 3 liability company means a limited liability company taxed as a 4 partnership. 5 (a) The amount of the credit allowed a shareholder, 6 partner, or member by this subsection is equal to the shareholder’s 7 percentage of stock ownership, partner’s interest in the partnership, 8 or member’s interest in the limited liability company for the 9 taxable year multiplied by the amount of the credit earned by the 10 entity. This nonrefundable credit is allowed against taxes due 11 under Section 12-6-510 or 12-6-530 and bank taxes imposed 12 pursuant to Chapter 11 of this title and may not exceed fifty 13 percent of the shareholder’s, partner’s, or member’s tax liability 14 under Section 12-6-510 or 12-6-530 or bank tax liability imposed 15 pursuant to Chapter 11 of this title. 16 (b) Notwithstanding subitem (a), the credit earned 17 pursuant to this section by an S corporation owing corporate level 18 income tax must be used first at the entity level. Only the 19 remaining credit passes through to each shareholder. 20 (3) A credit claimed pursuant to this subsection but not used 21 in a taxable year may be carried forward by each shareholder, 22 partner, or member for fifteen years from the close of the tax year 23 in which the credit is earned by the S corporation, partnership, or 24 limited liability company. The entity earning the credit may not 25 carry over credit that passes through to its shareholders, partners, 26 or members. 27 (L) Notwithstanding any other provision of this section, a 28 county with a population under twenty-five thousand as 29 determined by the most recent United States Census shall receive 30 the next increased credit designation for purposes of the credit 31 allowed by this section. 32 (M) As used in this section: 33 (1) ‘Taxpayer’ means a sole proprietor, partnership, 34 corporation of any classification, limited liability company, or 35 association taxable as a business entity that is subject to South 36 Carolina taxes as contained in Section 12-6-510, Section 12-6-530, 37 Chapter 11 of Title 12, or Chapter 7 of Title 38. 38 (2) ‘Appropriate agency’ means the Department of Revenue, 39 except that for taxpayers subject to the premium tax imposed by 40 Chapter 7 of Title 38, it means the Department of Insurance. 41 (3) ‘New job’ means a job created in this State at the time a 42 new qualifying facility or an expansion is initially staffed that 43 represents a net increase in the number of the taxpayer’s

1 [4912] 13 1 employees statewide as described in subsection (F). Except as 2 otherwise provided in this item, the term does not include a job 3 created when an employee is shifted from an existing location in 4 this State to a new or expanded facility another location in this 5 State whether the transferred job is from, or to, a facility of the 6 taxpayer or a related person. A related person includes any entity 7 or person that bears a relationship to the taxpayer as described in 8 Section 267 of the Internal Revenue Code. However, this 9 exclusion of a new job created by employee shifting does not 10 extend to a job created at a new or expanded facility located in a 11 county in which is located an ‘applicable federal facility’ as 12 defined in Section 12-6-3450(A)(1)(b). The term ‘new job’ also 13 includes an existing job at a facility of an employer which is 14 reinstated after the employer has rebuilt the facility due to: 15 (a) its destruction by accidental fire, natural disaster, or 16 act of God; 17 (b) involuntary conversion as a result of condemnation or 18 exercise of eminent domain by the State or any of its political 19 subdivisions or by the federal government. 20 Destruction for purposes of this provision means that more than 21 fifty percent of the facility was destroyed. For purposes of this 22 section, involuntary conversion as a result of condemnation or 23 exercise of eminent domain includes a legally binding agreement 24 for the purchase of a facility of an employer entered into between 25 an employer and the State of South Carolina or a political 26 subdivision of the State under threat of exercise of eminent domain 27 by the State or its political subdivision. 28 The year of reinstatement is the year of creation of the job. All 29 reinstated jobs qualify for the credit pursuant to this section, and a 30 comparison is not required to be made between the number of 31 full-time jobs of the employer in the taxable year and the number 32 of full-time jobs of the employer with the corresponding period of 33 the prior taxable year. 34 Notwithstanding another provision of law, ‘new job’ includes 35 jobs created by a taxpayer when the taxpayer hires more than five 36 hundred full-time individuals: 37 (a) at a manufacturing facility located in a county 38 classified as distressed; 39 (b) immediately before their employment by the taxpayer, 40 the individuals were employed by a company operating, as of the 41 effective date of this paragraph, under Chapter 11 of the United 42 States Bankruptcy Code; and

1 [4912] 14 1 (c) the taxpayer, as an unrelated entity, acquires as of 2 March 12, 2004, substantially all of the assets of the company 3 operating under Chapter 11 of the United States Bankruptcy Code. 4 (4) ‘Full-time’ means a job requiring a minimum of 5 thirty-five hours of an employee’s time a week for the entire 6 normal year of company operations or a job requiring a minimum 7 of thirty-five hours of an employee’s time for a week for a year in 8 which the employee was hired initially for or transferred to the 9 South Carolina at the qualifying facility. For the purposes of this 10 section, two half-time jobs are considered one full-time job. A 11 ‘half-time job’ is a job requiring a minimum of twenty hours of an 12 employee’s time a week for the entire normal year of the 13 company’s operations or a job requiring a minimum of twenty 14 hours of an employee’s time a week for a year in which the 15 employee was hired initially for or transferred to the South 16 Carolina at the qualifying facility. 17 (5) ‘Manufacturing facility’ means an establishment where 18 tangible personal property is produced or assembled. 19 (6) ‘Processing facility’ means an establishment that 20 prepares, treats, or converts tangible personal property into 21 finished goods or another form of tangible personal property. The 22 term includes a business engaged in processing agricultural, 23 aquacultural, or maricultural products. It does not include an 24 establishment in which retail sales of tangible personal property 25 are made to retail customers. 26 (7) ‘Warehousing facility’ means an establishment where 27 tangible personal property is stored but does not include any 28 establishment where retail sales of tangible personal property are 29 made to retail customers. 30 (8) ‘Distribution facility’ means an establishment where 31 shipments of tangible personal property are processed for delivery 32 to customers. The term does not include an establishment where 33 retail sales of tangible personal property are made to retail 34 customers on more than twelve days in a calendar year except for a 35 facility which processes customer sales orders by mail, telephone, 36 or electronic means, if the facility also processes shipments of 37 tangible personal property to customers and if at least seventy-five 38 percent of the dollar amount of goods sold through the facility are 39 sold to customers outside of South Carolina. Retail sales made 40 inside the facility to employees working at the facility are not 41 considered for purposes of the twelve-day and seventy-five percent 42 limitation. For purposes of this definition, ‘retail sale’ and

1 [4912] 15 1 ‘tangible personal property’ have the meaning provided in Chapter 2 36 of this title. 3 (9) ‘Research and development facility’ means an 4 establishment engaged in laboratory, scientific, or experimental 5 testing and development related to new products, new uses for 6 existing products, or improving existing products. The term does 7 not include an establishment engaged in efficiency surveys, 8 management studies, consumer surveys, economic surveys, 9 advertising, promotion, banking, or research in connection with 10 literary, historical, or similar projects. 11 (10) ‘Corporate office facility’ means a corporate 12 headquarters that meets the definition of a ‘corporate headquarters’ 13 contained in Section 12-6-3410(J)(1). The corporate headquarters 14 of a general contractor licensed by the South Carolina Department 15 of Labor, Licensing and Regulation qualifies even if it is not a 16 regional or national headquarters as those terms are defined in 17 Section 12-6-3410(J)(1). 18 (11) The terms ‘retail sales’ and ‘tangible personal property’ 19 for purposes of this section are defined in Chapter 36 of this title. 20 (12) ‘Tourism facility’ means an establishment used for a 21 facility that consists of a theme park; amusement park; historical, 22 educational, or trade museum; botanical garden; cultural center; 23 theater; motion picture production studio; convention center; 24 arena; auditorium; or a spectator or participatory sports facility; 25 and similar establishments facilities where the primary function is 26 to provide entertainment, education, or recreation is provided to 27 the general public. Tourism facility also includes new hotel and 28 motel construction facilities that are subject to the 29 accommodations tax provisions of Section 12 - 36 - 920, except that 30 to qualify for the credits allowed by this section and regardless of 31 the county in which the facility is located, the number of new jobs 32 that must be created by the new hotel or motel that facility is 33 twenty or more. It does not include that portion of an 34 establishment the facility where retail merchandise or retail 35 services are sold directly to retail customers. 36 (13) ‘Qualifying service-related facility’ means: 37 (a) an establishment a facility engaged in an activity or 38 activities listed under the North American Industry Classification 39 System Manual (NAICS) Section 62, subsectors 621, 622, and 40 623; or 41 (b) a business facility, other than a business engaged in 42 legal, accounting, banking, or investment services or facility 43 making retail sales, which has a net increase of at least:

1 [4912] 16 1 (i) two hundred fifty jobs at a single location the 2 facility; 3 (ii) one hundred twenty-five jobs at a single location the 4 facility and the jobs have an average cash compensation level of 5 more than one and one-half times the lower of state per capita 6 income or per capita income in the county where the jobs are 7 facility is located; 8 (iii) seventy-five jobs at a single location and the jobs 9 have an average cash compensation level of more than twice the 10 lower of state per capita income or per capita income in the county 11 where the jobs are facility is located; or 12 (iv) thirty jobs at a single location the facility and the 13 jobs have an average cash compensation level of more than two 14 and one-half times the lower of state per capita income or per 15 capita income in the county where the jobs are located. 16 A taxpayer shall use the most recent per capita income data 17 available as of the end of the taxable year in which the jobs are 18 filled to determine whether the definition is met. Determination of 19 the required number of jobs is in accordance with the monthly 20 average described in subsection (F). 21 (14) ‘Technology intensive facility’ means: 22 (a) a facility at which a firm engages in the design, 23 development, and introduction of new products or innovative 24 manufacturing processes, or both, through the systematic 25 application of scientific and technical knowledge. Included in this 26 definition are the following North American Industrial 27 Classification Systems, NAICS, codes published by the Office of 28 the Management and Budget of the federal government: 29 (i) 5114 database and directory publishers; 30 (ii) 5112 software publishers; 31 (iii) 54151 computer systems design and related 32 services; 33 (iv) 541511 custom computer programming services; 34 (v) 541512 computer systems design services; 35 (vi) 541710 scientific research and development 36 services; 37 (vii) 9271 space research and technology; or 38 (b) a facility primarily used for one or more activities 39 listed under the 2002 version of the NAICS Codes 51811 (Internet 40 Service Providers and Web Search Portals). 41 (15) ‘Extraordinary retail establishment’ is as defined in 42 Sections 12-21-6520 and 12-21-6590.

1 [4912] 17 1 (N) Except for employees employed in distressed counties, the 2 maximum aggregate credit that may be claimed in any tax year for 3 a single employee pursuant to this section and Section 4 12-6-3470(A) is five thousand five hundred dollars.” 5 6 SECTION 3. Section 12-6-3367(B)(1) of the 1976 Code, as added 7 by Act 297 of 2006, is amended to read: 8 9 “(1) To qualify for the moratorium pursuant to subsection (A), a 10 taxpayer shall: 11 (a)(i) create at least one hundred full-time new jobs at a 12 facility in a county with an average annual unemployment rate of 13 at least twice the state average during each of the last two 14 completed calendar years, based on the most recent unemployment 15 rates available, or that is one of the three lowest per capita income 16 counties, based on the average of the three most recent years of 17 available average per capita income data; and 18 (ii) invest at least ninety percent of its total investment in 19 this State in the moratorium county; or 20 (b)(i) create at least one hundred full-time new jobs, and 21 invest at least one hundred fifty million dollars, at a manufacturing 22 facility in a county with an average annual unemployment rate of 23 at least twice the state average during each of the last two 24 completed calendar years, based on the most recent unemployment 25 rates available, or that is one of the three lowest per capita income 26 counties, based on the average of the three most recent years of 27 available average per capita income data; 28 (ii) create at least one hundred full-time new jobs, and 29 invest at least one hundred fifty million dollars, at a manufacturing 30 facility in a second county which is designated as distressed, least 31 developed, or underdeveloped tier one or tier two pursuant to 32 Section 12-6-3360; and 33 (iii) invest at least ninety percent of its total investment in 34 this State in one or both of the counties specified in subsubitems (i) 35 and (ii) of subsection (B)(1)(b).” 36 37 SECTION 4.A. Section 12-6-3470(A)(2) of the 1976 Code, as 38 last amended by Act 69 of 2003, is further amended to read: 39 40 “(2) Except for employees employed in distressed tier one 41 counties, the maximum aggregate credit that may be claimed in a 42 tax year for a single employee pursuant to this subsection and 43 Section 12-6-3360 is five thousand five one hundred fifty dollars.”

1 [4912] 18 1 2 B. Section 12-6-3470(B) of the 1976 Code, as last amended by Act 3 332 of 2002, is further amended to read: 4 5 “(B) In addition to the credits provided for in subsection (A) and 6 Section 12-6-3360, an employer who employs a person who 7 received Family Independence payments within this State for three 8 months immediately preceding the month the person becomes 9 employed and employs that person to work full time in a distressed 10 county or a least developed tier one county, as defined in Section 11 12-6-3360, is allowed a credit in an amount equal to one hundred 12 seventy-five dollars for each full month during the first thirty-six 13 months of employment.” 14 15 SECTION 5. Section 12-6-3530 of the 1976 Code, as last 16 amended by Act 89 of 2001, is further amended to read: 17 18 “Section 12-6-3530. (A) A Subject to the limitations below, a 19 taxpayer may claim as a credit against his state income tax, bank 20 tax, or premium tax liability equal to thirty-three percent of all 21 amounts invested in contributed to a community development 22 corporation or in a community development financial institution, 23 as defined in Section 34-43-20(2) or (3). 24 To qualify for this credit the taxpayer must obtain a certificate 25 from the South Carolina Department of Commerce certifying that 26 the entity into which the funds are invested is a community 27 development corporation or a community development financial 28 institution within the meaning of Section 34-43-20(2) or (3) and 29 certifying that the credit taken or available to that taxpayer will not 30 exceed the aggregate five million dollar limitation of all those 31 credits as provided in subsection (B) when added to the credits 32 previously taken or available to other taxpayers making similar 33 investments. A taxpayer who invested in good faith in a certified 34 corporation or institution may claim the credit provided in this 35 section, notwithstanding the fact that the certification is later 36 revoked or not renewed by the department. 37 (B) The total amount of credits allowed pursuant to this section 38 may not exceed in the aggregate five million dollars for all 39 taxpayers and all calendar years and one million dollars for all 40 taxpayers in one calendar year. 41 (C) A single community development corporation or 42 community development financial institution may not receive

1 [4912] 19 1 more than twenty-five percent of the total tax credits authorized 2 pursuant to this section in any one calendar year. 3 (D) The department shall monitor the investments made by 4 taxpayers in community development corporations and community 5 development financial institutions as permitted by this section and 6 shall perform the functions as provided in subsection (A) above. 7 (E) If the amount of the credit determined, pursuant to 8 subsection (A), exceeds the taxpayer’s state tax liability for the 9 applicable taxable year, the taxpayer may carry over the excess to 10 the immediately succeeding taxable years. However, the credit 11 carry-over may not be used for a taxable year that begins on or 12 after ten years from the date of the acquisition of stock or other 13 equity interest that is the basis for a credit pursuant to this section. 14 The amount of the credit carry-over from a taxable year must be 15 reduced to the extent that the carry-over is used by the taxpayer to 16 obtain a credit provided for in this section for a later taxable year. 17 (F) Notwithstanding the provisions of subsections (A), (B), 18 (C), (D), and (E) above, if on April 1, 2001, or as soon after that as 19 the department is able to determine, the total amount of tax credits 20 which may be claimed by all taxpayers exceeds the total amount of 21 tax credits authorized by this section, the credits must be 22 determined on a pro rata basis. For purposes of this subsection, a 23 community development corporation or community development 24 financial institution for which an investment may be claimed as a 25 tax credit pursuant to this section must report all investments made 26 before April 1, 2001, to the department by April 1, 2001, which 27 shall inform, as soon as reasonably possible, all community 28 development corporations and community development financial 29 institutions of the total of all investments in all institutions and 30 corporations as of April 1, 2001. 31 (G) If stock or another equity interest that is the basis for a 32 credit provided for in this section is redeemed by the community 33 development corporation or the community development financial 34 institution within five years of the date it is acquired, the credit 35 provided by this section for the stock or other equity interest is 36 disallowed, and credit previously claimed and allowed with respect 37 to the redeemed stock or other equity interest must be paid to the 38 Department of Revenue with the appropriate return of the taxpayer 39 covering the period in which the redemption occurred. When 40 payments are made to the Department of Revenue pursuant to this 41 section, the amount collected must be handled as if no credit had 42 been allowed.

1 [4912] 20 1 (H) To receive the credit provided by this section, a taxpayer 2 shall: 3 (1) claim the credit on his annual state income or premium 4 tax return as prescribed by the Department of Revenue; and 5 (2) file with the Department of Revenue and with his annual 6 state income or premium tax return a copy of the form issued by 7 the department as to the stock or other equity interest that is the 8 basis for a credit claimed pursuant to this section, by the taxpayer, 9 including an undertaking by the taxpayer to report to the 10 Department of Revenue a redemption of the stock or other equity 11 interest by the community development corporation or the 12 community development financial institution. 13 (I) The department shall complete forms prescribed by the 14 Department of Revenue which must show as to each stock or other 15 equity interest in a community development corporation or a 16 community development financial institution that is the basis for a 17 credit pursuant to this section: 18 (1) the name, address, and identification number of the 19 taxpayer who acquired the stock or other equity interest; and 20 (2) the nature of the stock or other equity interest acquired 21 by the taxpayer and the amount advanced for it. 22 These forms must be filed with the Department of Revenue on or 23 before the fifteenth day of the third month following the month in 24 which the stock or other equity interest is acquired. Copies of the 25 forms to be provided to the Department of Revenue must be 26 mailed to the taxpayer on or before the fifteenth day of the second 27 month following the month in which the acquisition is made. 28 (J) A taxpayer may not claim the tax credit provided in this 29 section unless the community development corporation or 30 community development financial institution in which the 31 investment is made has been certified at the time the investment is 32 made. 33 (K) If the community development financial institution in 34 which the investment is made is a tax-exempt nonprofit 35 corporation, the tax credit provided in this section is not allowed if 36 the taxpayer claims the investment as a deduction pursuant to 37 Section 170 of the Internal Revenue Code. 38 (L) Banks and financial institutions chartered by the State of 39 South Carolina may invest in community development 40 corporations and community development financial institutions 41 incorporated pursuant to the laws of this State, up to a maximum 42 of ten percent of a chartered bank or financial institution’s total 43 capital and surplus.

1 [4912] 21 1 (B) For purposes of this credit, amounts contributed to a 2 community development corporation include contributions of cash 3 or any noncash contribution that is valued in accordance with 4 regulations and guidance issued by the Internal Revenue Service 5 interpreting Section 170 of the Internal Revenue Code in existence 6 as of the date specified in Section 12 - 6 - 50 and state laws of 7 regulations addressing charitable contributions and deductions. 8 Contributions of personal services do not qualify for the credit. 9 (C) By February first of each calendar year, a taxpayer seeking 10 to claim a credit for a contribution made in the past calendar year 11 must submit an application for approval to the South Carolina 12 Department of Commerce. By March first of each calendar year, if 13 a taxpayer qualifies for the credit, the Department of Commerce 14 shall issue an approval letter to the taxpayer certifying that the 15 entity to which the funds are contributed is a community 16 development corporation within the meaning of Section 17 34 - 43 - 20(2) and certifying the amount of credit that has been 18 allocated to the taxpayer. The Department of Commerce may 19 require information about the contribution as well as any other 20 information necessary in the application for approval. 21 (D) The total amount of credits allowed pursuant to this section 22 may not exceed in the aggregate five million dollars for all 23 taxpayers and all calendar years and one million dollars for all 24 taxpayers in one calendar year. If the amount of credits submitted 25 for approval exceeds the one million or five million dollar 26 limitations, the available credit must be allocated among all 27 qualifying taxpayers on a pro rata basis based on the amount 28 contributed by a taxpayer to the total amounts contributed by all 29 taxpayers for the calendar year. 30 (E) Contributions to a single community development 31 corporation may not result in allocations of more than two hundred 32 fifty thousand dollars in tax credits in any one calendar year. To 33 the extent that contributions result in tax credits that do exceed the 34 two hundred fifty thousand dollar limitation, tax credits for 35 contributions made by all eligible taxpayers to that community 36 development corporation must be prorated based on the amount 37 contributed by each eligible taxpayer as compared to the total 38 amount contributed to that community development corporation by 39 all taxpayers for the calendar year. 40 (F) If the amount of the credit allocated to a taxpayer pursuant 41 to subsection (B) exceeds the taxpayer’s state tax liability for the 42 applicable taxable year, unused credit may be carried forward for 43 the succeeding ten taxable years.

1 [4912] 22 1 (G) To receive the credit provided by this section, a taxpayer 2 shall: 3 (1) claim the credit on his annual state income, bank, or 4 premium tax return as prescribed by the Department of Revenue; 5 and 6 (2) make available to the Department of Revenue a copy of 7 the approval letter issued by the Department of Commerce. 8 (H) To the extent that a taxpayer is allowed the credit provided 9 by this section, the taxpayer is not required to include the amount 10 of the contribution as an addition to South Carolina taxable income 11 if the contribution qualified for a deduction under Section 170 of 12 the Internal Revenue Code.” 13 14 SECTION 6.A. Section 12-10-60(B) of the 1976 Code, as added 15 by Act 399 of 2000, is amended to read: 16 17 “(B) If a qualifying business that entered into a revitalization 18 agreement before January 1, 1997, receives council approval to 19 amend its revitalization agreement to increase its minimum job 20 requirement, the law in effect on the date of the amendment 21 determines the amount of job development credit a qualifying 22 business may claim pursuant to Section 12-10-80 for additional 23 jobs created after the date of the amendment. This subsection does 24 not apply to a business whose application for job development fees 25 or credits pursuant to Section 12-10-81 has been approved by 26 council before the effective date of this act August 17, 2000. 27 (C) The council, in its discretion, may negotiate a provision in a 28 revitalization agreement entered into after June 30, 2008, that 29 requires a qualifying business to repay job development credits 30 previously claimed and collected.” 31 32 B. Section 12-10-80(D)(1) of the 1976 Code, as last amended by 33 Act 332 of 2002, is further amended to read: 34 35 “(1) The amount of job development credits a qualifying 36 business may claim for its use for qualifying expenditures is 37 limited according to the designation of the county as defined in 38 Section 12-6-3360(B) as follows: 39 (a) one hundred percent of the maximum job development 40 credits may be claimed by businesses located in counties 41 designated as distressed or least developed tier one;

1 [4912] 23 1 (b) eighty-five percent of the maximum job development 2 credits may be claimed by businesses located in counties 3 designated as ‘underdeveloped’; 4 (c) seventy - five percent of the maximum job development 5 credits may be claimed by businesses located in counties 6 designated as ‘moderately developed’ tier two; or 7 (d)(c) fifty-five percent of the maximum job development 8 credits may be claimed by businesses located in counties 9 designated as ‘developed’ tier three.” 10 11 C. Section 12-10-81(E)(1) of the 1976 Code, as last amended by 12 Act 332 of 2002, is further amended to read: 13 14 “(1) For purposes of subsection (C)(1)(a) through (d), the 15 amount of job development credits a qualifying business may 16 claim for its use for qualifying expenditures is limited according to 17 the designation of the county as defined in Section 12-6-3360(B) 18 as follows: 19 (a) one hundred percent of the maximum job development 20 credits may be claimed by businesses located in counties 21 designated as distressed or least developed tier one; 22 (b) eighty-five percent of the maximum job development 23 credits may be claimed by businesses located in counties 24 designated as ‘underdeveloped’; 25 (c) seventy - five percent of the maximum job development 26 credits may be claimed by businesses located in counties 27 designated as ‘moderately developed’ tier two; or 28 (d)(c) fifty-five percent of the maximum job development 29 credits may be claimed by businesses located in counties 30 designated as ‘developed’ tier three.” 31 32 D. Section 12-10-85(B) of the 1976 Code, as last amended by Act 33 161 of 2005, is further amended to read: 34 35 “(B) Rural Infrastructure Fund grants must be available to 36 benefit counties or municipalities designated as ‘distressed’ or 37 ‘least developed’ tier one or tier two as defined in Section 38 12-6-3360 according to guidelines established by the council, 39 except that up to twenty-five percent of the funds annually 40 available in excess of ten million dollars must be set aside for 41 grants to areas of ‘underdeveloped’, ‘moderately developed’, and 42 ‘developed” tier three counties’. A governing body of an 43 ‘underdeveloped’, ‘moderately developed’, or ‘developed’ a tier

1 [4912] 24 1 three county must apply to the council for these set-aside grants 2 stating the reasons that certain areas of the county qualify for these 3 grants because the conditions in that area of the county are 4 comparable to those conditions qualifying a county as ‘distressed’ 5 or ‘least developed’ tier one or tier two.” 6 7 E. Section 12-10-90 of the 1976 Code is amended to read: 8 9 “Section 12-10-90. If a qualifying business fails to achieve and 10 maintain the level of capital investment or employment set forth in 11 the revitalization agreement, the council may terminate the 12 revitalization agreement and reduce or suspend all or any part of 13 the incentives until the time the anticipated capital investment and 14 employment levels are met. However, these incentives must not 15 be suspended retroactively and maintained. The council, in its 16 discretion, may further require repayment of job development 17 credits previously claimed and collected as provided in Section 18 12 - 10 - 60(C). The council shall provide in the revitalization 19 agreement entered into in connection with a project for the levels 20 of capital investment and employment which must be achieved and 21 for the time period in which the levels must be achieved. A statute 22 of limitations that may apply pursuant to Section 12 - 54 - 85 is 23 suspended for all qualifying businesses that enter into a 24 revitalization agreement, and the department or the council may 25 seek to collect amounts that may be due pursuant to this section.” 26 27 SECTION 7. Chapter 14, Title 12 of the 1976 Code is hereby 28 repealed. 29 30 SECTION 8. Except as otherwise provided herein, this act is 31 effective for taxable years beginning on or after January 1, 2009, 32 except that: 33 (A) Section 12-6-3360 as amended by this act applies to all 34 taxpayers that create the number of new jobs necessary to qualify 35 for the job tax credit in taxable years ending on or after January 1, 36 2009. Section 12-6-3360 of the 1976 Code as it existed before 37 amendment by this act applies to all new jobs created in taxable 38 years ending before January 1, 2009, and all increases after that 39 which do not result in eligibility for a new five-year credit period. 40 For increases of two or ten, as applicable, more jobs in a five-year 41 credit period that began in or before 2009, the taxpayer may 42 choose to treat these new jobs as additional increases of the 43 existing credit or choose to start a new five-year credit period as

1 [4912] 25 1 governed by Section 12-6-3360 as amended by this act. The 2 Department of Revenue shall continue to publish county rankings 3 in accordance with Section 12-6-3360 as it exited before the 4 amendment by this act until 2018. 5 (B) Taxpayers entering into revitalization agreements pursuant 6 to Section 12-10-60 on or after January 1, 2009, will be governed 7 by this act. Taxpayers entering into revitalization agreements 8 before January 2, 2009, are governed by Title 12, Chapter 10 as it 9 existed before amendment by this act. 10 (C) Any provision in this act that has been amended to conform 11 to changes in county designations in Section 12-6-3360(B) are 12 effective for taxable years ending on or after January 1, 2009. 13 (D) Notwithstanding the repeal of Chapter 14, Title 12 of the 14 1976 Code, effective for taxable years beginning on or after 15 January 1, 2010, taxpayer with existing carryforward of credits 16 earned under Section 12-14-60 may continue to carryforward those 17 credits as provided by Section 12-14-60. 18 (E) Notwithstanding the repeal of Chapter 14, Title 12 of the 19 1976 Code, effective for taxable years beginning on or after 20 January 1, 2010, a taxpayer qualifying for the tax credit allowed by 21 former Section 12-14-80 may continue to claim credits as allowed 22 by that section for capital investments placed in service outside an 23 economic impact zone after June 20, 2007, and for quarterly state 24 withholding returns due on or after that date, provided that for the 25 period July 1, 2007 to June 20, 2008, a taxpayer qualifying for 26 credits allowed by Section 12-14-80 may not reduce its state 27 withholding tax to less than the withholding tax remitted for the 28 period June 30, 2006 to July 1, 2007. 29 ----XX---- 30

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