Legislative Agenda

2012 SCEDA Legislative Agenda

SCEDA seeks to ensure South Carolina's business environment remains competitive. As states are continually improving their game, goals for the upcoming year include: championing incentive legislation that makes South Carolina more competitive for technology companies, headquarters and office operations, and data centers; ensuring adequate funding of key state agencies including the Department of Commerce, the State Technical College System, the Department of Parks, Recreation, and Tourism, and the South Carolina State Ports Authority; and supporting the new angel investor legislation.

Other areas being watched carefully as they could have significant negative ramifications on economic development include the South Carolina Supreme Court case, Bodman vs. South Carolina, which could result in the elimination of all sales tax exemptions if they are found unconstitutional, and economic development transparency. The elimination of sales tax exemptions would put a major burden on South Carolina businesses, in particular manufacturers, and being required to open confidential economic development deals before they close could halt economic development in our state.

INCENTIVE LEGISLATION

H.3506 – Technical Corrections Bill

STATUS: Passed House. Pending in Senate Finance.

H.3506 is primarily a technical corrections bill. There are three key provisions in H.3506 including:

• Technology Intensive Facilities – Updates current statutes to reflect current NAICS Code classification system.
• Utility Tax Credit (UTC) – Allows counties to use Utility Tax Credit funds for site preparation, which includes clearing, grubbing, grading, and stormwater retention and refurbishment of county-owned buildings that are used for economic development purposes.
• FILOT – Corrects a technical error that occurred in legislation that passed in 2010 by clarifying that the 10 year extension to 30 years for FILOTs is allowed but not mandated.

H.3720 – Economic Development Incentives Bill

STATUS: Passed House. Pending in Senate Finance.

H.3720 is an economic development incentives bill that includes expansions of existing incentives and a few new incentives.

• Qualifying Service Related Facilities – Relaxes existing job thresholds for these types of companies to qualify for jobs tax credits.
• Technology Intensive Facility – Expands the definition of technology intensive facilities for purposes of qualifying for jobs tax credits by adding NAICS codes 518210 (data processing, hosting, and related services), 541513 (computer facilities management services), and 541519 (other computer-related services).
• National Corporate Headquarters – Provides a 10-year corporate income tax exemption for national corporate headquarters locating or expanding in South Carolina and that add at least 50 full-time jobs.
• Utility Tax Credit – Increases the maximum credit a utility may claim in a single year from $300,000 to $400,000 for purposes of the utility tax credit.
• Financial Verification for FILOT – Allows counties to obtain certain financial information to verify the calculations of a company’s fee in lieu of taxes forms.
• Sales Tax Exemption for Datacenters – Provides a sales tax exemption on computers, computer equipment, computer hardware or software, and electricity for datacenters investing at least $50 million in South Carolina over a five-year period of time.

STATE BUDGET

SCEDA supports appropriate and adequate funding of the SC Dept. of Commerce, the SC Technical College Systems, the SC Dept. of Parks, Recreation, and Tourism, and the SC State Ports Authority. In particular, SCEDA supports the funding of the Dept. of Commerce’s grants programs and the Closing Fund, the Technical College System’s ReadySC program, and the Charleston harbor deepening project for the Port of Charleston.

POLLUTION CONTROL ACT

A recent South Carolina Supreme Court decision has caught the attention of the regulated business community in South Carolina. In Georgetown County League of Women Voters v. Smith Land Company, Inc, the company sought a permit to fill less than 2/10 of an acre of an isolated wetland from the SC Dept. of Health and Environmental Control and the US Army Corps of Engineers. Neither agency had a regulatory program requiring a permit to fill the isolated wetland, so the company moved forward with their project. The Supreme Court held that a permit from SCDHEC was required and found two major holdings:

• Every citizen has the right to sue any other citizen for having such a permit.
• Any and all discharges or emissions into the environment require a DHEC permit

The business community is working to fix this ruling by pursuing legislation to reverse the court’s ruling. It is expected that the environmental community will be strongly opposed to any efforts to do this.

ANGEL INVESTMENT ACT

SCEDA supports the passage of H.3779, the Angel Investment Act. The legislation provides for state income tax credits allocated by the Department of Commerce for qualified investments in businesses primarily engaged in manufacturing, processing, warehousing, wholesaling, software development, information technology services, research and development or other non-prohibited services that meet certain criteria.

View January 12 Legislative Update here