Current Status BillNumber: 2151 Ratification Number: 584 Act Number: 487 Introducing Body: House Subject: Enterprise zones and spending limitationsView additional legislative information at the LPITS web site.
(A487, R584, S2151)
AN ACT TO DESIGNATE SECTIONS 11-11-10 THROUGH 11-11-110 AND SECTION 11-11-130, CODE OF LAWS OF SOUTH CAROLINA, 1976, ARTICLE 1 OF CHAPTER 11 OF TITLE 11 OF THE 1976 CODE TO BE ENTITLED "GENERAL PROVISIONS"; TO DESIGNATE SECTION 12 OF PART 11 OF ACT 219 OF 1977 AS SECTION 11-11-310 AND ARTICLE 3 OF CHAPTER 11 OF TITLE 11 OF THE 1976 CODE TO BE ENTITLED "RESERVE FUND"; TO AMEND CHAPTER 11 OF TITLE 11 BY ADDING ARTICLE 5 SO AS TO ESTABLISH A LIMITATION ON APPROPRIATIONS OF STATE GOVERNMENT BASED ON THE ECONOMIC GROWTH OF THE STATE AS MEASURED BY THE GROWTH IN SOUTH CAROLINA PERSONAL INCOME, AND A LIMITATION ON GROWTH OF STATE EMPLOYMENT BASED ON THE GROWTH OF THE POPULATION OF THE STATE AND PROVIDE PROCEDURES FOR COMPUTING AND SUSPENDING BOTH LIMITATIONS; PROHIBIT THE COMPTROLLER GENERAL FROM APPROVING OR ISSUING WARRANTS FOR DISBURSEMENT ABOVE THE AMOUNT APPROPRIATED UNLESS AUTHORIZED BY THE GENERAL ASSEMBLY; PROVIDE THAT THE DIVISION OF RESEARCH AND STATISTICAL SERVICES OFTHE BUDGET AND CONTROL BOARD SHALL ANNUALLY COMPUTE AND CERTIFY TO THE GENERAL ASSEMBLY A CURRENT FIGURE TO LIMIT APPROPRIATIONS AS PROVIDED IN THIS ARTICLE PRIOR TO THE BOARD'S SUBMISSION OF ITS RECOMMENDED BUDGET TO THE HOUSE WAYS AND MEANS COMMITTEE; PROVIDE THAT THE GENERAL ASSEMBLY MAY, BY A SPECIAL VOTE, SUSPEND THE SPENDING LIMITATION FOR ANY ONE FISCAL YEAR FOR A SPECIFIC AMOUNT IF A FINANCIAL EMERGENCY IS DECLARED TO EXIST; PROVIDE THAT WHEN SURPLUS FUNDS ARE COLLECTED, THE SURPLUS MAY BE APPROPRIATED BY THE GENERAL ASSEMBLY TO MATCH FUNDS FOR PUBLIC EDUCATION, PUBLIC WELFARE, PUBLIC HEALTH, ROAD AND HIGHWAY CONSTRUCTION, REHABILITATION, REPLACEMENT, OR MAINTENANCE FINANCED IN PART WITH FEDERAL PARTICIPATION FUNDING OR FEDERAL GRANTS OR TOLLS OR TO ACCELERATE THE RETIREMENT OF BONDED INDEBTEDNESS TRANSFERRED TO THE GENERAL FUND RESERVE, PROVIDE TAX RELIEF, OR BE USED TO AVOID THE ISSUANCE OF BONDS FOR PROJECTS THAT ARE AUTHORIZED BUT NOT ISSUED; PROVIDE THAT THE RATIO OF THE NUMBER OF PERMANENT STATE POSITIONS TO THE TOTAL ANNUALLY UPDATED RESIDENT POPULATION OF THE STATE MAY NOT EXCEED THAT RATIO OF PERMANENT STATE POSITIONS AS EXISTED IN FISCAL YEAR 1980-81 COMPARED TO THE TOTAL RESIDENT POPULATION OF THE STATE AS DETERMINED BY THE 1980 DECENNIAL CENSUS; PROVIDE THAT THE BUDGET AND CONTROL BOARD DETERMINE THE NUMBER OF PERMANENT STATE POSITIONS; PROHIBIT THE BUDGET AND CONTROL BOARD FROM RECOMMENDING TO THE WAYS AND MEANS COMMITTEE OF THE HOUSE OF REPRESENTATIVES THAT THE COMMITTEE MAY NOT INTRODUCE ANY APPROPRIATION BILL WHICH PROVIDES FOR AN INCREASE IN STATE EMPLOYMENT IN EXCESS OF THE RATIO PRESCRIBED IN THIS ARTICLE; PROVIDE THAT IF A FINANCIAL EMERGENCY IS DECLARED TO EXIST THE GENERAL ASSEMBLY MAY SUSPEND, BY A SPECIAL VOTE, THE EMPLOYMENT LIMITATION FOR ANY ONE FISCAL YEAR FOR A SPECIFIC NUMBER; PROVIDE THAT THE PRESIDING OFFICER OF EITHER HOUSE OF THE GENERAL ASSEMBLY SHALL NOT ALLOW TO BE INTRODUCED ANY AMENDMENT TO THE APPROPRIATION BILL WHICH INCREASES THE NUMBER OF STATE EMPLOYEES UNLESS THERE IS ATTACHED TO THE AMENDMENT A CERTIFICATE FROM THE STATE AUDITOR WHICH STATES THE INCREASE IN STATE EMPLOYEES IS WITHIN THE LIMITATION PRESCRIBED; PROHIBIT THE USE OF BOND PROCEEDS FOR OTHER THAN CAPITAL IMPROVEMENTS AND LIMIT ANNUAL MAXIMUM DEBT SERVICE ON GENERAL OBLIGATION BONDS TO NOT MORE THAN FIVE AND ONE-HALF PERCENT OF GENERAL STATE REVENUES FOR THE FISCAL YEAR NEXT PRECEDING; REQUIRE NEW OR INCREASED TAXES TO BE LEVIED BY SEPARATE LEGISLATIVE ACTS RATHER THAN IN APPROPRIATION ACTS; TO AMEND THE CODE BY ADDING SECTION 12-7-616 SO AS TO PROVIDE FOR A TAX CREDIT FOR BUSINESS ENTERPRISES WHO EMPLOY EIGHTEEN OR MORE FULL-TIME EMPLOYEES AND LOCATE THE BUSINESS IN A DESIGNATED LESS DEVELOPED AREA; AND TO REPEAL SECTION 12, PART II, OF ACT 517 OF 1980 RELATING TO SPENDING AND EMPLOYMENT LIMITATIONS AND OTHER BUDGET MATTERS.
Be it enacted by the General Assembly of the State of South Carolina:
Sections designated
SECTION 1. Sections 11-11-10 through 11-11-110 and Section 11-11-130 of the 1976 Code are designated Article 1 of Chapter 11 of Title 11 of the 1976 Code to be entitled "General Provisions".
Further
SECTION 2. Section 12 of Part 11 of Act 219 of 1977 is designated Section 11-11-310 and Article 3 of Chapter 11 of Title 11 of the 1976 Code and the article to be entitled "Reserve Fund".
Limitations on appropriations
SECTION 3. Chapter 11 of Title 11 is amended by adding:
Section 11-11-410 (A) State appropriations in any fiscal year may not exceed appropriations authorized by the spending limitation prescribed in this section. State appropriations subject to the spending limtation are those appropriations authorized annually in the State General Appropriation Act and acts supplemental hereto which fund general, school, and highway purposes. A statement of total General, School, and Highway Revenues must be included in each annual General Appropriation Act. As used in this section the appropriations so limited as defined above must be those funded by General, School, and Highway Revenues that must be defined as such in the 1985-86 General Appropriation Act; it being the intent of this section that all additional nonfederal and nonuser fee revenue items must be included in that category as they may be created by act of the General Assembly.
(B) The limitation on state appropriations prescribed in subsection (A) is an amount equal to either those state appropriations authorized by the spending limit for the previous fiscal year increased by the average percentage rate of growth in state personal income for the previous three completed calendar years or nine and one-half percent of the total personal income of the State for the calendar year ending before the fiscal year under consideration, whichever is greater. As used in this section, state personal income means total personal income for a calendar year as determined by the Budget and Control Board or its successor based on the most recent data of the United States Department of Commerce or its successors. During the initial year this spending limit is in effect, the actual state appropriations for general, school, and highway purposes for the fiscal year 1985-1986 must be used as the base figure for computation of the spending limitation if the average rate of growth method is used.
(C) The Comptroller General, or any other authorized agency, commission, or officer, may not approve or issue warrants which would allow disbursements above the amount appropriated for general fund purposes unless and until the General Assembly authorizes expenditures in excess of the limitation through procedures provided for in this article. This subsection may not apply to funds transferred from the reserve fund to the general fund.
(D) The Division of Research and Statistical Services of the Budget and Control Board shall annually compute and certify to the General Assembly a current figure to limit appropriations as provided in subsection (B) of this section prior to the Budget and Control Board's submission of its recommended budget to the House Ways and Means Committee.
(E) Notwithstanding the provisions of subsection (A) of this section, the General Assembly may declare a financial emergency and suspend the spending limitation for any one fiscal year for a specific amount by a special vote as provided in this subsection by enactment of legislation which relates only to that matter. The authorized state appropriations for the fiscal year following the suspension must be determined as if the suspension had not occurred and, for purposes of determining subsequent limits, must be presumed to have been the maximum limit which could have been authorized if such limitation had not been suspended.
The special vote referred to in this subsection means an affirmative vote in each branch of the General Assembly by two-thirds of the members present and voting but not less than three-fifths of the total membership in each branch.
(F) In any year when surplus funds are collected, such revenue surplus may be appropriated by the General Assembly to match funds for public education, public welfare, public health, road and highway construction, rehabilitation, replacement, or maintenance financed in part with federal participation funding or federal grants or tolls, or to accelerate the retirement of bonded indebtedness or transferred to the general fund reserve, or tax relief or for avoiding the issuance of bonds for projects that are authorized but not issued or any combination of these purposes without regard to the spending limitation. For the purposes of this section, surplus funds mean that portion of revenues, as defined in subsection (A) of this section, over and above revenues authorized for appropriation in subsection (B).
Section 11-11 -420. (A) In any fiscal year, the ratio of the number of permanent state positions to the total annually up-dated resident population of the State may not exceed that ratio of permanent state positions as existed in fiscal year 1980-81 compared to the total resident population of the State as determined by the 1980 decennial census. The number of permanent state positions shall be based on full-time annual equivalency funded in whole or in part by appropriations of the General Assembly as defined by the South Carolina Classification and Compensation System or its successor.
(B) To insure compliance with subsection (A) of this section, the Budget and Control Board shall annually and prior to December first determine the total number of permanent state positions based on full-time annual equivalency and the total resident population of the State for which data are available.
(C)The Budget and Control Board may not present to the Ways and Means Committee of the House of Representatives and the committee may not introduce any appropriation bill which provides for an increase in state employment in excess of the ratio prescribed in subsection (A) of this section. The committee may alter the specific positions created or eliminated so long as the total employment remains within the prescribed limitation.
(D) Notwithstanding the provisions of subsection (A) of this section, the General Assembly may declare an emergency and suspend the employment limitation for any one fiscal year for a specific number by a special vote as provided in this subsection by enactment of legislation which relates only to that matter. The authorized state employment for the fiscal year following the suspension must be determined as if the suspension had not occurred and, for purposes of determining subsequent limits, must be presumed to have been the maximum limit which could have been authorized if such limitation had not been suspended.
The special vote referred to in this subsection means an affirmative vote in each branch of the General Assembly by two-thirds of the members present and voting, but not less than three-fifths of the total membership in each branch.
(E) When any appropriation bill is under consideration by the House of Representatives or the Senate, the presiding officer of either House of the General Assembly shall not allow to be
introduced any amendment to such bill which increases the number of state employees unless there is attached thereto a certificate of the State Auditor that such increase in state employees is within the limitations prescribed.
Section 11-11-430. (A) In order to continue to maintain the fiscal integrity of the State, the proceeds of the state bonds must not be used to fund operating expenses of state government and such proceeds must be used only for capital improvements.
(B) In order to continue the policy of the State to maintain the full faith and credit of the State with respect to any existing or future bonded indebtedness, the principal and interest payments on general obligation bonds shall constitute priority state expenditures.
(C) The issuance of general obligation bonds of the State must be limited so that the maximum annual debt service on all general obligation bonds of the State (excluding highway bonds, state institution bonds, tax anticipation notes, and bond anticipation notes) may not exceed five percent of the general revenues of the State for the fiscal year next preceding (excluding revenues which are authorized to be pledged for state highway bonds and state institution bonds).
Section 11-11-440. (A) The General Assembly may not provide for any general tax increase or enact new general taxes in the permanent provisions of the State General Appropriation Act or acts supplemental thereto, and any such general tax increases or new general taxes must be enacted only by separate act.
(B) General tax increases and new general taxes as used in this section mean tax increases and new taxes which apply to over fifty percent of the population as a whole."
Tax credit
SECTION 4. The 1976 Code is amended by adding:
"Section 12-7-616. (A) Annually by December thirty-first, using the most current data available from the South Carolina Employment Security Commission and the United States Department of Commerce, the South Carolina Tax Commission shall make a single determination as to which twelve counties in the State have a combination of the highest unemployment rate and lowest per capita income for the most recent thirty-six month period with equal weight being given to each category. Such counties must be designated less developed areas by the Tax Commission and shall be qualified for tax credit for jobs as provided in subsection (B) of this section. The designation by the Tax Commission must be effective for the tax years of permanent business enterprises which begin after the date of designation. For companies which plan a significant expansion in their labor forces, the Tax Commission shall prescribe certification procedures to insure that such companies can claim credits in future years without regard to whether or not a particular county is removed from the list of less developed areas.
(B) Permanent business enterprises engaged in manufacturing, processing, warehousing, wholesaling, and research and development in less developed areas must be allowed a job tax credit for taxes imposed by Section 12-7-230 equal to five hundred dollars annually for each new full-time employee job for five years beginning with years two through six after the creation of the job. The number of new full-time jobs must be determined by comparing the monthly average number of full-time employees subject to South Carolina income tax withholding for the taxable year with the corresponding period of the prior taxable year. Only those permanent businesses that increase employment by eighteen or more in a less developed area are eligible for the credit. Credit must not be allowed during any of the five years if the net employment increase falls below eighteen. The Tax Commission shall adjust the credit allowed each year for net new employment fluctuations above the minimum level of eighteen.
(C) Additional tax credits of five hundred dollars for five years for the taxes imposed by Section 12-7-230 must be awarded for additional new full-time jobs created by business enterprises qualified under subsection (A) of this section. Additional new full-time jobs shall be determined by subtracting highest total employment of the business enterprise during years two through six, or whatever portion of year two through six completed, from the total increased employment. The Tax Commission shall adjust the credit allowed in the event of employment fluctuations during the additional five years of credit.
(D) The sale, merger, acquisition, or bankruptcy of any business enterprise may not create new eligibility in any succeeding business entity; however, any unused job tax credit may be transferred and continued by any transfer of such business enterprise. The Tax Commission shall determine whether or not qualifying net increases or decreases have occurred and may require reports, promulgate regulations, and hold hearings as needed for substantiation and qualification.
(E) Any credit claimed under this section but not used in any taxable year may be carried forward for ten years but the credit established by this section taken in any one year must be limited to an amount not greater than fifty percent of the taxpayer's state income tax liability which is attributable to income derived from operations in the State for that year."
Repeal
SECTION 5. Section 12 of Part 11 of Act 517 of 1980 is repealed.
Time effective
SECTION 6. This act shall take effect upon approval by the Governor.
Approved the 27th day of June, 1984.