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COMMITTEE REPORT
April 20, 2006
H. 4951
S. Printed 4/20/06--H.
Read the first time April 05, 2006.
To whom was referred a Bill (H. 4951) 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 provide, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass:
DANIEL T. COOPER for Committee.
REVENUE IMPACT 1/
This bill would reduce general fund income tax revenue by $958,500 in FY2006-07.
Explanation
This bill would amend Section 12-6-3360(B)(5) to allow a county that is at least one thousand square miles in size and has had an unemployment rate greater than the state average and an average per capita income lower than the state average for the past ten years to receive a job tax credit two tiers higher than that level currently imposed pursuant to Section 12-6-3360(B)(1)(a). Based upon those criteria, only Orangeburg County is eligible under this provision. In calendar year 2005, Orangeburg County was designated a distressed county with an $8,000 income tax credit for each eligible new job created in the county. In calendar year 2006, the county is designated a moderately-developed county with each eligible new job receiving a $3,500 tax credit, or two tiers lower than the prior year. According to the Department of Commerce, two companies in Orangeburg County applied for and received approval for eligible job tax credits for 213 new jobs during calendar year 2005. Job tax credits may be taken by a company once the new jobs are "created". These companies have been "approved" for job tax credits; however, the associated new jobs have not been "created" as of January 1, 2006. If the same number of new jobs is created in Orangeburg County during calendar year 2006, the jobs would be eligible for a tax credit of $8,000 per new job instead of the present $3,500 per new job. Multiplying 213 new qualified jobs by a tax credit increase of $4,500 per job would yield an estimated reduction in general fund income tax revenue of $958,500 in FY2006-07.
Approved By:
William C. Gillespie
Board of Economic Advisors
1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact by the BEA, or Section 2-7-76 for a local revenue impact or Section 6-1-85(B) for an estimate of the shift in local property tax incidence by the Office of Economic Research.
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 PROVIDE THAT IN A COUNTY OF AT LEAST ONE-THOUSAND SQUARE MILES IN SIZE AND WHICH HAS HAD AN UNEMPLOYMENT RATE GREATER THAN THE STATE AVERAGE AND AN AVERAGE PER CAPITA LOWER THAN THE STATE AVERAGE PER CAPITA INCOME FOR THE PAST TEN YEARS AND WHICH IS OTHERWISE NOT ELIGIBLE FOR ANY SPECIAL CLASSIFICATION, THE TARGETED JOBS TAX CREDIT ALLOWED IN THE COUNTY IS TWO TIERS HIGHER THAN THE CREDIT FOR WHICH THE COUNTY WOULD OTHERWISE QUALIFY.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-6-3360(B)(5) of the 1976 Code, as last amended by Act 161 of 2005, is further amended by adding a subitem at the end of the item to read:
"(g) In a county which is at least one thousand 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."
SECTION 2. This act takes effect upon approval by the Governor and applies for taxable years beginning after 2005 and applies for any company which applied for job development credits pursuant to Section 12-6-3360 of the 1976 Code after 2005.
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