Presentation to the South Carolina Association of Counties

1
Presentation to the South Carolina Association of
Counties
October 21, 2004 Embassy Suites Hotel Columbia
2
Todays Agenda

• Overview of Economic Development
• Program Structure and Participants
• Tools for Economic Development
• Question and Answer Session

3
Central SC Alliance

• Mike Briggs, President
• Ed Parler, Director, Government Relations
• Mark Simmons, Managing Director, Economic
  Development

4
Overview of Economic Development

• Basic Principles
• Value
• National and International Trends
• State of South Carolina

5
South Carolina Regional Alliances
6
Central South Carolina Region
7
Board and Organization
Archie B. Kelly, Bank of AmericaStephen S.
Kelly, Kershaw County CouncilGreg Lapointe,
Wachovia Bank, N.A.Joseph T. McElveen, City of
SumterCarnell Murphy, Fairfield County
CouncilRobert Pulliam, Richland-Lexington
Airport CommissionJohn H. Rickenbaker,
Orangeburg County CouncilBarry Russell, Midlands
Technical CollegeNaomi Sanders, Sumter County
CouncilBernice Scott, Richland County
CouncilRobert Smith, Sumter National BankAndrew
Sorenson, University of SCDwight L. Stewart,
Clarendon County CouncilDavid Summers, Calhoun
County CouncilE.V. Whitaker, Mayesville Land
ManagementRandall Horn, Colonial Supplemental
Insurance

• Jim Apple, First Citizens Bank
• Arthur Beasley, Lee County Council
• George Bullwinkel, SCANA
• David Campbell, CNSG
• Pierce Centey, Jr, Cantey, Tiller, Pierce
  Associates
• Raymond Caughman, BBT of South Carolina
• Robert Coble, City of Columbia
• E.W. Cromartie, Central Midlands Council of
  Governments
• George Smokey Davis, Lexington County Council
• John David Dawkins, Newberry County Council
• Barry Falin, Voridian Company
• Hank Fisher, BellSouth
• William L. hart, Fairfield Electric Cooperative
• William Harwell, Bank of Ridgeway
• James E. Hazel, Elliot Daivd Company
• J. Thomas Johnson, Newberry Federal Savings Bank

8

• CCEDA Staff

Central SC Alliance Staff

• Mike Briggs - President
• Annette Burrell - Office Manager
• Annie Caggiano - Research Technician
• David King - Dir. Marketing / New Industry
• Tracy McMillin - Director, Research
• Ed Parler - Dir. Govt. Existing Industry
• Jeff Ruble, CEcD - Director, Projects
• Mark Simmons, CEcD - Mng Director ED
• Sandra Wallace - Dir. Committee of 100

9
Central SC Alliance Services

• Market Research
• Economic Impact Analysis
• Project Administration
• Project Performance Analysis
• Site Identification/Project Development
• Labor Analysis
• Community Profiles

• Collaborative Economics/ Regional Stewardship
• Incentive Facilitation
• Marketing Mission- Domestic/International
• New/ Existing Industry Assistance
• Corporate Relocation Assistance
• Event Coordination
• Follow-Up

10
Establishing Basic Framework for Success

• Structure
• Development Boards
• County Council
• Staff

11
Preparation

• Economic Development Plan
• Product Development
• Website

12
(No Transcript)
13
(No Transcript)
14
(No Transcript)
15
(No Transcript)
16
Health Services is Largest and Fastest-Growing,
Advanced Manufacturing is Most Concentrated, ICS
is Highest-Paying
17
A Regional Cluster Portfolio
18
Occupational Analysis
19
Employment
20
Wage
21
AAGR
22
Tools, Taxes and Incentives

• Business Tax Environment
• Statutory Incentives
• Discretionary Incentives
• Multi County Industrial Parks

23
South Carolinas Tax Structure and Business
Incentives

• Three Business Taxes
• 1. Corporate Income Tax- State
• 2. Sales and use Tax- State
• 3. Property Tax- Local
• Performance-based Incentives
• 1. Jobs and Capital Investment
• 2. Economic Designation of County

24
Corporate Income Tax

• Taxed only on income derived from business done
  in the state
• Rate is 5
• Three Factor Formula
• 1. Property
• 2. Payroll
• 3. Sales

25
2004 Corporate Income Tax Moratorium Counties

• Union
• Chester
• Fairfield
• McCormick
• Edgefield
• Lee
• Marlboro
• Marion
• Williamsburg
• 10 Year- 100 Jobs
• 15 Year- 200 Jobs

26
Jobs Tax Credit County Designations
27
Economic Impact Zone Investment Tax Credit

• For Investment in NEW Production Machinery

28
State and Local Sales Tax

• Exemptions
• Electricity and fuels used in
• the manufacturing process
• Machinery equipment and
• repair parts
• Raw materials
• Packaging materials
• Toll-free
• telephone services

29
Local Property Tax Exemptions

• Property tax liability is a function of
  depreciation, assessment and millage rate.
• Tax (FMV-Depreciation) X AR X MR
• Exemptions include
• 1. Inventories
• 2. Intangibles (stocks, dividends, etc,)
• 3. Pollution Control Equipment

30
Local Property Tax Incentives

• Companies can work to reduce local property tax
  liability in two ways
• 1. 5-year Property Tax Abatement
• 2. Fee-In-Lieu of Property Tax Agreement

31
Five Year Property Tax Abatement

• Low Investment Requirement
• - 50,000 Threshold
• Creates Valuable Savings
• - Abates Countys Operating Millage for the
  first 5 years of operations
• - Generally 20 - 25 savings

32
State and Local Discretionary Incentives

• Fee-In-Lieu of Property Tax Agreement
• Enterprise Program Job Development Credits

33
FILOT Agreements

• Offered at discretion of local governments
• Creates valuable savings for company
• - Property Tax reduction of 30 - 45
• - Assessment rate to as low as 6, even 4
• Greater financial control
• - Can negotiate locked or 5-year adjustable
  millage rates
• - 20-year agreements

34
Amount of Investment Needed to Qualify for FILOT
35
The Enterprise Program Job Development Credit

• Quarterly cash reimbursement of approved project
  expenses for up to 15 years
• Value is based on individual employee wage rates
  and development designation of the county
• Value ranges from 2 to 5 of actual payroll
• Must be approved by the SC Coordinating Council
  for Economic Development

36
Enterprise Program Eligibility Criteria

• 10 net new jobs with benefits
• Submit application
• Positive cost/benefit certification
• Incentive and its value determined solely by the
  SCCCED
• Companies can expect to collect benefits from
  jobs that meet or exceed the average per capita
  county wage rate

37
SC County Per Capita Wage Rates
38
Enterprise Program Job Development Credit

• Offsets capital expenditures
• Utility systems upgrades
• Real estate (site/building improvements)
• Pollution control equipment
• Approved training costs (not covered by CATT)

39
Tools and Incentives

• Multi-County Industrial Park

40
Summary

• Corporate Income Tax and Associated Credits
• Property Tax Incentives 5-Year Abatement and
  FILOT
• Sales Tax and Associated Exemptions
• Job Development Credits
• Multi-County Industrial Park

41
Thank You