Workforce Development (Job Retraining Credit)
South Carolina law allows a business engaged in manufacturing or processing operations or technology intensive activities to claim a credit against withholding taxes for the retraining of a production or technology employee. However, few companies utilize the credit due to the minimal value of the credit and the cumbersome application and auditing process that is required. As a result, SCEDA is seeking to enhance the credit to make it more valuable and useful to existing industry and workforce development.
Key points of the proposed legislation include:
The technical college will have exclusive authority over the program, changing from the current system where businesses must apply with both the technical college and the Coordinating Council
Increases the credit from $500 to $1,000 per employee per year
Aggregate credit increases from $2,000 to $5,000 per employee over five years
Removes the reporting and auditing requirements that are currently required under law
Eliminates the $500 annual renewal fee
Clarifies that a company may do the training internally provided it is under the supervision of the technical college
Clarifies that the retraining programs that are eligible for the credit include:
o Retraining of current employees on newly installed equipment and retraining of current employees on newly implemented technology, such as computer platforms, software implementation and upgrades, Total Quality Management, ISO 9000, and self-directed work teams
Clarifies that the retraining programs that are not eligible include:
o Executive training, management development training, career development, personal enrichment training, and cross training of employees on equipment or technology that is not new
Lists the eligible direct costs as instructor salaries, employee wages during the retraining, development of retraining programs, purchase or rental of materials and supplies, textbooks, and manuals, instructional media, and reasonable travel costs
Requires the qualifying business to match $1.50 for every $1.00 claimed against withholding
Provides that all approved programs and training are subject to review and audit by the SC Dept. of Revenue and the State Board of Technical and Comprehensive Education.
Utility Tax Credit
South Carolina law allows utility companies to claim a credit against utility license taxes for amounts paid in cash for infrastructure for an eligible project. The requirements for a project to be eligible and authorized uses of the funds are often ambiguous and unclear. SCEDA is seeking legislation to clarify the law.
Key points of the proposed legislation include:
Clarifies that an eligible project includes projects owned or constructed by:
o a county, municipality, or special purpose district, or
o an agency or instrumentality of the county, municipality, or special purpose district, or
o an agency or instrumentality of the State, and
o used exclusively to attract one or more business enterprises that are reasonably expected to contribute to economic development.
Clarifies that infrastructure improvements include refurbishment and upfit of both the interior and exterior of buildings
Clarifies that infrastructure improvements include expenditures related to compliance with site certification requirements of the South Carolina Dept. of Commerce
Allows a county, political subdivision, or agency to transfer or sell an eligible project at any time after the utility company has paid in cash to provide the infrastructure for an eligible project
Workforce Development (MSSC Certificate)
A key component of economic development is ensuring the availability of a skilled, ready, and able workforce. Across the United States, 67% of manufacturers say they are facing moderate to severe shortages in workers and 64% say the shortage of skilled workers makes it harder to expand operations and increase productivity.
From January 1, 2010 – December 31, 2011, over 230 manufacturers committed to investing $8.4 billion and creating over 24,000 jobs in South Carolina. South Carolina must be prepared to meet these workforce needs.
SCEDA supports a $6.5 million state budget request for an initiative to create a statewide program through the technical college system for students to obtain the Manufacturing Skills Standard Council (MSSC) certificate. The program, which is modeled after the National Association of Manufacturing (NAM)-endorsed MSSC for both Production and Logistics, will educate and prepare a portion of South Carolina’s workforce for entry-level positions in manufacturing by centering on six major themes: employability skills, academic skills, processes and production, maintenance awareness, quality and continuous improvement, and safety.
State Agency Partners
SCEDA supports adequate funding and specific programs of key state agencies involved in economic development including the Department of Commerce, the State Technical College System, the Department of Parks, Recreation, and Tourism, and the South Carolina State Ports Authority.
Please contact SCEDA at (803) 929-0305 should you have any questions or comments.