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House passes, Senate considers Industry Partners Act
By Shelia Watson
Contributing Writer
A bill has passed the state House of Representatives and is under consideration in the state Senate that would bring companies and individuals into the South Carolina Research Authority’s process of building a knowledge economy in South Carolina.
House Bill 4840, known as the Industry Partners Act, would establish a target program reflecting the applied research and development currently undertaken at each of the South Carolina Research Innovation Centers at Clemson University, the Medical University of South Carolina and the University of South Carolina.
The SCRA, through the SCRIC, would implement and manage specified programs that will develop collaborative relationships with public and private resources, trade groups, research labs and other universities to apply research for the overall goal of product development and commercialization.
“This act allows other corporations in addition to the SCRA to join in the process of forming indigenous knowledge-economy companies,” said Bill Mahoney, SCRA’s president and CEO. “It’s a far-reaching formula to get people and companies engaged in growing business in the state.”
The bill will also establish the Industry Partnership Fund, which will allow contributions for funding the various programs. Eligible contributors to the fund will receive a nonrefundable tax credit of 100% against state income taxes, insurance premium taxes or license fees.
“I think it’s a brilliant construct,” said Mahoney. “It encourages companies and individuals to donate to the program, and at the same time, it guarantees the program will have longevity as a fulfillment of the innovation centers’ mandate beyond the three years we were prescribed in the original legislation.”
The bill would allow a taxpayer to claim a credit up to $1 million, not to exceed an aggregate of $6 million for all taxpayers in the first fiscal year of existence.
Eligible taxpayers include individuals, corporations, partnerships, trusts, banks, insurance companies or any entity having a state income or insurance premium tax or license fee liability that has made a qualified contribution.
The General Assembly would establish a limit on the aggregate amount of tax credits that may be claimed in the general appropriations bill. If an aggregate amount is not established for a fiscal year, the aggregate amount of tax credits for that year would default to $6 million.
The individual taxpayer credit will be limited to $2 million of qualified contributions for each fiscal year.
“This is part of the commercialization segment of the continuum that involves the endowed chairs program, the Venture Capital Act and the innovation centers,” Mahoney said. “It helps tremendously in building bridges to other companies and allows them to help put South Carolina on the map in terms of innovative research and development.”
Other technical amendments to the act are encouraging for the SCRA. For instance, the head of the Savannah River National Laboratory will sit on the SCRA’s board, Mahoney said.
“Where that can have an effect is getting the SCRA board of trustees, along with all the core research foundations and the most technically capable institutions in the state, all sitting around the table in meetings and activities,” Mahoney said. “The act will help accelerate this collaboration, which will in turn make it a premier forum for the process of building a knowledge economy in South Carolina.”
The bill is expected to reduce general fund income tax, license tax and insurance tax revenue by $6 million in fiscal year 2006-07.
Contributions to the Industry Partnership Fund are eligible for tax credits after taxable years beginning on or after January 1, 2006. The act will take effect upon approval by the governor.
“We have to credit the Speaker of the House and the Ways and Means chair who both helped clear the way for this legislation, as well as Larry Wilson from our board who was instrumental in putting the legislation together,” said Mahoney. “It’s a real cooperative effort to ensure we’ll be able to continue the program for the next 20 to 30 years.”
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