Subcommittee backs raising reimbursement cap for manufacturing property tax exemption to $300 million

The subcommittee voted to give a favorable report to S.1, a bill that raises the statutory cap for reimbursements to local governments tied to the manufacturing property tax exemption from $170,000,000 to $300,000,000.

Under current law, a portion of the assessed value of manufacturing property receives a reduced assessment ratio; that exemption is reimbursed to counties through a state mechanism. "This exemption is reimbursed to local governments in the same manner as the trust fund for property tax relief," a staff summary said. The bill would effectively keep the assessment ratio at 6% for qualifying manufacturing property by increasing the statutory cap on reimbursements.

Alan Klump of the South Carolina Manufacturers Alliance spoke in support, saying the change "stops a tax increase on manufacturers" and helps manufacturers avoid pursuing fee-in-lieu-of-tax agreements. Staff projected the reimbursement cap is likely to be reached in a coming year; one witness estimated next year's projected pressure on the cap at roughly $25$30 million and said raising the cap helps avoid an unintended tax increase next year.

The committee chair called for a motion; the subcommittee adopted a favorable report by voice vote. The chair said staff would be available if members wanted to hear additional technical detail from agency witnesses.

Supporters framed the bill as protecting the state's manufacturing competitiveness and avoiding ad hoc budget provisos; opponents did not mount extended public opposition at the subcommittee hearing.