S.C. Senate Committee OKs Boeing Package

COLUMBIA, S.C. (AP) -- An economic incentive package that appears tailored to bring a massive Boeing assembly facility to North Charleston crossed its first legislative hurdle Tuesday, winning approval in a state Senate committee.

The Finance Committee OK'd low-interest construction bonds and incentives that include a sales tax exemption on fuel used in test flights. To qualify, a company would have to bring at least 3,800 full-time jobs and at least $750 million in investment to the state over seven years.

"We've got an opportunity before us now ... to bring jobs to our people that are so desperately needed," said committee chairman Hugh Leatherman, R-Florence.

The measure, which does not name a specific company, was headed next to the full Senate and leaders believe it could be approved this week.

The lawmakers are meeting as Boeing decides where to site a second assembly line for the 787 airliner. Everett, Wash., also is competing for the facility.

Sen. Robert Ford said legislative leaders have instructed lawmakers not to discuss the company because the situation is too sensitive.

"Of course, for any district in the world, it would be a major, major employment opportunity," said the Charleston Democrat, whose district includes Boeing's existing North Charleston plant which makes fuselage sections for the 787.

The five-part legislation, which expands existing law, includes sales tax incentives that would exempt fuel used in test flights and flights to transfer aircraft between manufacturing facilities. It would also exempt computer equipment purchases and allow a qualifying company to immediately pay no sales tax on construction materials, rather than wait for a 2011 phase-in.

It would ensure the company could negotiate with state officials to pay little corporate income taxes for 10 years. It deletes the minimum pay requirement from the break already allowed for companies investing less and creating fewer jobs.

The proposal would also allow the state to issue up to $170 million of economic development bonds that would allow a company to build using a lower interest rate, making the project cheaper, if approved by the Legislature on a two-thirds vote.

Business leaders praised the proposal.

"I think if what we believe is going to happen happens, without talking about a name, this is almost as big as" Michelin's expansion and BMW's move to South Carolina more than a decade ago, said Otis Rawl, president of the state Chamber of Commerce. "This is another one of those marquee companies that puts South Carolina not only on a national map but a global map."

Rawl said it's the first time legislators have addressed economic incentives in a special session.

"The fact that we're here sends a message to whoever the prospect is," Sen. Larry Martin, R-Pickens, said about an impending announcement, while declining to name a company. "We'd have walked to Columbia for that."

Senators did not discuss a price tag for the incentives, and business leaders declined to do so.

"The fiscal impact of the project itself far exceeds what state's putting in this thing," said South Carolina Manufacturers Alliance president Lewis Gossett. "It's going to be a net gain, when you're talking something on this scale in manufacturing."

John Cawley, the economic development coordinator for North Charleston where Boeing is considering building a second production line, declined to comment on the economic incentives, saying he did not know what they were.

He also said he could not comment on any Boeing plans for the city.

Boeing announced in August that it was seeking permits to expand its North Charleston plant, but said it was simply a procedural step because of the lead time required to secure permits.

Last month, plant workers voted against continued union representation.

Boeing has said it plans to make a decision on a second assembly line in the coming weeks.

Associated Press Writer Bruce Smith in Charleston, S.C., contributed to this report.

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