COLUMBIA, S.C. - Small businesses have a better chance to get a tax break if they hire more workers under legislation that cleared the House on Tuesday.

The Jobs Creation Act would reduce the minimum number of new employees needed to qualify for the credit to two instead of what small-business advocates said was an unrealistic number of 10 new workers.

"I think it will be a huge boost to small businesses," said House Speaker David Wilkins, one of the bill's co-sponsors. "The purpose of it is to work in good times and bad times and have it give employers incentives to hire people."

Wilkins said South Carolina needs to aggressively focus on its work force, which "unfortunately, has been at the top of the heap in unemployment in the last several months."

The state's unemployment rate rose to 6.6 percent in November, up from 6.4 percent in October, the most current figures available.

Hal Stevenson said he was eager to see the legislation pass because it would entice him to increase his staff of 13 at his Columbia advertising company.

"Whenever you're hiring people, obviously, you look at the expense," Stevenson said. "By having this extra incentive, that risk and cost of making a new hire lessens."

House Ways and Means Chairman Bobby Harrell, R-Charleston and another co-sponsor, said the bill corresponds with existing law that says businesses in wealthier counties could qualify for $1,500 tax break per job created, while those in the most distressed counties could get up to $8,000.

The measure passed with little resistance.

"Anything that can help create jobs, I support," said Greeleyville Democrat Rep. Kenneth Kennedy, whose Williamsburg County has one of the state's highest unemployment rates.

Business advocates liked the changes.

"It really gives small businesses the opportunity to take advantage of these incentives that the larger companies have been able to take advantage of since they created a jobs tax credit," said Michael Fields, state director for the National Federation of Independent Business. "It sends a clear message that they are serious about helping entrepreneurs grow the economy."

The South Carolina Chamber of Commerce wants to tie the job tax credit to the percentage increase in workers at a company. It may have a chance when the bill heads to the Senate next.

The measure also singles out companies that build distribution centers, movie production companies and investors who put money into startup concerns tied to the state's research universities for tax breaks.

Companies growing out of work done at the state's research universities are a prime target. Investors could get a tax break on 25 percent of an investment up to $100,000. Companies with revenues of less than $2 million a year would be eligible.

But the bill has limits for richer counties. It specifically says that investors won't get tax credits for money they put into many typical small businesses - including professional service operations; construction or contracting; retail sales or leasing; financial and real estate concerns; cosmetics services or businesses charging admission for entertainment, amusement, recreation or fitness activities.

Distribution businesses will be attracted by the state assuring them that their sales won't be taxed here.

The House has previously approved elements of the bill, including breaks for movie production concerns. Qualifying companies wouldn't have to pay sales or lodging taxes.

Overall, the legislation would cost $60 million the first year for the fiscal year beginning July, 2007.

Fields said it's a first step to foster job growth in the state.

"You've got to do a lot of things within the tax code, the tort reform code in order to make the ground fertile for small business," Fields said.