Economic bill faces veto from Sanford

COLUMBIA -- A bill that proponents say would create much-needed jobs in South Carolina is on its way to Gov. Mark Sanford's desk.

Therein lies the problem -- Sanford has vowed to veto the bill because it is weighted down with amendments.

The state Senate on Tuesday gave final approval to the bill, which would create a $50-million venture capital fund, make pharmaceutical and laboratory instrument manufacturers eligible for the same economic development incentives offered to other manufacturers, and make available more than $200 million to research universities for qualifying projects. The vote was 39-5.

Supporters also have said passing the legislation could be the determining factor in whether an unidentified pharmaceutical manufacturer and its high-paying jobs land in Greenville County or in Texas.

"This is the most significant package to create good, high-wage jobs that we've passed in 10 years," said Sen. Jim Ritchie, R-Spartanburg, who developed the venture capital portion of the legislation. "Hopefully the governor will recognize the seriousness of the need for this economic development legislation."

Under the legislation, banks and insurance companies would make funds available to the state. A board created by the bill would borrow the money and invest in venture capital firms, which would then invest in South Carolina businesses to create jobs, Ritchie said.

The board would charge a fee for the use of the money and would use the fee to repay the banks and insurance companies. The goal is for the fund to eventually become self-sustaining.

Ritchie said the most that could ever be "in play" would be $50 million, and no more than $20 million could come due in a given year.

The plan is modeled on ones being used in Oklahoma and Arkansas, Ritchie said.

"We have a really difficult time in this state supporting innovative entrepreneurs," Ritchie said. "I searched for nearly two years to find a model that would work for us with our constitution."

The legislation also would allow pharmaceutical and laboratory instrument manufacturers that invest at least $100 million and create at least 200 jobs that pay at least 150 percent of the state's per capita income to qualify to receive incentives.

The bill also would allow the state to match all private, foundation or federal money raised by research universities for qualifying projects. A qualifying project would be one tied to economic development, Ritchie said.

A total of $206 million would be available, and universities would compete for the funds.

"This will help stimulate the economy and bring more jobs to South Carolina," said Sen. John Hawkins, R-Spartanburg. "Job creation must be one of the top priorities. Instead of outsourcing, we need to keep the jobs in South Carolina."

Sen. Glenn Reese, D-Boiling Springs, and Sen. Harvey Peeler, R-Gaffney, also voted in favor of the proposal.

The House gave overwhelming support to the measure last week. The bill could end up on Sanford's desk as early as Tuesday.

Sanford has said all along that he supports the venture capital and life sciences portions of the bill. The add-ons -- such as changing the University of South Carolina Sumter from a two-year to a four-year school and creating a four-year culinary arts program at Trident Technical College -- are the sticking point.

"On numerous occasions, both publicly and privately, the governor has made his concerns regarding this legislation perfectly clear," said Sanford spokesman Will Folks. "His position hasn't changed."

Folks said Sanford had no problem discussing four-year status for USC Sumter on its own merits.

"The bottom line, though, is that this is a process problem that started with the USC Sumter amendment getting tacked on, and quite frankly the bill's weight has gotten heavier and heavier as it continued to move forward in that process."

If Sanford does veto the bill, he could be headed for a showdown with the General Assembly.

"This is an important piece of legislation," said House Speaker Pro Tem Doug Smith, R-Spartanburg. "Obviously, it's something we'll have to talk about. We don't take lightly the responsibility of trying to override our governor's veto."

Robert W. Dalton can be reached at 562-7274 or bob.dalton@shj.com.

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