South Carolina Code of Regulations Chapter 68 - SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY
South Carolina Code of Regulations
Chapter 68 – South Carolina Jobs-Economic Development Authority (JEDA)
🔷 Overview
Chapter 68 of the South Carolina Code of Regulations contains the rules and administrative procedures governing the South Carolina Jobs-Economic Development Authority (JEDA). JEDA is a state-level financing authority created to support economic development, job creation, and public welfare by facilitating tax-exempt and taxable bond financing for qualifying projects.
The regulation provides a framework for:
The application and approval process for bond financing.
Eligibility requirements for borrowers and projects.
Oversight and post-issuance compliance.
The procedural relationship between JEDA, borrowers, and governmental bodies.
⚖️ Statutory Authority
JEDA operates under the South Carolina Jobs-Economic Development Authority Act, codified at S.C. Code Ann. §§ 41-43-10 et seq. The agency is governed by a board of directors appointed by the governor and has the power to issue bonds for eligible projects.
Chapter 68 is the regulatory implementation of this statute and outlines how JEDA executes its mission within legal and financial constraints.
🔑 Key Objectives of JEDA
Promote Economic Development
Facilitate financing for projects that create or retain jobs, attract investment, and promote public welfare.
Issue Tax-Exempt Bonds
Enable qualifying entities (e.g., nonprofit hospitals, educational institutions, manufacturers) to access lower-cost financing through tax-exempt municipal bonds.
Support Public-Private Partnerships
Encourage cooperation between the public and private sectors in building infrastructure and services that benefit communities.
📑 Key Provisions of Chapter 68
1. Eligible Borrowers
Nonprofit corporations (e.g., hospitals, schools, cultural institutions).
Manufacturing businesses seeking to expand or locate operations in South Carolina.
Educational institutions, including private colleges.
Public-private partnership projects.
To qualify, the entity must demonstrate the project’s economic benefit, job creation potential, and public purpose.
2. Eligible Projects
Examples of JEDA-financed projects include:
Construction or expansion of manufacturing plants.
Building or renovating hospital or healthcare facilities.
Development of affordable housing (under federal tax code compliance).
Upgrades to educational or research institutions.
Projects must comply with federal tax code requirements (especially for tax-exempt financing) and serve the public interest.
3. Bond Application Process
The borrower submits a formal application with details about the project, estimated costs, number of jobs created, etc.
JEDA staff reviews the application and conducts due diligence, including creditworthiness and legal compliance.
The JEDA Board votes to approve or deny the application.
If approved, bonds are issued and sold to investors; the borrower is responsible for repaying the bond debt.
4. Public Hearing Requirement (TEFRA Hearing)
For tax-exempt private activity bonds, a TEFRA hearing (Tax Equity and Fiscal Responsibility Act) is required.
The public must be notified, and the governor or other authorized official must give final approval.
5. Compliance and Reporting
Borrowers must provide annual compliance reports, including employment metrics and financial statements.
Noncompliance can lead to penalties, revocation of bond eligibility, or reporting to the IRS (if tax-exempt bonds are involved).
⚖️ Relevant Case Law
Although direct case law under Chapter 68 is limited due to the administrative nature of JEDA, several cases involving economic development financing and public-private partnerships in South Carolina illustrate key principles:
1. South Carolina Jobs-Economic Development Authority v. Key Project, Inc., Admin. Proceeding (Hypothetical)
Issue: Allegation that a nonprofit misrepresented its eligibility in the bond application.
Outcome: JEDA revoked bond approval after a compliance audit revealed misuse of funds and job creation targets not met.
Legal Significance: Reinforces that bond recipients must meet ongoing public benefit obligations or risk enforcement action.
2. City of Charleston v. JEDA, S.C. App. LEXIS 421 (Hypothetical)
Issue: City challenged a JEDA-approved bond issuance for a private facility in its jurisdiction.
Outcome: The court held that because the project served a public interest (education and job training), the financing was lawful.
Legal Significance: Validates JEDA’s discretion in approving projects with a demonstrable public benefit, even if privately operated.
3. Anderson Regional Hospital v. JEDA, S.C. Admin. Law Court (Hypothetical)
Issue: Dispute over bond proceeds used for non-authorized expansion purposes.
Outcome: ALJ ruled that bond covenants were violated; borrower was required to repay bonds and lost tax-exempt status.
Legal Significance: Emphasizes the importance of strict compliance with bond covenants and IRS tax-exempt rules.
🏛️ Governance and Oversight
JEDA is governed by a Board of Directors appointed by the Governor.
The Board reviews bond applications, conducts public hearings, and sets financing policy.
JEDA operates under the oversight of the South Carolina Department of Labor, Licensing and Regulation (LLR).
📌 Summary Table
| Aspect | Details |
|---|---|
| Regulatory Body | South Carolina Jobs-Economic Development Authority (JEDA) |
| Governing Law | S.C. Code Ann. §§ 41-43-10 et seq.; SC Code of Regulations Chapter 68 |
| Purpose | Promote job creation and economic development through financing |
| Eligible Projects | Manufacturing, nonprofit, healthcare, education, affordable housing |
| Bond Types | Tax-exempt and taxable revenue bonds |
| Approval Process | Application → Board Review → TEFRA Hearing (if needed) → Bond Issuance |
| Post-Issuance Duties | Annual reporting, job verification, financial compliance |
| Enforcement Tools | Revocation of bond approval, penalties, IRS reporting (for tax-exempt bonds) |
✅ Final Notes
JEDA is a non-taxpayer-supported entity—it does not lend state funds, but enables access to capital markets for eligible projects.
The financing provided by JEDA plays a critical role in South Carolina’s economic growth strategy, especially for nonprofits, manufacturers, and healthcare providers.
Compliance with federal tax code provisions, particularly for private activity bonds, is central to maintaining bond eligibility and tax-exempt status.
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