(A) A fee agreement must contain the requirement that a fee in lieu of property tax be paid as follows:

1. (1) During the exemption period, the sponsor shall pay, or be responsible for payment, to the county the annual fee payment in connection with the economic development property which has been placed in service, in an amount not less than the property taxes that would be due on the economic development property if it were taxable but using:

   1. (a) an assessment ratio of not less than six percent, or if the project involves an enhanced investment, an assessment ratio of not less than four percent;

   2. (b) a millage rate as established, either:

      1. (i) by the county, which must not be lower than the cumulative property tax millage rate legally levied by or on behalf of all millage levying entities within which the project is to be located, which is the cumulative rate applicable on the thirtieth day of June preceding the calendar year in which the fee agreement is executed; or
      2. (ii) as provided under subsubitem (i), except that every fifth year the millage rate is allowed to increase or decrease in step with the average cumulative actual millage rate applicable to the project based upon the preceding five-year period; and
   3. (c) a fair market value for the economic development property. The fair market value of real property is determined by using the original income tax basis for South Carolina income tax purposes without regard to depreciation, but if real property is constructed for the fee or is purchased in an arm's length transaction, fair market value equals the original income tax basis. Otherwise, the department shall determine fair market value by appraisal. Fair market value for personal property is determined by using the original tax basis for South Carolina income tax purposes less depreciation allowable for property tax purposes, except that the investor is not entitled to extraordinary obsolescence.
2. (2) The fee calculation must be made so that the property, if taxable, is allowed all applicable property tax exemptions except the exemption allowed under Section 3(g) of Article X of the Constitution of this State and the exemption allowed pursuant to Section 12-37-220(B)(32) and (34).
3. (3) If the project subject to the fee agreement involves an investment of forty-five million dollars or more, or any higher minimum established by the county, the county and the sponsor may agree to pay the fees established in subsection (A)(1) based on an alternative payment method yielding a net present value of the fee schedule as calculated in subsection (A)(1) provided the sponsor agrees to a millage rate as established in subsection (A)(1)(b)(i). Net present value calculations must use a discount rate equivalent to the yield in effect for new or existing United States Treasury bonds of similar maturity as published during the month in which the fee agreement is executed. If no yield is available for the month in which the fee agreement is executed, the last published yield for the appropriate maturity available must be used. If there are no bonds of appropriate maturity available, bonds of different maturities may be averaged to obtain the appropriate maturity.