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					                                   South Carolina General Assembly
                                       117th Session, 2007-2008

S. 457

STATUS INFORMATION

General Bill
Sponsors: Senators Grooms, Thomas, Vaughn, McConnell, Bryant, Fair, Hawkins, Mescher, Ryberg,
Verdin, Knotts and Campsen
Document Path: l:\council\bills\ggs\22732sj07.doc
Companion/Similar bill(s): 3484

Introduced in the Senate on February 20, 2007
Currently residing in the Senate Committee on Finance

Summary: Educational Opportunity Scholarship Act


HISTORY OF LEGISLATIVE ACTIONS

    Date   Body Action Description with journal page number
 2/20/2007 Senate Introduced and read first time SJ-3
 2/20/2007 Senate Referred to Committee on Finance SJ-3

View the latest legislative information at the LPITS web site


VERSIONS OF THIS BILL

2/20/2007
 1
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 8
 9                       A BILL
10
11   TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA,
12   1976, BY ENACTING THE “SOUTH CAROLINA
13   EDUCATIONAL OPPORTUNITY SCHOLARSHIP ACT” BY
14   ADDING CHAPTER 18 TO TITLE 12 SO AS TO PROVIDE A
15   CREDIT FOR CERTAIN TAXES FOR TUITION PAID TO
16   PUBLIC OR INDEPENDENT SCHOOLS AND FOR
17   CONTRIBUTIONS    TO     THE     RURAL     SCHOOL
18   INFRASTRUCTURE FUND, TO PROVIDE FOR THE
19   CREATION OF THE RURAL SCHOOL INFRASTRUCTURE
20   AUTHORITY AND ITS GOVERNANCE AND PROVIDE HOW
21   CONTRIBUTIONS TO THE AUTHORITY MUST BE USED,
22   TO DEFINE CERTAIN TERMS, TO PROVIDE FOR
23   REPORTING    AND   ACCOUNTABILITY        OF   THE
24   IMPLEMENTATION OF THIS CHAPTER, TO AUTHORIZE
25   THE AUTHORITY TO PROVIDE LOANS AND OTHER
26   FINANCIAL ASSISTANCE TO SCHOOL DISTRICTS TO
27   FINANCE CAPITAL PROJECTS, TO ALLOW STATE
28   APPROPRIATIONS, GRANTS, LOAN REPAYMENTS, AND
29   OTHER AVAILABLE AMOUNTS TO BE CREDITED TO THE
30   FUND OF THE AUTHORITY, TO AUTHORIZE LENDING TO
31   AND BORROWING BY SCHOOL DISTRICTS THROUGH
32   THE AUTHORITY, AND TO AUTHORIZE THE ISSUANCE
33   OF GENERAL OBLIGATION BONDS BY THE AUTHORITY
34   TO BE USED FOR ITS STATED PURPOSES; BY ADDING
35   ARTICLE 6 TO CHAPTER 63, TITLE 59 SO AS TO ALLOW
36   CERTAIN STUDENTS TO USE AN EDUCATIONAL
37   OPPORTUNITY SCHOLARSHIP EQUAL TO A PORTION OF
38   THE AVERAGE STATE PER PUPIL EXPENDITURE TO
39   TRANSFER FROM A FAILING PUBLIC SCHOOL TO
40   ANOTHER PUBLIC SCHOOL OR TO AN INDEPENDENT
41   SCHOOL, TO PROVIDE FOR AN ADDITIONAL AWARD
42   FOR TRANSPORTATION OF THE TRANSFERRING

     [457]                   1
 1   STUDENT, TO DEFINE CERTAIN TERMS, TO PROVIDE
 2   THE DUTIES OF A FAILING PUBLIC SCHOOL AND THE
 3   DUTIES AND RIGHTS OF THE PARENT AND STUDENT
 4   WHO WISHES TO TRANSFER, AND TO PROVIDE FOR
 5   REPORTING, ACCOUNTABILITY, AND CONDUCTING OF
 6   EXAMINATIONS AND INVESTIGATIONS.
 7
 8   Be it enacted by the General Assembly of the State of South
 9   Carolina:
10
11   SECTION 1. This act may be cited as the “South Carolina
12   Educational Opportunity Scholarship Act”.
13
14   SECTION 2. The purpose of this act is to:
15     (1) put parents in charge of their children‟s education;
16     (2) assist parents whose children are zoned to attend
17   unsatisfactory schools;
18     (3) assist parents who have special needs children;
19     (4) expand educational opportunities for children of families in
20   poverty;
21     (5) restore parental input in education; and
22     (6) improve public school performance.
23
24   SECTION 3. Title 12 of the 1976 Code is amended by adding:
25
26                            “CHAPTER 18
27
28                  Educational Opportunity Tax Credit
29
30                               Article 1
31
32                          General Provisions
33
34     Section 12-18-30. As used in this chapter, unless otherwise
35   required by the context:
36     (1) „Department‟ means the South Carolina Department of
37   Revenue.
38     (2) „Independent school‟ means a school, other than a public
39   school, at which the compulsory attendance requirements of
40   Section 59-56-10 may be met and that does not discriminate based
41   on the grounds of race, color, or national origin. „Independent
42   school‟ includes home schools as provided in Article 1, Chapter
43   65, Title 59.

     [457]                           2
 1      (3) „Public school‟ means a public school as defined in Section
 2   59-1-120.
 3      (4) „Qualifying student‟ means an individual:
 4         (a) who is:
 5            ( i) enrolled at an independent school as a full-time
 6   student, as determined by the school, for which the school has a
 7   release of information form;
 8            ( ii) taught at home pursuant to Article 1, Chapter 65, Title
 9   59; or
10            (iii) a resident of this State, and, if enrolled in a public
11   school, is not a resident of the school district operating that public
12   school;
13         (b) who is in kindergarten through grade twelve; and
14         (c) who is not receiving a scholarship pursuant to Article 6,
15   Chapter 63, Title 59.
16      A student who is determined by a school psychologist to be
17   physically or mentally handicapped according to the definitions in
18   Section 59-21-510 is also considered a „qualifying student‟
19   pursuant to this item.
20      Once a student becomes a „qualifying student‟, the student is
21   eligible for the tax credit program until he graduates from high
22   school.
23      (5) „Receipt‟ means a document that a school issues to the
24   person that makes a tuition payment on behalf of a qualifying
25   student. The department shall develop the form of the document,
26   the content of which must be limited to and include, the name and
27   address of the school; the name, address and social security
28   number of the qualifying student on whose behalf the tuition was
29   paid; the name of the person paying the tuition; the names of all
30   other persons who have paid tuition, in chronological order, during
31   the then current calendar year on behalf of the qualifying student
32   prior to the payment for which the receipt is being issued and
33   including the total tuition paid by the named person; and the date
34   and amount of tuition paid and the aggregate amount of tuition
35   paid for the qualifying student. For a student taught at home
36   pursuant to Article 1, Chapter 65, Title 59, „receipt‟ means a
37   document issued by the entity receiving a payment for tuition,
38   which contains the name of the entity receiving the payment; the
39   identity of the goods or services purchased; the date and amount of
40   tuition paid; and, if the receipt is for personal services, the person‟s
41   taxpayer identification number.
42      (6) „Release of information form‟ means a form developed by a
43   school that states that a parent or the legal guardian of the

     [457]                              3
 1   qualifying student consents to the release of the information
 2   contained in the receipt and is consistent with the requirements of
 3   20 U.S.C. Section 1232g, Family Educational Rights and Privacy
 4   Act of 1974.
 5      (7) „School‟ means a public school or independent school.
 6      (8) „State‟ means the government of the State of South
 7   Carolina.
 8      (9) „Tuition‟ means the amount charged for attending a public
 9   school when the student is not a resident of the school district or
10   for attending an independent school. „Tuition‟ includes fees
11   necessary for attending the respective school including, but not
12   limited to, enrollment fees and transportation fees. For students
13   taught at home pursuant to Article 1, Chapter 65, Title 59, „tuition‟
14   means expenses incurred for tutors, textbooks, school supplies,
15   computers, including hardware and software, fees for membership
16   in an association that sets the academic standards for the student‟s
17   home schooling program, and academic lessons including, but not
18   limited to, science, math, music, and art. Expenses for tutors or
19   academic lessons may be included in „tuition‟ only if the person
20   providing the tutoring or academic lessons is a person other than
21   the student‟s parent or legal guardian and who meets the
22   requirements for providing the service as set by the
23   standard-setting entity for that student‟s home school program.
24   „Tuition‟ does not include athletic fees.
25
26      Section 12-18-40. The department may promulgate regulations
27   to aid in the performance of its duties pursuant to this chapter;
28   however, the department‟s power does not extend to matters of
29   school governance, curriculum, hiring or firing, or religious beliefs
30   or practices.
31
32     Section 12-18-50. The department may conduct examinations
33   and investigations whenever it believes that the provisions of this
34   chapter have been evaded or violated in any manner. All powers
35   possessed by the department as provided in Title 12 to conduct
36   examinations and investigations apply to examinations and
37   investigations conducted pursuant to this section.
38
39      Section 12-18-60. If a student wants to transfer to a different
40   school district, the board of trustees of the school district to which
41   the student wishes to transfer shall approve or disapprove the
42   transfer. If the board of trustees approves the transfer, the board
43   may estimate the tuition to charge the transferring student.

     [457]                             4
 1
 2      Section 12-18-70. The annual determinations required in this
 3   chapter to be made by the budget office must be used by the
 4   department to set the limits on the amount of credit that may be
 5   claimed pursuant to Section 12-18-310 for the tax year beginning
 6   after December thirty-first immediately following the
 7   determinations.
 8
 9                                 Article 3
10
11                   Educational Opportunity Tax Credit
12
13      Section 12-18-310. (A) A person is allowed a tax credit for
14   tuition paid for qualifying students to attend a school. The credit
15   may be applied against the person‟s liability for taxes imposed
16   pursuant to Chapter 6 of this title. Limitations upon the total
17   amount of liability for taxes that can be reduced by the use of
18   another credit allowed for that tax must be computed after the
19   credit allowed by this section is used to reduce a tax liability
20   pursuant to Chapter 6 of this title. The credit may be claimed only
21   by the person who actually paid the tuition. More than one person
22   may claim a credit for the payment of a portion of the qualifying
23   student‟s total tuition but only if the person actually paid the
24   portion and the total credit taken by all persons does not exceed, in
25   the aggregate, the limits set in this section. If the person‟s receipt
26   indicates that the aggregate tuition paid by all persons for the
27   qualifying student exceeds the credit that may be claimed pursuant
28   to this article, then that person may claim the credit only to the
29   extent that the person‟s tuition payment does not exceed the
30   allowable credit. No credit may be claimed by a person without a
31   receipt. The credit is nonrefundable. A credit claimed pursuant to
32   this section, but not used in a taxable year, may be carried forward
33   for five years from the taxable year in which the credit is earned by
34   the taxpayer. Credits that are carried forward must be used in the
35   order earned.
36      (B)(1) The credit claimed for each qualifying student pursuant
37   to this article is one thousand dollars indexed each year to the
38   consumer price index.
39         (2) Notwithstanding the provisions of item (1), the credit
40   claimed for each physically or mentally handicapped student
41   pursuant to this article may not exceed the lesser of the:
42           (a) actual tuition paid; or


     [457]                             5
 1           (b) appropriate pupil classification weighting for that
 2   student pursuant to Section 59-20-40 multiplied by seventy-five
 3   percent of the projected state per pupil cost as promulgated by the
 4   office of research and statistics.
 5        (3) Notwithstanding the provisions of items (1) and (2), the
 6   credit claimed for a qualifying student who is taught at home
 7   pursuant to Article 1, Chapter 65, Title 59 may not exceed the
 8   lesser of the amount provided in item (1) or item (2) or five
 9   hundred dollars indexed each year to the consumer price index.
10        (C) If a qualifying student‟s enrollment in an independent
11   school is terminated before the end of the school year, the
12   independent school shall refund to the tuition payers any tuition
13   paid that is applicable to a semester or term beyond the semester or
14   term during which the qualifying student‟s enrollment is
15   terminated. At the time of making the refund, the independent
16   school shall issue a receipt reflecting the date, amount, and payee
17   for each refund and shall provide a copy of the receipt to the
18   department.
19
20    Section 12-18-320. The credit claimed pursuant to this article
21   may not reduce the amount of funds distributed to school districts.
22
23                                Article 6
24
25                 Rural School Infrastructure Tax Credit
26
27      Section 12-18-610. A person is allowed a tax credit for a
28   contribution to the Rural School Infrastructure Fund. The credit
29   may be applied against the person‟s liability for taxes imposed
30   pursuant to Chapter 6 of this title. Limitations upon the total
31   amount of liability for taxes that can be reduced by the use of
32   another credit allowed for that tax must be computed after the
33   credit allowed by this section is used to reduce a tax liability
34   pursuant to Chapter 6 of this title. The credit may be claimed only
35   by the person who actually made the contribution except that, if
36   the credit is earned by one member of a controlled group of
37   corporations, the credit may be used and applied by that member
38   and by another member of the controlled group of corporations.
39   As used in this article, „Controlled Group of Corporations‟ has the
40   same meaning as provided in Section 12-6-3480(5) and „person‟
41   has the same meaning as provided in Section 12-2-20. The credit
42   is nonrefundable. A credit claimed pursuant to this section, but not
43   used in a taxable year, may be carried forward for five years from

     [457]                            6
 1   the taxable year in which the credit is earned by the taxpayer.
 2   Credits that are carried forward must be used in the order earned.
 3
 4     Section 12-18-620. The Rural School Infrastructure Fund
 5   receiving contributions for which the person claims a credit
 6   pursuant to this article must segregate the contributions from other
 7   funds of the school district.
 8
 9      Section 12-18-630. A person claiming a tax credit pursuant to
10   this article may claim:
11         (1) seventy-five percent of the contribution up to two
12   hundred thousand dollars; or
13         (2) ninety percent of the contribution if the person
14   contributed for more than one year.
15
16     Section 12-18-640. The total amount of tax credits claimed each
17   year pursuant to this article is thirty million dollars.
18
19                                Article 8
20
21                     Rural School Infrastructure Act
22
23                              Subarticle 1
24
25                 Rural School Infrastructure Authority
26
27     Section 12-18-810. (A) The Rural School Infrastructure
28   Authority is created as a body politic and corporate to provide
29   assistance to failing schools. As used in this article, „failing
30   school‟ means a school that receives an absolute rating of below
31   average or unsatisfactory on its most recent report card and is
32   located in a district where at least sixty percent of the students
33   qualify for free or reduced-price lunch.
34     (B) The Rural School Infrastructure Authority shall establish
35   and maintain the Rural School Infrastructure Fund to provide
36   bonds to failing schools for capital projects. Contributions to the
37   Rural School Infrastructure Fund, which qualify for the tax credit
38   provided in Article 6 of this chapter, must only be used for the
39   purpose of issuing bonds for capital projects to failing schools.
40
41      Section 12-18-815. As used in this article unless the context
42   clearly indicates otherwise:


     [457]                            7
 1      (1) „Authority‟ means the Rural School Infrastructure
 2   Authority.
 3      (2) „Board‟ means the board of directors of the authority.
 4      (3) „Bonds or school infrastructure bonds‟ means bonds as
 5   authorized by this article.
 6      (4) „Eligible cost‟ means as applied to a qualified project to be
 7   financed from the Rural School Infrastructure Fund, the costs that
 8   are permitted under applicable laws, requirements, procedures, and
 9   guidelines in regard to establishing, operating, and providing
10   assistance from the authority.
11      (5) „Eligible project‟ means a capital project of a school
12   district.
13      (6) „Financing agreement‟ means any agreement entered into
14   between the authority and a school district pertaining to a loan or
15   other financial assistance. This agreement may contain, in addition
16   to financial terms, provisions relating to the regulation and
17   supervision of a qualified project, or other provisions as the board
18   may determine. The term „financing agreement‟ includes, without
19   limitation, a loan agreement, trust indenture, security agreement,
20   reimbursement agreement, guarantee agreement, bond or note,
21   ordinance or resolution, or similar instrument.
22      (7) „Governing body of a school district‟ means the board of
23   trustees of a school district, a county board of education, or the
24   entity responsible for administering the school district.
25      (8) „Loan‟ means an obligation subject to repayment which is
26   provided by the authority to a qualified school district borrower for
27   all or a part of the eligible cost of a qualified project. A loan may
28   be disbursed in anticipation of reimbursement for or direct
29   payment of eligible costs of a qualified project.
30      (9) „Loan obligation‟ means a bond, note, or other evidence of
31   an obligation issued by a qualified borrower.
32      (10) „Other financial assistance‟ means, but is not limited to,
33   grants, contributions, credit enhancement, capital or debt reserves
34   for bonds or debt instrument financing, interest rate subsidies,
35   provision of letters of credit and credit instruments, provision of
36   bond or other debt financing instrument security, and other lawful
37   forms of financing and methods of leveraging funds that are
38   approved by the board.
39      (11) „Qualified borrower‟ means a school district that has been
40   authorized for a qualified project.
41      (12) „Qualified project‟ means an eligible project that has been
42   selected by the authority to receive a loan or other financial
43   assistance from the authority to defray an eligible cost.

     [457]                             8
 1     (13) „Revenues‟ means, when used with respect to the authority,
 2   any receipts, fees, income, or other payments received or to be
 3   received by the authority including, without limitation, receipts
 4   and other payments deposited in the Rural School Infrastructure
 5   Fund and investment earnings on the Rural School Infrastructure
 6   Fund.
 7
 8      Section 12-18-820. (A) The Rural School Infrastructure
 9   Authority must be governed by a nine-member board composed of
10   three members appointed by each of the following:
11         (1) Governor;
12         (2) Speaker of the House of Representatives; and
13         (3) President Pro Tempore of the Senate.
14      (B) Members shall serve terms of four years, except that of the
15   initial members, one member appointed by the Governor, two
16   members appointed by the Speaker of the House of
17   Representatives, and two members appointed by the President Pro
18   Tempore of the Senate shall serve terms of two years.
19      (C) The board shall elect a chairman from the members who
20   comprise the board and other officers as necessary.
21
22      Section 12-18-830. (A) In addition to the powers contained
23   elsewhere in this article, the authority has all power necessary,
24   useful, or appropriate to fund, operate, and administer the
25   authority, and to perform its other functions including, but not
26   limited to, the power to:
27        (1) have perpetual succession;
28        (2) adopt, promulgate, amend, and repeal bylaws, not
29   inconsistent with provisions in this article for the administration of
30   the authority‟s affairs and the implementation of its functions
31   including the right of the board to select qualifying projects and to
32   provide loans and other financial assistance;
33        (3) sue and be sued in its own name;
34        (4) have a seal and alter it at its pleasure, although the failure
35   to affix the seal does not affect the validity of an instrument
36   executed on behalf of the authority;
37        (5) make loans to qualified borrowers to finance the eligible
38   costs of qualified projects and to acquire, hold, and sell loan
39   obligations at prices and in a manner as the board determines
40   advisable;
41        (6) provide qualified borrowers with other financial
42   assistance necessary to defray eligible costs of a qualified project;


     [457]                              9
 1        (7) enter into contracts, arrangements, and agreements with
 2   qualified borrowers and other persons and execute and deliver all
 3   financing agreements and other instruments necessary or
 4   convenient to the exercise of the powers granted in this article;
 5        (8) enter into agreements with school districts of this State
 6   for the purpose of planning and providing for the financing of
 7   qualified projects;
 8        (9) establish policies and procedures for the making and
 9   administering of loans and other financial assistance, and establish
10   fiscal controls and accounting procedures to ensure proper
11   accounting and reporting by the authority and school districts;
12        (10) acquire by purchase, lease, donation, or other lawful
13   means and sell, convey, pledge, lease, exchange, transfer, and
14   dispose of all or any part of its properties and assets of every kind
15   and character or any interest in it to further the public purpose of
16   the authority;
17        (11) procure insurance, guarantees, letters of credit, and other
18   forms of collateral or security or credit support from any public or
19   private entity, including any department, agency, or
20   instrumentality of this State, for the payment of any bonds issued
21   by it, including the power to pay premiums or fees on any
22   insurance, guarantees, letters of credit, and other forms of
23   collateral or security or credit support;
24        (12) collect or authorize the trustee under any trust indenture
25   securing any bonds to collect amounts due under any loan
26   obligations owned by it, including taking the action required to
27   obtain payment of any sums in default;
28        (13) unless restricted under any agreement with holders of
29   bonds, consent to any modification with respect to the rate of
30   interest, time, and payment of any installment of principal or
31   interest, or any other term of any loan obligations owned by it;
32        (14) borrow money through the issuance of bonds and other
33   forms of indebtedness as provided in this article;
34        (15) expend funds to obtain accounting, management, legal,
35   financial consulting, and other professional services necessary to
36   the operations of the authority;
37        (16) expend funds credited to the authority as the board
38   determines necessary for the costs of administering the operations
39   of the authority;
40        (17) establish advisory committees as the board determines
41   appropriate, which may include individuals from the private sector
42   with banking and financial expertise;


     [457]                            10
 1        (18) procure insurance against losses in connection with its
 2   property, assets, or activities including insurance against liability
 3   for its acts or the acts of its employees or agents or to establish
 4   cash reserves to enable it to act as a self-insurer against any and all
 5   such losses;
 6        (19) collect fees and charges in connection with its loans or
 7   other financial assistance;
 8        (20) apply for, receive and accept from any source, aid,
 9   grants, and contributions of money, property, labor, or other things
10   of value to be used to carry out the purposes of this article subject
11   to the conditions upon which the aid, grants, or contributions are
12   made;
13        (21) enter into contracts or agreements for the servicing and
14   processing of financial agreements; and
15        (22) do all other things necessary or convenient to exercise
16   powers granted or reasonably implied by this article.
17      (B) The authority is subject to the provisions of Article 1,
18   Chapter 23 of Title 1, the Administrative Procedures Act.
19
20      Section 12-18-840. (A) The following sources may be used to
21   capitalize the Rural School Infrastructure Fund and for the
22   authority to carry out its purposes:
23         (1) state general fund appropriations made by the General
24   Assembly;
25         (2) federal funds made available to the State;
26         (3) federal funds made available to the State for the
27   authority;
28         (4) contributions and donations from government units,
29   private entities, and any other source as may become available to
30   the authority;
31         (5) all monies paid or credited to the authority, by contract
32   or otherwise, payments of principal and interest on loans or other
33   financial assistance made from the authority, and interest earnings
34   which may accrue from the investment or reinvestment of the
35   authority‟s monies;
36         (6) proceeds from the issuance of bonds as provided in this
37   article; and
38         (7) other lawful sources as determined appropriate by the
39   board.
40
41     Section 12-18-850. Earnings on balances in the Rural School
42   Infrastructure Fund must be credited and invested as provided by
43   law. Earnings must be credited to the Rural School Infrastructure

     [457]                             11
 1   Fund. The authority may establish accounts and subaccounts
 2   within the Rural School Infrastructure Fund as considered
 3   desirable to effectuate the purposes of this article, or to meet the
 4   requirements of any state or federal program. All accounts must
 5   be held in trust by the State Treasurer.
 6
 7
 8     Section 12-18-860. (A) The authority may provide loans and
 9   other financial assistance to a school district to pay for all or part
10   of the eligible cost of a qualified project. Before providing a loan
11   or other financial assistance to a qualified borrower, the authority
12   must obtain the review and approval of the Joint Bond Review
13   Committee. The term of the loan or other financial assistance must
14   not exceed the useful life of the project. The authority may require
15   the school district to enter into a financing agreement in
16   connection with its loan obligation or other financial assistance.
17   The authority shall determine the form and content of loan
18   applications, financing agreements, and loan obligations including
19   the term and rate or rates of interest on a financing agreement.
20     (B) The board shall determine which projects are eligible
21   projects and then select from among the eligible projects those
22   qualified to receive from the authority a loan or other financial
23   assistance.
24
25      Section 12-18-870. (A) School districts are authorized to obtain
26   loans or other financial assistance from the authority through
27   financing agreements. Qualified borrowers entering into financing
28   agreements and issuing loan obligations to the authority may
29   perform any acts, take any action, adopt any proceedings, and
30   make and carry out any contracts or agreements with the authority
31   as may be agreed to by the authority and any qualified borrower
32   for the carrying out of the purposes contemplated by this article.
33      (B) In addition to the authorizations contained in this article, all
34   other statutes or provisions permitting school districts to borrow
35   money may be utilized by any school district in obtaining a loan or
36   other financial assistance from the authority to the extent
37   determined necessary or useful by the school district in connection
38   with any financing agreement and the issuance, securing, or sale of
39   loan obligations to the authority.
40      (C) A school district may receive, apply, pledge, assign, and
41   grant a security interest in revenues or ad valorem taxes, to secure
42   its obligations as provided in this article, to meet its obligations


     [457]                             12
 1   under a financing agreement, or to provide for the construction and
 2   improving of a qualified project.
 3
 4     Section 12-18-880. The authority is performing an essential
 5   governmental function in the exercise of the powers conferred
 6   upon it and is not required to pay taxes or assessments upon
 7   property or upon its operations or the income from them, or taxes
 8   or assessments upon property or loan obligations acquired or used
 9   by the authority or upon the income from them.
10
11     Section 12-18-890. (A) If a school district fails to collect and
12   remit in full all amounts due to the authority on the date these
13   amounts are due under the terms of any note or other obligation of
14   the school district, the authority shall notify the State Treasurer
15   who, subject to the withholding of amounts under Article X,
16   Section 15 of the Constitution, shall withhold all or a portion of the
17   funds of the State and all funds administered by the State allotted
18   or appropriated to the school district and apply an amount
19   necessary to the payment of the amount due.
20     (B) Nothing contained in this section mandates the withholding
21   of funds allocated to a school district which would violate
22   contracts to which the State is a party or judgments of a court
23   binding on the State.
24
25      Section 12-18-900. Neither the authority nor any officer,
26   employee, or committee of the authority acting on behalf of it,
27   while acting within the scope of this authority, is subject to any
28   liability resulting from carrying out any of the powers given in this
29   article.
30
31     Section 12-18-910. Notice, proceeding, or publication, except
32   those required in this article, are not necessary to the performance
33   of any act authorized in this article nor is any act of the authority
34   subject to any referendum.
35
36     Section 12-18-920. All money of the authority and in the Rural
37   School Infrastructure Fund, except as authorized by law or
38   provided in this article, must be deposited with and invested by the
39   State Treasurer. Funds of the authority not needed for immediate
40   use or disbursement may be invested by the State Treasurer in
41   obligations or securities that are declared to be legal obligations by
42   the provisions of Section 11-9-660.
43

     [457]                             13
 1      Section 12-18-930. Following the close of each state fiscal year,
 2   the authority shall submit an annual report of its activities for the
 3   preceding year to the Governor and to the General Assembly. An
 4   independent certified public accountant shall perform an audit of
 5   the books and accounts of the authority at least once in each state
 6   fiscal year.
 7
 8     Section 12-18-940. (A) This article, being for the welfare of this
 9   State and its inhabitants, must be liberally construed to effect the
10   purposes specified in this article. However, nothing in this article
11   must be construed as affecting any proceeding, notice, or approval
12   required by law for the issuance by a school district of the loan
13   obligations, instruments, or security for loan obligations.
14     (B) Where the governing body of a school district does not
15   have unlimited fiscal autonomy granting them the right to impose
16   ad valorem property taxes for general operating school purposes
17   without limitation, the public entity, if applicable, which has the
18   authority to approve ad valorem property taxes for general
19   operating school purposes without limitation must also approve a
20   loan or security obligation provided by this article.
21
22      Section 12-18-950. If any provision of this article is held or
23   determined to be unconstitutional, invalid, or otherwise
24   unenforceable by a court of competent jurisdiction, it is the
25   intention of the General Assembly that the provision is severable
26   from the remaining provisions of the article and that the holding
27   does not invalidate or render unenforceable another provision of
28   the article.
29
30                               Subarticle 3
31
32           Rural School Infrastructure General Obligation Bonds
33
34     Section 12-18-1010. As used in this subarticle:
35     (1) „Board‟ means the board of directors of the authority.
36     (2) „State board‟ means the State Budget and Control Board.
37     (3) „School infrastructure bonds‟ means all general obligation
38   bonds of this State designated as school infrastructure bonds,
39   which are now outstanding and which may hereafter be issued
40   pursuant to the authorizations of this subarticle.
41
42    Section 12-18-1020. Whenever it shall become necessary that
43   monies be raised for qualified projects, including monies to be

     [457]                            14
 1   used to refund any school infrastructure bonds then outstanding,
 2   the board may make a request to the state board for the issuance of
 3   school infrastructure bonds pursuant to this article. This request
 4   may be in the form of a resolution adopted at any regular or special
 5   meeting of the board. The request shall set forth on the face
 6   thereof or by schedules attached thereto:
 7      (1) the amount then required for qualified projects;
 8      (2) a tentative time schedule setting forth the period of time
 9   during which the sum requested will be expended; and
10      (3) a debt service table showing the annual principal and
11   interest requirements for all the school infrastructure bonds then
12   outstanding.
13
14      Section 12-18-1030. Following the receipt of any request
15   pursuant to Section 12-18-1020, the state board shall review the
16   same and it shall approve the request, by resolution duly adopted,
17   to effect the issuance of school infrastructure bonds, or pending the
18   issuance thereof, effect the issuance of bond anticipation notes.
19
20      Section 12-18-1040. The issuance of school infrastructure
21   bonds is subject to the limitations contained in Article X, Section
22   13(6)(c) of the Constitution of this State.          These school
23   infrastructure bonds so issued shall be considered general
24   obligation debt of the State of South Carolina under Section 13 of
25   Article X of the Constitution of this State and not of the school
26   district under Section 15 of Article X of the Constitution of this
27   State. Within such limitations, rural school infrastructure bonds
28   may be issued for qualified projects or to refund school
29   infrastructure bonds from time to time under the conditions
30   prescribed by this article. The review and approval of the Joint
31   Bond Review Committee must be obtained prior to the issuance of
32   any school infrastructure bonds. No school infrastructure bonds
33   may be issued unless the board has a source of revenues to pay the
34   principal and interest on the bonds.
35
36      Section 12-18-1050. For the payment of the principal of and
37   interest on all school infrastructure bonds, whether or not
38   outstanding or hereafter issued, as they come due, there is pledged
39   the full faith, credit, and taxing power of this State, and in
40   accordance with the provisions of Article X, Section 13(4) of the
41   Constitution of this State, the General Assembly authorizes the
42   allocation on an annual basis of sufficient tax revenues to provide
43   for the punctual payment of the principal and interest on school

     [457]                            15
 1   infrastructure bonds. In addition to the full faith, credit, and taxing
 2   power, there also is pledged such revenue as may be available to
 3   the board, and the State Treasurer is authorized to use the revenue
 4   when pledged, without further action of the board, for the payment
 5   of the principal and interest on school infrastructure bonds as the
 6   bonds respectively mature. If the revenues so pledged prove
 7   insufficient to meet the payments of the interest on and principal of
 8   the school infrastructure bonds in the fiscal year, then the State
 9   Treasurer shall set aside from the general tax revenues received in
10   the fiscal year so much of the general tax revenues as are needed
11   for the purpose and shall apply these revenues to the punctual
12   payment of the interest on and principal of school infrastructure
13   bonds due or to become due in the fiscal year.
14
15      Section 12-18-1060. The board is authorized to request the
16   state board to issue school infrastructure bonds. In order to effect
17   the issuance of bonds pursuant to this article, the state board may
18   adopt a resolution providing for the issuance of school
19   infrastructure bonds, upon written request by the board, and may
20   transmit a certified copy thereof to the Governor and to the State
21   Treasurer, with the request that they issue and deliver school
22   infrastructure bonds in accordance with the terms and conditions of
23   such resolution. This resolution must set forth:
24      (1) the amount, denomination, and numbering of school
25   infrastructure bonds to be issued;
26      (2) the date as of which the same shall be issued;
27      (3) the maturity schedule for the retirement of the school
28   infrastructure bonds;
29      (4) the redemption provisions, if any, applicable to the bonds;
30      (5) the maximum rate or rates of interest the bonds shall bear;
31      (6) the purposes for which the bonds are to be issued;
32      (7) the occasion on which bids must be received for the sale of
33   the bonds;
34      (8) the form of advertisement of sale;
35      (9) the form of the bonds of the particular issue; and
36      (10) other matters as may be considered necessary in order to
37   effect the sale, issuance, and delivery thereof.
38
39     Section 12-18-1070. Following receipt of a certified copy of
40   the resolution of the state board, the Governor and State Treasurer
41   shall issue school infrastructure bonds in accordance with the
42   provisions of the resolution of the state board.
43

     [457]                             16
 1      Section 12-18-1080. School infrastructure bonds must be
 2   issued in the form, in the denominations, and with such provisions
 3   as to time, place, or places and medium of payment as may be
 4   determined by the state board, subject to the provisions of this
 5   article.
 6
 7      Section 12-18-1090. School infrastructure bonds must be
 8   issued as fully registered bonds with both principal and interest
 9   thereof made payable only to the registered holder. The fully
10   registered bonds are subject to transfer under such conditions as
11   the state board prescribes.
12
13      Section 12-18-1100. School infrastructure bonds shall bear
14   interest, payable on such occasions as shall be prescribed not more
15   than thirty years after such date. The installments or series may be
16   equal or unequal in amount. School infrastructure bonds, in the
17   discretion of the state board, may be made subject to redemption at
18   par and accrued interest, plus such redemption premium as it shall
19   approve and on such occasions as it may prescribe. School
20   infrastructure bonds are not redeemable before maturity unless
21   they contain a statement to that effect.
22
23      Section 12-18-1110. All school infrastructure bonds issued
24   under this article, and the interest thereon, are exempt from all
25   state, county, municipal, school district, and other taxes or
26   assessments, direct or indirect, general or special, imposed by this
27   State, whether imposed for the purpose of general revenue or
28   otherwise, except inheritance, estate, or transfer taxes.
29
30      Section 12-18-1120. School infrastructure bonds must be sold
31   by the Governor and the State Treasurer upon sealed proposals,
32   after publication of notice of the sale one or more times at least
33   seven days before the sale, in a newspaper of general circulation in
34   the State and also in a financial paper published in New York City
35   which regularly publishes notices of sale of state or municipal
36   bonds. The bonds must be awarded to the bidder offering to
37   purchase the school infrastructure bonds at the lowest net interest
38   cost to the State at a price of not less than ninety-nine percent of
39   par and accrued interest to the date of delivery, but the right is
40   reserved to reject all bids and to readvertise the bonds for sale and
41   to waive technicalities in the bidding.
42


     [457]                            17
 1      Section 12-18-1130. The proceeds derived from the sale of
 2   school infrastructure bonds must be applied only to the purposes
 3   set forth in the resolution of the state board pursuant to which the
 4   bonds are issued.”
 5
 6   SECTION 4. Chapter 63, Title 59 of the 1976 Code is amended
 7   by adding:
 8
 9                               “Article 6
10
11                  Educational Opportunity Scholarship
12
13      Section 59-63-610. (A) As used in this article:
14        (1) „Failing public school‟ means a public school in the State
15   that has received a rating of „below average‟ or „unsatisfactory‟ as
16   its absolute grade on its most recent annual report card under the
17   education accountability act.
18        (2) „Parent‟ means the natural or adoptive parent or legal
19   guardian of a child.
20        (3) „Independent school‟ means a school, other than a public
21   school, at which the compulsory attendance requirements of
22   Section 59-56-10 may be met and that does not discriminate based
23   on the grounds of race, color, or national origin. „Independent
24   school‟ includes home schools as provided in Article 1, Chapter
25   65, Title 59.
26        (4) „Public school‟ means a public school in the State as
27   defined in Section 59-1-120.
28      (B) This article only applies to a student:
29        (1) whose household income is less than two hundred
30   percent of the federal poverty rate; or
31        (2) who is determined by a school psychologist to be
32   physically or mentally handicapped according to the definitions in
33   Section 59-21-510.
34
35      Section 59-63-620. (A) A student is eligible to transfer to a
36   passing public school or an independent school if the student:
37        (1) has spent the prior school year in attendance at a failing
38   public school;
39        (2) attended another public school and has been assigned to
40   attend a failing public school;
41        (3) is entering kindergarten or first grade and has been
42   assigned to a failing public school;
43        (4) resides in an area zoned for a failing school; or

     [457]                            18
 1        (5) is determined by a school psychologist to be physically
 2   or mentally handicapped according to the definitions in Section
 3   59-21-510.
 4     (B) A student who meets the criteria in subsection (A) may
 5   contact the Department of Education for a list of independent
 6   schools and public schools.
 7
 8      Section 59-63-625. (A) If a student meets the criteria in Section
 9   59-63-620 and chooses to transfer from a failing public school:
10         (1) to another public school in his resident district but not in
11   his attendance area, the district shall adjust monetary differences
12   between the schools;
13         (2) to another public school outside his resident district and
14   if the receiving district accepts the transfer student, his resident
15   school district shall reimburse that district for the cost of his
16   attendance equal to seventy-five percent of the projected per pupil
17   cost as promulgated by the Office of Research and Statistics; or
18         (3) to an independent school, the Department of Education
19   shall issue a check to the parents or guardians and the independent
20   school they select for the lesser of four thousand five hundred
21   dollars indexed each year to the consumer price index or the cost
22   of tuition fees at the independent school.
23      (B) Notwithstanding subsection (A) of this section or Section
24   59-63-620, if the student is determined by a school psychologist to
25   be physically or mentally handicapped and the special needs
26   student chooses to transfer from his school district to:
27         (1) another public school in his resident district but not in his
28   attendance area, the district shall adjust monetary differences
29   between the schools;
30         (2) another public school outside his resident district, his
31   resident school district shall reimburse that district for the cost of
32   his attendance equal to seventy-five percent of the projected per
33   pupil cost as promulgated by the Office of Research and Statistics
34   for the school district to which the student transfers; or
35         (3) an independent school, the Department of Education
36   shall issue a check to the parents or guardians and the independent
37   school they select for the lesser of an amount equal to the
38   appropriate pupil classification weighting for that student pursuant
39   to Section 59-20-40 multiplied by seventy-five percent of the
40   projected state per pupil cost as promulgated by the Office of
41   Research and Statistics or the cost of tuition fees at the
42   independent school.


     [457]                             19
 1     (C) A student who is taught at home is not eligible to receive a
 2   scholarship pursuant to this article.
 3
 4      Section 59-63-630. An independent school that accepts
 5   scholarship students pursuant to this article:
 6      (1) shall comply with the federal anti-discrimination law,
 7   pursuant to 42 U.S.C. Section 2000(d);
 8      (2) shall meet state and local health and safety laws and codes;
 9      (3) shall comply with state statutes relating to independent
10   schools;
11      (4) shall employ or contract with teachers who hold a
12   baccalaureate or higher degree, or have at least three years of
13   teaching experience in a public or independent school, or have
14   special skills, knowledge, or expertise that qualifies them to
15   provide instruction in subjects taught;
16      (5) must be academically accountable to the parent or guardian
17   for meeting the education needs of the student;
18      (6) shall administer to all students a nationally recognized
19   achievement test and report the school‟s aggregate score to all
20   parents;
21      (7) shall adhere to the tenets of the school‟s published
22   disciplinary procedures prior to the expulsion of an educational
23   opportunity scholarship program participant;
24      (8) shall accept scholarship students who meet the admissions
25   criteria of the school on a random, religion-neutral basis, without
26   regard to the student‟s past academic history, with preference
27   given to siblings of other scholarship students;
28      (9) may not compel a scholarship student to profess a specific
29   ideological belief, to pray, or to worship; and
30      (10) shall demonstrate their financial viability by showing they
31   can repay any funds that might be owed to the State, if they are to
32   receive more than fifty thousand dollars in scholarship payments
33   during the school year by filing with the department of revenue,
34   before the beginning of the school year:
35         (a) a surety bond payable to the State in an amount equal to
36   the aggregate amount of scholarship revenue expected to be paid to
37   the school by participating families during the school year; or
38         (b) financial information that demonstrates that the school
39   has the ability to pay an aggregate amount equal to the amount of
40   scholarship revenue expected to be paid to the school by
41   participating families during the school year.
42


     [457]                           20
 1      Section 59-63-633. To ensure that schools provide academic
 2   accountability to parents of students in the educational opportunity
 3   scholarship program, participating schools annually shall
 4   administer either the state tests or nationally recognized,
 5   norm-referenced tests, or both, in math and language arts to each
 6   student participating in the program. Participating schools publicly
 7   shall disclose the aggregate results of the tests by grade level and
 8   provide the parents of each student with a copy of the results.
 9
10      Section 59-63-635. (A) A failing public school shall:
11         (1) notify the parent of a student if the school is considered a
12   failing public school pursuant to Section 59-63-610; and
13         (2) present the parent with his options of:
14            (a) sending the student to an independent school;
15            (b) sending the student to another public school; or
16            (c) keeping the student at the failing school.
17      (B) The parent of the student shall:
18         (1) notify the Department of Education and the school
19   district of the decision to transfer the student from a failing public
20   school to an independent or public school, or from an independent
21   or public school back to another independent or public school;
22         (2) have access to the school‟s aggregate testing
23   information; and
24         (3) arrange for transportation of the student to the
25   independent school or to the district boundary or a mutually agreed
26   upon location, if the student chooses to attend a public school
27   outside his district.
28      (C) The student shall remain in attendance throughout the
29   school year, unless excused for illness or good cause, and comply
30   with the school‟s code of conduct.
31
32      Section 59-63-637. The Department of Education shall make
33   scholarship payment by check payable to the transferring student‟s
34   parent or legal guardian and to the school at which the scholarship
35   is to be used. The check may be delivered or mailed by the
36   Department of Education to the school at which the scholarship is
37   to be used. All payees must endorse the check. The check may be
38   endorsed by the school on behalf of the student‟s parent or legal
39   guardian if the parent or legal guardian has placed on file with the
40   school written authorization to endorse the check.
41
42     Section 59-63-640. Once a student transfers from a failing
43   school pursuant to this article, the student is eligible for the

     [457]                             21
 1   scholarship program until he graduates from high school regardless
 2   of a subsequent change in the rating of the school from which he
 3   transferred.
 4
 5     Section 59-63-645. If a qualifying student‟s enrollment in an
 6   independent school is terminated before the end of the school year,
 7   the independent school shall pay to the State on a pro rata basis
 8   any excess tuition paid. At the time of making the refund, the
 9   independent school shall issue a receipt reflecting the date,
10   amount, and payee for each refund and shall provide a copy of the
11   receipt to the Department of Revenue.
12
13      Section 59-63-647. The Department of Revenue may
14   promulgate regulations to aid in the performance of its duties
15   pursuant to this chapter; however, its power does not extend to
16   matters of school governance, curriculum, hiring or firing, or
17   religious beliefs or practices.
18
19     Section 59-63-648. The Department of Revenue may conduct
20   examinations and investigations whenever it believes that the
21   provisions of this chapter have been evaded or violated in any
22   manner. All powers possessed by the department as provided in
23   Title 12 to conduct examinations and investigations apply to
24   examinations and investigations conducted pursuant to this section.
25
26      Section 59-63-650. (A) Annually, the State Budget and Control
27   Board shall provide for the preparation of a report on the impact of
28   the implementation of this chapter on school enrollment and state
29   and local funding of public schools for the fiscal year most
30   recently completed. The report must include, but need not be
31   limited to, an analysis of and statement on the:
32         (1) change in public school enrollment, by school district,
33   attributable to this chapter; and
34         (2) amount of funds the State would have had to expend for
35   public schools under the education funding formula in existence on
36   or before the enactment of this chapter and the amount actually
37   expended by the State in public schools.
38      (B) The report must be submitted by December first of each
39   year to the Governor, the Chairman of the Senate Finance
40   Committee, the Chairman of the Senate Education Committee, the
41   Chairman of the House Ways and Means Committee, and the
42   Chairman of the House Education and Public Works Committee.
43

     [457]                            22
 1      Section 59-63-655. (A)(1) In addition to the annual report as
 2   provided in Section 59-63-650, the State Budget and Control
 3   Board shall provide for a long-term evaluation of the impact of this
 4   chapter. The evaluation must be conducted by contract with one or
 5   more qualified persons or entities with previous experience
 6   evaluating school choice programs and must be conducted for a
 7   minimum of five years beginning five years after enactment of this
 8   section. The evaluation must include an assessment of the:
 9           (a) level of parental satisfaction for parents of students
10   participating in the scholarship program provided for in this
11   chapter;
12           (b) level of parental satisfaction for parents of students in
13   failing public schools;
14           (c) academic performance of participating independent
15   schools and failing public schools;
16           (d) level of student satisfaction with the scholarship
17   program provided for in this chapter;
18           (e) level of student satisfaction for students attending
19   failing public schools;
20           (f) impact of the provisions of this chapter on public
21   school districts, public school students, independent schools, and
22   independent school students; and
23           (g) impact of the provisions of this chapter on school
24   capacity, availability, and quality.
25         (2) The evaluation must be conducted using appropriate
26   analytical and behavioral science methodologies and must protect
27   the identity of participating schools and students by, at a minimum,
28   keeping anonymous all disaggregated data other than that for the
29   categories of grade, gender, race, and ethnicity. The evaluation of
30   public and independent school students must compute the relative
31   efficiency of public and independent schools, the value added to
32   educational performance by independent schools relative to failing
33   public schools, and a comparison of acceptance rates into college,
34   while adjusting or controlling for student and family background.
35      (B) State and local government entities shall cooperate with the
36   persons or entities conducting the evaluation provided for in
37   subsection (A). Cooperation includes providing available student
38   assessment results and other information needed to complete the
39   evaluation.
40      (C) The State Budget and Control Board shall pay the cost of
41   the evaluation from funds available to it for that purpose except
42   that state funds used must not exceed four hundred thousand
43   dollars per year.

     [457]                            23
 1     (D) By January thirty-first of each year, the State Budget and
 2   Control Board shall provide to each member of the General
 3   Assembly interim reports of the results of the evaluation. Upon
 4   completion of the evaluation, the State Budget and Control Board
 5   shall provide a final report to each member of the General
 6   Assembly. At the same time as the final report is made public, the
 7   persons or entities who conducted the evaluation must make their
 8   data and methodology available for public review and inspection,
 9   but only if the release of the data and methodology is in
10   compliance with 20 U.S.C. Section 1232g, Family Educational
11   Rights and Privacy Act of 1974.
12
13      Section 59-63-660. The provisions of this article regarding
14   independent schools only apply to independent schools that choose
15   to accept scholarship students.”
16
17   SECTION 5. (A) A qualifying school that accepts students
18   benefiting from scholarships, grants, or tax credits is not an agent
19   or arm of the state or federal government.
20      (B) Except as provided by this act, the Department of
21   Education, Department of Revenue, Budget and Control Board, or
22   any other state agency may not regulate the educational program of
23   a qualifying school that accepts students pursuant to this act.
24      (C) One purpose of this act is to allow maximum freedom to
25   parents and independent schools to respond to and provide for the
26   educational needs of children without governmental control, and
27   this act must be liberally construed to achieve that purpose.
28
29   SECTION 6. If a section, subsection, paragraph, subparagraph,
30   sentence, clause, phrase, or word of this act is for any reason held
31   to be unconstitutional or invalid, this holding does not affect the
32   constitutionality or the validity of the remaining portions of this
33   act, the General Assembly hereby declaring that it would have
34   passed this act, and each section, subsection, paragraph,
35   subparagraph, sentence, clause, phrase, and word thereof,
36   irrespective of the fact that any one or more other sections,
37   subsections, paragraphs, subparagraphs, sentences, clauses,
38   phrases, or words thereof may be declared to be unconstitutional,
39   invalid, or otherwise ineffective.
40
41   SECTION 7. This act takes effect upon approval by the Governor
42   and applies at the start of the first school year beginning one year
43   after approval of this act.

     [457]                            24
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    [457]       25

				
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