(Doc Name h:\legwork\house\amend\h-wm\001\hou2 school choice.docx):
EXPLANATION: school choice tax credit for exceptional needs & low income children
Amend the bill, as and if amended, Part IB, Section 1,
DEPARTMENT OF EDUCATION, page 344, after line 15, by adding an
appropriately numbered paragraph to read:
/ (SDE: Educational Credit for Exceptional Needs Children
& Low Income Children) (A) As used in this proviso:
(1)
'Independent school' means a school, other than a
public school, at which the compulsory attendance requirements
of Section 59-65-10 may be met and that does not discriminate
based on the grounds of race, color, religion, or national
origin.
(2)
'Parent' means the natural or adoptive parent or
legal guardian of a child.
(3)
'Qualifying student' means a student who is a South
Carolina resident and who is eligible to be enrolled in a South
Carolina secondary or elementary public school at the
kindergarten or later year level for the current school
year.
(4)
'Resident public school district' means the public
school district in which a student resides.
(5)
'Tuition' means the total amount of money charged
for the cost of a qualifying student to attend an independent
school including, but not limited to, fees for attending the
school and school-related transportation.
(6)
'Eligible school' means an independent school
including those religious
in nature, other than a public school, at which the
compulsory attendance requirements of Section 59-65-10 may be
met, that:
(a)
offers a general education to primary or secondary
school students;
(b)
does not discriminate on the basis of race, color,
or national origin;
(c)
is located in this State;
(d)
has an educational curriculum that includes courses
set forth in the state's diploma requirements and where the
students attending are administered national achievement or
state standardized tests, or both, at progressive grade levels
to determine student progress;
(e)
has school facilities that are subject to
applicable federal, state, and local laws; and
(f)
is a member in good standing of the Southern
Association of Colleges and Schools, the South Carolina
Association of Christian Schools or the South Carolina
Independent Schools Association.
(7)
'Nonprofit scholarship funding organization' means
a charitable organization that:
(a)
is exempt from federal tax under Section 501(a) of
the Internal Revenue Code by being listed as an exempt
organization in Section 501(c)(3) of the Code;
(b)
allocates, after its first year of operation, at
least ninety-five percent of its annual contributions and
revenue received during a particular year to provide grants for
tuition, transportation, or textbook expenses (collectively
hereinafter referred to as tuition) or any combination thereof
to children enrolled in an eligible school meeting the criteria
of this section, and incurs administrative expenses annually,
after its first year of operation, of not more than five percent
of its annual contributions and revenue for a particular
year;
(c)
allocates all of its funds used for grants on an
annual basis to children who are 'exceptional needs' students as
defined herein or who are eligible for the federal free or
reduced lunch program, or whose families meet the qualifications
for federal Medicaid benefits;
(d)
does not provide grants solely for the benefit of
one school, and if the Department of Revenue determines that the
nonprofit scholarship funding organization is providing grants
to one particular school, the tax credit allowed by this section
may be disallowed;
(e)
does not have as a member of its governing board
any parent, legal guardian, or member of their immediate family
who has a child or ward who is currently receiving or has
received a scholarship grant authorized by this section from the
organization within one year of the date the parent, legal
guardian, or member of their immediate family became a board
member; and
(f)
does not have as a member of its governing board
any person who has been convicted of a felony, or who has
declared bankruptcy within the last seven years.
(8)
'Person' means an individual, partnership,
corporation, or other similar entity.
(9)
'Transportation' means transportation to and from
school only.
(B) A person is
entitled to a tax credit for the amount of money the person
contributes to a nonprofit scholarship funding organization up
to the limits of this proviso if:
(1) the
contribution is used to provide grants for tuition,
transportation, or textbook expenses or any combination thereof
to exceptional needs children or students who are eligible for
the federal free or reduced lunch program, or whose families
meet the qualifications for federal Medicaid benefits and are
enrolled in eligible schools who qualify for these grants under
the provisions of this proviso; and
(2)
the person does not designate a specific child or
school as the beneficiary of the contribution.
(C) Grants may
be awarded by a scholarship funding organization in an amount
not exceeding ten thousand dollars or the total cost of tuition,
whichever is less, for students with 'exceptional needs' to
attend an independent school. An 'exceptional needs' child is
defined as a child who has been designated by the South Carolina
Department of Education to meet the requirements of CFR Part A
Section 300.8 and the child's parents or legal guardian believe
that the services provided by the school district of legal
residence do not sufficiently meet the needs of the child.
Grants may be awarded by a scholarship funding organization in
an amount not exceeding five thousand dollars or the total cost
of tuition, whichever is less for students who are eligible for
the federal free or reduced lunch program, or whose families
meet the qualifications for federal Medicaid benefits.
(D) (1)
The tax credits authorized by subsection (B) may
not exceed a combined cumulative total of ten million dollars
for contributions made on behalf of both 'exceptional needs'
students and students who are eligible for the federal free or
reduced lunch program, or whose families meet the qualifications
for federal Medicaid benefits. If the Department of Revenue
determines that the total of such credits claimed by all
taxpayers exceeds this amount, it shall proportionally reduce
the credits of all taxpayers pro rata for the year in the
particular category. The Department of Revenue shall ensure
that the cumulative total credit claimed pursuant to this
provision is evenly divided between contributions made on behalf
of "exceptional needs" students and students who are
eligible for the federal free or reduced lunch program, or whose
families meet the qualifications for federal Medicaid benefits.
(2) A taxpayer
may not claim more than sixty percent of their total tax
liability for the year in contribution towards the tax credit
authorized by subsection (C). Tax credits allowed by this
proviso may be used in computing any tax imposed by Title 12 of
the 1976 Code of Law or in computing insurance premium taxes or
bank license fees. This credit is not refundable.
(3)
If a husband and wife file separate returns, they
each may only claim one-half of the tax credit that would have
been allowed for a joint return for the year.
(4)
The person shall apply for a credit under
subsection (B) on or with the tax return for the period for
which the credit is claimed.
(5)
The Department of Revenue shall prescribe the form
and manner of proof required to obtain the credit authorized by
subsection (B). Also, the department shall develop a method of
informing taxpayers if either of the credit limits are met at
any time during the 2014 tax year.
(6)
A person may claim a credit under subsection (B)
for contributions made on or after January 1, 2014.
(E) A
corporation or entity entitled to a credit under subsection (B)
may not convey, assign, or transfer the deduction or credit
authorized by this section to another entity unless all of the
assets of the entity are conveyed, assigned, or transferred in
the same transaction.
(F) Except as
otherwise provided, neither the Department of Education, the
Department of Revenue, nor any other state agency may regulate
the educational program of an independent school that accepts
students receiving scholarship grants pursuant to this
proviso.
(G) (1)
The Education Oversight Committee, as established
in Chapter 6, Title 59, is responsible for determining if an
eligible school meets the criteria established by subsection
(A)(6), and shall publish an approved list of such schools
meeting this criteria below. For this purpose, it also shall
promulgate regulations further enumerating the specifics of this
criteria. In performing this function, the Education Oversight
Committee shall establish an advisory committee made up of not
more than nine members including parents, and representatives of
independent schools and independent school associations. The
advisory committee shall provide recommendations to the
Education Oversight Committee on the content of these
regulations and any other matters requested by the Education
Oversight Committee.
(2)
(a) By the first day of August
for the current fiscal year, the Education Oversight Committee,
on its website available to the general public, shall provide a
list with addresses and telephone numbers of nonprofit
scholarship funding organizations in good standing which provide
grants under this proviso, and a list of approved independent
schools which accept grants for eligible students and which in
its determination are in compliance with the requirements of
subsection (A)(6).
(b)
Student test scores, by category, on national
achievement or state standardized tests, or both, for all grades
tested and administered by an eligible school receiving or
entitled to receive scholarship grants under this proviso must
be transmitted to the Education Oversight Committee which in
turn shall publish this information on its website with the most
recent scores by category included.
(3)
Any independent school not determined to be an
eligible school under the provisions of this proviso may seek
review by filing a request for a contested case hearing with the
Administrative Law Court in accordance with the court's rules of
procedure.
(4)
The Education Oversight Committee, after
consultation with its nine-member advisory committee, may exempt
an independent school having students with exceptional needs who
receive scholarship grants pursuant to this proviso from the
curriculum requirements of subsection (A)(6)(d).
(H) (1)
Every nonprofit scholarship funding organization
providing grants under subsection (C), shall cause an outside
auditing firm to conduct a comprehensive financial audit of its
operations in conformity with generally accepted accounting
principles and shall furnish the same within thirty days of its
completion and acceptance to the Secretary of State and
Department of Revenue which must be made available by them on
their website for public review.
(2)
Every independent school accepting grants for
eligible students shall cause to be conducted a compliance audit
by an outside entity or auditing firm examining its compliance
with the provisions of this proviso, and shall furnish the same
within thirty days of its completion and acceptance to the
Secretary of State and Department of Revenue which must be made
available by them on their website for public review. /
Renumber sections to conform.
Amend totals and titles to conform.