Reference is to Printer's Date 3/30/17.
Amend the bill, as and if amended, by striking all after the enacting words and inserting:
/ SECTION 1. Article 25, Chapter 6, Title 12 of the 1976 Code is amended by adding:
"Section 12-6-3790.
(A) As used in this section:
(1)
'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, graduation
certificate requirements for special needs children, 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;
(f)
is a member in good standing of the
Southern Association of Colleges and Schools, the South Carolina
Association of Christian Schools, the South Carolina Independent
Schools Association, or Palmetto Association of Independent
Schools; and
(g)
provides a specially designed program or learning resource
center to provide needed accommodations based on the needs of
exceptional needs students or provides onsite educational
services or supports to meet the needs of exceptional needs
students, or is a school specifically existing to meet the needs
of only exceptional needs students with documented
disabilities.
(2)
'Exceptional needs child' means a child:
(a)
who has been evaluated in accordance with this state's
evaluation criteria, as set forth in S.C. Code Ann. Regs.
43-243.1, and determined eligible as a child with a disability
who needs special education and related services, in accordance
with the requirements of Section 300.8 of the federal
Individuals with Disabilities Education Act; or
(b)
who has been diagnosed within the last three years by a
licensed speech-language pathologist, psychiatrist, or medical,
mental health, psychoeducational, or other comparable licensed
health care provider as having a neurodevelopmental disorder, a
substantial sensory or physical impairment such as deaf, blind,
or orthopedic disability, or some other disability or acute or
chronic condition that significantly impedes the student's
ability to learn and succeed in school without specialized
instructional and associated supports and services tailored to
the child's unique needs.
(3)
'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.
(4)
'Parent' means the natural or adoptive parent or legal
guardian of a child.
(5)
'Qualifying student' means a student who is an exceptional
needs child, 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
applicable school year.
(6)
'Resident public school district' means the public school
district in which a student resides, or in the case of
dependents of active military personnel, the public school
district which the student may attend.
(7)
'Transportation' means transportation to and from school
only.
(8)
'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,
textbook fees, and school-related transportation.
(B)(1) There is created
the 'Educational Credit for Exceptional Needs Children's Fund'
that is separate and distinct from the State general fund. The
fund must be organized by the department as a public charity as
defined by the Internal Revenue Code under section 509(a)(1)
through (4) and consist only of contributions made to the fund.
The fund may not receive an appropriation of public funds. The
fund must receive and hold all contributions intended for it as
well as all earnings until disbursed as provided in this
section. Monies received in the fund must be used to provide
scholarships to exceptional needs children attending eligible
schools.
(2)
The amounts on deposit in the fund do not constitute
public funds and are not the property of the State. Amounts on
deposit in the fund may not be commingled with public funds, and
the State does not have a claim to or interest in the amounts on
deposit. Agreements or contracts entered into by or on behalf of
the fund do not constitute a debt or obligation of the
State.
(3)
The public charity is governed by five directors, two
appointed by the Chairman of the House Ways and Means Committee,
one of which is based upon the recommendation of the South
Carolina Association of Christian Schools and one which is based
upon the recommendation of the Diocese of Charleston, two
appointed by the Chairman of the Senate Finance Committee based
upon the recommendations of the South Carolina Independent
Schools Association, and one appointed by the Governor based
upon the recommendation of the Palmetto Association of
Independent Schools. The directors of the public charity, along
with the director of the department, shall designate an
executive director of the public charity.
(4)
In concert with the public charity directors, the
department shall administer the public charity, including, but
not limited to, the keeping of records, the management of
accounts, and disbursement of the grants awarded pursuant to
this section. The public charity may expend up to two percent of
the fund for administration and related costs. The department
and the public charity may not expend public funds to administer
the program.
(5)
By January fifteenth of each year, the department shall
report to the Chairman of the Senate Finance Committee, the
Chairman of the House Ways and Means Committee, and the
Governor:
(a)
the number and total amount of grants issued to eligible
schools in each year;
(b)
the identity of the school and the amount of the grant for
each grant issued to an eligible school in each year;
(c)
an itemized and detailed explanation of fees or other
revenues obtained from or on behalf of an eligible school;
(d)
a copy of a compilation, review, or audit of the fund's
financial statements, conducted by a certified public accounting
firm; and
(e)
the criteria and eligibility requirements for scholarship
awards.
(C)(1) Grants may be
awarded in an amount not exceeding eleven thousand dollars or
the total annual cost of tuition, whichever is less, to a
qualifying student at an eligible school.
(2)
Before awarding a grant, the public charity shall receive
written documentation from the qualifying student's parent or
guardian documenting that the qualifying student is an
exceptional needs child. Upon approving the application, the
public charity shall issue a check to the eligible school in the
name of the qualifying student within either thirty days upon
approval of the application or thirty days of the start of the
school's semester.
(3)
If a qualifying student leaves or withdraws from the
school for any reason before the end of the semester or school
year and does not reenroll within thirty days, then the eligible
school shall return a prorated amount of the grant to the public
charity based on the number of days the qualifying student was
enrolled in the school during the semester or school year within
sixty days of the qualifying student's departure.
(4)
The public charity may not award grants only for the
benefit of one school.
(5)
The department or the public charity may not release
personally identifiable information pertaining to students or
donors or use information collected about donors, students, or
schools for financial gain.
(6)
The public charity shall develop a process to prioritize
the awarding of grants to eligible incumbent grant recipients at
eligible schools.
(D)(1)(a) Tax credits
authorized by subsection (H)(1) and subsection (I) annually may
not exceed cumulatively a total of eleven million dollars for
contributions to the Educational Credit for Exceptional Needs
Children's Fund.
(b)
Tax credits authorized pursuant to subsection (H)(2)
annually may not exceed cumulatively a total of two million
dollars for tuition payments made on behalf of qualifying
students.
(c)
If the department determines that the total of the credits
claimed by all taxpayers exceeds either limit amount as
contained in subitems (a) or (b), it shall allow credits only up
to those amounts on a first come, first-served basis.
(2)(a)
The department shall establish an application process to
determine the amount of credit available to be claimed. The
receipt of the application by the department determines priority
for the credit. The credit must be claimed on the return for the
tax year that the contribution is made.
(b)
A taxpayer may not claim more than sixty percent of his
total tax liability for the year in contribution toward the tax
credit authorized by subsection (H)(1) or subsection (I). This
credit is nonrefundable.
(c)
If a taxpayer deducts the amount of the contribution on
his federal return and claims the credit allowed by subsection
(H)(1) or subsection (I), then he must add back the amount of
the deduction for purposes of South Carolina income taxes.
(d)
The department shall prescribe the form and manner of
proof required to obtain the credit authorized by subsection
(H)(1) or subsection (I). The department also shall develop a
method of informing taxpayers if the credit limit is met any
time during the tax year.
(e)
A taxpayer only may claim a credit pursuant to subsection
(H)(1) and subsection (I) for contributions made during the tax
year.
(3)
A corporation or entity entitled to a credit under
subsection (H)(1) and subsection (I) may not convey, assign, or
transfer the 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.
(E)(1) By August first
of each year, an independent school who participated in the
program in the previous year and who desires to participate in
the program in the current year shall reapply to the Education
Oversight Committee. The independent school shall certify to the
Education Oversight Committee that it continues to meet all
program requirements and shall provide to the committee student
test score data from the previous school year by December
thirty-first. If student test score data is not submitted by
December thirty-first, then the Education Oversight Committee
shall remove the school from the program. The Education
Oversight Committee shall consult with the Southern Association
of Colleges and Schools, the South Carolina Association of
Christian Schools, the South Carolina Independent Schools
Association, the Palmetto Association of Independent Schools, or
the Diocese of Charleston to verify that the school is still a
member in good standing and that the school continues to serve
exceptional needs children. An independent school who did not
participate in the program in the previous year but desires to
participate in the program in the current year shall apply to
the Education Oversight Committee. The Education Oversight
Committee shall develop an application to be completed by the
independent schools which must contain at least:
(a)
the number and total amount of grants received in the
preceding school year;
(b)
student test scores, by category, on national achievement
or state standardized tests, or both, for all grades tested and
administered by the school receiving or entitled to receive
scholarship grants pursuant to this section in the previous
school year;
(c)
a copy of a compilation, review, or compliance audit of
the organization's financial statements as relating to the
grants received, conducted by a certified public accounting
firm; and
(d)
a certification by the independent school that it meets
the definition of an eligible school as that term is defined in
subsection (A)(1) and that the report is true, accurate, and
complete under penalty of perjury in accordance with Section
16-9-10.
(2)(a) The Education
Oversight Committee may waive the August first deadline
contained in subsection (E) upon good cause shown by an
independent school.
(b)
The Education Oversight Committee may waive some or all of
the curriculum requirements contained in subsection (A)(1)(d)
following consultation with the advisory committee.
(3)(a)
By September first of each year the Education Oversight
Committee shall publish on its website a comprehensive list of
independent schools certified as eligible institutions. The list
must include for each eligible institution:
(i)
the institution's name, addresses, telephone numbers, and,
if available, website addresses; and
(ii)
the score reports and compliance audits received by the
committee pursuant to subsection (E)(1)(b) and (c).
(b)
The Education Oversight Committee shall summarize or
redact the score reports identified in subitem (a)(ii) if
necessary to prevent the disclosure of personally identifiable
information.
(4)
An independent school that does not apply for
certification pursuant to this subsection may not be included on
the list of eligible schools and contributions to that school
may not be allowed for purposes of the tax credits permitted by
this section.
(5)
An independent school that is denied certification
pursuant to this section 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.
(F)(1) 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.
(2)
The advisory committee shall:
(a)
consult with the Education Oversight Committee concerning
requests for exemptions from curriculum requirements; and
(b)
provide recommendations on other matters requested by the
Education Oversight Committee.
(G) Except as otherwise
provided, the Department of Education, the Education Oversight
Committee, and the Department of Revenue, or any other state
agency may not regulate the educational program of an
independent school that accepts students receiving scholarship
grants pursuant to this section.
(H)(1) A taxpayer is
entitled to a tax credit against income taxes imposed pursuant
to this chapter for the amount of cash and the monetary value of
any publicly traded securities the taxpayer contributes to the
Educational Credit for Exceptional Needs Children Fund up to the
limits contained in subsection (D)(1)(a) if:
(a)
the contribution is used to provide grants for tuition to
exceptional needs children enrolled in eligible schools who
qualify for these grants under the provisions of this section;
and
(b)
the taxpayer does not designate a specific child or school
as the beneficiary of the contribution.
(2)(a)
A taxpayer is entitled to a refundable tax credit against
income taxes imposed pursuant to this chapter for the amount of
cash and the monetary value of any publicly traded securities,
not exceeding eleven thousand dollars for each child, for
tuition payments to an eligible school for an exceptional needs
child within his custody or care who would be eligible for a
grant pursuant to this section up to the limits contained in
subsection (D)(1)(b).
(b)
If a child within the care and custody of taxpayer
claiming a tax credit pursuant to this item also receives a
grant from the Educational Credit for Exceptional Needs
Children's Fund, then the taxpayer only may claim a credit equal
to the difference of eleven thousand dollars or the cost of
tuition, whichever is lower, and the amount of the grant.
(I) A taxpayer is
entitled to a tax credit against income taxes imposed pursuant
to Chapter 11, Title 12 for the amount of cash and the monetary
value of any publicly traded securities the taxpayer contributes
to the Educational Credit for Exceptional Needs Children's Fund
up to the limits contained in subsection (D)(1)(a) if:
(1)
the contribution is used to provide grants for tuition to
exceptional needs children enrolled in eligible schools who
qualify for these grants under the provisions of this section;
and
(2)
the taxpayer does not designate a specific child or school
as the beneficiary of the contribution.
(J)(1) The department
shall conduct a comprehensive study of the Exceptional Needs Tax
Credit program. The study must examine the following:
(a)
whether or not the students participating in the program
have experienced measurable improvement as a result of
participation;
(b)
the allocation of scholarship funds and tax credits among
students, including the effect of funding limitations on the
addition of new participants; the demographic and socio-economic
data of the participants and their families; and the
geographical distribution of the participants;
(c)
the distribution of scholarship funds among all eligible
schools;
(d)
identification of the schools in which the most measurable
improvement has occurred among students, with an analysis of the
types of schools achieving the best results and best practices
implemented by those schools; and
(e)
any other aspect of the program that the department
determines would be relevant and useful in making future policy
decisions in regard to the program and its continued existence
or expansion.
(2)
The department shall submit a report of its study to the
General Assembly no later than January fifteenth of each
year."
SECTION 2. This act takes effect upon approval of the Governor and applies to income tax years beginning after 2017. All tax credits earned as a result of a contribution made to the Educational Credit for the Exceptional Needs Children's Fund in 2018 apply to the cumulative total of eleven million dollars regardless of when in 2018 the contribution is made. All tax credits earned as a result of a tuition payment made by a taxpayer to an eligible school for an exceptional needs child within his custody or care in 2018 apply to the cumulative total of two million dollars regardless of when in 2018 the payment is made. All necessary reports and forms must be submitted as soon as practicable upon the enactment of this act. /
Renumber sections to conform.
Amend title to conform.