S 364 Session 109 (1991-1992)
S 0364 General Bill, By Passailaigue
A Bill to amend Title 59, Chapter 115, Code of Laws of South Carolina, 1976,
relating to state education assistance, by adding a new article to establish a
Baccalaureate Savings Act.
12/10/90 Senate Prefiled
12/10/90 Senate Referred to Committee on Education
01/08/91 Senate Introduced and read first time SJ-123
01/08/91 Senate Referred to Committee on Education SJ-123
A BILL
TO AMEND TITLE 59, CHAPTER 115, CODE OF LAWS OF SOUTH
CAROLINA, 1976, RELATING TO STATE EDUCATION
ASSISTANCE, BY ADDING A NEW ARTICLE TO ESTABLISH
THE BACCALAUREATE SAVINGS ACT.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 59, Chapter 115 of the 1976 Code is amended by
adding:
"Article 3
Baccalaureate Savings Act
Section 59-115-210. This act shall be known and may be cited as the
`Baccalaureate Savings Act'.
Section 59-115-220. It is declared that for the benefit of the people
of the State of South Carolina, the conduct and increase of their
commerce, the protection and enhancement of their welfare, the
development of continued prosperity and the improvement of their
health and living conditions, it is essential that this and future
generations of youth be given the fullest opportunity to learn and to
develop their intellectual and mental capacities and skills; that to achieve
these ends it is of the utmost importance that South Carolina residents
be provided with investment alternatives to enhance their financial
access to institutions of higher education. It is the intent of this act to
provide to the State of South Carolina an alternative low cost method of
borrowing and to encourage enrollment in institutions of higher
education located in the State of South Carolina, all in execution of the
public policy set forth above.
Section 59-115-230. (A) The following terms shall have the
meanings ascribed to them in this article unless the context clearly
indicates otherwise:
(1) `College savings bonds' means general obligation bonds
of the State issued in accordance with this article and designated as
General Obligation Savings Bonds.
(2) `Institutions of higher education' includes: The University
of South Carolina; the public community colleges of the State; any
public universities, colleges and technical colleges now or hereafter
established or authorized by the General Assembly; any nonpublicly
supported postsecondary educational organization located and
authorized to operate in this State which operates privately, not for
profit. `Institutions of higher education' do not include any educational
organization used for sectarian instruction, as a place of religious
teaching or worship or for any religious denomination or the training of
ministers, priests, rabbis, or other professional persons in the field of
religion.
(3) `Authority' means the Baccalaureate Trust Authority.
Section 59-115-240. In order to provide investors with investment
alternatives to enhance their financial access to institutions of higher
education located in the State of South Carolina, and in furtherance of
the public policy of this article, general obligation bonds as authorized
by the provisions of Article X, Section 13 of the South Carolina
Constitution, may be issued and sold from time to time as college
savings bonds. Bonds to be issued and sold as college savings bonds
shall be designated as General Obligation College Savings Bonds in the
proceedings authorizing the issuance of such bonds, and shall be subject
to all of the terms and provisions as set out in the law. Any bond issued
under this article shall be payable in one payment on a fixed date, unless
the General Assembly, upon the recommendation of the State Treasurer
and the Joint Bond Review Committee, determines otherwise.
Section 59-115-250. As provided in this article, the issuance of
college savings bonds in all respects for the benefit of the people of the
State of South Carolina, the conduct and increase of their commerce, the
protection and enhancement of their welfare, the development of
continued prosperity and the improvement of their health and living
conditions and the issuance of such bonds is for public purposes. In
consideration thereof, college savings bonds issued in accordance with
this article and the income derived therefrom shall be free from all
taxation by the State or its political subdivisions, except for estate,
transfer, and inheritance taxes.
Section 59-115-260. The proceedings authorizing the issuance of
college savings bonds also shall provide for a grant program of
additional financial incentives to be provided to holders of such bonds
to encourage the enrollment of students at institutions of higher
education located in the State of South Carolina. The grant program of
financial incentives shall be administered by the State Commission on
Higher Education pursuant to administrative rules promulgated by the
commission. Such financial incentives may include, among others,
supplemental payments to the holders of such bonds at maturity to be
applied to tuition costs at institutions of higher education located in the
State of South Carolina. The commission may establish, by regulation,
administrative procedures and eligibility criteria for the grant program,
provided such rules are consistent with the purposes of this act. The
commission may require bond holders, institutions of higher education,
and other necessary parties to assist in the determination of eligibility for
financial incentives under the grant program. All grants shall be subject
to annual appropriation of funds for such purpose by the General
Assembly. Such financial incentives shall be provided only if the cost
of such incentives shall not cause the cost to the State of the proceeds of
the college savings bonds being sold to be increased by more than one-half of one percent. No such financial incentives shall be paid to assist
in the financing of the education of a student (a) in a school or
department of divinity for any religious denomination or (b) pursuing a
course of study consisting of training to become a minister, priest, rabbi,
or other professional person in the field of religion.
Section 59-115-270. No contributions toward the purchase of the
first twenty-five thousand dollars of bonds or accumulated bonds and
interest shall be considered in evaluating the financial situation of such
student, or shall be considered a financial resource of or a form of
financial aid or assistance to such student, for purposes of determining
the eligibility of such student for any scholarship, grant, or monetary
assistance awarded by the Higher Education Tuition Grants
Commission, the State or any agency thereof; nor shall the first twenty-five thousand dollars of any bond or interest provided for a qualified
student under this act reduce the amount of any scholarship, grant, or
monetary assistance which such student is entitled to be awarded by the
State Higher Education Tuition Grants Commission, the State or any
agency thereof in accordance with the provisions of any other section of
this article or any other law of this State.
Section 59-115-280. The State Commission on Higher Education
with the assistance of the State Higher Education Tuition Grants
Commission shall develop and implement an educational program and
marketing strategies designed to inform parents about the options
available for financing a college education. The commission shall report
to the Governor and the General Assembly on the program developed
and its operation prior to June 1, 1991. The State Commission of Higher
Education shall promulgate rules and regulations with respect to their
powers and duties pursuant to this article.
Section 59-115-290. (A) There is hereby created the Baccalaureate
Trust Authority. The authority shall consist of eleven members, as
follows:
(1) the Speaker of the House and the President of the Senate
shall each appoint one;
(2) the Governor shall appoint four;
(3) the Treasurer of the State or his designee;
(4) the Commissioner of the State Commission on Higher
Education or his designee;
(5) the Executive Director of the State Higher Education
Tuition Grants Commission or his designee;
(6) the Director of the State Budget and Control Board or his
designee; and
(7) the Chairman of the Joint Bond Review Committee or his
designee.
The Governor and legislative leaders shall give consideration to
selecting members that include representatives from the following
categories:
(1) a trustee, director, officer, or employee of a private
institution of higher education;
(2) a person having a favorable reputation for skill knowledge
and experience in the field of state and municipal finance, either as a
partner, officer, or employee of an investment banking firm which
originates and purchases state and municipal securities as an investment;
and
(3) a person experienced in and having a favorable reputation
for skill, knowledge, and experience in the higher education loan finance
field.
The authority shall elect a chairman by a majority vote of the
members. The appointed members of the authority first appointed shall
serve for terms expiring on June 30 in 1992, 1993, 1994, 1995, 1996,
1997, 1998, and 1999 respectively, or until their respective successors
have been appointed and qualified, the initial term of each such member
to be determined by lot. Upon the expiration of the term of any
member, his successor shall be appointed for a term of six years. Each
member shall serve until his successor has been appointed and has
qualified. Any vacancy shall be filled in the manner of the original
appointment for the remainder of the unexpired term. Any member of
the authority may be removed by the appointing authority for
misfeasance or wilful neglect of duty or other cause after notice and a
public hearing unless such notice and hearing shall be expressly waived
in writing. Members shall be compensated for reasonable actual
expenses from funds appropriated to the State Commission on Higher
Education. Staff assistance shall be provided to the authority by the
State Commission on Higher Education. The authority shall meet at
least annually.
(B) The authority shall have the following responsibilities:
(1) To make recommendations to the General Assembly regarding
the marketing of college savings bonds to ensure their broad distribution
throughout the State for educational purposes;
(2) To advise the General Assembly on an effective advertising
campaign to inform the general public about college savings bonds and
their availability;
(3) To advise the General Assembly regarding the increments in
which to market the bonds and to recommend maturity dates which will
make funds available to purchasers at the time when such funds are
needed for educational purposes;
(4) To advise the State Commission on Higher Education and the
State Higher Education Tuition Grants Commission regarding additional
financial incentives as provided in this act;
(5) To advise the General Assembly on limits that may be
imposed on the amount of college savings bonds that may be purchased
by individual households;
(6) To advise the General Assembly on the minimum
denominations to market the college savings bonds so that they are
affordable by individuals;
(7) To evaluate the feasibility of staggered or periodic forms of
payments for college savings bonds, and to advise the State Budget and
Control Board regarding such evaluation;
(8) After the initial sale of college savings bonds, to assess the
effectiveness of the program and recommend constructive changes to the
General Assembly regarding future bond sales;
(9) To study and review alternative investment instruments with
respect to their suitability for a college savings program;
(10) To make recommendations to the General Assembly
regarding statutory changes that it considers to be necessary or
desirable."
SECTION 2. This act takes effect upon approval by the Governor.
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