S 101 Session 112 (1997-1998)
S 0101 General Bill, By Wilson
Similar(H 3196)
A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER
118 TO TITLE 59, SO AS TO ENACT THE SOUTH CAROLINA PREPAID POST-SECONDARY
EDUCATION EXPENSE PROGRAM; TO ESTABLISH THE SOUTH CAROLINA PREPAID
POST-SECONDARY EDUCATION EXPENSE BOARD TO IMPLEMENT THE PROGRAM.-SHORT TITLE
01/14/97 Senate Introduced and read first time SJ-117
01/14/97 Senate Referred to Committee on Education SJ-117
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA,
1976, BY ADDING CHAPTER 118 TO TITLE 59, SO AS TO
ENACT THE SOUTH CAROLINA PREPAID
POST-SECONDARY EDUCATION EXPENSE PROGRAM; TO
ESTABLISH THE SOUTH CAROLINA PREPAID
POST-SECONDARY EDUCATION EXPENSE BOARD TO
IMPLEMENT THE PROGRAM; TO AMEND SECTION
12-6-1140, AS AMENDED, RELATING TO DEDUCTIONS FROM
SOUTH CAROLINA TAXABLE INCOME, SO AS TO ALLOW
THE DEDUCTION OF PAYMENTS FOR AND BENEFITS FROM
AN ADVANCE PAYMENT CONTRACT FOR UNIVERSITY
AND COMMUNITY COLLEGE ADVANCE PAYMENT PLANS,
TO REQUIRE THE BOARD TO OBTAIN RULINGS FROM THE
INTERNAL REVENUE SERVICE AND THE SECURITIES AND
EXCHANGE COMMISSION WITH RESPECT TO THE
PROGRAM AND TO REQUIRE THE INFORMATION TO BE
PROVIDED TO PARTICIPANTS.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Title 59 of the 1976 Code is amended by adding:
"CHAPTER 118
The South Carolina Prepaid Post-secondary
Education Expense Program
Section 59-118-10. This chapter may be cited as the South
Carolina Prepaid Post-secondary Education Expense Program.
Section 59-118-20. As used in this chapter:
(1) `Advance payment contract' means a contract entered into
by the board and a purchaser pursuant to this chapter.
(2) `Board' means the South Carolina Prepaid Post-secondary
Education Expense Board.
(3) `Community college' means a two-year state post-secondary
institution offering an associate degree.
(4) `Fund' means the Prepaid Post-secondary Education
Expense Trust Fund.
(5) `Program' means the South Carolina Prepaid Post-secondary
Education Expense Program.
(6) `Purchaser' means a person who makes or is obligated to
make advance registration or dormitory residence payments in
accordance with an advance payment contract.
(7) `Qualified beneficiary' means:
(a) A resident of this State at the time a purchaser enters into
an advance payment contract on behalf of the resident; or
(b) A nonresident who is the child of a noncustodial parent
who is a resident of this State at the time that the parent enters into an
advance payment contract on behalf of the child.
(8) `State post-secondary institution' means a public institution
of higher learning as defined in Section 59-103-5.
(9) `Registration fee' means the semester charges imposed to
attend a state post-secondary institution and all mandatory fees
required as a condition for enrolling as determined by the board.
(10) `University' means a four-year state post-secondary
institution which offers a baccalaureate degree.
Section 59-110-25. (A) There is created the South Carolina
Prepaid Post-secondary Education Expense Program Board
consisting of nine members as follows:
(1) the State Treasurer, ex officio;
(2) eight members appointed by the Governor with the advice
and consent of the Senate as follows:
(a) one member nominated by the President Pro Tempore of
the Senate for a term coterminous with that of the President Pro
Tempore;
(b) one member nominated by the Speaker of the House of
Representatives for a term coterminous with that of the Speaker of
the House;
(c) one member nominated by the Council of Presidents of
State Institutions of Higher Learning for a term of four years;
(d) one member nominated by the Advisory Council of
Private College Presidents for a term of four years;
(e) four members who shall serve for terms of four years, one
of whom must be designated chairman.
(B) Vacancies must be filed in the manner of original appointment
for the unexpired portion of the term. Members shall receive the per
diem, mileage, and subsistence authorized by law for members of
state boards, committees, and commissions.
Section 59-118-27. The board shall appoint an executive
director to serve as the chief administrative and operational officer of
the board and to perform other duties assigned to him by the board.
The board has the powers necessary to carry out the provisions of
this chapter, including, but not limited to, the power to:
(1) adopt an official seal and rules;
(2) sue and be sued;
(3) make and execute contracts and other necessary instruments;
(4) establish agreements or other transactions with federal, state,
and local agencies, including state post-secondary institutions;
(5) invest funds not required for immediate disbursement;
(6) appear in its own behalf before boards, commissions, or
other governmental agencies;
(7) hold, buy, and sell any instruments, obligations, securities,
and property determined appropriate by the board;
(8) require a reasonable length of state residence for qualified
beneficiaries;
(9) restrict the number of participants in the various plans.
However, any person denied participation solely on the basis of the
restriction must be granted priority for participation during the
succeeding year.
(10) segregate contributions and payments to the fund into
various accounts and funds;
(11) contract for necessary goods and services, employ necessary
personnel, and engage the services of private consultants, actuaries,
managers, legal counsel, and auditors for administrative or technical
assistance;
(12) solicit and accept gifts, grants, loans, and other aids from
any source or participate in any other way in any government
program to carry out the purposes of this chapter;
(13) require and collect administrative fees and charges in
connection with any transaction and impose reasonable penalties,
including default, for delinquent payments or for entering into an
advance payment contract on a fraudulent basis;
(14) procure insurance against any loss in connection with the
property, assets, and activities of the fund or the board;
(15) impose reasonable time limits on use of the tuition benefits
provided by the program. However, any such limitation must be
specified within the advance payment contract;
(16) delineate the terms and conditions under which payments
may be withdrawn from the fund and impose reasonable fees and
charges for the withdrawal. The terms and conditions must be
specified within the advance payment contract.
(17) provide for the receipt of contributions in lump sums or
installment payments;
(18) establish other policies, procedures, and criteria to
implement and administer the provisions of this chapter.
Section 59-118-30. (A) There is created the South Carolina
Prepaid Post-secondary Education Expense Program to provide a
medium through which the cost of registration and dormitory
residence may be paid in advance of enrollment in a state
post-secondary institution at a rate lower than the projected
corresponding cost at the time of actual enrollment. These payments
must be combined and invested in a manner that yields, at a
minimum, sufficient interest to generate the difference between the
prepaid amount and the cost of registration and dormitory residence
at the time of actual enrollment. Students who enroll in a state
post-secondary institution pursuant to this chapter may be charged no
fees in excess of the terms delineated in the advance payment
contract.
(B) The board shall administer the fund in a manner that is
sufficiently actuarially sound to defray the obligations of the
program. The board shall annually evaluate or cause to be evaluated
the actuarial soundness of the fund. If the board perceives a need for
additional assets in order to preserve actuarial soundness, the board
may adjust the terms of subsequent advance payment contracts to
ensure such soundness.
(C) The board, acting with the approval of the State Budget and
Control Board, shall establish a comprehensive investment plan for
the purposes of this chapter. The comprehensive investment plan
shall specify the investment policies to be utilized by the board in its
administration of the fund. The board may place assets of the fund
in savings accounts or use assets to purchase fixed or variable life
insurance or annuity contracts, securities, evidence of indebtedness,
or other investment products pursuant to the comprehensive
investment plan and in the proportions as may be designated or
approved under that plan. The insurance, annuity, savings, or
investment products must be underwritten and offered in compliance
with the applicable federal and state laws, regulations, and rules by
persons who are authorized by applicable federal and state
authorities. Within the comprehensive investment plan, the board
may authorize investment vehicles, or products incident to investment
vehicles, as may be available or offered by qualified companies or
persons.
(D) The board may delegate responsibility for administration of the
comprehensive investment plan required in subsection (C) of this
section to a person the board determines to be qualified. This person
must be compensated by the board. Directly or through this person,
the board may contract with a private corporation or institution to
provide those services as may be a part of the comprehensive
investment plan or as considered necessary by the board or the
person, including, but not limited to, providing consolidated billing,
individual and collective recordkeeping and accountings, and asset
purchase, control, and safekeeping.
(E) The board shall annually prepare or cause to be prepared a
report setting forth in appropriate detail an accounting of the fund and
a description of the financial condition of the program at the close of
each fiscal year. The report must be submitted to the President of the
Senate, the Speaker of the House of Representatives, the State Budget
and Control Board, and members of the Commission on Higher
Education before March first of each year. In addition, the board
shall make the report available to purchasers of advance payment
contracts. The accounts of the fund are subject to annual audits by
the State Auditor or his designee.
(F) The board shall solicit answers to applicable ruling requests
from the Internal Revenue Service regarding the tax status of fees
paid pursuant to an advance payment contract to the purchaser or
qualified beneficiary and from the Securities and Exchange
Commission regarding the application of federal securities laws to the
fund. The board shall make the status of these requests known before
entering into an advance payment contract.
(G) The board shall solicit proposals for the marketing of the South
Carolina Prepaid Post-secondary Education Expense Program
pursuant to the South Carolina Consolidated Procurement Code. The
entity designated pursuant to this subsection shall serve as a
centralized marketing agent for the program and is solely responsible
for the marketing of the program. Any materials produced for the
purpose of marketing the program must be submitted to the board for
review. No materials may be made available to the public before the
materials are approved by the board. Any educational institution may
distribute marketing materials produced for the program; however, all
the materials must have been approved by the board before
distribution. Neither the State nor the board shall be liable for
misrepresentation of the program by a marketing agent.
(H) The board may establish a direct-support organization which
is:
(1) A South Carolina corporation, not for profit, organized
under the applicable laws of this State.
(2) Organized and operated exclusively to receive, hold, invest,
and administer property and to make expenditures to or for the
benefit of the program.
(3) An organization which the board, after review, has certified
to be operating in a manner consistent with the goals of the program
and in the best interests of the State. Unless so certified, the
organization may not use the name of the program.
(4) Subject to an annual post audit by an independent certified
public accountant in accordance with rules prescribed by the board.
The annual audit must be submitted to the Department of Insurance
and the State Auditor for review. The Department of Insurance and
the State Auditor may require and receive from the organization or its
independent auditor any detail or supplemental data relative to the
operation of the organization. The identity of donors who desire to
remain anonymous must be protected, and this anonymity must be
maintained in the auditor's report. All records of the organization
other than the auditor's report and the supplemental data requested by
the Department of Insurance or the State Auditor are not considered
public records for the purpose of the Freedom of Information Act.
The chairman of the board and the executive director must be
directors of the direct-support organization and shall jointly name
three other individuals to serve as directors of the organization.
(I) The board may endorse insurance coverage written exclusively
for the purpose of protecting advance payment contracts, and the
purchasers or beneficiaries of the contracts, which may be issued in
the form of a group life policy.
Section 59-118-40. (A) The board shall construct advance
payment contracts for registration and advance payment contracts for
dormitory residence in accordance with the provisions of this chapter.
Advance payment contracts constructed for the purposes of this
section are exempt from the provisions of the South Carolina
insurance laws. The board may request assistance from the Attorney
General in the development of the advance payment contracts. The
contents of both contracts must include, but not be limited to, the
following:
(1) the amount of the payment or payments and the number
of payments required from a purchaser on behalf of a qualified
beneficiary;
(2) the terms and conditions under which purchasers shall
remit payments including, but not limited to, the date or dates upon
which each payment is due;
(3) provisions for late payment charges and for default;
(4) provisions for penalty fees for withdrawals from the
fund;
(5) the name and date of birth of the qualified beneficiary
on whose behalf the contract is drawn and the terms and conditions
under which another person may be substituted as the qualified
beneficiary;
(6) the name of a person who may terminate the contract.
The terms of the contract must specify whether the contract may be
terminated by the purchaser, the qualified beneficiary, a specific
designated person, or any combination of these persons;
(7) the terms and conditions under which a contract may
be terminated, the name of the person entitled to a refund due as a
result of termination of the contract pursuant to the terms and
conditions, and the amount of refund, if any, due to the person so
named;
(8) the time limitations, if any, within which the qualified
beneficiary must claim his benefits through the program;
(9) other terms and conditions considered by the board to
be appropriate.
(B) In addition to the provisions of Subsection (A), an
advance payment contract for registration must include, but not be
limited to, the following:
(1) the number of credit hours contracted by the purchaser;
(2) the state post-secondary system toward which the
contracted credit hours will be applied;
(3) the assumption of a contractual obligation by the board
to the qualified beneficiary to provide for a specified number of
credit hours of undergraduate instruction at a state post-secondary
institution, not to exceed the average number of credit hours required
for the conference of the degree that corresponds to the plan
purchased on behalf of the qualified beneficiary.
(C) In addition to the provisions of subsection (A), an
advance payment contract for dormitory residence must include, but
not be limited to, the following:
(1) the number of semesters of dormitory residence
contracted by the purchaser;
(2) the assumption of a contractual obligation by the board
to the qualified beneficiary to provide for a specified number of
semesters of dormitory residence at a state university, not to exceed
the maximum number of semesters of full-time enrollment required
for the conference of a baccalaureate degree.
(D) An advance payment contract may provide that contracts
which have not been terminated or the benefits exercised within a
specified period of time are considered terminated. Time expended
by a qualified beneficiary as an active duty member of any of the
armed services of the United States must be added to the time
specified pursuant to this subsection. No purchaser or qualified
beneficiary whose advance payment contract is terminated pursuant
to this subsection is entitled to a refund. The board shall retain any
monies paid by the purchaser for an advance payment contract that
has been terminated in accordance with this subsection. Monies
retained by the board must be used by the board to further the
purposes of this chapter.
(E) No refund provided pursuant to Subsection (A)(7) may
exceed the amount paid into the fund by the purchaser. If an advance
payment contract is converted from a university to a community
college registration plan, the refund amount must be reduced by the
amount transferred to a community college on behalf of the qualified
beneficiary. However, refunds may exceed the amount paid into the
fund in the following circumstances:
(a) If the beneficiary is awarded a scholarship, the
terms of which cover the benefits included in the advance payment
contracts, monies paid for the purchase of the advance payment
contracts must be returned to the purchaser in semester installments
coinciding with the matriculation by the beneficiary in amount of the
original purchase price plus five percent compounded interest.
(b) In the event of the death or total disability of the
beneficiary, monies paid for the purchase of advance payment
contracts must be returned to the purchaser together with five percent
compounded interest.
(c) (i) If an advance payment contract is converted
from a university plan to a community college plan or a community
college plus university plan, or is converted from a community
college plus university plan to a community college plan, the amount
refunded must be the value of the original advance payment contract
minus the value of the contract after the conversion.
(ii) No refund is authorized through an advance
payment contract for any school year partially attended but not
completed. For purposes of this chapter, a school year partially
attended but not completed shall mean any one semester in which the
student is still enrolled at the conclusion of the official drop-add
period, but withdraws before the end of the semester. If a beneficiary
does not complete a community college plan or university plan for
reasons other than specified in this section, the purchaser shall
receive a refund of the amount paid into the fund for the remaining
unattended years of the advance payment contract pursuant to rules
prescribed by the board.
Section 59-118-50. At a minimum, the board shall make
advance payment contracts available for three independent plans to
be known as the community college plan, the university plan, and the
dormitory residence plan, respectively.
(1) Through the community college plan, the advance payment
contract must provide prepaid registration fees for a specified number
of undergraduate semester credit hours not to exceed the average
number of hours required for the conference of an associate degree.
The cost of participation in the community college plan must be
based primarily on the average current and projected registration fees
within the Technical Education System and the number of years
expected to elapse between the purchase of the plan on behalf of a
qualified beneficiary and the exercise of the benefits provided in the
plan by the beneficiary. Qualified beneficiaries shall bear the cost of
any laboratory fees associated with enrollment in specific courses.
Each qualified beneficiary must be classified as a resident for tuition
purposes regardless of his actual legal residence.
(2) Through the university plan, the advance payment contract
must provide prepaid registration fees for a specified number of
undergraduate semester credit hours not to exceed the average
number of hours required for the conference of a baccalaureate
degree. The cost of participation in the university plan must be based
primarily on the current and projected registration fees of state
four-year post-secondary institutions and the number of years
expected to elapse between the purchase of the plan on behalf of a
qualified beneficiary and the exercise of the benefits provided in the
plan by the beneficiary. Qualified beneficiaries must bear the cost of
any laboratory fees associated with enrollment in specific courses.
If a qualified beneficiary fails to be admitted to a state four-year
post-secondary institution or chooses to attend a community college,
the qualified beneficiary may convert the average number of semester
credit hours required for the conference of an associate degree from
a university plan to a community college plan and may retain the
remaining semester credit hours in the university plan or may request
a refund for prepaid credit hours in excess of the average number of
semester or quarter credit hours required for the conference of an
associate degree pursuant to Section 59-118-40(A)(7). Each
qualified beneficiary must be classified as a resident for tuition
purposes regardless of his actual legal residence.
(3) Through the dormitory residence plan, the advance payment
contract must provide prepaid housing fees for a maximum of ten
semesters of full-time undergraduate enrollment in a state four-year
post-secondary institution. Dormitory residence plans are optional
and may be purchased only in conjunction with a university plan.
Dormitory residence plans must be purchased in increments of two
semesters. The cost of participation in the dormitory residence plan
must be based primarily on the average current and projected housing
fees for state four-year post-secondary institutions and the number of
years expected to elapse between the purchase of the plan on behalf
of a qualified beneficiary and the exercise of the benefits provided in
the plan by the beneficiary. Qualified beneficiaries must bear the
cost of any additional elective charges such as laundry service or long
distance telephone service. Each four-year post-secondary institution
may specify the residence halls eligible for inclusion in the plan. In
addition, any such institution may request immediate termination of
a dormitory residence contract based on a violation or multiple
violations of rules of the residence hall. Qualified beneficiaries must
have the highest priority in the assignment of housing within
residence halls. If sufficient housing is not available for all qualified
beneficiaries, the board shall refund the purchaser or qualified
beneficiary an amount equal to the fees charged for dormitory
residence during that semester.
(4) A qualified beneficiary may apply a community college
plan, university plan, or dormitory residence plan toward any eligible
independent college or university in this State as defined in Section
59-113-50. In order to be eligible for participation in the dormitory
residence plan, an eligible independent college or university must
provide written certification to the board that it complies with the
provisions of item (3) of this section. The board shall transfer or
cause to have transferred to the eligible independent college or
university designated by the qualified beneficiary an amount not to
exceed the redemption value of the plan within a state post-secondary
institution. If the cost of registration or housing fees at the
independent college or university is less than the corresponding fees
at a state post-secondary institution, the amount transferred may not
exceed the actual cost of registration or housing fees. No transfer
authorized pursuant to this item may exceed the number of semester
credit hours or semesters of dormitory residence contracted on behalf
of a qualified beneficiary.
Section 59-118-60. The board shall solicit proposals for the
operation of the South Carolina Post-secondary Education Expense
Program pursuant to the South Carolina Consolidated Procurement
Code, through which the board shall contract for the services of a
records administrator, a trustee services firm, and one or more
product providers.
(1) The records administrator must be the entity designated by the
board to conduct the daily operations of the program on behalf of the
board. The goals of the board in selecting a records administrator
must be to provide all purchasers with the most secure,
well-diversified, and beneficially administered post-secondary
education expense plan possible, to allow all qualified firms invested
in providing the services equal consideration and to provide the
services to the State at no cost and to the purchasers at the lowest cost
possible. Evaluations of proposals submitted pursuant to this
paragraph must include, but not be limited to, the following criteria:
(a) fees and other costs charged to purchasers that affect
account values or operational costs related to the program;
(b) past experience in records administration and current ability
to provide timely and accurate service in the areas of records
administration, audit, and reconciliation, plan communication,
participant service, and complaint resolution;
(c) sufficient staff and computer capability for the scope and
level of service expected by the board;
(d) financial history and current financial strength and capital
adequacy to provide administrative services required by the board.
(2) The trustee services firm must be the entity designated by the
board to select and supervise investment programs on behalf of the
board. The goals of the board in selecting a trustee services firm
must be to obtain the highest standards of professional trustee
services, to allow all qualified firms interested in providing these
services equal consideration, and to provide the services to the State
at no cost and to the purchasers at the lowest cost possible. The
trustee services firm shall agree to meet the obligations of the board
to qualified beneficiaries if monies in the fund fail to offset the
obligations of the board as a result of imprudent selection or
supervision of investment programs by the firm. Evaluation of
proposals submitted pursuant to this item must include, but not be
limited to, the following criteria:
(a) adequacy of trustee services for supervision and
management of the program, including current operations and staff
organization and commitment of management to the proposal;
(b) capability to execute program responsibilities within time
and regulatory constraints;
(c) past experience in trustee services and current ability to
maintain regular and continuous interactions with the board, records
administrator, and product provider;
(d) the minimum purchaser participation assumed within the
proposal and any additional requirements of purchasers;
(e) adequacy of technical assistance and services proposed for
staff;
(f) adequacy of a management system for evaluation and
improving overall trustee services to the program;
(g) adequacy of facilities, equipment, and electronic data
processing services;
(h) detailed projections of administrative costs, including the
amount and type of insurance coverage, and detailed projections of
total costs.
(3) (a) The product providers must be the entities designated by
the board to develop investment portfolios on behalf of the board to
achieve the purposes of this chapter. Product providers are limited
to authorized insurers, banks, savings and loan associations,
authorized Securities and Exchange Commission investment
advisors, and investment companies as defined in the Investment
Company Act of 1940. All product providers must have their
principal place of business and corporate charter located and
registered in the United States. In addition, each product provider
must agree to meet the obligations of the board to qualified
beneficiaries if monies in the fund fail to offset the obligations of the
board as a result of imprudent investing by the provider. Each
authorized insurer shall evidence superior performance overall on an
acceptable level of surety in meeting its obligations to its
policyholders and other contractual obligations. Only qualified
public depositories approved by the Director of the Department of
Insurance and State Treasurer are eligible for board consideration.
Each investment company shall provide investment plans as specified
within the request for proposals.
(b) The goals of the board in selecting a product provider
company must be to provide all purchasers with the most secure,
well-diversified, and beneficially administered post-secondary
education expense plan possible, to allow all qualified firms
interested in providing the services equal consideration, and to
provide the services to the State at no cost and to the purchasers at the
lowest cost possible. Evaluations of proposals submitted pursuant to
this section must include, but not be limited to, the following criteria:
(i) fees and other costs charged to purchasers that affect
account values or operational costs related to the program;
(ii) past and current investment performance, including
investment and interest rate history, guaranteed minimum rates of
interest, consistence of investment performance, and any terms and
conditions under which monies are held;
(iii) past experience and ability to provide timely and accurate
service in the areas of records administration, benefit payments,
investment management, and complaint resolution;
(iv) financial history and current financial strength and capital
adequacy to provide products, including operating procedures and
other methods of protecting program assets.
Section 59-118-70. The State shall agree to meet the obligations
of the board to qualified beneficiaries if monies in the fund fail to
offset the obligations of the board. The General Assembly shall
appropriate to the Prepaid Post-secondary Education Expense Trust
Fund the amount necessary to meet the obligations of the board to
qualified beneficiaries.
Section 59-118-80. The assets of the fund must be maintained,
invested, and expended solely for the purposes of this chapter and
may not be loaned, transferred, or otherwise used by the State for any
purpose other than the purposes of this chapter. This section may not
be construed to prohibit the board from investing in, by purchase or
otherwise, bonds, notes, or other obligations of the State or an agency
or instrumentality of the State. Unless otherwise specified by the
board, assets of the fund must be expended in the following order of
priority:
(1) to make payments to state post-secondary institutions on behalf
of qualified beneficiaries;
(2) to make refunds upon termination of advance payment
contracts;
(3) to pay the costs of program administration and operations.
Section 59-118-90. Monies paid into or out of the fund by or on
behalf of a purchaser or qualified beneficiary of an advance payment
contract made under this chapter, which contract has not been
terminated, are exempt from all claims of creditors of the purchaser
or the beneficiary.
Section 59-118-100. The State or a county, municipality, or other
political subdivision may by contract agree with any employee to
remit payments toward advance payment contracts through payroll
deductions made by the appropriate officer or officers of the State,
county, municipality, or political subdivision. The payments must be
held and administered in accordance with this chapter.
Section 59-118-110. Nothing in this chapter may be construed as
a promise or guarantee that a qualified beneficiary will be admitted
to a state post-secondary institution or to a particular state
post-secondary institution, will be allowed to continue enrollment at
a state post-secondary institution after admission, or will be
graduated from a state post-secondary institution.
Section 59-118-120. If the State determines the program to be
financially infeasible, the state may discontinue the program. Any
qualified beneficiary who has been accepted by and is enrolled or is
within five years of enrollment in an eligible independent college or
university or state post-secondary institution is entitled to exercise the
complete benefits for which he has contracted. All other contract
holders shall receive a refund, pursuant to Section 58-118-40(A)(7),
of the amount paid in and an additional amount in the nature of
interest at a rate that corresponds, at a minimum, to the prevailing
interest rates for savings accounts provided by banks and savings and
loan associations."
SECTION 2. Section 12-6-1140 of the 1976 Code, as last amended
by Act 431 of 1996, is further amended by adding an appropriately
numbered item at the end to read:
"( ) an amount paid to purchase a university or community
college advance payment plan, not including a dormitory residence
plan, pursuant to Chapter 118 of Title 59 and an amount equal to
income attributable for federal income tax purposes to a beneficiary
from payments of tuition and fees by a university or community
college advance payment contract in the year the beneficiary's tuition
is paid."
SECTION 3. The initial terms of two of the four members of the
South Carolina Prepaid Post-secondary Education Expense Program
Board established by this act is two years and the Governor shall note
the term of the appointment.
SECTION 4. This act takes effect July 1, 1997.
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