S 705 Session 111 (1995-1996)
S 0705 General Bill, By Senate Education
A Bill to amend Title 59, Code of Laws of South Carolina, 1976, relating to
education, by adding Chapter 118 so as to enact the South Carolina Endowment
Incentive Act of 1995 which permits certain state-supported colleges and
universities to establish an Academic Endowment Incentive Trust Fund the
disbursements from which shall be matched by the State on a fifty percent
basis to provide funds to support academic scholarships, need-based tuition
assistance, academic programs specifically developed to improve the quality of
teacher education and faculty positions necessary to provide teacher education
in areas determined to be of critical need.
04/05/95 Senate Introduced, read first time, placed on calendar
without reference SJ-9
04/18/95 Senate Retaining place on calendar recommitted to
Committee on Education SJ-15
INTRODUCED
April 5, 1995
S. 705
Introduced by Education Committee
S. Printed 4/5/95--S.
Read the first time April 5, 1995.
A BILL
TO AMEND TITLE 59, CODE OF LAWS OF SOUTH
CAROLINA, 1976, RELATING TO EDUCATION, BY ADDING
CHAPTER 118 SO AS TO ENACT THE SOUTH CAROLINA
ACADEMIC ENDOWMENT INCENTIVE ACT OF 1995 WHICH
PERMITS CERTAIN STATE-SUPPORTED COLLEGES AND
UNIVERSITIES TO ESTABLISH AN ACADEMIC
ENDOWMENT INCENTIVE TRUST FUND, THE
DISBURSEMENTS FROM WHICH SHALL BE MATCHED BY
THE STATE ON A FIFTY PERCENT BASIS TO PROVIDE
FUNDS TO SUPPORT ACADEMIC SCHOLARSHIPS,
NEED-BASED TUITION ASSISTANCE, ACADEMIC
PROGRAMS SPECIFICALLY DEVELOPED TO IMPROVE THE
QUALITY OF TEACHER EDUCATION AND FACULTY
POSITIONS NECESSARY TO PROVIDE TEACHER
EDUCATION IN AREAS DETERMINED TO BE OF CRITICAL
NEED.
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
South Carolina Academic Endowment Incentive Act of
1995
Section 59-118-10. This chapter is known and may be cited as
the South Carolina Academic Endowment Incentive Act of 1995.
Section 59-118-20. The purposes of this chapter are to:
(1) further the state's efforts to meet its responsibility for the
intellectual development of our youth;
(2) enhance statewide economic development through initiatives
in higher education; to provide incentives to individuals,
corporations, or private funding organizations to create endowments
to support the teaching and related activities at South Carolina's
public colleges and universities;
(3) supplement endowments at these colleges and universities;
and
(4) improve the quality of teacher education in South Carolina.
Section 59-118-30. For purposes of this chapter:
(1) `Qualifying college or university' means a state-supported,
post-secondary, four-year educational institution offering
undergraduate, master, or doctoral degree programs.
(2) `Endowments' mean permanent gifts or donations to the
qualifying college or university including cash, income producing
securities, an income producing business, real property, personal
property, fixed assets, mortgage notes, and life income gifts or
bequests. Research grants and funds received by the institution in
the performance of a contractual obligation are not an endowment
for purposes of this chapter and funds therefrom may not be
deposited into the institution's academic endowment incentive trust
fund.
(3) `Year' means a state fiscal year beginning on the first day of
July and ending the following June thirtieth.
Section 59-118-40. Each qualifying college or university may
establish an academic endowment incentive trust fund. Such trust
fund shall provide each qualifying college or university with the
opportunity to provide donors with an incentive in the form of
matching state gifts on disbursements from earnings on certain
endowments, donations, or gifts if these monies are used for the
purposes specified in Section 59-118-50. Endowments received
after July 1, 1995, as selected by the donor and the institution, may
be deposited into the trust fund and disbursements therefrom are
eligible for a fifty percent match by the State in the manner
provided in this chapter.
Section 59-118-50. Disbursements from the earnings of an
academic endowment incentive trust fund if used to provide funds
for the following purposes are eligible to receive state matching
gifts on a fifty percent basis:
(1) academic scholarships;
(2) need-based tuition assistance;
(3) academic programs specifically developed to improve the
quality of teacher education; and
(4) faculty positions necessary to provide teacher education in
areas determined to be of critical need.
Section 59-118-60. The board of trustees of each qualifying
college or university may delegate to the board of one of its
principal foundations its duties and responsibilities in regard to the
managing of the academic endowment incentive trust fund
authorized to be established as provided by this chapter.
Section 59-118-70. There is created the South Carolina Higher
Education Matching Gift Fund which shall be separate and distinct
from the state general fund. The General Assembly in the annual
general appropriations act beginning with fiscal year 1995-96 shall
appropriate such monies as it determines necessary into this
matching gift fund to be used for the purpose of providing
matching state funds on a fifty percent basis beginning with fiscal
year 1996-97 to qualifying colleges and universities which make
disbursements from their Academic Endowment Incentive Trust
Fund for purposes stipulated by this chapter. The State Treasurer
shall manage and invest the monies in the Higher Education
Matching Gift Fund in the same manner and under the same terms
and conditions as other state funds under his control are managed
and invested and disbursements to particular colleges or universities
shall be made on warrant and under the direction of the
Commission on Higher Education pursuant to the provisions of this
chapter.
Section 59-118-80. The State of South Carolina from the Higher
Education Matching Gift Fund established in Section 59-118-70, to
the extent of available funds therein and acting through the
Commission on Higher Education, shall provide funds to match on
a fifty percent basis disbursements from the qualifying college or
university's Academic Endowment Incentive Trust Fund.
Section 59-118-90. The state matching gifts authorized in Section
59-118-80 are subject to the following conditions:
(1) disbursements from the college or university's Academic
Endowment Incentive Fund to which the state matching gift is
applied must come from the income of the fund and not from
principal or corpus;
(2) the state matching funds must go directly into the college
or university's operating bank account to be spent within two years
from the date of the state match only for the purposes authorized;
(3) the college or university must make application to receive
state matching funds on forms and under procedures prescribed by
the Commission on Higher Education and must specifically disclose
the purposes for which the disbursement from the institution's
Academic Endowment Incentive Trust Fund and the state's
matching gift funds will be used;
(4) all matters relating to the institution's Academic
Endowment Incentive Trust Fund, the State Higher Education
Matching Gift Fund, including their governance, investments,
donors, and expenditures, are subject to disclosure under the
Freedom of Information Act;
(5) annual audits of the institution's Academic Endowment
Incentive Trust Fund, the State Higher Education Matching Gift
Fund, and disbursements and expenditures therefrom must be
performed and the results disclosed to the institution, the Governor,
the General Assembly, and the Commission on Higher Education.
Section 59-118-100. The Commission on Higher Education by
regulation shall specify the procedures for submission,
documentation, and approval of requests for matching state funds,
accountability for endowments and disbursements of income from
endowments in academic endowment incentive trust funds,
allocation to qualifying colleges and universities of state matching
funds, restrictions on the use of the monies received under this
chapter, and other criteria to implement the provisions of this
chapter.
Section 59-118-110. The Commission on Higher Education
shall ensure that each qualifying college or university has equal
access to the monies in the State Higher Education Matching Gift
Fund. No qualifying college or university may receive more than
ten percent of the monies in the State Higher Education Matching
Gift Fund available to be distributed during any particular year,
unless thirty days before the end of that year monies still are
available to be distributed from the State Higher Education
Matching Gift Fund. In this case, institutions may receive
additional matching distributions from the fund, but in no event
shall an institution's total receipts from the matching gift fund
exceed twenty-five percent of the monies available to be distributed
in any one year. Any monies in the State Higher Education
Matching Gift Fund not distributed in any year shall be carried
forward for the same purposes in future years and all earnings on
monies in the State Higher Education Matching Gift Fund shall be
retained in the fund and used for its stated purposes.
Section 59-118-120. Income earned from the principal or corpus
of the Academic Endowment Incentive Trust Fund shall be used to
provide disbursements from the fund, provided that nothing herein
prevents earnings or income to be reinvested in the fund rather than
disbursed in the manner authorized by this chapter. However, if
earnings in any year are reinvested and not disbursed during that
year, it will for future years be considered principal and not
income. No principal or corpus of the fund may be disbursed in
any year unless the fund is dissolved in a manner permitted by law.
In addition, for the period July 1, 1995, to June 30, 1996, no
earnings may be disbursed and for this period must be added to
principal.
Section 59-118-130. The board of trustees of each qualifying
college and university authorized to establish an Academic
Endowment Incentive Trust Fund shall manage and serve as the
trustees for such fund and in this regard are authorized in its
absolute discretion with respect to any property, real or personal, in
addition to any other rights, powers, authority, and privileges
granted by any other provision of law:
(1) To retain in the form received any property or undivided
interests in property donated to, or otherwise acquired as a part of
the trust, regardless of any lack of diversification, risk, or
nonproductivity, as long as it considers advisable, and to exchange
any such property for other securities or properties and to retain
such items received in exchange, although the property represents a
large percentage of the total property of the trust or even the
entirety thereof.
(2) To invest all or any part of the trust in any property and
undivided interests in property, wherever located, including bonds,
debentures, notes, secured or unsecured, stocks or corporations
regardless of class, interest in partnerships, real estate, or any
interest in real estate whether or not productive at the time of
investment, investment trusts, whether of the open or closed fund
type, without being limited by any statute or rule of law concerning
investments by fiduciaries.
(3) To sell or dispose of or grant option to purchase any
property, real or personal, constituting a part of the trust, for cash
or upon credit, to exchange any property of the trust for other
property, at such times and upon such terms and conditions as it
considers best.
(4) To hold any securities or other property in the trustee's own
name as trustee, in its own name, in the name of a nominee (with
or without disclosure of any fiduciary relationship) or in bearer
form.
(5) To keep, at any time and from time-to-time, all or any
portion of the trust in cash and uninvested for such period or
periods of time as it may consider advisable.
(6) To sell or exercise stock subscription or conversion rights.
(7) To refrain from voting or to vote shares of stock owned by
the trust at shareholders' meetings in person or by special, limited,
or general proxy and in general to exercise all the rights, powers,
and privileges of an owner in respect to any securities constituting a
part of the trust.
(8) To borrow money and to encumber, mortgage, or pledge
any asset of the trust for such terms as considered appropriate, in
connection with the exercise of any power vested in the trustee.
(9) To enter for any purpose into a lease as lessor or lessee with
or without option to purchase or renew for any term.
(10) To make ordinary or extraordinary repairs or alterations in
buildings or other structures, to demolish any improvements or
buildings.
(11) To collect, receive, and receipt for rents, issues, profits, and
income of the trust.
(12) To insure the assets of the trust against damage or loss and
the trustee against liability with respect to third persons.
(13) To compromise, adjust, arbitrate, sue or defend, abandon, or
otherwise deal with and settle claims in favor of or against the trust
as the trustee considers best.
(14) To employ and compensate agents, accountants, investments
advisers, brokers, attorneys in fact, attorneys at law, tax specialists,
realtors, and other assistants and advisors considered by the trustee
needful for the proper administration of the trust, and to do so
without liability for any neglect, omission, misconduct, or default of
any such agent or professional representative provided he was
selected and retained with reasonable care.
(15) To receive property bequeathed, devised, or donated to the
trust by any person; to receive the proceeds of any insurance policy;
to execute all necessary receipts and releases to donors, insurance
companies, and other parties adding property to the trust.
(16) In general, to exercise all powers in the management of the
trust which any individual could exercise in his own right, upon
such terms and conditions as it considers best, and to do all acts
which it considers necessary or proper to carry out the purposes of
this trust."
SECTION 2. This act takes effect July 1, 1995.
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