Current Status Introducing Body:Senate Bill Number:364 Primary Sponsor:Passailaigue Committee Number:04 Type of Legislation:GB Subject:Baccalaureate Savings Act Residing Body:Senate Current Committee:Education Computer Document Number:364 Introduced Date:Jan 08, 1991 Last History Body:Senate Last History Date:Jan 08, 1991 Last History Type:Introduced and read first time, referred to Committee Scope of Legislation:Statewide All Sponsors:Passailaigue Type of Legislation:General Bill
Bill Body Date Action Description CMN
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364 Senate Jan 08, 1991 Introduced and read first 04
time, referred to Committee
364 Senate Dec 10, 1990 Prefiled, referred to 04
Committee
View additional legislative information at the LPITS web site.
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:
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.