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1232Type of Legislation: General Bill GBIntroducing Body: SenateIntroduced Date: 20020418Primary Sponsor: GieseAll Sponsors: Giese and RankinDrafted Document Number: l:\council\bills\pt\1931dw02.docResiding Body: SenateCurrent Committee: Finance Committee 06 SFSubject: SC College Investment Program (SCCIP) and SC Tuition Prepayment Program (SCTPP), provisionsHistory Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ Senate 20020418 Introduced, read first time, 06 SF referred to Committee Versions of This Bill
TO AMEND SECTION 59-2-70, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO INVESTMENT AND OTHER PROCEDURES UNDER THE SOUTH CAROLINA COLLEGE INVESTMENT PROGRAM (SCCIP) WHICH ESTABLISHES A QUALIFIED PLAN FOR QUALIFIED HIGHER EDUCATION EXPENSES, SO AS TO PROVIDE THAT BENEFICIARIES MAY BE CHANGED IN ANY ACCOUNT BY AN ACCOUNT OWNER AS DESIRED TO THE EXTENT NOT PROHIBITED BY FEDERAL LAW; TO AMEND SECTION 59-2-80, RELATING TO CONTRIBUTIONS TO AND EARNINGS AND WITHDRAWALS FROM INVESTMENT ACCOUNTS UNDER THE PROGRAM, SO AS TO FURTHER PROVIDE FOR THE DEDUCTIBILITY OF CONTRIBUTIONS UNDER THE PROGRAM, AND TO PROVIDE THAT WITHDRAWALS OF THE PRINCIPAL AMOUNT OF CONTRIBUTIONS THAT ARE NOT QUALIFIED WITHDRAWALS MUST BE RECAPTURED INTO SOUTH CAROLINA INCOME SUBJECT TO TAX IN SPECIFIED CIRCUMSTANCES; TO ADD SECTION 59-2-85 SO AS TO PERMIT STATE EMPLOYEES TO CONTRIBUTE TO THE PROGRAM THROUGH PAYROLL DEDUCTIONS, AND PERMIT THE STATE TREASURER TO ESTABLISH METHODS FOR EMPLOYEES OF PRIVATE ENTITIES TO CONTRIBUTE TO THE PROGRAM THROUGH PAYROLL DEDUCTIONS; AND TO AMEND SECTION 12-6-1140, RELATING TO DEDUCTIONS FROM SOUTH CAROLINA INDIVIDUAL TAXABLE INCOME, SO AS TO FURTHER PROVIDE FOR THE DEDUCTIBILITY OF CONTRIBUTIONS TO THE SOUTH CAROLINA COLLEGE INVESTMENT PROGRAM (SCCIP) AND THE SOUTH CAROLINA TUITION PREPAYMENT PROGRAM (SCTPP).
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 59-2-70 of the 1976 Code, as added by Act 72 of 2001, is amended by adding a new subsection appropriately numbered to read:
"( ) Beneficiaries may be changed in any account by an account owner as desired to the extent not prohibited by federal law."
SECTION 2. Section 59-2-80(C) of the 1976 Code, as added by Act 72 of 2001, is amended to read:
"(C) The earnings portion of any withdrawals from an account that are not qualified withdrawals shall be included in the gross income of the resident recipient of the withdrawal for purposes of South Carolina income taxes in the year of the withdrawal. Withdrawals of the principal amount of contributions that are not qualified withdrawals must be recaptured into South Carolina income subject to tax to the extent the contributions were previously deducted from South Carolina taxable income."
SECTION 3. Section 59-2-80(D) of the 1976 Code, as added by Act 72 of 2001, is amended to read:
"(D) Contributions to
an each investment trust account created under this chapter by a resident of this State or a nonresident required to file a State of South Carolina income tax return for any year are deductible from South Carolina income subject to tax for that year up to the limit of maximum contributions allowed to such accounts under Section 529 of the Internal Revenue Code of 1986, as amended, including funds transferred to an investment trust account from another qualified college investment account plan, as allowable under Section 529 of the Internal Revenue Code of 1986, as amended, and to the extent that the transferred funds were not permitted a state income tax deduction previously under state law. The deduction for funds transferred from another qualified college investment account shall be allowable in the year in which the funds are transferred South Carolina law.
For purposes of this subsection, the term 'qualified plan' means any plan qualified under Section 529 of the Internal Revenue Code of 1986, as amended.
State income tax deductions as provided for in this section may be taken in any taxable year for contributions and rollovers made during that taxable year, and up to April fifteenth of the succeeding year, or the due date of a taxpayer's state income tax return excluding extensions, whichever is longer."
SECTION 4. The 1976 Code is amended by adding:
"Section 59-2-85. The Comptroller General and the chief financial officers of state agencies, departments, and institutions maintaining separate payroll accounts, at the request of a state employee, may arrange for contributions, through payroll deduction to the program. The State Treasurer is authorized to devise a method whereby private and nonprofit businesses or organizations may arrange for employees to contribute through payroll deduction to the program."
SECTION 5. Section 12-6-1140(11) of the 1976 Code, as added by Act 72 of 2001, is amended to read:
a contribution contributions to the South Carolina Tuition Prepayment Program as to the extent provided in Section 59-4-100 and to the South Carolina College Investment Program to the extent provided in Section 59-2-80."
SECTION 6. This act takes effect upon approval by the Governor, and applies to taxable years beginning after December 31, 2002.
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