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376Type of Legislation: General Bill GBIntroducing Body: SenateIntroduced Date: 20010227Primary Sponsor: HuttoAll Sponsors: HuttoDrafted Document Number: l:\council\bills\gjk\20248sd01.docResiding Body: HouseCurrent Committee: Ways and Means Committee 30 HWMSubject: Income tax credit for tuition, additional qualification for students to receive; Taxation, Colleges and UniversitiesHistory Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ House 20010620 Introduced, read first time, 30 HWM referred to Committee Senate 20010607 Read third time, sent to House Senate 20010514 Read second time, notice of general amendments ------ 20010510 Scrivener's error corrected Senate 20010509 Committee report: Favorable 06 SF Senate 20010227 Introduced, read first time, 06 SF referred to Committee Versions of This Bill Revised on May 9, 2001 - Word format Revised on May 10, 2001 - Word format
Indicates Matter Stricken
Indicates New Matter
May 9, 2001
S. Printed 5/9/01--S. [SEC 5/10/01 3:41 PM]
Read the first time February 27, 2001.
To whom was referred a Bill (S. 376) to amend Section 12-6-3385, Code of Laws of South Carolina, 1976, relating to refundable state individual income tax credits for tuition expenditures paid to institutions of higher learning, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass:
HUGH K. LEATHERMAN, SR. for Committee.
This bill would increase state revenues by $807,397 in fiscal year 2001-2002. This same amount would apply to current revenue projections for each fiscal year thereafter.
This bill would require students in institutions of higher education to have attended three of four years of high school in-state in order for them or their parents to take state tuition tax credits for their college tuition. Net in-migration of students who attended only two of the last four grades of high school who will be enrolled as undergraduates in fiscal year 2001-2002 is estimated to be 3,300. These high-school graduates would not qualify under this bill because they would not have been in high school for three of their last four years before graduating. The number of full-time South Carolina residents in South Carolina's institutions of higher education is estimated to be 81,229, therefore the proportion of non-qualifying students would be 4.1%. Although there are significant numbers of private-schooled graduates, they are assumed to be affected in the same proportion as public-school graduates. Home-school graduates may be affected differently, but the growth in the number of home-school graduates is relatively recent and therefore would have relatively little effect upon the change this bill proposes because a small proportion of students with tuition eligible for tax credits are home-school graduates.
The cost of tuition tax credits is estimated at $33,725,000. A 4.1% reduction in this amount would be $1,307,209. Whether South Carolinian taxpayers take this deduction depends on their income level and whether they take itemized deductions. The best available data indicates that 58.9% of South Carolinians itemize their returns and have a high enough income level to take advantage of the tax credits that this bill modifies. Taking 58.9% of $1,307,209 yields a revenue gain of $807,397.
William C. Gillespie
Board of Economic Advisors
1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact, Section 2-7-76 for a local revenue impact, and Section 6-1-85(B) for an estimate of the shift in local property tax incidence.
TO AMEND SECTION 12-6-3385, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO REFUNDABLE STATE INDIVIDUAL INCOME TAX CREDITS FOR TUITION EXPENDITURES PAID TO INSTITUTIONS OF HIGHER LEARNING IN THIS STATE BY STUDENTS WHO DO NOT RECEIVE A LIFE OR PALMETTO FELLOWS SCHOLARSHIP AND WHO MEET DESIGNATED CRITERIA, SO AS TO PROVIDE THAT THE STUDENT AS AN ADDITIONAL QUALIFICATION MAY HAVE ATTENDED AT LEAST THREE OF HIS FINAL FOUR YEARS OF HIGH SCHOOL WITHIN THIS STATE.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-6-3385(B)(3) of the 1976 Code is amended to read:
"(3) 'Student' means an individual enrolled in an institution of higher learning:
(a) eligible for in-state tuition and fees as determined pursuant to Chapter 112 of Title 59 and applicable regulations;
(b) who at the end of the taxable year for which the credit is claimed has completed at least thirty credit hours each year, or its equivalent, as determined by the Commission on Higher Education, and who is admitted, enrolled, and classified as a degree seeking undergraduate or enrolled in a certificate or diploma program of at least one year;
(c) who, within twelve months before enrolling:
(i) graduated from a high school in this State or attended at least three of his final four years of high school within this State;
(ii) successfully completed a high school home school program in this State in the manner required by law; or
(iii) graduated from a preparatory high school outside this State while a dependent of a parent or guardian who is a legal resident of this State and has custody of the dependent;
(d) not in default on a Federal Title IV or State of South Carolina educational loan, nor who owes a refund on a Federal Title IV or a State of South Carolina student financial aid program;
(e) who has not been adjudicated delinquent or been convicted or pled guilty or nolo contendere to any felonies or any alcohol or drug related offenses under the laws of this State, any other state or comparable jurisdiction, or the United States
;, except that a student who has been adjudicated delinquent or has been convicted or pled guilty or nolo contendere to an alcohol or drug related misdemeanor offense is ineligible only for the taxable year in which the adjudication, conviction, or plea occurred;
(f) who is in good standing at the institution attended;
(g) who is not a Palmetto Fellowship recipient;
(h) who is not a LIFE Scholarship recipient."
SECTION 2. This act takes effect upon approval by the Governor.
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