Download This Version in Microsoft Word format
AMENDED
April 11, 2001
H. 3172
Introduced by Reps. Vaughn, Barrett, Davenport, Leach, Witherspoon, Walker, Campsen, Robinson, Rodgers, Stuart, Altman, Sharpe, Loftis, Rice, Hamilton, Easterday, Delleney, Phillips, Harrison, Chellis, Scarborough, Huggins, Tripp, Cato and Gilham
S. Printed 4/11/01--H. [SEC 4/16/01 12:32 PM]
Read the first time January 9, 2001.
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-6-3600 SO AS TO AUTHORIZE STATE INCOME TAX CREDITS UP TO FIVE HUNDRED DOLLARS A YEAR ON A PHASED-IN BASIS FOR CONTRIBUTIONS MADE TO NONPROFIT EDUCATION FOUNDATIONS THAT PROVIDE ACADEMIC ASSISTANCE GRANTS FOR CHILDREN WHO ATTEND PUBLIC OR NONGOVERNMENT SCHOOLS, A MAJORITY OF WHOM MUST QUALIFY FOR NEEDS-BASED ASSISTANCE, AND TO PROVIDE THE PROCEDURES FOR, AND CONDITIONS AND LIMITATIONS OF, THESE INCOME TAX CREDITS.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The 1976 Code is amended by adding:
"Section 12-6-3600. (A) The purpose of this section is to:
(1) provide tax credits for certain contributions to a nonprofit education foundation;
(2) expand educational opportunities for children of families that have limited financial resources; and
(3) enable children in this State to achieve a greater level of excellence in their education.
(B) In enacting this section, the General Assembly recognizes diversity among children and affirms that every child is unique. The General Assembly also affirms that children learn differently from one another and may benefit from expanded educational opportunities.
(C) It is the intent of the General Assembly that freedom of religion of all citizens is inviolate and that nothing in this section be construed to cause excessive governmental entanglement with the religious instruction of a nongovernment school. With respect to a nongovernment school, nothing in this section gives a governmental agency authority to regulate, control, supervise, or in any way be involved in the:
(1) form, manner, or content of religious instruction, ministry, teaching, or curriculum offered by the nongovernment school;
(2) ability of the nongovernment school to select and supervise qualified personnel and otherwise control the terms of employment, including the right to employ individuals who share the religious views of the school;
(3) internal self-governance and autonomy of the nongovernment school; or
(4) religious environment of the nongovernment school, such as symbols, art, icons, and scripture.
(D) As used in this section:
(1) 'Eligible school' means a K-12 public school in this State. It also means a nongovernment funded, managed, and operated primary or secondary school that:
(a) offers a general education to primary or secondary school students;
(b) does not discriminate on the basis of race, color, or national origin; and
(c) is located in this State.
(2) 'Nonprofit education foundation' means a charitable organization that:
(a) is exempt from federal tax under Section 501(a) of the Internal Revenue Code by being listed as an exempt organization in Section 501(c)(3) of the code;
(b) allocates, after its first year of operation, a majority of its annual contributions and revenue received to provide academic assistance grants for tuition, transportation, or other academically related expenses including, but not limited to, academic fees, tutoring services, tuition required to attend schools in other districts, special transportation needs, and other types of academic support to children enrolled in an eligible school; provided that if its annual contributions and revenues received in any year exceed three hundred thousand dollars, at least eighty percent of these contributions and revenues must be used to provide such grants;
(c) allocates at least seventy-five percent of its funds used for grants on an annual basis to children who are eligible for the federal free or reduced lunch program;
(d) does not provide grants solely for the benefit of one school and does not accept donations that designate a specific child or school as the beneficiary; and
(e) if the Department of Revenue determines that the nonprofit education foundation is providing grants to students attending one school to the exclusion of other schools, the tax credit allowed by this section may be disallowed.
(3) 'Person' means an individual, partnership, corporation, or other similar entity.
(4) 'Transportation' means transportation to and from school only.
(E) The tax credits allowed by this section may be applied against any tax imposed by this chapter or against insurance premium taxes or bank license fees.
(F) A person is entitled to a tax credit under this section for the amount of money up to the limits of this section if the person contributes to a nonprofit education foundation if the contribution is used to provide school or student support of an academic nature not provided by public or other funding sources provided:
(1) the support does not relate to improvements to or for the purchase of real property;
(2) students who are eligible for the federal free or reduced lunch program receive directly or indirectly at least seventy-five percent of such support on an annual basis;
(3) the grant is used to provide tuition, transportation, academic fees, tutoring services, textbook expenses, other academic support, or any combination thereof.
(G) Grants awarded by the nonprofit education foundation to recipients in eligible schools on a needs basis shall be determined by using applicable federal forms and procedures to determine the ability of the child and the child's family to contribute to the cost of the child's tuition and expenses. Grants given by the organization must provide at least sixty percent of the remaining eligible expenses after deducting the estimated contribution of the child and the child's family and after considering any other tuition assistance available to the family.
(H) Nonprofit education foundations cannot discriminate based on whether a child shall attend a public or nongovernment school.
(I)(1) The tax credits authorized by this section may not exceed one hundred dollars for calendar year 2002, two hundred dollars for calendar year 2003, three hundred dollars for calendar year 2004, four hundred dollars for calendar year 2005, and five hundred dollars for calendar year 2006 and thereafter.
(2) Taxpayers who elect to file a joint return for any year are together limited to the amounts specified by item (1) above, and if a husband and wife file separate returns for any year, they each may claim only one-half of the tax credit that would have been allowed for a joint return for the year.
(3) The tax credits allowed by this section are in lieu of any State of South Carolina charitable contribution deductions that could have been taken on the applicable return in regard to the contribution.
(4) The person must apply for a credit under this section on or with the tax return for the period for which the credit is claimed.
(5) The Department of Revenue shall prescribe the form and manner of proof required to obtain the credit authorized by this section.
(6) A person may claim a credit under this section for a contribution during a particular period only against the tax owed for the corresponding period.
(7) If the allowable tax credit of a taxpayer exceeds the taxes otherwise due or if there are no taxes due, or if a contribution exceeds the allowable tax credit for any year, the excess may be carried forward for a period not exceeding five consecutive years.
(J) A corporation or entity entitled to a credit under this section may not convey, assign, or transfer the credit authorized by this section to another entity unless all of the assets of the entity are conveyed, assigned, or transferred in the same transaction."
SECTION 2. This act takes effect upon approval by the Governor and applies to contributions authorized by Section 12-6-3600 made on or after January 1, 2002.
This web page was last updated on Thursday, June 25, 2009 at 2:10 P.M.