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STATUS INFORMATION
General Bill
Sponsors: Senators Grooms, Thomas, Vaughn, McConnell, Bryant, Fair, Hawkins, Mescher, Ryberg, Verdin, Knotts and Campsen
Document Path: l:\council\bills\ggs\22732sj07.doc
Companion/Similar bill(s): 3484
Introduced in the Senate on February 20, 2007
Currently residing in the Senate Committee on Finance
Summary: Educational Opportunity Scholarship Act
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 2/20/2007 Senate Introduced and read first time SJ-3 2/20/2007 Senate Referred to Committee on Finance SJ-3
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VERSIONS OF THIS BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ENACTING THE "SOUTH CAROLINA EDUCATIONAL OPPORTUNITY SCHOLARSHIP ACT" BY ADDING CHAPTER 18 TO TITLE 12 SO AS TO PROVIDE A CREDIT FOR CERTAIN TAXES FOR TUITION PAID TO PUBLIC OR INDEPENDENT SCHOOLS AND FOR CONTRIBUTIONS TO THE RURAL SCHOOL INFRASTRUCTURE FUND, TO PROVIDE FOR THE CREATION OF THE RURAL SCHOOL INFRASTRUCTURE AUTHORITY AND ITS GOVERNANCE AND PROVIDE HOW CONTRIBUTIONS TO THE AUTHORITY MUST BE USED, TO DEFINE CERTAIN TERMS, TO PROVIDE FOR REPORTING AND ACCOUNTABILITY OF THE IMPLEMENTATION OF THIS CHAPTER, TO AUTHORIZE THE AUTHORITY TO PROVIDE LOANS AND OTHER FINANCIAL ASSISTANCE TO SCHOOL DISTRICTS TO FINANCE CAPITAL PROJECTS, TO ALLOW STATE APPROPRIATIONS, GRANTS, LOAN REPAYMENTS, AND OTHER AVAILABLE AMOUNTS TO BE CREDITED TO THE FUND OF THE AUTHORITY, TO AUTHORIZE LENDING TO AND BORROWING BY SCHOOL DISTRICTS THROUGH THE AUTHORITY, AND TO AUTHORIZE THE ISSUANCE OF GENERAL OBLIGATION BONDS BY THE AUTHORITY TO BE USED FOR ITS STATED PURPOSES; BY ADDING ARTICLE 6 TO CHAPTER 63, TITLE 59 SO AS TO ALLOW CERTAIN STUDENTS TO USE AN EDUCATIONAL OPPORTUNITY SCHOLARSHIP EQUAL TO A PORTION OF THE AVERAGE STATE PER PUPIL EXPENDITURE TO TRANSFER FROM A FAILING PUBLIC SCHOOL TO ANOTHER PUBLIC SCHOOL OR TO AN INDEPENDENT SCHOOL, TO PROVIDE FOR AN ADDITIONAL AWARD FOR TRANSPORTATION OF THE TRANSFERRING STUDENT, TO DEFINE CERTAIN TERMS, TO PROVIDE THE DUTIES OF A FAILING PUBLIC SCHOOL AND THE DUTIES AND RIGHTS OF THE PARENT AND STUDENT WHO WISHES TO TRANSFER, AND TO PROVIDE FOR REPORTING, ACCOUNTABILITY, AND CONDUCTING OF EXAMINATIONS AND INVESTIGATIONS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. This act may be cited as the "South Carolina Educational Opportunity Scholarship Act".
SECTION 2. The purpose of this act is to:
(1) put parents in charge of their children's education;
(2) assist parents whose children are zoned to attend unsatisfactory schools;
(3) assist parents who have special needs children;
(4) expand educational opportunities for children of families in poverty;
(5) restore parental input in education; and
(6) improve public school performance.
SECTION 3. Title 12 of the 1976 Code is amended by adding:
Section 12-18-30. As used in this chapter, unless otherwise required by the context:
(1) 'Department' means the South Carolina Department of Revenue.
(2) 'Independent school' means a school, other than a public school, at which the compulsory attendance requirements of Section 59-56-10 may be met and that does not discriminate based on the grounds of race, color, or national origin. 'Independent school' includes home schools as provided in Article 1, Chapter 65, Title 59.
(3) 'Public school' means a public school as defined in Section 59-1-120.
(4) 'Qualifying student' means an individual:
(a) who is:
( i) enrolled at an independent school as a full-time student, as determined by the school, for which the school has a release of information form;
( ii) taught at home pursuant to Article 1, Chapter 65, Title 59; or
(iii) a resident of this State, and, if enrolled in a public school, is not a resident of the school district operating that public school;
(b) who is in kindergarten through grade twelve; and
(c) who is not receiving a scholarship pursuant to Article 6, Chapter 63, Title 59.
A student who is determined by a school psychologist to be physically or mentally handicapped according to the definitions in Section 59-21-510 is also considered a 'qualifying student' pursuant to this item.
Once a student becomes a 'qualifying student', the student is eligible for the tax credit program until he graduates from high school.
(5) 'Receipt' means a document that a school issues to the person that makes a tuition payment on behalf of a qualifying student. The department shall develop the form of the document, the content of which must be limited to and include, the name and address of the school; the name, address and social security number of the qualifying student on whose behalf the tuition was paid; the name of the person paying the tuition; the names of all other persons who have paid tuition, in chronological order, during the then current calendar year on behalf of the qualifying student prior to the payment for which the receipt is being issued and including the total tuition paid by the named person; and the date and amount of tuition paid and the aggregate amount of tuition paid for the qualifying student. For a student taught at home pursuant to Article 1, Chapter 65, Title 59, 'receipt' means a document issued by the entity receiving a payment for tuition, which contains the name of the entity receiving the payment; the identity of the goods or services purchased; the date and amount of tuition paid; and, if the receipt is for personal services, the person's taxpayer identification number.
(6) 'Release of information form' means a form developed by a school that states that a parent or the legal guardian of the qualifying student consents to the release of the information contained in the receipt and is consistent with the requirements of 20 U.S.C. Section 1232g, Family Educational Rights and Privacy Act of 1974.
(7) 'School' means a public school or independent school.
(8) 'State' means the government of the State of South Carolina.
(9) 'Tuition' means the amount charged for attending a public school when the student is not a resident of the school district or for attending an independent school. 'Tuition' includes fees necessary for attending the respective school including, but not limited to, enrollment fees and transportation fees. For students taught at home pursuant to Article 1, Chapter 65, Title 59, 'tuition' means expenses incurred for tutors, textbooks, school supplies, computers, including hardware and software, fees for membership in an association that sets the academic standards for the student's home schooling program, and academic lessons including, but not limited to, science, math, music, and art. Expenses for tutors or academic lessons may be included in 'tuition' only if the person providing the tutoring or academic lessons is a person other than the student's parent or legal guardian and who meets the requirements for providing the service as set by the standard-setting entity for that student's home school program. 'Tuition' does not include athletic fees.
Section 12-18-40. The department may promulgate regulations to aid in the performance of its duties pursuant to this chapter; however, the department's power does not extend to matters of school governance, curriculum, hiring or firing, or religious beliefs or practices.
Section 12-18-50. The department may conduct examinations and investigations whenever it believes that the provisions of this chapter have been evaded or violated in any manner. All powers possessed by the department as provided in Title 12 to conduct examinations and investigations apply to examinations and investigations conducted pursuant to this section.
Section 12-18-60. If a student wants to transfer to a different school district, the board of trustees of the school district to which the student wishes to transfer shall approve or disapprove the transfer. If the board of trustees approves the transfer, the board may estimate the tuition to charge the transferring student.
Section 12-18-70. The annual determinations required in this chapter to be made by the budget office must be used by the department to set the limits on the amount of credit that may be claimed pursuant to Section 12-18-310 for the tax year beginning after December thirty-first immediately following the determinations.
Section 12-18-310. (A) A person is allowed a tax credit for tuition paid for qualifying students to attend a school. The credit may be applied against the person's liability for taxes imposed pursuant to Chapter 6 of this title. Limitations upon the total amount of liability for taxes that can be reduced by the use of another credit allowed for that tax must be computed after the credit allowed by this section is used to reduce a tax liability pursuant to Chapter 6 of this title. The credit may be claimed only by the person who actually paid the tuition. More than one person may claim a credit for the payment of a portion of the qualifying student's total tuition but only if the person actually paid the portion and the total credit taken by all persons does not exceed, in the aggregate, the limits set in this section. If the person's receipt indicates that the aggregate tuition paid by all persons for the qualifying student exceeds the credit that may be claimed pursuant to this article, then that person may claim the credit only to the extent that the person's tuition payment does not exceed the allowable credit. No credit may be claimed by a person without a receipt. The credit is nonrefundable. A credit claimed pursuant to this section, but not used in a taxable year, may be carried forward for five years from the taxable year in which the credit is earned by the taxpayer. Credits that are carried forward must be used in the order earned.
(B)(1) The credit claimed for each qualifying student pursuant to this article is one thousand dollars indexed each year to the consumer price index.
(2) Notwithstanding the provisions of item (1), the credit claimed for each physically or mentally handicapped student pursuant to this article may not exceed the lesser of the:
(a) actual tuition paid; or
(b) appropriate pupil classification weighting for that student pursuant to Section 59-20-40 multiplied by seventy-five percent of the projected state per pupil cost as promulgated by the office of research and statistics.
(3) Notwithstanding the provisions of items (1) and (2), the credit claimed for a qualifying student who is taught at home pursuant to Article 1, Chapter 65, Title 59 may not exceed the lesser of the amount provided in item (1) or item (2) or five hundred dollars indexed each year to the consumer price index.
(C) If a qualifying student's enrollment in an independent school is terminated before the end of the school year, the independent school shall refund to the tuition payers any tuition paid that is applicable to a semester or term beyond the semester or term during which the qualifying student's enrollment is terminated. At the time of making the refund, the independent school shall issue a receipt reflecting the date, amount, and payee for each refund and shall provide a copy of the receipt to the department.
Section 12-18-320. The credit claimed pursuant to this article may not reduce the amount of funds distributed to school districts.
Section 12-18-610. A person is allowed a tax credit for a contribution to the Rural School Infrastructure Fund. The credit may be applied against the person's liability for taxes imposed pursuant to Chapter 6 of this title. Limitations upon the total amount of liability for taxes that can be reduced by the use of another credit allowed for that tax must be computed after the credit allowed by this section is used to reduce a tax liability pursuant to Chapter 6 of this title. The credit may be claimed only by the person who actually made the contribution except that, if the credit is earned by one member of a controlled group of corporations, the credit may be used and applied by that member and by another member of the controlled group of corporations. As used in this article, 'Controlled Group of Corporations' has the same meaning as provided in Section 12-6-3480(5) and 'person' has the same meaning as provided in Section 12-2-20. The credit is nonrefundable. A credit claimed pursuant to this section, but not used in a taxable year, may be carried forward for five years from the taxable year in which the credit is earned by the taxpayer. Credits that are carried forward must be used in the order earned.
Section 12-18-620. The Rural School Infrastructure Fund receiving contributions for which the person claims a credit pursuant to this article must segregate the contributions from other funds of the school district.
Section 12-18-630. A person claiming a tax credit pursuant to this article may claim:
(1) seventy-five percent of the contribution up to two hundred thousand dollars; or
(2) ninety percent of the contribution if the person contributed for more than one year.
Section 12-18-640. The total amount of tax credits claimed each year pursuant to this article is thirty million dollars.
Section 12-18-810. (A) The Rural School Infrastructure Authority is created as a body politic and corporate to provide assistance to failing schools. As used in this article, 'failing school' means a school that receives an absolute rating of below average or unsatisfactory on its most recent report card and is located in a district where at least sixty percent of the students qualify for free or reduced-price lunch.
(B) The Rural School Infrastructure Authority shall establish and maintain the Rural School Infrastructure Fund to provide bonds to failing schools for capital projects. Contributions to the Rural School Infrastructure Fund, which qualify for the tax credit provided in Article 6 of this chapter, must only be used for the purpose of issuing bonds for capital projects to failing schools.
Section 12-18-815. As used in this article unless the context clearly indicates otherwise:
(1) 'Authority' means the Rural School Infrastructure Authority.
(2) 'Board' means the board of directors of the authority.
(3) 'Bonds or school infrastructure bonds' means bonds as authorized by this article.
(4) 'Eligible cost' means as applied to a qualified project to be financed from the Rural School Infrastructure Fund, the costs that are permitted under applicable laws, requirements, procedures, and guidelines in regard to establishing, operating, and providing assistance from the authority.
(5) 'Eligible project' means a capital project of a school district.
(6) 'Financing agreement' means any agreement entered into between the authority and a school district pertaining to a loan or other financial assistance. This agreement may contain, in addition to financial terms, provisions relating to the regulation and supervision of a qualified project, or other provisions as the board may determine. The term 'financing agreement' includes, without limitation, a loan agreement, trust indenture, security agreement, reimbursement agreement, guarantee agreement, bond or note, ordinance or resolution, or similar instrument.
(7) 'Governing body of a school district' means the board of trustees of a school district, a county board of education, or the entity responsible for administering the school district.
(8) 'Loan' means an obligation subject to repayment which is provided by the authority to a qualified school district borrower for all or a part of the eligible cost of a qualified project. A loan may be disbursed in anticipation of reimbursement for or direct payment of eligible costs of a qualified project.
(9) 'Loan obligation' means a bond, note, or other evidence of an obligation issued by a qualified borrower.
(10) 'Other financial assistance' means, but is not limited to, grants, contributions, credit enhancement, capital or debt reserves for bonds or debt instrument financing, interest rate subsidies, provision of letters of credit and credit instruments, provision of bond or other debt financing instrument security, and other lawful forms of financing and methods of leveraging funds that are approved by the board.
(11) 'Qualified borrower' means a school district that has been authorized for a qualified project.
(12) 'Qualified project' means an eligible project that has been selected by the authority to receive a loan or other financial assistance from the authority to defray an eligible cost.
(13) 'Revenues' means, when used with respect to the authority, any receipts, fees, income, or other payments received or to be received by the authority including, without limitation, receipts and other payments deposited in the Rural School Infrastructure Fund and investment earnings on the Rural School Infrastructure Fund.
Section 12-18-820. (A) The Rural School Infrastructure Authority must be governed by a nine-member board composed of three members appointed by each of the following:
(1) Governor;
(2) Speaker of the House of Representatives; and
(3) President Pro Tempore of the Senate.
(B) Members shall serve terms of four years, except that of the initial members, one member appointed by the Governor, two members appointed by the Speaker of the House of Representatives, and two members appointed by the President Pro Tempore of the Senate shall serve terms of two years.
(C) The board shall elect a chairman from the members who comprise the board and other officers as necessary.
Section 12-18-830. (A) In addition to the powers contained elsewhere in this article, the authority has all power necessary, useful, or appropriate to fund, operate, and administer the authority, and to perform its other functions including, but not limited to, the power to:
(1) have perpetual succession;
(2) adopt, promulgate, amend, and repeal bylaws, not inconsistent with provisions in this article for the administration of the authority's affairs and the implementation of its functions including the right of the board to select qualifying projects and to provide loans and other financial assistance;
(3) sue and be sued in its own name;
(4) have a seal and alter it at its pleasure, although the failure to affix the seal does not affect the validity of an instrument executed on behalf of the authority;
(5) make loans to qualified borrowers to finance the eligible costs of qualified projects and to acquire, hold, and sell loan obligations at prices and in a manner as the board determines advisable;
(6) provide qualified borrowers with other financial assistance necessary to defray eligible costs of a qualified project;
(7) enter into contracts, arrangements, and agreements with qualified borrowers and other persons and execute and deliver all financing agreements and other instruments necessary or convenient to the exercise of the powers granted in this article;
(8) enter into agreements with school districts of this State for the purpose of planning and providing for the financing of qualified projects;
(9) establish policies and procedures for the making and administering of loans and other financial assistance, and establish fiscal controls and accounting procedures to ensure proper accounting and reporting by the authority and school districts;
(10) acquire by purchase, lease, donation, or other lawful means and sell, convey, pledge, lease, exchange, transfer, and dispose of all or any part of its properties and assets of every kind and character or any interest in it to further the public purpose of the authority;
(11) procure insurance, guarantees, letters of credit, and other forms of collateral or security or credit support from any public or private entity, including any department, agency, or instrumentality of this State, for the payment of any bonds issued by it, including the power to pay premiums or fees on any insurance, guarantees, letters of credit, and other forms of collateral or security or credit support;
(12) collect or authorize the trustee under any trust indenture securing any bonds to collect amounts due under any loan obligations owned by it, including taking the action required to obtain payment of any sums in default;
(13) unless restricted under any agreement with holders of bonds, consent to any modification with respect to the rate of interest, time, and payment of any installment of principal or interest, or any other term of any loan obligations owned by it;
(14) borrow money through the issuance of bonds and other forms of indebtedness as provided in this article;
(15) expend funds to obtain accounting, management, legal, financial consulting, and other professional services necessary to the operations of the authority;
(16) expend funds credited to the authority as the board determines necessary for the costs of administering the operations of the authority;
(17) establish advisory committees as the board determines appropriate, which may include individuals from the private sector with banking and financial expertise;
(18) procure insurance against losses in connection with its property, assets, or activities including insurance against liability for its acts or the acts of its employees or agents or to establish cash reserves to enable it to act as a self-insurer against any and all such losses;
(19) collect fees and charges in connection with its loans or other financial assistance;
(20) apply for, receive and accept from any source, aid, grants, and contributions of money, property, labor, or other things of value to be used to carry out the purposes of this article subject to the conditions upon which the aid, grants, or contributions are made;
(21) enter into contracts or agreements for the servicing and processing of financial agreements; and
(22) do all other things necessary or convenient to exercise powers granted or reasonably implied by this article.
(B) The authority is subject to the provisions of Article 1, Chapter 23 of Title 1, the Administrative Procedures Act.
Section 12-18-840. (A) The following sources may be used to capitalize the Rural School Infrastructure Fund and for the authority to carry out its purposes:
(1) state general fund appropriations made by the General Assembly;
(2) federal funds made available to the State;
(3) federal funds made available to the State for the authority;
(4) contributions and donations from government units, private entities, and any other source as may become available to the authority;
(5) all monies paid or credited to the authority, by contract or otherwise, payments of principal and interest on loans or other financial assistance made from the authority, and interest earnings which may accrue from the investment or reinvestment of the authority's monies;
(6) proceeds from the issuance of bonds as provided in this article; and
(7) other lawful sources as determined appropriate by the board.
Section 12-18-850. Earnings on balances in the Rural School Infrastructure Fund must be credited and invested as provided by law. Earnings must be credited to the Rural School Infrastructure Fund. The authority may establish accounts and subaccounts within the Rural School Infrastructure Fund as considered desirable to effectuate the purposes of this article, or to meet the requirements of any state or federal program. All accounts must be held in trust by the State Treasurer.
Section 12-18-860. (A) The authority may provide loans and other financial assistance to a school district to pay for all or part of the eligible cost of a qualified project. Before providing a loan or other financial assistance to a qualified borrower, the authority must obtain the review and approval of the Joint Bond Review Committee. The term of the loan or other financial assistance must not exceed the useful life of the project. The authority may require the school district to enter into a financing agreement in connection with its loan obligation or other financial assistance. The authority shall determine the form and content of loan applications, financing agreements, and loan obligations including the term and rate or rates of interest on a financing agreement.
(B) The board shall determine which projects are eligible projects and then select from among the eligible projects those qualified to receive from the authority a loan or other financial assistance.
Section 12-18-870. (A) School districts are authorized to obtain loans or other financial assistance from the authority through financing agreements. Qualified borrowers entering into financing agreements and issuing loan obligations to the authority may perform any acts, take any action, adopt any proceedings, and make and carry out any contracts or agreements with the authority as may be agreed to by the authority and any qualified borrower for the carrying out of the purposes contemplated by this article.
(B) In addition to the authorizations contained in this article, all other statutes or provisions permitting school districts to borrow money may be utilized by any school district in obtaining a loan or other financial assistance from the authority to the extent determined necessary or useful by the school district in connection with any financing agreement and the issuance, securing, or sale of loan obligations to the authority.
(C) A school district may receive, apply, pledge, assign, and grant a security interest in revenues or ad valorem taxes, to secure its obligations as provided in this article, to meet its obligations under a financing agreement, or to provide for the construction and improving of a qualified project.
Section 12-18-880. The authority is performing an essential governmental function in the exercise of the powers conferred upon it and is not required to pay taxes or assessments upon property or upon its operations or the income from them, or taxes or assessments upon property or loan obligations acquired or used by the authority or upon the income from them.
Section 12-18-890. (A) If a school district fails to collect and remit in full all amounts due to the authority on the date these amounts are due under the terms of any note or other obligation of the school district, the authority shall notify the State Treasurer who, subject to the withholding of amounts under Article X, Section 15 of the Constitution, shall withhold all or a portion of the funds of the State and all funds administered by the State allotted or appropriated to the school district and apply an amount necessary to the payment of the amount due.
(B) Nothing contained in this section mandates the withholding of funds allocated to a school district which would violate contracts to which the State is a party or judgments of a court binding on the State.
Section 12-18-900. Neither the authority nor any officer, employee, or committee of the authority acting on behalf of it, while acting within the scope of this authority, is subject to any liability resulting from carrying out any of the powers given in this article.
Section 12-18-910. Notice, proceeding, or publication, except those required in this article, are not necessary to the performance of any act authorized in this article nor is any act of the authority subject to any referendum.
Section 12-18-920. All money of the authority and in the Rural School Infrastructure Fund, except as authorized by law or provided in this article, must be deposited with and invested by the State Treasurer. Funds of the authority not needed for immediate use or disbursement may be invested by the State Treasurer in obligations or securities that are declared to be legal obligations by the provisions of Section 11-9-660.
Section 12-18-930. Following the close of each state fiscal year, the authority shall submit an annual report of its activities for the preceding year to the Governor and to the General Assembly. An independent certified public accountant shall perform an audit of the books and accounts of the authority at least once in each state fiscal year.
Section 12-18-940. (A) This article, being for the welfare of this State and its inhabitants, must be liberally construed to effect the purposes specified in this article. However, nothing in this article must be construed as affecting any proceeding, notice, or approval required by law for the issuance by a school district of the loan obligations, instruments, or security for loan obligations.
(B) Where the governing body of a school district does not have unlimited fiscal autonomy granting them the right to impose ad valorem property taxes for general operating school purposes without limitation, the public entity, if applicable, which has the authority to approve ad valorem property taxes for general operating school purposes without limitation must also approve a loan or security obligation provided by this article.
Section 12-18-950. If any provision of this article is held or determined to be unconstitutional, invalid, or otherwise unenforceable by a court of competent jurisdiction, it is the intention of the General Assembly that the provision is severable from the remaining provisions of the article and that the holding does not invalidate or render unenforceable another provision of the article.
Section 12-18-1010. As used in this subarticle:
(1) 'Board' means the board of directors of the authority.
(2) 'State board' means the State Budget and Control Board.
(3) 'School infrastructure bonds' means all general obligation bonds of this State designated as school infrastructure bonds, which are now outstanding and which may hereafter be issued pursuant to the authorizations of this subarticle.
Section 12-18-1020. Whenever it shall become necessary that monies be raised for qualified projects, including monies to be used to refund any school infrastructure bonds then outstanding, the board may make a request to the state board for the issuance of school infrastructure bonds pursuant to this article. This request may be in the form of a resolution adopted at any regular or special meeting of the board. The request shall set forth on the face thereof or by schedules attached thereto:
(1) the amount then required for qualified projects;
(2) a tentative time schedule setting forth the period of time during which the sum requested will be expended; and
(3) a debt service table showing the annual principal and interest requirements for all the school infrastructure bonds then outstanding.
Section 12-18-1030. Following the receipt of any request pursuant to Section 12-18-1020, the state board shall review the same and it shall approve the request, by resolution duly adopted, to effect the issuance of school infrastructure bonds, or pending the issuance thereof, effect the issuance of bond anticipation notes.
Section 12-18-1040. The issuance of school infrastructure bonds is subject to the limitations contained in Article X, Section 13(6)(c) of the Constitution of this State. These school infrastructure bonds so issued shall be considered general obligation debt of the State of South Carolina under Section 13 of Article X of the Constitution of this State and not of the school district under Section 15 of Article X of the Constitution of this State. Within such limitations, rural school infrastructure bonds may be issued for qualified projects or to refund school infrastructure bonds from time to time under the conditions prescribed by this article. The review and approval of the Joint Bond Review Committee must be obtained prior to the issuance of any school infrastructure bonds. No school infrastructure bonds may be issued unless the board has a source of revenues to pay the principal and interest on the bonds.
Section 12-18-1050. For the payment of the principal of and interest on all school infrastructure bonds, whether or not outstanding or hereafter issued, as they come due, there is pledged the full faith, credit, and taxing power of this State, and in accordance with the provisions of Article X, Section 13(4) of the Constitution of this State, the General Assembly authorizes the allocation on an annual basis of sufficient tax revenues to provide for the punctual payment of the principal and interest on school infrastructure bonds. In addition to the full faith, credit, and taxing power, there also is pledged such revenue as may be available to the board, and the State Treasurer is authorized to use the revenue when pledged, without further action of the board, for the payment of the principal and interest on school infrastructure bonds as the bonds respectively mature. If the revenues so pledged prove insufficient to meet the payments of the interest on and principal of the school infrastructure bonds in the fiscal year, then the State Treasurer shall set aside from the general tax revenues received in the fiscal year so much of the general tax revenues as are needed for the purpose and shall apply these revenues to the punctual payment of the interest on and principal of school infrastructure bonds due or to become due in the fiscal year.
Section 12-18-1060. The board is authorized to request the state board to issue school infrastructure bonds. In order to effect the issuance of bonds pursuant to this article, the state board may adopt a resolution providing for the issuance of school infrastructure bonds, upon written request by the board, and may transmit a certified copy thereof to the Governor and to the State Treasurer, with the request that they issue and deliver school infrastructure bonds in accordance with the terms and conditions of such resolution. This resolution must set forth:
(1) the amount, denomination, and numbering of school infrastructure bonds to be issued;
(2) the date as of which the same shall be issued;
(3) the maturity schedule for the retirement of the school infrastructure bonds;
(4) the redemption provisions, if any, applicable to the bonds;
(5) the maximum rate or rates of interest the bonds shall bear;
(6) the purposes for which the bonds are to be issued;
(7) the occasion on which bids must be received for the sale of the bonds;
(8) the form of advertisement of sale;
(9) the form of the bonds of the particular issue; and
(10) other matters as may be considered necessary in order to effect the sale, issuance, and delivery thereof.
Section 12-18-1070. Following receipt of a certified copy of the resolution of the state board, the Governor and State Treasurer shall issue school infrastructure bonds in accordance with the provisions of the resolution of the state board.
Section 12-18-1080. School infrastructure bonds must be issued in the form, in the denominations, and with such provisions as to time, place, or places and medium of payment as may be determined by the state board, subject to the provisions of this article.
Section 12-18-1090. School infrastructure bonds must be issued as fully registered bonds with both principal and interest thereof made payable only to the registered holder. The fully registered bonds are subject to transfer under such conditions as the state board prescribes.
Section 12-18-1100. School infrastructure bonds shall bear interest, payable on such occasions as shall be prescribed not more than thirty years after such date. The installments or series may be equal or unequal in amount. School infrastructure bonds, in the discretion of the state board, may be made subject to redemption at par and accrued interest, plus such redemption premium as it shall approve and on such occasions as it may prescribe. School infrastructure bonds are not redeemable before maturity unless they contain a statement to that effect.
Section 12-18-1110. All school infrastructure bonds issued under this article, and the interest thereon, are exempt from all state, county, municipal, school district, and other taxes or assessments, direct or indirect, general or special, imposed by this State, whether imposed for the purpose of general revenue or otherwise, except inheritance, estate, or transfer taxes.
Section 12-18-1120. School infrastructure bonds must be sold by the Governor and the State Treasurer upon sealed proposals, after publication of notice of the sale one or more times at least seven days before the sale, in a newspaper of general circulation in the State and also in a financial paper published in New York City which regularly publishes notices of sale of state or municipal bonds. The bonds must be awarded to the bidder offering to purchase the school infrastructure bonds at the lowest net interest cost to the State at a price of not less than ninety-nine percent of par and accrued interest to the date of delivery, but the right is reserved to reject all bids and to readvertise the bonds for sale and to waive technicalities in the bidding.
Section 12-18-1130. The proceeds derived from the sale of school infrastructure bonds must be applied only to the purposes set forth in the resolution of the state board pursuant to which the bonds are issued."
SECTION 4. Chapter 63, Title 59 of the 1976 Code is amended by adding:
Section 59-63-610. (A) As used in this article:
(1) 'Failing public school' means a public school in the State that has received a rating of 'below average' or 'unsatisfactory' as its absolute grade on its most recent annual report card under the education accountability act.
(2) 'Parent' means the natural or adoptive parent or legal guardian of a child.
(3) 'Independent school' means a school, other than a public school, at which the compulsory attendance requirements of Section 59-56-10 may be met and that does not discriminate based on the grounds of race, color, or national origin. 'Independent school' includes home schools as provided in Article 1, Chapter 65, Title 59.
(4) 'Public school' means a public school in the State as defined in Section 59-1-120.
(B) This article only applies to a student:
(1) whose household income is less than two hundred percent of the federal poverty rate; or
(2) who is determined by a school psychologist to be physically or mentally handicapped according to the definitions in Section 59-21-510.
Section 59-63-620. (A) A student is eligible to transfer to a passing public school or an independent school if the student:
(1) has spent the prior school year in attendance at a failing public school;
(2) attended another public school and has been assigned to attend a failing public school;
(3) is entering kindergarten or first grade and has been assigned to a failing public school;
(4) resides in an area zoned for a failing school; or
(5) is determined by a school psychologist to be physically or mentally handicapped according to the definitions in Section 59-21-510.
(B) A student who meets the criteria in subsection (A) may contact the Department of Education for a list of independent schools and public schools.
Section 59-63-625. (A) If a student meets the criteria in Section 59-63-620 and chooses to transfer from a failing public school:
(1) to another public school in his resident district but not in his attendance area, the district shall adjust monetary differences between the schools;
(2) to another public school outside his resident district and if the receiving district accepts the transfer student, his resident school district shall reimburse that district for the cost of his attendance equal to seventy-five percent of the projected per pupil cost as promulgated by the Office of Research and Statistics; or
(3) to an independent school, the Department of Education shall issue a check to the parents or guardians and the independent school they select for the lesser of four thousand five hundred dollars indexed each year to the consumer price index or the cost of tuition fees at the independent school.
(B) Notwithstanding subsection (A) of this section or Section 59-63-620, if the student is determined by a school psychologist to be physically or mentally handicapped and the special needs student chooses to transfer from his school district to:
(1) another public school in his resident district but not in his attendance area, the district shall adjust monetary differences between the schools;
(2) another public school outside his resident district, his resident school district shall reimburse that district for the cost of his attendance equal to seventy-five percent of the projected per pupil cost as promulgated by the Office of Research and Statistics for the school district to which the student transfers; or
(3) an independent school, the Department of Education shall issue a check to the parents or guardians and the independent school they select for the lesser of an amount equal to the appropriate pupil classification weighting for that student pursuant to Section 59-20-40 multiplied by seventy-five percent of the projected state per pupil cost as promulgated by the Office of Research and Statistics or the cost of tuition fees at the independent school.
(C) A student who is taught at home is not eligible to receive a scholarship pursuant to this article.
Section 59-63-630. An independent school that accepts scholarship students pursuant to this article:
(1) shall comply with the federal anti-discrimination law, pursuant to 42 U.S.C. Section 2000(d);
(2) shall meet state and local health and safety laws and codes; (3) shall comply with state statutes relating to independent schools;
(4) shall employ or contract with teachers who hold a baccalaureate or higher degree, or have at least three years of teaching experience in a public or independent school, or have special skills, knowledge, or expertise that qualifies them to provide instruction in subjects taught;
(5) must be academically accountable to the parent or guardian for meeting the education needs of the student;
(6) shall administer to all students a nationally recognized achievement test and report the school's aggregate score to all parents;
(7) shall adhere to the tenets of the school's published disciplinary procedures prior to the expulsion of an educational opportunity scholarship program participant;
(8) shall accept scholarship students who meet the admissions criteria of the school on a random, religion-neutral basis, without regard to the student's past academic history, with preference given to siblings of other scholarship students;
(9) may not compel a scholarship student to profess a specific ideological belief, to pray, or to worship; and
(10) shall demonstrate their financial viability by showing they can repay any funds that might be owed to the State, if they are to receive more than fifty thousand dollars in scholarship payments during the school year by filing with the department of revenue, before the beginning of the school year:
(a) a surety bond payable to the State in an amount equal to the aggregate amount of scholarship revenue expected to be paid to the school by participating families during the school year; or
(b) financial information that demonstrates that the school has the ability to pay an aggregate amount equal to the amount of scholarship revenue expected to be paid to the school by participating families during the school year.
Section 59-63-633. To ensure that schools provide academic accountability to parents of students in the educational opportunity scholarship program, participating schools annually shall administer either the state tests or nationally recognized, norm-referenced tests, or both, in math and language arts to each student participating in the program. Participating schools publicly shall disclose the aggregate results of the tests by grade level and provide the parents of each student with a copy of the results.
Section 59-63-635. (A) A failing public school shall:
(1) notify the parent of a student if the school is considered a failing public school pursuant to Section 59-63-610; and
(2) present the parent with his options of:
(a) sending the student to an independent school;
(b) sending the student to another public school; or
(c) keeping the student at the failing school.
(B) The parent of the student shall:
(1) notify the Department of Education and the school district of the decision to transfer the student from a failing public school to an independent or public school, or from an independent or public school back to another independent or public school;
(2) have access to the school's aggregate testing information; and
(3) arrange for transportation of the student to the independent school or to the district boundary or a mutually agreed upon location, if the student chooses to attend a public school outside his district.
(C) The student shall remain in attendance throughout the school year, unless excused for illness or good cause, and comply with the school's code of conduct.
Section 59-63-637. The Department of Education shall make scholarship payment by check payable to the transferring student's parent or legal guardian and to the school at which the scholarship is to be used. The check may be delivered or mailed by the Department of Education to the school at which the scholarship is to be used. All payees must endorse the check. The check may be endorsed by the school on behalf of the student's parent or legal guardian if the parent or legal guardian has placed on file with the school written authorization to endorse the check.
Section 59-63-640. Once a student transfers from a failing school pursuant to this article, the student is eligible for the scholarship program until he graduates from high school regardless of a subsequent change in the rating of the school from which he transferred.
Section 59-63-645. If a qualifying student's enrollment in an independent school is terminated before the end of the school year, the independent school shall pay to the State on a pro rata basis any excess tuition paid. At the time of making the refund, the independent school shall issue a receipt reflecting the date, amount, and payee for each refund and shall provide a copy of the receipt to the Department of Revenue.
Section 59-63-647. The Department of Revenue may promulgate regulations to aid in the performance of its duties pursuant to this chapter; however, its power does not extend to matters of school governance, curriculum, hiring or firing, or religious beliefs or practices.
Section 59-63-648. The Department of Revenue may conduct examinations and investigations whenever it believes that the provisions of this chapter have been evaded or violated in any manner. All powers possessed by the department as provided in Title 12 to conduct examinations and investigations apply to examinations and investigations conducted pursuant to this section.
Section 59-63-650. (A) Annually, the State Budget and Control Board shall provide for the preparation of a report on the impact of the implementation of this chapter on school enrollment and state and local funding of public schools for the fiscal year most recently completed. The report must include, but need not be limited to, an analysis of and statement on the:
(1) change in public school enrollment, by school district, attributable to this chapter; and
(2) amount of funds the State would have had to expend for public schools under the education funding formula in existence on or before the enactment of this chapter and the amount actually expended by the State in public schools.
(B) The report must be submitted by December first of each year to the Governor, the Chairman of the Senate Finance Committee, the Chairman of the Senate Education Committee, the Chairman of the House Ways and Means Committee, and the Chairman of the House Education and Public Works Committee.
Section 59-63-655. (A)(1) In addition to the annual report as provided in Section 59-63-650, the State Budget and Control Board shall provide for a long-term evaluation of the impact of this chapter. The evaluation must be conducted by contract with one or more qualified persons or entities with previous experience evaluating school choice programs and must be conducted for a minimum of five years beginning five years after enactment of this section. The evaluation must include an assessment of the:
(a) level of parental satisfaction for parents of students participating in the scholarship program provided for in this chapter;
(b) level of parental satisfaction for parents of students in failing public schools;
(c) academic performance of participating independent schools and failing public schools;
(d) level of student satisfaction with the scholarship program provided for in this chapter;
(e) level of student satisfaction for students attending failing public schools;
(f) impact of the provisions of this chapter on public school districts, public school students, independent schools, and independent school students; and
(g) impact of the provisions of this chapter on school capacity, availability, and quality.
(2) The evaluation must be conducted using appropriate analytical and behavioral science methodologies and must protect the identity of participating schools and students by, at a minimum, keeping anonymous all disaggregated data other than that for the categories of grade, gender, race, and ethnicity. The evaluation of public and independent school students must compute the relative efficiency of public and independent schools, the value added to educational performance by independent schools relative to failing public schools, and a comparison of acceptance rates into college, while adjusting or controlling for student and family background. (B) State and local government entities shall cooperate with the persons or entities conducting the evaluation provided for in subsection (A). Cooperation includes providing available student assessment results and other information needed to complete the evaluation.
(C) The State Budget and Control Board shall pay the cost of the evaluation from funds available to it for that purpose except that state funds used must not exceed four hundred thousand dollars per year.
(D) By January thirty-first of each year, the State Budget and Control Board shall provide to each member of the General Assembly interim reports of the results of the evaluation. Upon completion of the evaluation, the State Budget and Control Board shall provide a final report to each member of the General Assembly. At the same time as the final report is made public, the persons or entities who conducted the evaluation must make their data and methodology available for public review and inspection, but only if the release of the data and methodology is in compliance with 20 U.S.C. Section 1232g, Family Educational Rights and Privacy Act of 1974.
Section 59-63-660. The provisions of this article regarding independent schools only apply to independent schools that choose to accept scholarship students."
SECTION 5. (A) A qualifying school that accepts students benefiting from scholarships, grants, or tax credits is not an agent or arm of the state or federal government.
(B) Except as provided by this act, the Department of Education, Department of Revenue, Budget and Control Board, or any other state agency may not regulate the educational program of a qualifying school that accepts students pursuant to this act.
(C) One purpose of this act is to allow maximum freedom to parents and independent schools to respond to and provide for the educational needs of children without governmental control, and this act must be liberally construed to achieve that purpose.
SECTION 6. If a section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, this holding does not affect the constitutionality or the validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words thereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
SECTION 7. This act takes effect upon approval by the Governor and applies at the start of the first school year beginning one year after approval of this act.
This web page was last updated on Monday, October 10, 2011 at 1:28 P.M.