South Carolina General Assembly
117th Session, 2007-2008

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Bill 1252

Indicates Matter Stricken
Indicates New Matter


(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

Indicates Matter Stricken

Indicates New Matter

COMMITTEE REPORT

May 15, 2008

S. 1252

Introduced by Senators Leatherman and Peeler

S. Printed 5/15/08--H.    [SEC 5/19/08 3:05 PM]

Read the first time April 15, 2008.

            

THE COMMITTEE ON WAYS AND MEANS

To whom was referred a Bill (S. 1252) to amend Section 2-75-30 of the 1976 Code, relating to the centers of excellence matching endowment, to provide that the interest earnings in the fund may be, etc., respectfully

REPORT:

That they have duly and carefully considered the same and recommend that the same do pass with amendment:

Amend the bill, as and if amended, by striking all after the enacting words and inserting:

/SECTION    1.    Section 2-75-5 of the 1976 Code is amended to read:

"Section 2-75-5.    (A)    This chapter is known and may be cited as the 'South Carolina Research Centers of Economic Excellence Act'.

(B)    The General Assembly finds that:

(1)    it is in the public interest to create incentives for the senior research universities of South Carolina consisting of Clemson University, the Medical University of South Carolina, and the University of South Carolina to raise capital from the private sector to fund endowments for professorships in research areas targeted to create well-paying jobs and enhanced economic opportunities for the people of South Carolina;

(2)    these endowed professorships should be used to recruit and maintain leading scientists and engineers at the senior research universities of South Carolina for the purposes of developing and leveraging the research capabilities of the universities for the creation of well-paying jobs and enhanced economic opportunities in knowledge-based industries for all South Carolinians;

(3)    in communities across the United States in which better paying jobs and enhanced economic development in knowledge-based industries has flourished, the local or state government has created incentives and made a long-term commitment to public and private funding for a significant number of endowments for professorships in targeted knowledge-based industries;

(4)    the South Carolina Education Lottery provides a source of funding and an incentive for the senior research universities to raise, in dollar-for-dollar matching amounts, sums from private nonstate sources sufficient to create endowed professorships;

(5)    these endowed professorships should be awarded to the senior research universities through a competitive application process, provided that the competitive process must encourage the senior research universities to submit cooperative applications with one another as well as in cooperation with other institutions of higher education; and

(6)    these endowed professorships, funded equally from the South Carolina Education Lottery and from other private nonstate sources, provide a foundation for the creation of centers of economic excellence."

SECTION    2.    Section 2-75-10 of the 1976 Code is amended to read:

"Section 2-75-10.    There is created the Research Centers of Excellence Review Board. The board shall consist of nine members. Of the nine members, three must be appointed by the Governor, three must be appointed by the President Pro Tempore of the Senate, and three must be appointed by the Speaker of the House of Representatives. The terms of members are three years and members are eligible to be appointed for no more than two additional terms. Of the members initially appointed by the Governor, the President Pro Tempore, and the Speaker of the House, one shall be appointed for a term of one year, one for a term of two years, and one for a term of three years, the initial term of each member to be designated by the Governor, President Pro Tempore, and Speaker of the House when making the appointments. The Governor, the President Pro Tempore, and the Speaker of the House shall appoint persons with substantial experience in business, law, accounting, technology, manufacturing, engineering, or other professions and experience which provide an understanding of the purposes of this chapter. The board shall be responsible for providing annually to the Commission on Higher Education a schedule by which applications for funding are received and awarded on a competitive basis, the awarding of matching funds as provided in Section 2-75-60, and for oversight and operation of the fund created by Section 2-75-30. The Members of the review board shall serve without compensation and must provide an annual report to the General Assembly as well as the Budget and Control Board, which shall include an audit performed by an independent auditor."

SECTION    3.    Section 2-75-30 of the 1976 Code is amended to read:

"Section 2-75-30.    There is created the Centers of Excellence Matching Endowment. The endowment must be funded annually by appropriations from the South Carolina Education Lottery Account in an aggregate amount not to exceed $200,000,000 by 2010, except that endowment appropriations for the current fiscal year may not be funded until all state-supported scholarships are fully funded. The fund must be managed by the State Treasurer, subject to awards from the endowment as provided in this chapter. Interest earnings of the endowment must remain in the fund."

SECTION    4.    Section 2-75-50 of the 1976 Code is amended to read:

"Section 2-75-50.    (A)    An application for an award from the endowment shall:

(1)    provide to the board documentation of private matching funds, on hand, in an amount equal to the amount for which application is made;

(2)    provide to the board documentation that all matching funds have been committed and raised exclusively from sources other than South Carolina tax dollars, and that the funds have been committed and raised after January 1, 2002;

(3)    be in an amount of not less than two million dollars and not more than five million dollars;

(4)    document that the application has significant potential to provide for enhanced economic development for the citizens of South Carolina in a specified knowledge-based industry or field of commerce; and

(5)    provide specific partnering activities with other institutions, businesses, or the community.

(B)    Eligible research universities are strongly encouraged to partner with other South Carolina colleges and universities to develop proposals that will enhance the economic competitiveness of our State, and to enhance science and engineering through collaborations in related disciplines."

SECTION    5.    Section 2-75-90 of the 1976 Code, as added by Act 187 of 2004, is amended to read:

"Section 2-75-90.    (A)    Notwithstanding the provisions of Sections 2-75-05(B)(4) and (6) and 2-75-50, To meet the endowed professorships matching requirement of those provisions, a research university may use funds specifically provided for use in the areas provided in subsection (B) that are derived from private or federal government sources, excluding state appropriations to the institution, tuition, or fees. Subject to the restrictions in subsection (B), only federal dollars received after July 1, 2003, may be used to meet the endowed professorships matching requirement.

(B)    The matching funds in subsection (A) may be used only in the areas of Engineering, Nanotechnology, Biomedical Sciences, Energy Sciences, Environmental Sciences, Information and Management Sciences, and for other sciences and research that create well-paying jobs and enhanced economic opportunities for the people of South Carolina and that are approved by the Research Centers of Excellence Review Board."

SECTION    6.    Chapter 75, Title 2 of the 1976 Code is amended by adding:

"Section 2-75-100.    (A)    The board may, at its discretion, permit the senior research universities to utilize a portion of the nonstate matching funds of any single award to pay for initial operating costs including, but not limited to, infrastructure improvement, purchase of equipment, and payment of salaries for junior faculty, researchers, technicians, and other support staff directly associated with the establishment of the professorship's research efforts and the creation of the center of economic excellence which the professorship serves. The portion established by the board must apply equally to all of the senior research universities' centers of economic excellence and endowed professorships created under this act. The portion established by the board may be modified by the board in order to facilitate program success.

(B)    The full amount of every state award, with the exception of programmatic support proposals, must be placed into and remain in endowment. Should a center of economic excellence be dissolved, withdrawn, or otherwise terminated, the entirety of the state award which has been drawn by the institution must be returned to the Centers of Excellence Matching Endowment."

SECTION    7.    Chapter 75, Title 2 of the 1976 Code is amended by adding:

"Section 2-75-110.    In addition to accepting and applying nonstate funds, as stipulated in Section 2-75-90(A), to meet the matching requirement of each state award, a senior research university may accept and apply cash equivalent and in-kind donations from nonstate sources. Such donations must directly impact and promote the research of the endowed professorship and the center of economic excellence which the professorship serves. Such donations may include, but are not limited to, donated or rent-discounted laboratory, and research facility space; buildings, including sale-lease back; equipment; furnishings; and infrastructure upgrades. The value of each cash equivalent or in-kind donations must be determined using standard accounting methods and a cost share accounting policy established by the board. The total value of cash equivalent and in-kind donations applicable per award may not exceed the portion of nonstate matching funds available for non-endowment use established by the board. Cash equivalent and in-kind donations may only be applied if received by a senior research university after July 1, 2002."

SECTION    8.    Title 59 of the 1976 Code is amended by adding:

"CHAPTER 151

South Carolina LightRail Consortium

Section 59-151-100.    (A)    The General Assembly declares that by this chapter it is establishing the South Carolina LightRail Consortium in response to growing demand for South Carolina academic institutions to expand their capacity for high speed, highly available bandwidth across the State, nation, and world in support of their missions, and to connect directly to national and regional networks for purposes directly related to their missions.

(B)    For this purpose, the South Carolina LightRail shall provide facilities-based advanced high performance communications infrastructure in support of the missions of the South Carolina academic institutions that are members of the South Carolina LightRail Consortium. The General Assembly declares its intent that this infrastructure must not compete with the commercial communications or information offerings of private sector participants.

(C)    The goal of the South Carolina LightRail Consortium is to promote collaboration among participating clinical, research, and educational institutions throughout the State, region, and nation to accomplish the objectives stated above.

Section 59-151-110.    (A)    For purposes of this chapter, the South Carolina LightRail is defined as a communication grid network where the South Carolina academic institutions that are members of the South Carolina LightRail Consortium, and private organizations and entities as permitted by subsection (C) of this section tap into facilities-based fiber optic including, the National Lambda Rail, Internet2, TeraGrid, and other regional and national networks which carry high volumes of data at high speed allowing faculty members at participating institutions in different locations to collaborate in real time.

(B)    The South Carolina LightRail is to be used as an academic network for the use of the South Carolina academic institutions that are members of the South Carolina LightRail Consortium for the exchange of information directly related to their missions and must not carry commercial traffic, commercial internet traffic, or K-12 traffic originated in South Carolina. Occasional and incidental use of the network by persons appropriately granted access to the network for purposes that are not directly related to the missions of the participating academic institutions is not considered a violation of this subsection.

(C)    Private organizations and entities may be provided access to the network only through formal documented partnerships with one or more of the South Carolina academic institutions that are members of the South Carolina LightRail Consortium that are directly related to the missions of the partnering institutions. This access must be consistent with guidelines and procedures approved by the consortium board. These guidelines and procedures, at a minimum, shall comply with the provisions of Section 59-151-115.

Section 59-151-115.    (A)    Prior to allowing any university employee or student access to the network, the board must adopt guidelines and procedures which, at a minimum, ensure that:

(1)    access to the network is limited to specific university employees and specific university students who have direct involvement in one or more formal documented partnerships that meet the requirements of Section 59-151-110(C);

(2)    these university employees and university students cease to have access to the network once they are no longer directly involved in such a formal documented partnership; and

(3)    the access to the network does not compete with the commercial communications or information offerings of private sector participants.

(B)    Prior to allowing any private organization or entity access to the network, the board must adopt guidelines and procedures which, at a minimum, ensure that:

(1)    access to the network is limited to specified employees of these private organizations or entities who have direct involvement in one or more formal documented partnerships that meet the requirements of Section 59-151-110(C);

(2)    these employees cease to have access to the network once they are no longer directly involved in such a formal documented partnership;

(3)    the access to the network does not compete with the commercial communications or information offerings of private sector participants; and

(4)    any South Carolina commercial entity has a separate commodity internet connection for its routine operations.

(C)    For purposes of this section, occasional and incidental use of the network by persons appropriately granted such access to the network for purposes that are not directly related to the missions of the participating institutions is not considered as competing with the commercial communications or information offerings of private sector participants.

Section 59-151-120.    Clemson University, the Medical University of South Carolina, and the University of South Carolina in Columbia are designated as the three charter member institutions of the South Carolina LightRail Consortium and through the consortium are directed to plan, procure, administer, oversee, and manage all functions associated with the South Carolina LightRail.

Section 59-151-130.    (A)    The South Carolina LightRail Consortium must be a joint venture exclusively among the three member universities, with administrative support to be provided by an appropriate department within one or more of the universities to include procurement, accounts payable, accounts receivable, web design and hosting, and similar administrative or technical support functions.

(B)    The South Carolina LightRail Consortium must be governed by a board of directors consisting of six members. The board of directors consists of two representatives each from Clemson University, the Medical University of South Carolina, and the University of South Carolina, to be appointed by the respective university presidents and to serve at their pleasure. The consortium must be chaired by a member of the board of directors from each member institution on a rotating basis among all institutions for a term of two years.

(C)    Membership on the board is not an office of honor or profit within the meaning of Section 3, Article VI of the Constitution of this State.

(D)    The board shall establish rules of procedure governing its operations and also may establish an executive committee of the board to act in the board's stead in the manner authorized by the full board.

Section 59-151-140.    (A)    The South Carolina LightRail Consortium is declared to be an instrumentality of this State and as such its board of directors has all powers and authority conferred upon public boards generally including the power to contract in its own name, to own property, and to sue and be sued.

(B)    The board shall ensure that the consortium functions in support of its mission and in the best interests of the State and the participating universities. In support of this task, the board shall:

(1)    assist and advise the chairman of the consortium board in matters related to scientific and administrative performance, consortium directions and needs, and government and interinstitutional interactions;

(2)    conduct an annual review of consortium status, activities, and plans to evaluate overall performance relative to its mission and strategic plan and to recommend possible changes to the strategic plan or South Carolina LightRail administration;

(3)    review and approve an annual budget request for the consortium; and

(4)    review the operations of the South Carolina LightRail annually to ensure relevance, to affirm the commitments of the participating institutions, and to confirm continued compliance with the provisions of Section 59-151-115.

(C)    Results of the annual review and budget request must be documented in a letter submitted to the presidents of the three universities.

Section 59-151-150.    (A)    The LightRail Consortium shall receive such funding as may be provided by the General Assembly in the annual general appropriations act, supplemental appropriations act, or in other provisions of law. This funding must be provided to its participating universities for purposes of the LightRail. Funds appropriated to Clemson University, the Medical University of South Carolina, and the University of South Carolina in the 2007-2008 general appropriations act for the South Carolina LightRail Consortium shall continue to be used for those purposes consistent with the requirements of this chapter and other applicable provisions of law.

(B)    The LightRail Consortium shall manage its own funding provided to it by the member institutions, based on a budget prepared and administered by the chairman of the board, and recommended by the board. The consortium funding appropriated to a particular member institution must be administered individually by that institution, except in those instances when consortium actions, services, or activities require joint budget action. Sufficient annual funding to meet the strategic and operational needs of South Carolina LightRail Consortium is the joint and co-equal responsibility of the member institutions, and the responsibility of each member institution to provide such funding must be determined annually by the board upon agreement of the institutions concerned.

Section 59-151-160.    The value of gifts, in-kind services, grants, appropriations, or other financial considerations directed to a single university for the primary purpose of support for South Carolina LightRail Consortium must be administered and accounted for in accordance with the policies of the recipient university. The value of gifts, in-kind services, grants, appropriations, or other financial considerations directed jointly to the three universities through the consortium must be divided into three equal shares, unless otherwise specified by a donor, and must be administered and accounted for by each recipient university in accordance with the policies of that university.

Section 59-151-170.    (A)    By unanimous vote, the three charter member institutions of the consortium shall create other categories of membership and include other institutions or organizations as consortium members, consistent with the mission and goals of the consortium.

(B)    New members may be admitted to the consortium at one of two levels: voting or nonvoting participation. The charter member institutions shall establish the financial commitments new members must meet at each of the two levels. The charter member institutions also may establish differential fee structures for not-for-profit and for-profit entities.

(C)    The board of directors must be expanded by one seat for each new voting member of the consortium admitted as provided in this section, the board member to be designated by the president of the newly admitted entity. Participatory, nonvoting members may form an advisory committee to provide advice and counsel to the board of directors on matters pertaining to current operations and future strategies of South Carolina LightRail Consortium.

(D)    Upon unanimous vote, the board of directors may include ex officio, nonvoting members at its discretion.

Section 59-151-180.    The South Carolina LightRail Consortium is considered a public body and as such is subject to all provisions of state law, including the Freedom of Information Act and state procurement requirements but is exempt from the planning, oversight, and project management regulations of the State Chief Information Officer. Procurement certification limits granted by the State Budget and Control Board are equivalent to the highest limit approved for any of the three charter member institutions. The board of the LightRail Consortium each year by February first shall submit to the chairman of the House Ways and Means Committee and the chairman of the Senate Finance Committee a report specifically identifying each entity with access to the network, the number of persons within each such entity with access to the network and a brief description of the formal documented partnership in which the persons are involved, and any payment, including without limitations, in-kind payment, that each such organization and entity is making for access to the network.

Section 59-151-190.    Upon unanimous vote of the board, the provisions of this chapter may be administratively supplemented by written agreement of all member institutions to reflect global capabilities and opportunities, statewide and institutional goals and resources, and annual assessment results. No such supplementation may be inconsistent with any of the provisions of this chapter."

SECTION    9.    This act takes effect upon approval by the Governor./

Renumber sections to conform.

Amend title to conform.

DANIEL T. COOPER for Committee.

            

A BILL

TO AMEND SECTION 2-75-30 OF THE 1976 CODE, RELATING TO THE CENTERS OF EXCELLENCE MATCHING ENDOWMENT, TO PROVIDE THAT THE INTEREST EARNINGS IN THE FUND MAY BE USED AT THE RESEARCH CENTERS OF EXCELLENCE REVIEW BOARD'S DISCRETION FOR ADDITIONAL STATE AWARDS.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION    1.    Section 2-75-30 of the 1976 Code is amended to read:

"Section 2-75-30.    There is created the Centers of Excellence Matching Endowment. The endowment must be funded annually by appropriations from the South Carolina Education Lottery Account in an aggregate amount not to exceed $200,000,000 by 2010. The fund must be managed by the State Treasurer, subject to awards from the endowment as provided in this chapter. Interest earnings of the endowment must remain in the fund and may be used at the board's discretion for additional state awards."

SECTION    2.    This act takes effect upon approval by the Governor.

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