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A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING ARTICLE 7 TO CHAPTER 11, TITLE 11 ENTITLED "SOUTH CAROLINA COMMUNITY INVESTMENT FUND" SO AS TO CREATE THE FUND, TO SPECIFY THE CONDITIONS UNDER WHICH THE FUND MAY BE APPROPRIATED, TO ESTABLISH A PER-DISTRICT ALLOCATION FORMULA, AND TO PROVIDE FOR ADMINISTRATION, TRANSPARENCY, AND ACCOUNTABILITY REQUIREMENTS.

 

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

 

SECTION 1.  Chapter 11, Title 11 of the S.C. Code is amended by adding:

 

Article 7

 

South Carolina Community Investment Fund

 

    Section 11-11-710. As used in this article:

    (1) "Board" means the Board of Economic Advisors.

    (2) "Community investment" means a capital improvement, infrastructure project, or piece of equipment or real property with a useful life of no less than five years, undertaken by an eligible entity for a public purpose. "Community investment" does not include salaries, recurring operating expenses, debt service on existing obligations of the eligible entity, or any grant, loan, or transfer to a private person, business, or nonprofit organization.

    (3) "Delegation weighted-vote methodology" means the method by which county legislative delegations apportion voting weight among members whose districts lie partly within the county, consistent with the practice applicable to grants under the Parks and Recreation Development Fund, set forth in Chapter 23, Title 51, and regulations promulgated thereunder, in which a member's weight is calculated as the percentage of that member's total district population that resides within the county.

    (4) "Eligible entity" means a political subdivision of the State, including school districts. "Eligible entity" does not include a state agency, a private corporation, a nonprofit corporation, an institution of higher learning, or an individual.

    (5) "Fund" means the South Carolina Community Investment Fund created by this article.

    (6) "House district" means a district for the election of a member of the South Carolina House of Representatives, as established pursuant to the most recent reapportionment.

    (7) "RFA" means the Revenue and Fiscal Affairs Office.

    (8) "Senate district" means a district for the election of a member of the South Carolina Senate, as established pursuant to the most recent reapportionment.

 

    Section 11-11-720. (A) There is created in the State Treasury the South Carolina Community Investment Fund, separate and distinct from the general fund of the State and all other funds. Earnings on the fund must be credited to the fund. Funds appropriated to, but not obligated from, the fund in a fiscal year do not lapse and carry forward, but remain subject to the reversion requirements of Section 11-11-770.

    (B) The fund is administered by the Executive Budget Office, in consultation with RFA, for purposes of receipt certification, disbursement, and compliance monitoring. Administration under this article does not include substantive review or approval of the merits of an individual community investment; that determination rests solely with the certifying member or members pursuant to Section 11-11-750.

 

    Section 11-11-730. (A) An appropriation to the fund may be made for a fiscal year only if, and only to the extent that, the board certifies as part of the annual revenue estimating process required for the general appropriations act, that projected general fund revenue for the applicable fiscal year exceeds the total amount necessary to fully fund, in the following order of priority, each of the following:

       (1) all reimbursements required by Section 11-11-150 and Section 11-11-156 in relation to the Homestead Exemption Fund and Trust Fund for Tax Relief;

       (2) the reimbursement required by Section 12-37-220(B)(52) for the manufacturing property tax exemption established by Act 228 of 2022, up to the maximum reimbursement amount then provided by law;

       (3) any other property tax, income tax, or other tax relief reimbursement to political subdivisions of the State required by permanent statute including, but not limited to, relief mandated under Article X of the Constitution of this State;

       (4) the amount required to be transferred to the General Reserve Fund to achieve or maintain the percentage of general fund revenue required by Section 36, Article III of the Constitution of this State and Section 11-11-310;

       (5) the amount required to be transferred to the Capital Reserve Fund to achieve or maintain the percentage of general fund revenue required by Section 36, Article III of the Constitution of this State and Section 11-11-320;

       (6) debt service on general obligation bonds of the State and any required contributions to the state retirement systems mandated by permanent statute;

       (7) the base student cost and other public education funding minimums required by the Education Finance Act and related permanent statutes; and

       (8) any other reimbursement, set-aside, or transfer that permanent state statute or the Constitution of this State requires to be funded before discretionary or member-directed appropriations.

    (B) Only after the amounts set forth in subsection (A) are fully provided for in the applicable version of the general appropriations act may the General Assembly appropriate funds to the fund. The appropriation to the fund is the last item of state spending to be funded from available revenue in a given fiscal year. It may not be funded ahead of, or in the same funding tier as, any item listed in subsection (A).

    (C) The maximum appropriation to the fund in a fiscal year is twenty-four million eight hundred thousand dollars. If certified surplus revenue available under subsection (A) after all listed priorities are met is less than twenty-four million eight hundred thousand dollars, the appropriation to the fund for that fiscal year is limited to the certified surplus amount, and every district's allocation pursuant to Section 11-11-750 must be reduced on a pro rata basis so that each House district and Senate district bears the same percentage reduction from its maximum allocation.

    (D) If certified surplus revenue available under subsection (A) is zero or a negative amount, no appropriation may be made to the fund for that fiscal year.

 

    Section 11-11-740. (A) Subject to Section 11-11-730, the fund must be allocated as follows:

       (1) up to one hundred thousand dollars for each of the one hundred twenty-four House of Representatives districts, for a maximum aggregate House allocation of twelve million four hundred thousand dollars; and

       (2) up to two hundred sixty-nine thousand five hundred sixty-five dollars for each of the forty-six Senate districts, for a maximum aggregate Senate allocation of twelve million three hundred ninety-nine thousand nine hundred ninety dollars.

    (B) A community investment funded under this article for a House district must be certified in writing to the Executive Budget Office by the member of the House of Representatives representing that district. A community investment funded under this article for a Senate district must be certified in writing by the member of the Senate representing that district. A certification must identify the eligible entity, the amount, and the public purpose of the community investment, and must be posted on the website of the Executive Budget Office for no less than thirty days before disbursement.

    (C) A member may certify community investments for more than one eligible entity within the member's district, provided the total certified for the district does not exceed the maximum allocation for that district under subsection (A), as adjusted pursuant to Section 11-11-730(C) in a year of partial funding. A member may also combine all or part of the member's district allocation with that of one or more other members for a single eligible entity, as provided in Section 11-11-750.

    (D) If a House district or Senate district lies within more than one county, the member's certified allocation for that district must be apportioned among eligible entities by county in the same proportion as the delegation weighted-vote methodology would assign voting weight to that member within each affected county, based on the percentage of the district's total population, as determined by the most recent decennial census or the most recent official population estimate certified by RFA, that resides within each county. An eligible entity located in a county comprising less than five percent of the district's total population is not required to receive a certification, but the member may still certify funds to that entity within the entity's proportional share.

    (E) A member may decline, in whole or in part, to certify the member's district allocation. Declined amounts do not carry forward to another district and revert to the general fund at the close of the fiscal year in which they were available.

 

    Section 11-11-750. (A) Two or more members, whether from the House of Representatives, the Senate, or both, may jointly certify a single community investment to one eligible entity, combining a portion or all of each member's respective district allocation pursuant to Section 11-11-740, provided that:

       (1) each contributing member's district is contiguous to, or shares a boundary with, the location of the eligible entity's proposed community investment, or the eligible entity itself provides services within more than one of the contributing members' districts;

       (2) the eligible entity and the community investment qualify and satisfy Section 11-11-760 in the same manner as a certification by a single member;

       (3) the joint certification states, for each contributing member, the district, the amount contributed, and confirms that the contributed amount does not exceed that member's remaining uncertified allocation for that district pursuant to Section 11-11-740(A), as apportioned pursuant to Section 11-11-740(D) if applicable; and

       (4) the joint certification is signed by each contributing member and posted pursuant to Section 11-11-740(B) in the same manner as an individual certification, identifying it as a joint certification and listing all contributing members and their respective shares.

    (B) A member's contribution to a joint certification under this section is counted against that member's own district allocation and does not increase, and is not increased by, the allocation available to any other contributing member's district.

    (C) A member whose district is apportioned among counties pursuant to Section 11-11-740(D) may contribute to a joint certification only from the portion of that member's allocation apportioned to the county in which the eligible entity's proposed community investment is located.

    (D) This section does not authorize a member to certify funds to an eligible entity located wholly outside the member's own district, except as part of a joint certification under this section, or, for a member described in subsection (C), except as part of the member's own county apportionment.

 

    Section 11-11-760. (A) A community investment funded under this article must be made only to an eligible entity and only for a community investment.

    (B) Funds disbursed under this article may not be redirected, subgranted, or contracted by an eligible entity to a private person, for-profit business, or nonprofit organization, except through an ordinary competitively bid public works or procurement contract for construction, materials, or equipment related to the certified community investment.

    (C) A member of the General Assembly may not certify a community investment under this article to an eligible entity if the member, or a member of the member's immediate family as defined in Section 8-13-100, has an economic interest in the eligible entity's receipt or use of the funds, other than as a resident and taxpayer of the jurisdiction generally. A violation of this subsection is subject to referral to the State Ethics Commission or the applicable legislative ethics committee.

    (D) Funds appropriated under this article may not be used to satisfy a required local match for a different state or federal grant program unless expressly authorized by the appropriating language of the annual general appropriations act for that fiscal year.

 

    Section 11-11-770. An eligible entity that receives a disbursement under this article must expend or contractually obligate the funds for the certified community investment within three years of disbursement. Funds not expended or obligated within that period must be remitted to the State Treasurer for deposit to the credit of the fund, to be available for reallocation in a subsequent fiscal year subject to Section 11-11-730.

 

    Section 11-11-780. (A) The Executive Budget Office shall maintain a searchable public record, updated at least quarterly, of every community investment certified under this article, including the certifying member, House or Senate district, eligible entity, county or counties of apportionment, amount, and stated public purpose.

    (B) By January fifteenth of each year, RFA shall report to the General Assembly and the Governor the total amount certified to the fund in the prior fiscal year, the amount disbursed, the amount reverted pursuant to Section 11-11-770, and the calculation supporting the certification required pursuant to Section 11-11-730(A).

    (C) The Legislative Audit Council may periodically audit disbursements made under this article for compliance with this article's eligibility and use restrictions.

 

    Section 11-11-790. Nothing in this article creates a vested right, entitlement, or contractual obligation of any member of the General Assembly or eligible entity to funding in a fiscal year in which the conditions of Section 11-11-730 are not met. Nothing in this article may be construed to reduce, delay, or subordinate any reimbursement, transfer, or set-aside identified in Section 11-11-730(A).

 

SECTION 2.  If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every 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 hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

 

SECTION 3.  This act takes effect upon approval by the Governor and first applies for appropriations for Fiscal Year 2027-2028.

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