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12                       SECTION 13
13
14     TO AMEND THE 1976 CODE BY ADDING SECTION 12-6-3385 SO AS TO ALLOW A REFUNDABLE STATE INDIVIDUAL
15     INCOME TAX CREDIT FOR A PORTION OF TUITION PAID AT A PUBLIC OR INDEPENDENT INSTITUTION OF HIGHER
16     LEARNING IN THIS STATE AND TO DEFINE SUCH INSTITUTIONS, TO PROVIDE THE PERCENTAGE AMOUNT OF THE
17     CREDIT AND ITS DURATION, TO PROVIDE THE CRITERIA STUDENTS ELIGIBLE FOR THE CREDIT MUST MEET, TO
18     DEFINE TUITION FOR PURPOSES OF THE CREDIT, AND TO PROVIDE THAT THE CREDIT APPLIES ONLY FOR
19     STUDENTS GRADUATING FROM HIGH SCHOOL DURING OR AFTER MAY, 1998.
20
21     A.  Article 25, Chapter 6, Title 12 of the 1976 Code is amended by adding:
22     



PART II                                                                            PAGE 553

 1           "Section 12-6-3385. (A) A student is allowed a refundable individual income tax credit equal to twenty percent of tuition paid an
 2     institution of higher learning during the taxable year.  A  qualified student', as defined in subsection (B)(2) of this section, is allowed an
 3     additional credit equal to five percent of tuition paid, not to exceed a total credit of twenty-five percent.  Tuition credits may not be claimed
 4     for more than eight consecutive semesters.  However, extensions may be granted due to medical necessity as defined by the Commission on
 5     Higher Education.   The credit may be claimed by the student or by an individual eligible to claim the student as a dependent on his federal
 6     income tax return, whoever actually paid the tuition. The department shall prescribe a form for claiming the credit.
 7           (B)  As used in this section:
 8                  (1)   Institution of higher learning' means a public institution defined in Section 59-103-5 and an independent institution as defined
 9     in Section 59-113-50.
10                  (2)   Qualified student' means a student as defined in item (3 ) of this subsection who:
11                         (a)  attends a four-year institution and who graduated from high school with a minimum 3.0 cumulative grade average on a 4.0
12     scale, or its numerical equivalent, scored 1000 or better on the Scholastic Aptitude Test (SAT), and has maintained a minimum cumulative 3.0
13     grade average; or
14                         (b)  attends a two-year institution and who graduated from high school with a minimum 3.0 cumulative grade average on a 4.0 scale
15     or its numerical equivalent, and has maintained a cumulative 3.0 grade average; or
16                         (c)  has earned at least forty-five semester hours and maintains a cumulative 3.0 grade average.
17                  (3)   Student' means an individual enrolled in an institution of higher learning:
18                         (a)  eligible for in-state tuition and fees as determined pursuant to Chapter 112 of Title 59 and applicable regulations;
19                         (b)  who has completed at least fifteen semester hours or its equivalent as determined by the Commission on Higher Education
20     and who is admitted, enrolled, and classified as a degree-seeking undergraduate or enrolled in a certificate or diploma program of at least one
21     year;
22                         (c)  who, within twelve months before enrolling:
23                                (i)   graduated from a high school in this State,
24                                (ii)  successfully completed a high school home school program in this State in the manner required by law, or
25                                (iii) graduated from a preparatory high school outside this State while a dependent of a parent or guardian who is a legal
26     resident of this State and has custody of the dependent;
27                         (d)  not in default on a federal Title IV or State of South Carolina educational loan, nor who owes a refund on a federal Title IV
28     or a State of South Carolina student financial aid program;
29                         (e)  who has not been adjudicated delinquent or been convicted or pled guilty or nolo contendere to any felonies or any alcohol or
30     drug-related offenses under the laws of this State, any other state or comparable jurisdiction, or of the United States;
31                         (f)   making satisfactory progress toward graduation as defined by the institution;
32                         (g)  who is not a Palmetto Fellowship recipient.



PART II                                                                            PAGE 554

 1                  (4)   Tuition' means the amount charged, including required fees, necessary for enrollment.  Higher education tuition at an independent
 2     institution means the average tuition at the four-year public institutions of higher learning as defined in Section 59-103-15(B)(2).  Before
 3     calculating the credit, there must be deducted from tuition  any amounts received toward its payment by any other scholarship grants."
 4
 5     B.   This section is effective for taxable years beginning after 1997 and applies only for persons graduating from high school during or after
 6     May, 1998.
 7