South Carolina General Assembly
116th Session, 2005-2006

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H. 4534

STATUS INFORMATION

General Bill
Sponsors: Reps. Edge, Leach, Merrill, Altman, Bailey, Barfield, Cato, Ceips, Chalk, Chellis, Clemmons, Davenport, Delleney, Duncan, Hagood, Hamilton, Hardwick, Harrison, Haskins, Herbkersman, Hinson, Limehouse, Loftis, McGee, Owens, M.A. Pitts, Rice, Scarborough, Simrill, G.M. Smith, G.R. Smith, J.R. Smith, W.D. Smith, Stewart, Tripp, Vaughn, Viers, Witherspoon, Young, Norman, Lucas, Coates, Perry, Bingham and D.C. Smith
Document Path: l:\council\bills\ggs\22343sj06.doc
Companion/Similar bill(s): 1166, 3012, 3204, 3652, 4054

Introduced in the House on January 26, 2006
Currently residing in the House Committee on Ways and Means

Summary: Educational Opportunity Scholarship Act

HISTORY OF LEGISLATIVE ACTIONS

     Date      Body   Action Description with journal page number
-------------------------------------------------------------------------------
   1/26/2006  House   Introduced and read first time HJ-30
   1/26/2006  House   Referred to Committee on Ways and Means HJ-30
   3/27/2006  House   Member(s) request name added as sponsor: Norman
    4/4/2006  House   Member(s) request name added as sponsor: Lucas
    4/5/2006  House   Member(s) request name added as sponsor: Coates
   4/18/2006  House   Member(s) request name added as sponsor: Perry
   4/19/2006  House   Member(s) request name added as sponsor: Bingham, 
                        D.C.Smith

View the latest legislative information at the LPITS web site

VERSIONS OF THIS BILL

1/26/2006

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

A BILL

TO ENACT THE "SOUTH CAROLINA EDUCATIONAL OPPORTUNITY SCHOLARSHIP ACT" BY ADDING ARTICLE 6 TO CHAPTER 63, TITLE 59, CODE OF LAWS OF SOUTH CAROLINA, 1976, SO AS TO ALLOW STUDENTS ATTENDING A FAILING PUBLIC SCHOOL TO USE AN EDUCATION SCHOLARSHIP TO TRANSFER TO ANOTHER PUBLIC SCHOOL OR TO AN INDEPENDENT SCHOOL, TO DEFINE CERTAIN TERMS, AND TO PROVIDE FOR REPORTING AND CONDUCTING OF EXAMINATIONS AND INVESTIGATIONS; AND BY ADDING CHAPTER 18 TO TITLE 12 SO AS TO PROVIDE A CREDIT FOR CERTAIN TAXES FOR TUITION PAID TO PUBLIC OR INDEPENDENT SCHOOLS, TO DEFINE CERTAIN TERMS, AND TO PROVIDE FOR REPORTING AND ACCOUNTABILITY OF THE IMPLEMENTATION OF THIS CHAPTER.

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

PART I

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 who reside in 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.

PART II

SECTION    1.    Chapter 63, Title 59 of the 1976 Code is amended by adding:

"Article 6

Educational Opportunity Scholarship Program

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, religious 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;

(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."

PART III

SECTION    1.    Title 12 of the 1976 Code is amended by adding:

"CHAPTER 18

Educational Opportunity Scholarship Tax Credit

Article 1

General Provisions

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 the December thirty-first immediately following the determinations.

Article 3

Educational Opportunity Scholarship Tax Credit

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."

PART IV

SECTION    1.    (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    2.    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    3.    This act takes effect at the start of the first school year beginning at least one year from approval of this act by the Governor.

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