Senate Amendment 8A
S 285 - Session 125 (2023-2024)
Providing Academic Choice in Education (PACE)

Senator Massey proposes the following amendment (SR-285.KM0061S):

Amend the bill, as and if amended, SECTION 1, by striking Sections 12-6-3850 and 12-6-3855 and inserting:

(3) "Disadvantaged child" means a child or his family who meets the qualifications for federal Medicaid benefits, or whose family has an annual adjusted gross income of four hundred percent or less of the federal poverty guidelines as promulgated annually by the United States Department of Health and Human Services.

(4) "Eligible school" means an independent school, including those religious in nature, other than a public school, at which the compulsory attendance requirements of Section 59-65-10 may be met, that:

(a) offers a general education to primary or secondary school students;

(b) does not discriminate on the basis of race, color, or national origin;

(c) is located in this State;

(d) has an educational curriculum that includes courses set forth in the state's diploma requirements;

(e) has school facilities that are subject to applicable federal, state, and local laws; and

(f) is a member in good standing of the South Carolina Association of Christian Schools, the South Carolina Independent Schools Association, the Palmetto Association of Independent Schools, the American Montessori Society, the International Montessori Council, or the National Association of Private Schools, or alternatively accredited by Cognia or the National Council for Private School Accreditation.

(5) "Eligible student" means a student who:

(a) meets the definition of "disadvantaged child"; or

(b) meets the definition of "home school child"; and

(c) is not a recipient of an Education Scholarship Trust Fund.

(6) "Home school" means a home, residence, or location where a parent or legal guardian teaches one or more children as authorized pursuant to Section 59-65-40, Section 59- 65-45, or Section 59-65-47.

(7) "Home school child" means any child attending an eligible home school.

(8) "Nonprofit scholarship funding organization" or "scholarship funding organization" means a charitable organization that:

(a) is registered and in good standing with the South Carolina Secretary of State;

(b) is exempt from federal tax pursuant to Section 501(a) of the Internal Revenue Code by being listed as an exempt organization in Section 501(c)(3) of the tax code; and

(c) is approved annually by the Treasurer and listed on the Treasurer's approved list, which must be published on the Treasurer's website;

(9) "Parent" means a resident of this State who is the natural or adoptive parent, legal guardian, custodian, or other person with legal authority to act on behalf of an eligible student.

(10) "Person" means an individual, partnership, corporation, or other similar entity.

(11) "Program" means the ACE scholarship program created by this article.

(12) "Public School" means a school operated by publicly elected or appointed school officials in which the program and activities are under the control of these officials and which is supported by public funds.

(13) "Qualifying expense" means:

(a) the total amount of money charged for the cost of an eligible student to attend an eligible school including, but not limited to, fees for attending the school, textbook fees, tutoring, or transportation to and from school that is provided by the school, or any combination thereof. These costs may not be in excess of what is currently provided; and

(b) in the case of an eligible home school student, the total amount of money charged for instruction-related expenditures to attend an eligible home school provider including, but not limited to, curriculum packages, textbooks, digital education, and testing materials.

(14) "Resident school district" means the public school district in which the student is domiciled.

(15) "Scholarship" means education funding allocated from an account established on a student's behalf pursuant to this article.

(16) "Treasurer" means the Office of the State Treasurer.

Section 12-6-3855. (A) A person is entitled to a tax credit against income taxes imposed pursuant to this chapter, or bank taxes imposed pursuant to Chapter 11 of this title, for the amount of cash and the monetary value of any publicly traded securities the person contributes to a nonprofit scholarship funding organization up to the limits of this section if:

(1) the contribution is used to provide scholarships for qualifying expenses to an eligible student enrolled in an eligible school; and

(2) the taxpayer does not designate a specific child or school as the beneficiary of the contribution.

(B)(1) Scholarships may be awarded by a scholarship funding organization to an eligible student qualifying and defined under Section 12-6-3850(5)(a)[Disadvantaged Child ] for a school year in an amount not exceeding the actual state allocated revenue for each pupil as calculated by the Revenue and Fiscal Affairs Office and required to be published by the annual appropriations act or the total amount of qualifying expenses, whichever is less.

(2) Scholarships may be awarded by a scholarship funding organization to an eligible student qualifying and defined under Section 12-6-3850(5)(b) [Home School Child] for a school year in an amount not exceeding twenty percent of the amount of subsection (B)(1) above or the total cost of home school curriculum fees, whichever is less. A scholarship funding organization may reimburse a parent directly for expenditures actually paid for home school curriculum fees or pay vendors directly for home school curriculum fees at the direction of the parent and on behalf of the home school child.

(3) Once an eligible student receives a scholarship, he must receive priority status for future scholarships; provided, however, that the eligible student is in good standing with the school.

(C) Except as otherwise provided, the Department of Education, the Department of Revenue, the Treasurer, or any other state agency may not regulate the educational programs of a school that accepts eligible students receiving scholarships pursuant to this article.

Amend the bill further, SECTION 1, by striking Section 12-6-3870 and inserting:

(D)(1) The tax credits authorized for an eligible student qualified and defined under Section 12-6-3850(5)(a) [Disadvantaged Child] may not exceed a total of forty-five million dollars, each calendar year.

(2) The tax credits authorized for an eligible student qualified and defined under Section 12-6-3850 (5)(b) [Home School Child] may not exceed cumulatively a total of ten million dollars each calendar year.

(3) If the South Carolina Department of Revenue determines that the total of the credits claimed in this section by all taxpayers exceeds the limit amount, it shall allow credits only up to those amounts on a first-come, first-served basis. However before October first of each tax year, no taxpayer may claim more than fifty percent of the allotment for any of the tax credits allowed in this section. After October first, a taxpayer that has claimed the maximum allotment may reapply to claim additional credits. For purposes of determining priority, the subsequent application must be placed in order with all other applications received.

(4) The tax credits authorized pursuant to this section remain the same unless an increased or decreased limit is authorized in the annual general appropriations act.

(E) The department shall establish an application process to determine the amount of credit available to be claimed. The receipt of the application by the department shall determine priority for the credit.

(1) The tax credit must be claimed on the return for the tax year that the contribution is made.

(2) A taxpayer may not claim more than one hundred percent of his total tax liability for the tax year in contributions toward the tax credits authorized by section. This credit is not refundable. If the credit exceeds the taxpayer's tax liability for the taxable year, the excess amount may be carried forward for credit against the next ten succeeding taxable years.

(3) If a taxpayer deducts the amount of the contribution on the taxpayer's federal return and claims the credit allowed by this section, then the taxpayer shall add back the amount of the deduction for purposes of South Carolina income or bank taxes.

(F) The department shall prescribe the form and manner of proof required to obtain the credits authorized by this article. Also the department shall develop a method of informing taxpayers and scholarship-funding organizations if the credit limit is met at any time during the year.

(1) A corporation or entity entitled to a credit under this section may not convey, assign, or transfer the credit authorized by this section to another entity unless all assets of the entity are conveyed, assigned, or transferred in the same transaction.

(2) Notwithstanding the maximum credit limits set forth in this article, if one of the eligible student-qualifying categories listed in subsection (D) reaches its limits but another eligible student-qualifying category has not reached its limit by October first of each tax year, then the department may transfer the unused credits to the eligible student qualifying category that has reached its limit. However, the credit only may be transferred and may not cumulatively allow more than the authorized annual cumulative total provided in this section. In considering a credit transfer under this item, those eligible student qualifying categories listed in subsection 12-6-3850(5)(a) [Disadvantaged Child], and (b) [Home School Child], must have priority order when transferring credits.