2005-2006 Bill 1166: Educational Opportunity Scholarship Act - South Carolina Legislature Online

1 South Carolina General Assembly 2 116th Session, 2005-2006 3 4 S. 1166 5 6 STATUS INFORMATION 7 8 General Bill 9 Sponsors: Senators Grooms, McConnell, Bryant, Campsen, Ryberg, Verdin, Mescher, Hawkins, Thomas, 10 Fair, Scott and Cromer 11 Document Path: l:\council\bills\ggs\22383sj06.doc 12 Companion/Similar bill(s): 3012, 3204, 3652, 4054, 4534 13 14 Introduced in the Senate on February 21, 2006 15 Currently residing in the Senate Committee on Education 16 17 Summary: Educational Opportunity Scholarship Act 18 19 20 HISTORY OF LEGISLATIVE ACTIONS 21 22 Date Body Action Description with journal page number 23 2/21/2006 Senate Introduced and read first time SJ-15 24 2/21/2006 Senate Referred to Committee on Education SJ-15 25 26 27 VERSIONS OF THIS BILL 28 29 2/21/2006 30 1 2 3 4 5 6 7 8 9 A BILL 10 11 TO ENACT THE “SOUTH CAROLINA EDUCATIONAL 12 OPPORTUNITY SCHOLARSHIP ACT” BY ADDING 13 ARTICLE 6 TO CHAPTER 63, TITLE 59, CODE OF LAWS OF 14 SOUTH CAROLINA, 1976, SO AS TO ALLOW STUDENTS 15 ATTENDING A FAILING PUBLIC SCHOOL TO USE AN 16 EDUCATION SCHOLARSHIP TO TRANSFER TO ANOTHER 17 PUBLIC SCHOOL OR TO AN INDEPENDENT SCHOOL, TO 18 DEFINE CERTAIN TERMS, AND TO PROVIDE FOR 19 REPORTING AND CONDUCTING OF EXAMINATIONS AND 20 INVESTIGATIONS; AND BY ADDING CHAPTER 18 TO 21 TITLE 12 SO AS TO PROVIDE A CREDIT FOR CERTAIN 22 TAXES FOR TUITION PAID TO PUBLIC OR INDEPENDENT 23 SCHOOLS, TO DEFINE CERTAIN TERMS, AND TO 24 PROVIDE FOR REPORTING AND ACCOUNTABILITY OF 25 THE IMPLEMENTATION OF THIS CHAPTER. 26 27 Be it enacted by the General Assembly of the State of South 28 Carolina: 29 30 PART I 31 32 SECTION 1. This act may be cited as the “South Carolina 33 Educational Opportunity Scholarship Act”. 34 35 SECTION 2. The purpose of this act is to: 36 (1) put parents in charge of their children’s education; 37 (2) assist parents who reside in unsatisfactory schools; 38 (3) assist parents who have special needs children; 39 (4) expand educational opportunities for children of families in 40 poverty; 41 (5) restore parental input in education; and 42 (6) improve public school performance.

1 [1166] 1 1 2 PART II 3 4 SECTION 1. Chapter 63, Title 59 of the 1976 Code is amended 5 by adding: 6 7 “Article 6 8 9 Educational Opportunity Scholarship Program 10 11 Section 59-63-610. (A) As used in this article: 12 (1) ‘Failing public school’ means a public school in the State 13 that has received a rating of ‘below average’ or ‘unsatisfactory’ as 14 its absolute grade on its most recent annual report card under the 15 Education Accountability Act. 16 (2) ‘Parent’ means the natural or adoptive parent or legal 17 guardian of a child. 18 (3) ‘Independent school’ means a school, other than a public 19 school, at which the compulsory attendance requirements of 20 Section 59-56-10 may be met and that does not discriminate based 21 on the grounds of race, color, or national origin. ‘Independent 22 school’ includes home schools as provided in Article 1, Chapter 23 65, Title 59. 24 (4) ‘Public school’ means a public school in the State as 25 defined in Section 59-1-120. 26 (B) This article only applies to a student: 27 (1) whose household income is less than two hundred 28 percent of the federal poverty rate; or 29 (2) who is determined by a school psychologist to be 30 physically or mentally handicapped according to the definitions in 31 Section 59-21-510. 32 33 Section 59-63-620. (A) A student is eligible to transfer to a 34 passing public school or an independent school if the student: 35 (1) has spent the prior school year in attendance at a failing 36 public school; 37 (2) attended another public school and has been assigned to 38 attend a failing public school; 39 (3) is entering kindergarten or first grade and has been 40 assigned to a failing public school; 41 (4) resides in an area zoned for a failing school; or

1 [1166] 2 1 (5) is determined by a school psychologist to be physically 2 or mentally handicapped according to the definitions in Section 3 59-21-510. 4 (B) A student who meets the criteria in subsection (A) may 5 contact the Department of Education for a list of independent 6 schools and public schools. 7 8 Section 59-63-625. (A) If a student meets the criteria in Section 9 59-63-620 and chooses to transfer from a failing public school: 10 (1) to another public school in his resident district but not in 11 his attendance area, the district shall adjust monetary differences 12 between the schools; 13 (2) to another public school outside his resident district and 14 if the receiving district accepts the transfer student, his resident 15 school district shall reimburse that district for the cost of his 16 attendance equal to seventy-five percent of the projected per pupil 17 cost as promulgated by the Office of Research and Statistics; or 18 (3) to an independent school, the Department of Education 19 shall issue a check to the parents or guardians and the independent 20 school they select for the lesser of four thousand five hundred 21 dollars indexed each year to the consumer price index or the cost 22 of tuition fees at the independent school. 23 (B) Notwithstanding subsection (A) of this section or Section 24 59-63-620, if the student is determined by a school psychologist to 25 be physically or mentally handicapped and the special needs 26 student chooses to transfer from his school district to: 27 (1) another public school in his resident district but not in his 28 attendance area, the district shall adjust monetary differences 29 between the schools; 30 (2) another public school outside his resident district, his 31 resident school district shall reimburse that district for the cost of 32 his attendance equal to seventy-five percent of the projected per 33 pupil cost as promulgated by the Office of Research and Statistics 34 for the school district to which the student transfers; or 35 (3) an independent school, the Department of Education 36 shall issue a check to the parents or guardians and the independent 37 school they select for the lesser of an amount equal to the 38 appropriate pupil classification weighting for that student pursuant 39 to Section 59-20-40 multiplied by seventy-five percent of the 40 projected state per pupil cost as promulgated by the Office of 41 Research and Statistics or the cost of tuition fees at the 42 independent school.

1 [1166] 3 1 (C) A student who is taught at home is not eligible to receive a 2 scholarship pursuant to this article. 3 4 Section 59-63-630. An independent school that accepts 5 scholarship students pursuant to this article: 6 (1) shall comply with the federal anti-discrimination law, 7 pursuant to 42 U.S.C. Section 2000(d); 8 (2) shall meet state and local health and safety laws and codes; 9 (3) shall comply with state statutes relating to independent 10 schools; 11 (4) shall employ or contract with teachers who hold a 12 baccalaureate or higher degree, or have at least three years of 13 teaching experience in a public or independent school, or have 14 special skills, knowledge, or expertise that qualifies them to 15 provide instruction in subjects taught; 16 (5) must be academically accountable to the parent or guardian 17 for meeting the education needs of the student; 18 (6) shall administer to all students a nationally recognized 19 achievement test and report the school’s aggregate score to all 20 parents; 21 (7) shall adhere to the tenets of the school’s published 22 disciplinary procedures prior to the expulsion of an educational 23 opportunity scholarship program participant; 24 (8) shall accept scholarship students who meet the admissions 25 criteria of the school on a random, religious neutral basis, without 26 regard to the student’s past academic history, with preference 27 given to siblings of other scholarship students; 28 (9) may not compel a scholarship student to profess a specific 29 ideological belief, to pray, or to worship; and 30 (10) shall demonstrate their financial viability by showing they 31 can repay any funds that might be owed to the State, if they are to 32 receive more than fifty thousand dollars in scholarship payments 33 during the school year by filing with the Department of Revenue, 34 before the beginning of the school year: 35 (a) a surety bond payable to the State in an amount equal to 36 the aggregate amount of scholarship revenue expected to be paid to 37 the school by participating families during the school year; or 38 (b) financial information that demonstrates that the school 39 has the ability to pay an aggregate amount equal to the amount of 40 scholarship revenue expected to be paid to the school by 41 participating families during the school year. 42

1 [1166] 4 1 Section 59-63-633. To ensure that schools provide academic 2 accountability to parents of students in the educational opportunity 3 scholarship program, participating schools annually shall 4 administer either the state tests or nationally recognized, 5 norm-referenced tests, or both, in math and language arts to each 6 student participating in the program. Participating schools 7 publicly shall disclose the aggregate results of the tests by grade 8 level and provide the parents of each student with a copy of the 9 results. 10 11 Section 59-63-635. (A) A failing public school shall: 12 (1) notify the parent of a student if the school is considered a 13 failing public school pursuant to Section 59-63-610; and 14 (2) present the parent with his options of: 15 (a) sending the student to an independent school; 16 (b) sending the student to another public school; or 17 (c) keeping the student at the failing school. 18 (B) The parent of the student shall: 19 (1) notify the Department of Education and the school 20 district of the decision to transfer the student from a failing public 21 school to an independent or public school, or from an independent 22 or public school back to another independent or public school; 23 (2) have access to the school’s aggregate testing 24 information; 25 (3) arrange for transportation of the student to the 26 independent school or to the district boundary or a mutually agreed 27 upon location, if the student chooses to attend a public school 28 outside his district. 29 (C) The student shall remain in attendance throughout the 30 school year, unless excused for illness or good cause, and comply 31 with the school’s code of conduct. 32 33 Section 59-63-637. The Department of Education shall make 34 scholarship payment by check payable to the transferring student’s 35 parent or legal guardian and to the school at which the scholarship 36 is to be used. The check may be delivered or mailed by the 37 Department of Education to the school at which the scholarship is 38 to be used. All payees must endorse the check. The check may be 39 endorsed by the school on behalf of the student’s parent or legal 40 guardian if the parent or legal guardian has placed on file with the 41 school written authorization to endorse the check. 42

1 [1166] 5 1 Section 59-63-640. Once a student transfers from a failing 2 school pursuant to this article, the student is eligible for the 3 scholarship program until he graduates from high school regardless 4 of a subsequent change in the rating of the school from which he 5 transferred. 6 7 Section 59-63-645. If a qualifying student’s enrollment in an 8 independent school is terminated before the end of the school year, 9 the independent school shall pay to the State on a pro rata basis 10 any excess tuition paid. At the time of making the refund, the 11 independent school shall issue a receipt reflecting the date, 12 amount, and payee for each refund and shall provide a copy of the 13 receipt to the Department of Revenue. 14 15 Section 59-63-647. The Department of Revenue may 16 promulgate regulations to aid in the performance of its duties 17 pursuant to this chapter; however, its power does not extend to 18 matters of school governance, curriculum, hiring or firing, or 19 religious beliefs or practices. 20 21 Section 59-63-648. The Department of Revenue may conduct 22 examinations and investigations whenever it believes that the 23 provisions of this chapter have been evaded or violated in any 24 manner. All powers possessed by the department as provided in 25 Title 12 to conduct examinations and investigations apply to 26 examinations and investigations conducted pursuant to this section. 27 28 Section 59-63-650. (A) Annually, the State Budget and Control 29 Board shall provide for the preparation of a report on the impact of 30 the implementation of this chapter on school enrollment and state 31 and local funding of public schools for the fiscal year most 32 recently completed. The report must include, but need not be 33 limited to, an analysis of and statement on the: 34 (1) change in public school enrollment, by school district, 35 attributable to this chapter; and 36 (2) amount of funds the State would have had to expend for 37 public schools under the education funding formula in existence on 38 or before the enactment of this chapter and the amount actually 39 expended by the State in public schools. 40 (B) The report must be submitted by December first of each 41 year to the Governor, the Chairman of the Senate Finance 42 Committee, the Chairman of the Senate Education Committee, the

1 [1166] 6 1 Chairman of the House Ways and Means Committee, and the 2 Chairman of the House Education and Public Works Committee. 3 4 Section 59-63-655. (A)(1) In addition to the annual report as 5 provided in Section 59-63-650, the State Budget and Control 6 Board shall provide for a long-term evaluation of the impact of this 7 chapter. The evaluation must be conducted by contract with one or 8 more qualified persons or entities with previous experience 9 evaluating school choice programs and must be conducted for a 10 minimum of five years beginning five years after enactment of this 11 section. The evaluation must include an assessment of the: 12 (a) level of parental satisfaction for parents of students 13 participating in the scholarship program provided for in this 14 chapter; 15 (b) level of parental satisfaction for parents of students in 16 failing public schools; 17 (c) academic performance of participating independent 18 schools and failing public schools; 19 (d) level of student satisfaction with the scholarship 20 program provided for in this chapter; 21 (e) level of student satisfaction for students attending 22 failing public schools; 23 (f) impact of the provisions of this chapter on public 24 school districts, public school students, independent schools, and 25 independent school students; and 26 (g) impact of the provisions of this chapter on school 27 capacity, availability, and quality. 28 (2) The evaluation must be conducted using appropriate 29 analytical and behavioral science methodologies and must protect 30 the identity of participating schools and students by, at a minimum, 31 keeping anonymous all disaggregated data other than that for the 32 categories of grade, gender, race, and ethnicity. The evaluation of 33 public and independent school students must compute the relative 34 efficiency of public and independent schools, the value added to 35 educational performance by independent schools relative to failing 36 public schools, and a comparison of acceptance rates into college, 37 while adjusting or controlling for student and family background. 38 (B) State and local government entities shall cooperate with the 39 persons or entities conducting the evaluation provided for in 40 subsection (A). Cooperation includes providing available student 41 assessment results and other information needed to complete the 42 evaluation.

1 [1166] 7 1 (C) The State Budget and Control Board shall pay the cost of 2 the evaluation from funds available to it for that purpose except 3 that state funds used must not exceed four hundred thousand 4 dollars per year. 5 (D) By January thirty-first of each year, the State Budget and 6 Control Board shall provide to each member of the General 7 Assembly interim reports of the results of the evaluation. Upon 8 completion of the evaluation, the State Budget and Control Board 9 shall provide a final report to each member of the General 10 Assembly. At the same time as the final report is made public, the 11 persons or entities who conducted the evaluation must make their 12 data and methodology available for public review and inspection, 13 but only if the release of the data and methodology is in 14 compliance with 20 U.S.C. Section 1232g, Family Educational 15 Rights and Privacy Act of 1974. 16 17 Section 59-63-660. The provisions of this article regarding 18 independent schools only apply to independent schools that choose 19 to accept scholarship students.” 20 21 PART III 22 23 SECTION 1. Title 12 of the 1976 Code is amended by adding: 24 25 “CHAPTER 18 26 27 Educational Opportunity Scholarship Tax Credit 28 29 Article 1 30 31 General Provisions 32 33 Section 12-18-30. As used in this chapter, unless otherwise 34 required by the context: 35 (1) ‘Department’ means the South Carolina Department of 36 Revenue. 37 (2) ‘Independent school’ means a school, other than a public 38 school, at which the compulsory attendance requirements of 39 Section 59-56-10 may be met and that does not discriminate based 40 on the grounds of race, color, or national origin. ‘Independent 41 school’ includes home schools as provided in Article 1, Chapter 42 65, Title 59.

1 [1166] 8 1 (3) ‘Public school’ means a public school as defined in Section 2 59-1-120. 3 (4) ‘Qualifying student’ means an individual: 4 (a) who is: 5 (i) enrolled at an independent school as a full-time 6 student, as determined by the school, for which the school has a 7 release of information form; 8 (ii) taught at home pursuant to Article 1, Chapter 65, Title 9 59; or 10 (iii) a resident of this State, and, if enrolled in a public 11 school, is not a resident of the school district operating that public 12 school; 13 (b) who is in kindergarten through grade twelve; and 14 (c) who is not receiving a scholarship pursuant to Article 6, 15 Chapter 63, Title 59. 16 A student who is determined by a school psychologist to be 17 physically or mentally handicapped according to the definitions in 18 Section 59-21-510 is also considered a ‘qualifying student’ 19 pursuant to this item. 20 Once a student becomes a ‘qualifying student’, the student is 21 eligible for the tax credit program until he graduates from high 22 school. 23 (5) ‘Receipt’ means a document that a school issues to the 24 person that makes a tuition payment on behalf of a qualifying 25 student. The department shall develop the form of the document 26 the content of which must be limited to and include, the name and 27 address of the school; the name, address and social security 28 number of the qualifying student on whose behalf the tuition was 29 paid; the name of the person paying the tuition; the names of all 30 other persons who have paid tuition, in chronological order, during 31 the then current calendar year on behalf of the qualifying student 32 prior to the payment for which the receipt is being issued and 33 including the total tuition paid by the named person; and the date 34 and amount of tuition paid and the aggregate amount of tuition 35 paid for the qualifying student. For a student taught at home 36 pursuant to Article 1, Chapter 65, Title 59, ‘receipt’ means a 37 document issued by the entity receiving a payment for tuition, 38 which contains the name of the entity receiving the payment; the 39 identity of the goods or services purchased; the date and amount of 40 tuition paid; and, if the receipt is for personal services, the person’s 41 taxpayer identification number. 42 (6) ‘Release of information form’ means a form developed by 43 a school that states that a parent or the legal guardian of the

1 [1166] 9 1 qualifying student consents to the release of the information 2 contained in the receipt and is consistent with the requirements of 3 20 U.S.C. Section 1232g, Family Educational Rights and Privacy 4 Act of 1974. 5 (7) ‘School’ means a public school or independent school. 6 (8) ‘State’ means the government of the State of South 7 Carolina. 8 (9) ‘Tuition’ means the amount charged for attending a public 9 school when the student is not a resident of the school district or 10 for attending an independent school. ‘Tuition’ includes fees 11 necessary for attending the respective school including, but not 12 limited to, enrollment fees and transportation fees. For students 13 taught at home pursuant to Article 1, Chapter 65, Title 59, ‘tuition’ 14 means expenses incurred for tutors, textbooks, school supplies, 15 computers including hardware and software, fees for membership 16 in an association that sets the academic standards for the student’s 17 home schooling program, and academic lessons including, but not 18 limited to, science, math, music, and art. Expenses for tutors or 19 academic lessons may be included in ‘tuition’ only if the person 20 providing the tutoring or academic lessons is a person other than 21 the student’s parent or legal guardian and who meets the 22 requirements for providing the service as set by the 23 standard-setting entity for that student’s home school program. 24 ‘Tuition’ does not include athletic fees. 25 26 Section 12-18-40. The department may promulgate regulations 27 to aid in the performance of its duties pursuant to this chapter; 28 however, the department’s power does not extend to matters of 29 school governance, curriculum, hiring or firing, or religious beliefs 30 or practices. 31 32 Section 12-18-50. The department may conduct examinations 33 and investigations whenever it believes that the provisions of this 34 chapter have been evaded or violated in any manner. All powers 35 possessed by the department as provided in Title 12 to conduct 36 examinations and investigations apply to examinations and 37 investigations conducted pursuant to this section. 38 39 Section 12-18-60. If a student wants to transfer to a different 40 school district, the board of trustees of the school district to which 41 the student wishes to transfer shall approve or disapprove the 42 transfer. If the board of trustees approves the transfer, the board 43 may estimate the tuition to charge the transferring student.

1 [1166] 10 1 2 Section 12-18-70. The annual determinations required in this 3 chapter to be made by the budget office must be used by the 4 department to set the limits on the amount of credit that may be 5 claimed pursuant to Section 12-18-310 for the tax year beginning 6 after the December thirty-first immediately following the 7 determinations. 8 9 Article 3 10 11 Educational Opportunity Scholarship Tax Credit 12 13 Section 12-18-310. (A) A person is allowed a tax credit for 14 tuition paid for qualifying students to attend a school. The credit 15 may be applied against the person’s liability for taxes imposed 16 pursuant to Chapter 6 of this title. Limitations upon the total 17 amount of liability for taxes that can be reduced by the use of 18 another credit allowed for that tax must be computed after the 19 credit allowed by this section is used to reduce a tax liability 20 pursuant to Chapter 6 of this title. The credit may be claimed only 21 by the person who actually paid the tuition. More than one person 22 may claim a credit for the payment of a portion of the qualifying 23 student’s total tuition but only if the person actually paid the 24 portion and the total credit taken by all persons does not exceed, in 25 the aggregate, the limits set in this section. If the person’s receipt 26 indicates that the aggregate tuition paid by all persons for the 27 qualifying student exceeds the credit that may be claimed pursuant 28 to this article, then that person may claim the credit only to the 29 extent that the person’s tuition payment does not exceed the 30 allowable credit. No credit may be claimed by a person without a 31 receipt. The credit is nonrefundable. A credit claimed pursuant to 32 this section but not used in a taxable year may be carried forward 33 for five years from the taxable year in which the credit is earned by 34 the taxpayer. Credits that are carried forward must be used in the 35 order earned. 36 (B)(1) The credit claimed for each qualifying student pursuant 37 to this article is one thousand dollars indexed each year to the 38 consumer price index. 39 (2) Notwithstanding the provisions of item (1), the credit 40 claimed for each physically or mentally handicapped student 41 pursuant to this article may not exceed the lesser of the: 42 (a) actual tuition paid; or

1 [1166] 11 1 (b) appropriate pupil classification weighting for that 2 student pursuant to Section 59-20-40 multiplied by seventy-five 3 percent of the projected state per pupil cost as promulgated by the 4 Office of Research and Statistics. 5 (3) Notwithstanding the provisions of items (1) and (2), the 6 credit claimed for a qualifying student who is taught at home 7 pursuant to Article 1, Chapter 65, Title 59 may not exceed the 8 lesser of the amount provided in item (1) or item (2) or five 9 hundred dollars indexed each year to the consumer price index. 10 (C) If a qualifying student’s enrollment in an independent 11 school is terminated before the end of the school year, the 12 independent school shall refund to the tuition payers any tuition 13 paid that is applicable to a semester or term beyond the semester or 14 term during which the qualifying student’s enrollment is 15 terminated. At the time of making the refund, the independent 16 school shall issue a receipt reflecting the date, amount, and payee 17 for each refund and shall provide a copy of the receipt to the 18 department.” 19 20 PART IV 21 22 SECTION 1. (A) A qualifying school that accepts students 23 benefiting from scholarships, grants, or tax credits is not an agent 24 or arm of the state or federal government. 25 (B) Except as provided by this act, the Department of 26 Education, Department of Revenue, Budget and Control Board, or 27 any other state agency may not regulate the educational program of 28 a qualifying school that accepts students pursuant to this act. 29 (C) One purpose of this act is to allow maximum freedom to 30 parents and independent schools to respond to and provide for the 31 educational needs of children without governmental control, and 32 this act must be liberally construed to achieve that purpose. 33 34 SECTION 2. If a section, subsection, paragraph, subparagraph, 35 sentence, clause, phrase, or word of this act is for any reason held 36 to be unconstitutional or invalid, this holding does not affect the 37 constitutionality or the validity of the remaining portions of this 38 act, the General Assembly hereby declaring that it would have 39 passed this act, and each section, subsection, paragraph, 40 subparagraph, sentence, clause, phrase, and word thereof, 41 irrespective of the fact that any one or more other sections, 42 subsections, paragraphs, subparagraphs, sentences, clauses,

1 [1166] 12 1 phrases, or words thereof may be declared to be unconstitutional, 2 invalid, or otherwise ineffective. 3 4 SECTION 3. This act takes effect at the start of the first school 5 year beginning at least one year from approval of this act by the 6 Governor. 7 ----XX---- 8

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