(A) There is hereby established the South Carolina Higher Education Excellence Enhancement Program for the general purpose of enhancing the educational opportunities of low-income and educationally disadvantaged students. The program must be administered by the Commission on Higher Education. The commission must enter into annual contracts with eligible institutions to accomplish the purposes of this program.

(B) The program must be funded by appropriations from the Education Lottery Account in an amount provided by the General Assembly.

(C)(1) An institution seeking to qualify as an eligible institution must submit an annual application to the commission. The commission must certify the eligibility of institutions seeking contracts pursuant to this section. Subject to the provisions of item (2), and less any allocations made pursuant to item (2), the funds appropriated for this program must be allocated equally among the eligible institutions.

(2) The Commission on Higher Education, or its successor, annually shall review and determine if funds allocated to a school pursuant to item (1) have been properly used by the school pursuant to § 2-77-30. If the Commission on Higher Education, or its successor, determines these funds were used inappropriately by a school, the funds must be returned, and the following year that school’s allocation must be reduced by fifty percent of the amount appropriated to each eligible institution pursuant to item (1). The balance remaining from a school’s reduced allocation must be distributed equally among the remaining eligible institutions.

(D) From the amounts allocated on an equal basis, an institution receiving an allocation of funds must first use the funds as the nonfederal match required by a federal funding program that provides funding for historic preservation or for capital improvements. In awarding funds based on merit, the commission shall give priority to those proposals that can be matched with funds from a federal funding program.