WASHINGTON - South Carolina Gov. Mark Sanford moved from the state Supreme Court to a federal district court a case revolving around the legality of a federal stimulus law provision permitting state legislatures to draw down federal funds for job creation and economic growth if their governors refuse to do so.

Sanford moved the case Wednesday, a day before the state's high court was expected to hear oral arguments in the case, which is being closely watched by individuals and legislators in other states where Republican governors have refused to use some of the federal stimulus funds.In the case, Casey Edwards v. the State of South Carolina, two students had asked the high court to force Sanford to use some of the $700 million of federal stimulus funds earmarked for South Carolina for education.

The governor has insisted the funds be used instead to pay down the state's debt.

The federal court could consolidate the case with other lawsuits pending over the stimulus funds.

The Edwards case has drawn attention because of its focus on the "Clyburn workaround amendment" that Rep. James Clyburn, D-S.C., persuaded Congress to add to the American Recovery and Reinvestment Act of 2009 after Sanford and other Republican governors indicated they might not accept stimulus funds from the federal government.

Under the amendment in Section 1607 of the ARRA, if a governor does not accept stimulus funds provided to the state, the legislature may do so by adopting a concurrent resolution and appropriating the money.

The South Carolina General Assembly acted in accordance with the Clyburn amendment recently after Sanford insisted that he would use some of the $700 million of stimulus funds targeted for education in the state to pay down the state's debt instead.

The General Assembly passed a concurrent resolution directing him to use the funds for education, and it approved budget legislation appropriating the money for education for the 2009-10 fiscal year.

Sanford vetoed the legislation, but the General Assembly overrode his veto last week.

The governor's continued resistance to using the money for education prompted Casey Edwards, a senior at Chapin High School in Lexington County, who became appalled by the state of schools in Dillon County after watching a documentary, and Justin Williams, a law student at the University of South Carolina, to take action. They filed a petition with the state Supreme Court asking it to rule that the General Assembly is permitted to request, accept, and distribute the ARRA funds under the Clyburn amendment, and that the governor must implement the budget as enacted by the legislature.

The petition was filed in late April, but the high court said it was premature, so Edwards and Williams refiled it this week, after the General Assembly overturned Sanford's veto of the budget bill.

Sanford appointed Attorney General Henry McMaster to represent the state in the case. In a response filed with the high court Monday, McMaster warned, "The circumstances in this case are extraordinary and unparalleled in state history."

McMaster seemed to acknowledge that the General Assembly could direct the governor to spend the money through the budget and appropriations legislation it passed and saved from a gubernatorial veto. But he urged the court not to validate the concurrent resolution the legislature enacted under the Clyburn amendment.

"Congress can neither bestow upon the governor powers not given by, or in conflict with, the Constitution or legislative acts of South Carolina, nor may it authorize the legislature to bind the state through the mechanism of a concurrent resolution which bypasses South Carolina's constitutional processes and excludes executive input," McMaster told the court.

The high court had scheduled oral arguments in the case for 2:30 p.m. today. But in a surprising development Wednesday, Sanford, after insisting that he would not participate in the case, asked the high court for permission to intervene.

The court granted his motion, and last night Sanford removed the case to U.S. District Court for South Carolina in Columbia.

The case could be consolidated with others, including a suit the South Carolina Association of School Administrators filed against Sanford and Jim Rex, the superintendent of education, urging that they be required to spend the money. Last week Sanford filed a lawsuit in the federal court against McMaster, as the chief enforcer of state law, balking at spending stimulus funds on education.

Sanford is not the only Republican governor to refuse to use stimulus funds for certain purposes.

Alaska Gov. Sarah Palin turned down $28.6 million of federal stimulus funds for weatherization and renewable energy projects, according to her Web site.

Texas Gov. Rick Perry rejected $555 million of stimulus funds that could have been used to expand state jobless benefits to part-time workers, according to news reports.

In a certification letter accepting some funds, Perry told President Obama, "I remain opposed to using these funds to expand existing government programs, burdening the state with ongoing expenditures long after the funding has dried up."

Louisiana Gov. Bobby Jindal refused $98.4 million of stimulus funds, claiming that taking the money would have required the state to expand its unemployment insurance coverage and make other changes in state law that would have resulted in a tax increase on Louisiana businesses, according to his Web site.

Alabama Gov. Bob Riley turned down $99 million of stimulus funds to expand unemployment benefits, saying it would lead to a $17 million tax increase after the funds were spent, according to his Web site and news reports.

Mississippi Gov. Haley Barbour said he would refuse $56 million of stimulus funds for expanding unemployment benefits, because it would cost business owners another $16 million each year after the money was spent.

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