HB 1291

 26.891.9  101st Legislative Session  1291
                                       2026 South Dakota Legislature
                                               House Bill 1291
 Introduced by: Representative Gosch
1 An Act to amend the process for calculating a school district's general fund base
2percentage.
3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
4 Section 1. That § 13-13-10.1 be AMENDED:
513-13-10.1. The education funding terms and procedures referenced in this
6    chapter are defined as follows:
7    (1)     Nonresident students who are in the care and custody of the Department of Social
8Services, the Unified Judicial System, the Department of Corrections, or other state
9agencies and are attending a public school may be included in the fall enrollment
10of the receiving district when enrolled in the receiving district;
11    (2)     "Fall enrollment," is calculated as follows:
12(a)     Determine the number of kindergarten through twelfth grade students
13enrolled in all schools operated by the school district on the last Friday of
14September of the current school year;
15(b)     Subtract the number of students for whom the district receives tuition
16except for:
17(i)    Nonresident students who are in the care and custody of a state
18agency and are attending a public school district; and
19(ii)   Students who are being provided an education pursuant to § 13-28-
2011; and
21(c)     Add the number of students for whom the district pays tuition.
22    When computing state aid to education for a school district pursuant to § 13-13-73, the
23secretary of the Department of Education shall use the school district's fall
24enrollment;
25    (3)     "Target teacher ratio factor," is:
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1(a)    For school districts with a fall enrollment of two hundred or less, the target
2teacher ratio factor is 12;
3(b)    For districts with a fall enrollment of greater than two hundred, but less
4than six hundred, the target teacher ratio factor is calculated as follows:
5(i)    Multiplying the fall enrollment by .00750; and
6(ii)   Adding 10.50 to the resulting product; and
7(c)    For districts with a fall enrollment of six hundred or greater, the target
8teacher ratio factor is 15.
9    The fall enrollment used for the determination of the target teacher ratio for a school
10district may not include any students residing in a residential treatment facility
11when the education program is operated by the school district;
12    (4)     "English learner (EL) adjustment," is calculated by multiplying 0.25 times the
13number of kindergarten-through-twelfth-grade students who, in the prior school
14year, scored below level four on the state-administered language proficiency
15assessment as required in the state's consolidated state application pursuant to
16§ 1111(b)(2)(G) of the Every Student Succeeds Act of 2015;
17    (5)     "Index factor," is the annual percentage change in the consumer price index for
18urban wage earners and clerical workers as computed by the Bureau of Labor
19Statistics of the United States Department of Labor for the year before the year
20immediately preceding the year of adjustment or three percent, whichever is less;
21    (6)     "Target teacher salary," for the school fiscal year beginning July 1, 2025, is
22$62,821.19. Each school fiscal year thereafter, the target teacher salary is the
23previous fiscal year's target teacher salary increased by the index factor;
24    (7)     "Target teacher benefits," is the target teacher salary multiplied by twenty-nine
25percent;
26    (8)     "Target teacher compensation," is the sum of the target teacher salary and the
27target teacher benefits;
28    (9)     "Overhead rate," is thirty-eight and seventy-eight-hundredths percent. Beginning
29in school fiscal year 2018, the overhead rate must be adjusted to take into account
30the sum of the amounts that districts exceed the other revenue base amount;
31    (10)    "Local need," is calculated as follows:
32(a)    Divide the fall enrollment by the target teacher ratio factor;
33(b)    If applicable, divide the English Learner adjustment pursuant to subdivision
34(4) by the target teacher ratio factor;
35(c)    Add the results of subsections (a) and (b);
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1(d)    Multiply the result of subsection (c) by the target teacher compensation;
2(e)    Multiply the product of subsection (d) by the overhead rate;
3(f)    Add the products of subsections (d) and (e) and subdivision (20);
4(g)    When calculating local need at the statewide level, include the amounts set
5aside for costs related to technology in schools and statewide student
6assessments;
7(h)    When calculating local need at the statewide level, include the amounts set
8aside for sparse school district benefits, calculated pursuant to §§ 13-13-
978 and 13-13-79; and
10(i)    When calculating local need at the statewide level, include the amounts set
11aside for career and technical education calculated pursuant to §§ 13-13-
1281 and 13-13-82;
13    (11)    "Alternative per student need," is calculated as follows:
14(a)    Add the total need for each school district for school fiscal year 2016,
15including the small school adjustment and the English learner adjustment,
16to the lesser of the amount of funds apportioned to each school district in
17the year preceding the most recently completed school fiscal year or school
18fiscal year 2015 pursuant to §§ 10-33-24, 10-35-21, 10-36-10, 10-43-77,
1911-7-73, 13-13-4, and 23A-27-25; and
20(b)    Divide the result of (a) by the September 2015 fall enrollment, excluding
21any adjustments based on prior year student counts;
22    (12)    "Alternative local need," may only be used by a school district created or
23reorganized before July 1, 2016, and is the alternative per student need multiplied
24by the fall enrollment, excluding any adjustments based on prior year student
25counts;
26    (13)    "Local effort," the amount of ad valorem taxes generated in a school fiscal year by
27applying the levies established pursuant to § 10-12-42. Beginning on July 1, 2017,
28local effort includes the amount of funds apportioned to each school district in the
29year preceding the most recently completed school fiscal year pursuant to §§ 10-
3033-24, 10-35-21 as provided by subdivision (15), 10-36-10, 10-43-77, 11-7-73,
3113-13-4, and 23A-27-25 and that exceeds the other revenue base amount;
32    (14)    "Other revenue base amount," is zero;
33    (15)    "Wind energy tax revenue," any wind energy tax revenue apportioned to school
34districts pursuant to § 10-35-21 from a wind farm producing power for the first
35time before July 1, 2016, is considered local effort pursuant to subdivision (13) and
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1other revenue base amount pursuant to subdivision (14). However, for wind energy
2tax revenue apportioned to a school district from a wind farm producing power for
3the first time after June 30, 2016, one hundred percent must be retained by the
4school district to which the tax revenue is apportioned for the first five years of
5producing power, eighty percent for the sixth year, sixty percent for the seventh
6year, forty percent for the eighth year, twenty percent for the ninth year, and zero
7percent thereafter. If a wind farm begins producing power for the first time
8between October first and December thirty-first in a calendar year, any revenues
9generated for that time period must be retained by the school district and that time
10period may not be counted against the first five-year period;
11    (16)    "Per student equivalent," for funding calculations that are determined on a per
12student basis, the per student equivalent is calculated as follows:
13(a)    Multiply the target teacher compensation times the sum of one plus the
14overhead rate; and
15(b)    Divide subsection (a) by 15;
16    (17)    "Monthly cash balance," the total amount of money for each month in the school
17district's general fund, calculated by adding all deposits made during the month to
18the beginning cash balance and deducting all disbursements or payments made
19during the month;
20    (18)    "General fund base percentage," is determined as follows:
21(a)    Forty percent for a school district with a fall enrollment as defined in
22subdivision (2) of two hundred or less;
23(b)    Thirty percent for a school district with fall enrollment as defined in
24subdivision (2) of more than two hundred but less than six hundred; and
25(c)    Twenty-five percent for a school district with fall enrollment as defined in
26subdivision (2) greater than or equal to six hundred.
27When determining the general fund base percentage, the secretary of the
28Department of Education shall use the lesser of the school district's fall enrollment
29as defined in subdivision (2) for the current school year or the school district's fall
30enrollment from the previous two years the percentage used to determine a school
31district's allowable general fund cash balance, as calculated by:
32(a)    Dividing the district's general fund balance, as of June thirtieth each year,
33by the district's general fund expenditures from the previous fiscal year;
34and
35(b)    Multiplying the quotient of subdivision (a) by one hundred;
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1    (19)    "Allowable general fund cash balance," the general fund base percentage multiplied
2by the district's general fund expenditures in the previous school year; and
3    (20)    "Alternative instruction participation adjustment," is calculated by multiplying 0.10
4times the number of children who participated in the prior school year in high
5school interscholastic activities sanctioned or sponsored by the South Dakota High
6School Activities Association, as permitted by § 13-36-7, while receiving
7alternative instruction pursuant to § 13-27-3, multiplied by the per student
8equivalent defined in this section.
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                                                                            Overstrikes indicate deleted language.