HB 1306

 26.83.15  101st Legislative Session  1306
                                       2026 South Dakota Legislature
                                               House Bill 1306
 Introduced by: Representative Weems
1 An Act to authorize the provision of charitable contributions to a scholarship
2granting organization.
3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
4 Section 1. That a NEW SECTION be added to a NEW CHAPTER in title 13:
5Terms used in this chapter mean:
6    (1)      "Eligible student," a student who has not reached the age of nineteen prior to July
7first of the current school year and:
8(a)    Is in any educational grade level from kindergarten through twelve;
9(b)    Is a resident of this state;
10(c)    Is a United States citizen or an alien who has permanent resident status;
11(d)    Is a member of a household whose annual income during the preceding
12calendar year did not exceed three hundred percent of the area median
13income, as determined by the U.S. Department of Housing and Urban
14Development; and
15(e)    Is not enrolled full-time in a school district in this state;
16    (2)      "Microschool," a business entity that:
17(a)    Is registered with the secretary of state;
18(b)    Is located within this state;
19(c)    Provides educational services or academic opportunities to students who
20receive alternative instruction in accordance with chapter 13-27; and
21(d)    Requires enrollment and the payment of tuition;
22    (3)      "Parent," any guardian, custodian, or other person with authority to act in place of
23a parent for the child;
24    (4)      "Scholarship," a grant to an eligible student to support the student's education;
25and
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1    (5)     "Scholarship granting organization," an entity that is registered in accordance with
2section 3 of this Act.
3 Section 2. That a NEW SECTION be added to a NEW CHAPTER in title 13:
4Any person may provide a charitable contribution to a scholarship granting
5    organization that is registered with the Department of Education, in accordance with
6    section 3 of this Act.
7 Section 3. That a NEW SECTION be added to a NEW CHAPTER in title 13:
8In order to become registered, a scholarship granting organization must:
9    (1)     File with the Department of Education documentation indicating that the
10organization is exempt from federal taxation under 26 U.S.C. § 501 (January 1,
112026); and
12    (2)     Enter into a contract with the department to:
13(a)    Distribute scholarships to or on behalf of eligible students in accordance
14with this chapter and rules adopted by the department;
15(b)    Retain no more than ten percent of the total annual contributions received
16under this chapter for administrative expenses;
17(c)    Provide an annual statement to each contributor verifying the amount
18contributed; and
19(d)    Provide to the department, no later than June first of each year, an audited
20financial statement showing, for the preceding calendar year, the amount
21of contributions received, the number and amount of scholarships awarded
22to or on behalf of eligible students, and the purposes for which the
23scholarship dollars were used.
24 Section 4. That a NEW SECTION be added to a NEW CHAPTER in title 13:
25The parent of an eligible student may annually apply to the scholarship granting
26    organization for a scholarship.
27A scholarship awarded to or on behalf of an eligible student must be forwarded to
28    the student's parent and used for:
29    (1)     Tuition and fees required as a condition of enrollment at an accredited nonpublic
30school or microschool located within this state;
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1    (2)     Virtual coursework approved by the Department of Education and offered by a
2provider, but not on behalf of a school district;
3    (3)     The purchase of curricula and associated instructional materials or supplies, used
4within a nonpublic school, within a microschool, or in the provision of alternative
5instruction;
6    (4)     The purchase of educationally related technological devices and associated
7hardware and services, used within a nonpublic school, within a microschool, or in
8the provision of alternative instruction;
9    (5)     Transportation between the student's home and any nonpublic school, microschool,
10or institution of higher education, in which the student is enrolled; and
11    (6)     The fee for any standardized college or university entrance examination approved
12by the department.
13A scholarship awarded to or on behalf of an eligible student may not exceed the
14    lesser of eighty-two and five-tenths percent of the state's share of the per student
15    equivalent, as defined in § 13-13-10.1, or the actual expenses noted in the application.
16 Section 5. That a NEW SECTION be added to a NEW CHAPTER in title 13:
17As a condition of awarding the scholarship to an eligible student, the scholarship
18    granting organization shall request documentation from the student's parent to verify any
19    expenditures and may seek the recovery, in whole or in part, of any scholarship amount
20    awarded, upon determination that the award was not used in accordance with the
21    purposes set forth in section 4 of this Act.
22 Section 6. That a NEW SECTION be added to a NEW CHAPTER in title 13:
23The Department of Education shall promulgate rules, in accordance with chapter
24    1-26, to:
25    (1)     Establish the application and review process for the registration of a scholarship
26granting organization;
27    (2)     Establish the process by which the parent of an eligible student may annually apply
28for a scholarship;
29    (3)     Establish a process by which, and the time within which, a scholarship granting
30organization must evaluate each application for a scholarship;
31    (4)     Establish the time, manner, and method applicable to the distribution of
32scholarship dollars;
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1    (5)     Establish a process for verifying that the scholarship dollars were used in
2compliance with section 4 of this Act;
3    (6)     Establish an appeal process under which a parent may request and receive a review
4of a denied reimbursement; and
5    (7)     Establish a process by which any amounts not annually utilized, in accordance with
6section 4 of this Act, may be recovered in whole or in part.
                                                                            Underscores indicate new language.
                                                                          Overstrikes indicate deleted language.