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South Dakota House Bill HB1003

South Dakota 2025 Regular Session

South Dakota House Bill HB1003 Compare Versions

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1-25.282.11 100th Legislative Session 1003
1+25.282.10 100th Legislative Session 1003
22
33
44 2025 South Dakota Legislature
55 House Bill 1003
6-ENROLLED
7-
8-AN ACT
9-
10-
11-ENTITLED An Act to amend definitions pertaining to the school funding formula.
12-BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
13-Section 1. That § 13-13-10.1 be AMENDED:
14-13-13-10.1. The education funding terms and procedures referenced in this
15-chapter are defined as follows:
16-(1) Nonresident students who are in the care and custody of the Department of Social
17-Services, the Unified Judicial System, the Department of Corrections, or other state
18-agencies and are attending a public school may be included in the fall enrollment
19-of the receiving district when enrolled in the receiving district;
20-(2) "Fall enrollment," is calculated as follows:
21-(a) Determine the number of kindergarten through twelfth grade students
22-enrolled in all schools operated by the school district on the last Friday of
23-September of the current school year;
24-(b) Subtract the number of students for whom the district receives tuition
25-except for:
26-(i) Nonresident students who are in the care and custody of a state
27-agency and are attending a public school district; and
28-(ii) Students who are being provided an education pursuant to § 13-28-
29-11; and
30-(c) Add the number of students for whom the district pays tuition.
31-When computing state aid to education for a school district pursuant to § 13-13-
32-73, the secretary of the Department of Education shall use the school district's fall
33-enrollment;
34-(3) "Target teacher ratio factor," is:
35-(a) For school districts with a fall enrollment of two hundred or less, the target
36-teacher ratio factor is 12; 25.282.11 2 1003
37-HB1003 ENROLLED
38-(b) For districts with a fall enrollment of greater than two hundred, but less
39-than six hundred, the target teacher ratio factor is calculated as follows:
40-(i) Multiplying the fall enrollment by .00750; and
41-(ii) Adding 10.50 to the resulting product; and
42-(c) For districts with a fall enrollment of six hundred or greater, the target
43-teacher ratio factor is 15.
44-The fall enrollment used for the determination of the target teacher ratio for a
45-school district may not include any students residing in a residential treatment
46-facility when the education program is operated by the school district;
47-(4) "English learner (EL) adjustment," is calculated by multiplying 0.25 times the
48-number of kindergarten-through-twelfth-grade students who, in the prior school
49-year, scored below level four on the state -administered language proficiency
50-assessment as required in the state's consolidated state application pursuant to
51-§ 1111(b)(2)(G) of the Every Student Succeeds Act of 2015;
52-(5) "Index factor," is the annual percentage change in the consumer price index for
53-urban wage earners and clerical workers as computed by the Bureau of Labor
54-Statistics of the United States Department of Labor for the year before the year
55-immediately preceding the year of adjustment or three percent, whichever is less;
56-(6) "Target teacher salary," for the school fiscal year beginning July 1, 2024, is
57-$62,045.62. Each school fiscal year thereafter, the target teacher salary is the
58-previous fiscal year's target teacher salary increased by the index factor;
59-(7) "Target teacher benefits," is the target teacher salary multiplied by twenty-nine
60-percent;
61-(8) "Target teacher compensation," is the sum of the target teacher salary and the
62-target teacher benefits;
63-(9) "Overhead rate," is thirty-eight and seventy-eight-hundredths percent. Beginning
64-in school fiscal year 2018, the overhead rate must be adjusted to take into account
65-the sum of the amounts that districts exceed the other revenue base amount;
66-(10) "Local need," is calculated as follows:
67-(a) Divide the fall enrollment by the target teacher ratio factor;
68-(b) If applicable, divide the English Learner adjustment pursuant to subdivision
69-(4) by the target teacher ratio factor;
70-(c) Add the results of subsections (a) and (b);
71-(d) Multiply the result of subsection (c) by the target teacher compensation;
72-(e) Multiply the product of subsection (d) by the overhead rate; 25.282.11 3 1003
73-HB1003 ENROLLED
74-(f) Add the products of subsections (d) and (e) and subdivision (20);
75-(g) When calculating local need at the statewide level, include the amounts set
76-aside for costs related to technology in schools and statewide student
77-assessments;
78-(h) When calculating local need at the statewide level, include the amounts set
79-aside for sparse school district benefits, calculated pursuant to §§ 13-13-
80-78 and 13-13-79; and
81-(i) When calculating local need at the statewide level, include the amounts set
82-aside for career and technical education calculated pursuant to §§ 13-13-
83-81 and 13-13-82;
84-(11) "Alternative per student need," is calculated as follows:
85-(a) Add the total need for each school district for school fiscal year 2016,
86-including the small school adjustment and the English learner adjustment,
87-to the lesser of the amount of funds apportioned to each school district in
88-the year preceding the most recently completed school fiscal year or school
89-fiscal year 2015 pursuant to §§ 13-13-4, 23A-27-25, 10-33-24, 10-36-10,
90-11-7-73, 10-35-21, and 10-43-77; and
91-(b) Divide the result of (a) by the September 2015 fall enrollment, excluding
92-any adjustments based on prior year student counts;
93-(12) "Alternative local need," may only be used by a school district created or
94-reorganized before July 1, 2016, and is the alternative per student need multiplied
95-by the fall enrollment, excluding any adjustments based on prior year student
96-counts;
97-(13) "Local effort," the amount of ad valorem taxes generated in a school fiscal year by
98-applying the levies established pursuant to § 10-12-42. Beginning on July 1, 2017,
99-local effort includes the amount of funds apportioned to each school district in the
100-year preceding the most recently completed school fiscal year pursuant to §§ 10-
101-33-24, 10-35-21 as provided by subdivision (15), 10-36-10, 10-43-77, 11-7-73,
102-13-13-4, and 23A-27-25 and that exceeds the other revenue base amount;
103-(14) "Other revenue base amount," is zero;
104-(15) "Wind energy tax revenue," any wind energy tax revenue apportioned to school
105-districts pursuant to § 10-35-21 from a wind farm producing power for the first
106-time before July 1, 2016, is considered local effort pursuant to subdivision (13) and
107-other revenue base amount pursuant to subdivision (14) wind energy tax revenue
108-from a wind farm producing power for the first time after June 30, 2016 hundred 25.282.11 4 1003
109-HB1003 ENROLLED
110-percent must be retained by the school district to which the tax revenue is
111-apportioned for the first five years of producing power, eighty percent for the sixth
112-year, sixty percent for the seventh year, forty percent for the eighth year, twenty
113-percent for the ninth year, and zero percent thereafter. If a wind farm begins
114-producing power for the first time between October first and December thirty-first
115-in a calendar year, any revenues generated for that time period must be retained
116-by the school district and that time period may not be counted against the first
117-five-year period;
118-(16) "Per student equivalent," for funding calculations that are determined on a per
119-student basis, the per student equivalent is calculated as follows:
120-(a) Multiply the target teacher compensation times the sum of one plus the
121-overhead rate; and
122-(b) Divide subsection (a) by 15;
123-(17) "Monthly cash balance," the total amount of money for each month in the school
124-district's general fund, calculated by adding all deposits made during the month to
125-the beginning cash balance and deducting all disbursements or payments made
126-during the month;
127-(18) "General fund base percentage," is determined as follows:
128-(a) Forty percent for a school district with a fall enrollment as defined in
129-subdivision (2) of two hundred or less;
130-(b) Thirty percent for a school district with fall enrollment as defined in
131-subdivision (2) of more than two hundred but less than six hundred; and
132-(c) Twenty-five percent for a school district with fall enrollment as defined in
133-subdivision (2) greater than or equal to six hundred.
134- When determining the general fund base percentage, the secretary of the
135-Department of Education shall use the lesser of the school district's fall enrollment
136-as defined in subdivision (2) for the current school year or the school district's fall
137-enrollment from the previous two years;
138-(19) "Allowable general fund cash balance," the general fund base percentage multiplied
139-by the district's general fund expenditures in the previous school year; and
140-(20) "Alternative instruction participation adjustment," is calculated by multiplying 0.10
141-times the number of children who participated in the prior school year in high
142-school interscholastic activities sanctioned or sponsored by the South Dakota High
143-School Activities Association, as permitted by § 13-36-7, while receiving 25.282.11 5 1003
144-HB1003 ENROLLED
145-alternative instruction pursuant to § 13-27-3, multiplied by the per student
146-equivalent defined in this section. 25.282.11 6 1003
147-HB1003 ENROLLED
148-An Act to amend definitions pertaining to the school funding formula.
149-
150-
151-
152-
153-I certify that the attached Act originated in
154-the:
155-
156-House as Bill No. 1003
157-
158-
159-
160-Chief Clerk
161-
162-
163-
164-
165-Speaker of the House
166-
167-Attest:
168-
169-
170-
171-
172-Chief Clerk
173-
174-
175-
176-
177-President of the Senate
178-
179-Attest:
1806
1817
1828
1839
18410
185-Secretary of the Senate
18611
12+Introduced by: The Chair of the Committee on Education at the request of the Department of Education
18713
188-
189-House Bill No. 1003
190-File No. ____
191-Chapter No. ______
192-
193-
194-
195-Received at this Executive Office
196-this _____ day of _____________,
197-
198-2025 at ____________M.
199-
200-
201-
202-By
203-for the Governor
204-
205-
206-The attached Act is hereby
207-approved this ________ day of
208-______________, A.D., 2025
209-
210-
211-
212-
213-
214-Governor
215-
216-STATE OF SOUTH DAKOTA ,
217-ss.
218-Office of the Secretary of State
219-
220-
221-Filed ____________, 2025
222- at _________ o'clock __M.
223-
224-
225-
226-
227-
228-Secretary of State
229-
230-
231-
232-By
233-Asst. Secretary of State
234-
235-
14+ Underscores indicate new language.
15+ Overstrikes indicate deleted language.
16+An Act to amend definitions pertaining to the school funding formula. 1
17+BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 2
18+Section 1. That § 13-13-10.1 be AMENDED: 3
19+13-13-10.1. The education funding terms and procedures referenced in this 4
20+chapter are defined as follows: 5
21+(1) Nonresident students who are in the care and custody of the Department of Social 6
22+Services, the Unified Judicial System, the Department of Corrections, or other state 7
23+agencies and are attending a public school may be included in the fall enrollment 8
24+of the receiving district when enrolled in the receiving district; 9
25+(2) "Fall enrollment," is calculated as follows: 10
26+(a) Determine the number of kindergarten through twelfth grade students 11
27+enrolled in all schools operated by the school district on the last Friday of 12
28+September of the current school year, and add to that number the product 13
29+of 0.10 multiplied by the number of children who participated in the prior 14
30+school year in high school interscholastic activities sanctioned or sponsored 15
31+by the South Dakota High School Activities Association, as permitted by 16
32+§ 13-36-7, while receiving alternative instruction pursuant to § 13-27-3; 17
33+(b) Subtract the number of students for whom the district receives tuition 18
34+except for: 19
35+(i) Nonresident students who are in the care and custody of a state 20
36+agency and are attending a public school district; and 21
37+(ii) Students who are being provided an education pursuant to § 13-28-22
38+11; and 23
39+(c) Add the number of students for whom the district pays tuition. 24 25.282.10 2 1003
40+ Underscores indicate new language.
41+ Overstrikes indicate deleted language.
42+When computing state aid to education for a school district pursuant to § 13-13-1
43+73, the secretary of the Department of Education shall use the school district's fall 2
44+enrollment; 3
45+(3) "Target teacher ratio factor," is: 4
46+(a) For school districts with a fall enrollment of two hundred or less, the target 5
47+teacher ratio factor is 12; 6
48+(b) For districts with a fall enrollment of greater than two hundred, but less 7
49+than six hundred, the target teacher ratio factor is calculated as follows: 8
50+(i) Multiplying the fall enrollment by .00750; and 9
51+(ii) Adding 10.50 to the resulting product; and 10
52+(c) For districts with a fall enrollment of six hundred or greater, the target 11
53+teacher ratio factor is 15. 12
54+The fall enrollment used for the determination of the target teacher ratio for a 13
55+school district may not include any students residing in a residential treatment 14
56+facility when the education program is operated by the school district; 15
57+(4) "English learner (EL) adjustment," is calculated by multiplying 0.25 times one-16
58+quarter of the number of kindergarten-through-twelfth-grade students who, in the 17
59+prior school year, scored below level four on the state-administered language 18
60+proficiency assessment as required in the state's consolidated state application 19
61+pursuant to § 1111(b)(2)(G) of the Every Student Succeeds Act of 2015 . For the 20
62+2021-2022 calculation only, the EL adjustment is calculated by multiplying 0.25 21
63+times the number of kindergarten -through-twelfth-grade students who scored 22
64+below level four on the state-administered language proficiency assessment in 23
65+school year 2019-2020 or 2020-2021, whichever is greater; 24
66+(5) "Index factor," is the annual percentage change in the consumer price index for 25
67+urban wage earners and clerical workers as computed by the Bureau of Labor 26
68+Statistics of the United States Department of Labor for the year before the year 27
69+immediately preceding the year of adjustment or three percent, whichever is less; 28
70+(6) "Target teacher salary," for the school fiscal year beginning July 1, 2024, is 29
71+$62,045.62. Each school fiscal year thereafter, the target teacher salary is the 30
72+previous fiscal year's target teacher salary increased by the index factor; 31
73+(7) "Target teacher benefits," is the target teacher salary multiplied by twenty-nine 32
74+percent; 33
75+(8) "Target teacher compensation," is the sum of the target teacher salary and the 34
76+target teacher benefits; 35 25.282.10 3 1003
77+ Underscores indicate new language.
78+ Overstrikes indicate deleted language.
79+(9) "Overhead rate," is thirty-eight and seventy-eight-hundredths percent. Beginning 1
80+in school fiscal year 2018, the overhead rate must be adjusted to take into account 2
81+the sum of the amounts that districts exceed the other revenue base amount; 3
82+(10) "Local need," is calculated as follows: 4
83+(a) Divide the fall enrollment by the target teacher ratio factor; 5
84+(b) If applicable, divide the English Learner (EL) adjustment pursuant to 6
85+subdivision (4) by the target teacher ratio factor; 7
86+(c) Add the results of subsections (a) and (b); 8
87+(d) Multiply the result of subsection (c) by the target teacher compensation; 9
88+(e) Multiply the product of subsection (d) by the overhead rate; 10
89+(f) Add the products of subsections (d) and (e): 11
90+(i) Subsection (d); 12
91+(ii) Subsection (e); and 13
92+(iii) The alternative instruction participation adjustment, as calculated in 14
93+subdivision (20); 15
94+(g) When calculating local need at the statewide level, include the amounts set 16
95+aside for costs related to technology in schools and statewide student 17
96+assessments; and 18
97+(h) When calculating local need at the statewide level, include the amounts set 19
98+aside for sparse school district benefits, calculated pursuant to §§ 13-13-20
99+78 and 13-13-79;: 21
100+(i) Costs related to technology in schools and statewide student 22
101+assessments; 23
102+(ii) Sparse school district benefits, calculated pursuant to §§ 13-13-78 24
103+and 13-13-79; and 25
104+(iii) Career and technical education, calculated pursuant to §§ 13-13-81 26
105+and 13-13-82; 27
106+(11) "Alternative per student need," is calculated as follows: 28
107+(a) Add the total need for each school district for school fiscal year 2016, 29
108+including the small school adjustment and the English learner adjustment, 30
109+to the lesser of the amount of funds apportioned to each school district in 31
110+the year preceding the most recently completed school fiscal year or school 32
111+fiscal year 2015 pursuant to §§ 13-13-4, 23A-27-25, 10-33-24, 10-36-10, 33
112+11-7-73, 10-35-21, and 10-43-77 §§ 10-33-24, 10-35-21, 10-36-10, 10-34
113+43-77, 11-7-73, 13-13-4, and 23A-27-25; and 35 25.282.10 4 1003
114+ Underscores indicate new language.
115+ Overstrikes indicate deleted language.
116+(b) Divide the result of (a) by the September 2015 fall enrollment, excluding 1
117+any adjustments based on prior year student counts; 2
118+(12) "Alternative local need," may only be used by a school district created or 3
119+reorganized before July 1, 2016, and is the alternative per student need multiplied 4
120+by the fall enrollment, excluding any adjustments based on prior year student 5
121+counts; 6
122+(13) "Local effort," the amount of ad valorem taxes generated in a school fiscal year by 7
123+applying the levies established pursuant to § 10-12-42. Beginning on July 1, 2017, 8
124+local effort includes the amount of funds apportioned to each school district in the 9
125+year preceding the most recently completed school fiscal year pursuant to §§ 10-10
126+33-24, 10-35-21 as provided by subdivision (15), 10-36-10, 10-43-77, 11-7-73, 11
127+13-13-4, and 23A-27-25 and that exceeds the other revenue base amount; 12
128+(14) "Other revenue base amount," for school districts not utilizing the alternative local 13
129+need calculation is the amount of funds apportioned to each school district pursuant 14
130+to §§ 10-33-24, 10-35-21 as provided by subdivision (15), 10-36-10, 10-43-77, 15
131+11-7-73, 13-13-4, and 23A-27-25, calculated as follows: 16
132+(a) Beginning on July 1, 2017, equals the greatest of the amounts of the funds 17
133+apportioned to each school district pursuant to §§ 10-33-24, 10-35-21 as 18
134+provided by subdivision (15), 10-36-10, 10-43-77, 11-7-73, 13-13-4, and 19
135+23A-27-25 for school fiscal years 2013, 2014, and 2015; 20
136+(b) Beginning on July 1, 2018, multiply eighty percent times subsection (a); 21
137+(c) Beginning on July 1, 2019, multiply sixty percent times subsection (a); 22
138+(d) Beginning on July 1, 2020, multiply forty percent times subsection (a); 23
139+(e) Beginning on July 1, 2021, multiply twenty percent times subsection (a); 24
140+and 25
141+(f) Beginning on July 1, 2022, is zero; 26
142+For school districts utilizing the alternative local need calculation, the other revenue 27
143+base amount is zero until the school district chooses to no longer utilize the 28
144+alternative local need calculation. At that time, the other revenue base amount is 29
145+calculated as defined above. 30
146+For a school district created or reorganized after July 1, 2016, the other revenue 31
147+base amount is the sum of the other revenue base amount for each district before 32
148+reorganization, and the new school district may not utilize the alternative local 33
149+need calculation. 34 25.282.10 5 1003
150+ Underscores indicate new language.
151+ Overstrikes indicate deleted language.
152+In the case of the dissolution and annexation of a district, the other revenue base 1
153+amount of the dissolved school district will be prorated based on the total number 2
154+of students in the fall enrollment as defined in subdivision (2) who attend each 3
155+district to which area of the dissolved district were annexed to in the first year of 4
156+reorganization. The amount apportioned for each district will be added to the 5
157+annexed districts' other revenue base is zero; 6
158+(15) "Wind energy tax revenue," any wind energy tax revenue apportioned to school 7
159+districts pursuant to § 10-35-21 from a wind farm producing power for the first 8
160+time before July 1, 2016, is considered local effort pursuant to subdivision (13) and 9
161+other revenue base amount pursuant to subdivision (14). However, any, provided 10
162+that wind energy tax revenue apportioned to a school district from a wind farm 11
163+producing power for the first time after June 30, 2016, one is apportioned to a 12
164+school district as follows: 13
165+(a) One hundred percent must be is retained by the school district to which the 14
166+tax revenue is apportioned for the first five years of producing power , 15
167+eighty; 16
168+(b) Eighty percent for the sixth year, sixty; 17
169+(c) Sixty percent for the seventh year, forty; 18
170+(d) Forty percent for the eighth year, twenty; 19
171+(e) Twenty percent for the ninth year, and zero; and 20
172+(f) Zero percent thereafter. 21
173+If a wind farm begins producing power for the first time between October first and 22
174+December thirty-first in a calendar year, any revenues generated for that time 23
175+period must be are retained by the school district and that time period may not be 24
176+counted against the first five-year period; 25
177+(16) "Per student equivalent," for funding calculations that are determined on a per 26
178+student basis, the per student equivalent is calculated as follows: 27
179+(a) Multiply the target teacher compensation times the sum of one plus the 28
180+overhead rate; and 29
181+(b) Divide subsection (a) by 15; 30
182+(17) "Monthly cash balance," the total amount of money for each month in the school 31
183+district's general fund, calculated by adding all deposits made during the month to 32
184+the beginning cash balance and deducting all disbursements or payments made 33
185+during the month; 34
186+(18) "General fund base percentage," is determined as follows: 35 25.282.10 6 1003
187+ Underscores indicate new language.
188+ Overstrikes indicate deleted language.
189+(a) Forty percent for a school district with a fall enrollment as defined in 1
190+subdivision (2) of two hundred or less; 2
191+(b) Thirty percent for a school district with fall enrollment as defined in 3
192+subdivision (2) of more than two hundred but less than six hundred; and 4
193+(c) Twenty-five percent for a school district with fall enrollment as defined in 5
194+subdivision (2) greater than or equal to six hundred. 6
195+ When determining the general fund base percentage, the secretary of the 7
196+Department of Education shall use the lesser of the school district's fall enrollment 8
197+as defined in subdivision (2) for the current school year or the school district's fall 9
198+enrollment from the previous two years; and 10
199+(19) "Allowable general fund cash balance," the general fund base percentage multiplied 11
200+by the district's general fund expenditures in the previous school year; and 12
201+(20) The alternative instruction participation adjustment is calculated by multiplying the 13
202+per student equivalent by one-tenth of the number of children who participated 14
203+during the prior school year in the interscholastic activities sanctioned or sponsored 15
204+by the South Dakota High School Activities Association, as permitted by § 13-36-16
205+7, while receiving alternative instruction pursuant to § 13-27-3. 17