amend the manner of calculating state aid to general and special education funding.

26.246.9 101st Legislative Session 1205

2026 South Dakota Legislature
House Bill 1205

Introduced by: Representative Uhre‑Balk

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An Act to amend the manner of calculating state aid to general and special education 1
funding. 2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 3
Section 1. That § 13-13-10.1 be AMENDED: 4
13-13-10.1. The education funding terms and procedures referenced in this 5
chapter are defined as follows: 6
(1) Nonresident students who are in the care and custody of the Department of Social 7
Services, the Unified Judicial System, the Department of Corrections, or other state 8
agencies and are attending a public school may be included in the fall enrollment 9
of the receiving district when enrolled in the receiving district; 10
(2) "Fall enrollment," is calculated as follows: 11
(a) Determine the number of kindergarten through twelfth grade students 12
enrolled in all schools operated by the school district on the last Friday of 13
September of the current school year; 14
(b) Subtract the number of students for whom the district receives tuition 15
except for: 16
(i) Nonresident students who are in the care and custody of a state 17
agency and are attending a public school district; and 18
(ii) Students who are being provided an education pursuant to § 13-28-19
11; and 20
(c) Add the number of students for whom the district pays tuition. 21
When computing state aid to education for a school district pursuant to § 13-13-22
73, the secretary of the Department of Education shall use the school district's fall 23
enrollment; 24
(3) "Target teacher ratio factor," is: 25
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(a) For school districts with a fall enrollment of two hundred or less, the target 1
teacher ratio factor is 12; 2
(b) For districts with a fall enrollment of greater than two hundred, but less 3
than six hundred, the target teacher ratio factor is calculated as follows: 4
(i) Multiplying the fall enrollment by .00750; and 5
(ii) Adding 10.50 to the resulting product; and 6
(c) For districts with a fall enrollment of six hundred or greater, the target 7
teacher ratio factor is 15. 8
The fall enrollment used for the determination of the target teacher ratio for a 9
school district may not include any students residing in a residential treatment 10
facility when the education program is operated by the school district; 11
(4) "English learner (EL) adjustment," is calculated by multiplying 0.25 times the 12
number of kindergarten -through-twelfth-grade students who, in the prior school 13
year, scored below level four on the state -administered language proficiency 14
assessment as required in the state's consolidated state application pursuant to 15
§ 1111(b)(2)(G) of the Every Student Succeeds Act of 2015; 16
(5) "Index factor," is the annual percentage change in the consumer price index for 17
urban wage earners and clerical workers as computed by the Bureau of Labor 18
Statistics of the United States Department of Labor for the year before the year 19
immediately preceding the year of adjustment or three percent, whichever is less 20
greater; 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 23
previous 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 25
percent; 26
(8) "Target teacher compensation," is the sum of the target teacher salary and the 27
target teacher benefits; 28
(9) "Overhead rate," is thirty-eight and seventy-eight-hundredths percent. Beginning 29
in school fiscal year 2018, the overhead rate must be adjusted to take into account 30
the 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
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(c) Add the results of subsections (a) and (b); 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); and 4
(g) When calculating local need at the statewide level, include the amounts set 5
aside for costs related to technology in schools and statewide student 6
assessments; 7
(h) When calculating local need at the statewide level, include the amounts set 8
aside for sparse school district benefits, calculated pursuant to §§ 13-13-9
78 and 13-13-79; and 10
(i) When calculating local need at the statewide level, include the amounts set 11
aside for career and technical education calculated pursuant to §§ 13-13-12
81 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, 15
including the small school adjustment and the English learner adjustment, 16
to the lesser of the amount of funds apportioned to each school district in 17
the year preceding the most recently completed school fiscal year or school 18
fiscal year 2015 pursuant to §§ 10-33-24, 10-35-21, 10-36-10, 10-43-77, 19
11-7-73, 13-13-4, and 23A-27-25; and 20
(b) Divide the result of (a) by the September 2015 fall enrollment, excluding 21
any adjustments based on prior year student counts; 22
(12) "Alternative local need," may only be used by a school district created or 23
reorganized before July 1, 2016, and is the alternative per student need multiplied 24
by the fall enrollment, excluding any adjustments based on prior year student 25
counts; 26
(13) "Local effort," the amount of ad valorem taxes generated in a school fiscal year by 27
applying the levies established pursuant to § 10-12-42. Beginning on July 1, 2017, 28
local effort includes the amount of funds apportioned to each school district in the 29
year preceding the most recently completed school fiscal year pursuant to §§ 10-30
33-24, 10-35-21 as provided by subdivision (15), 10-36-10, 10-43-77, 11-7-73, 31
13-13-4, 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 34
districts pursuant to § 10-35-21 from a wind farm producing power for the first 35
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time before July 1, 2016, is considered local effort pursuant to subdivision (13) and 1
other revenue base amount pursuant to subdivision (14) . However, for, provided 2
that any wind energy tax revenue apportioned to a school district from a wind farm 3
producing power for the first time after June 30, 2016, one is apportioned to a 4
school district as follows: 5
(a) One hundred percent must be is retained by the school district to which the 6
tax revenue is apportioned for the first five years of producing power , 7
eighty; 8
(b) Eighty percent for the sixth year, sixty; 9
(c) Sixty percent for the seventh year, forty; 10
(d) Forty percent for the eighth year, twenty; 11
(e) Twenty percent for the ninth year, and zero; and 12
(f) Zero percent thereafter. 13
If a wind farm begins producing power for the first time between October first and 14
December thirty -first in a calendar year, any revenues generated for that time 15
period must be are retained by the school district and that time period may not be 16
counted against the first five-year period; 17
(16) "Per student equivalent," for funding calculations that are determined on a per 18
student basis, the per student equivalent is calculated as follows: 19
(a) Multiply the target teacher compensation times the sum of one plus the 20
overhead rate; and 21
(b) Divide subsection (a) by 15; 22
(17) "Monthly cash balance," the total amount of money for each month in the school 23
district's general fund, calculated by adding all deposits made during the month to 24
the beginning cash balance and deducting all disbursements or payments made 25
during the month; 26
(18) "General fund base percentage," is determined as follows: 27
(a) Forty percent for a school district with a fall enrollment as defined in 28
subdivision (2) of two hundred or less; 29
(b) Thirty percent for a school district with fall enrollment as defined in 30
subdivision (2) of more than two hundred but less than six hundred; and 31
(c) Twenty-five percent for a school district with fall enrollment as defined in 32
subdivision (2) greater than or equal to six hundred. 33
When determining the general fund base percentage, the secretary of the 34
Department of Education shall use the lesser of the school district's fall enrollment 35
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as defined in subdivision (2) for the current school year or the school district's fall 1
enrollment from the previous two years; 2
(19) "Allowable general fund cash balance," the general fund base percentage multiplied 3
by the district's general fund expenditures in the previous school year; and 4
(20) "Alternative instruction participation adjustment," is calculated by multiplying 0.10 5
times the number of children who participated in the prior school year in high 6
school interscholastic activities sanctioned or sponsored by the South Dakota High 7
School Activities Association, as permitted by § 13-36-7, while receiving 8
alternative instruction pursuant to § 13-27-3, multiplied by the per student 9
equivalent defined in this section. 10
Section 2. That § 13-37-35.1 be AMENDED: 11
13-37-35.1. Terms used in chapter 13-37 mean: 12
(1) "Level one disability," a mild disability; 13
(2) "Level two disability," cognitive disability or emotional disorder; 14
(3) "Level three disability," hearing impairment, deafness, visual impairment, deaf -15
blindness, orthopedic impairment, or traumatic brain injury; 16
(4) "Level four disability," autism; 17
(5) "Level five disability," multiple disabilities; 18
(5A) "Level six disability," prolonged assistance; 19
(6) "Index factor," is the annual percentage change in the consumer price index for 20
urban wage earners and clerical workers as computed by the Bureau of Labor 21
Statistics of the United States Department of Labor for the year before the year 22
immediately preceding the year of adjustment, or three percent, whichever is less 23
greater; 24
(7) "Local effort," must be calculated for taxes payable in 2026 and thereafter using a 25
special education levy of one dollar and twenty -six and two-tenths cents per one 26
thousand dollars of valuation; 27
(8) "Allocation for a student with a level one disability," for the school fiscal year 28
beginning July 1, 2025, is $7,650.45. For each school year thereafter, the allocation 29
for a student with a level one disability must be the previous fiscal year's allocation 30
for the child increased by the index factor; 31
(9) "Allocation for a student with a level two disability," for the school fiscal year 32
beginning July 1, 2025, is $16,759.91. For each school year thereafter, the 33
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allocation for a student with a level two disability must be the previous fiscal year's 1
allocation for the child increased by the index factor; 2
(10) "Allocation for a student with a level three disability," for the school fiscal year 3
beginning July 1, 2025, is $23,139.68. For each school year thereafter, the 4
allocation for a student with a level three disability must be the previous fiscal 5
year's allocation for the child increased by the index factor; 6
(11) "Allocation for a student with a level four disability," for the school fiscal year 7
beginning July 1, 2025, is $18,053.89. For each school year thereafter, the 8
allocation for a student with a level four disability must be the previous fiscal year's 9
allocation for the child increased by the index factor; 10
(12) "Allocation for a student with a level five disability," for the school fiscal year 11
beginning July 1, 2025, is $37,039.28. For each school year thereafter, the 12
allocation for a student with a level five disability must be the previous fiscal year's 13
allocation for the child increased by the index factor; 14
(12A) "Allocation for a student with a level six disability," for the school fiscal year 15
beginning July 1, 2025, is $11,838.15. For each school year thereafter, the 16
allocation for a student with a level six disability must be the previous fiscal year's 17
allocation for the child increased by the index factor; 18
(13) "Child count," is the number of students in need of special education or special 19
education and related services according to criteria set forth in rules promulgated 20
pursuant to §§ 13-37-1.1 and 13-37-46 submitted to the Department of Education; 21
(14) "Fall enrollment," 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 previous school year minus the number of students for whom 24
the district receives tuition, except any nonresident student who is in the care and 25
custody of a state agency and is attending a public school and any student for 26
whom tuition is being paid pursuant to § 13-28-42.1, plus the number of students 27
for whom the district pays tuition; 28
(15) "Nonpublic school," a sectarian organization or entity accredited by the secretary of 29
education for the purpose of instructing children of compulsory school age. This 30
definition excludes any school that receives a majority of its revenues from public 31
funds; 32
(16) "Nonpublic fall enrollment," the number of children under age eighteen, who are 33
approved for alternative instruction pursuant to § 13-27-3 on the last Friday of 34
September of the previous school year plus: 35
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(a) For nonpublic schools located within the boundaries of a public school 1
district with a fall enrollment of six hundred or more on the last Friday of 2
September of the previous school year, the number of kindergarten -3
through-twelfth-grade students enrolled on the last Friday of September of 4
the previous regular school year in all nonpublic schools located within the 5
boundaries of the public school district; 6
(b) For nonpublic schools located within the boundaries of a public school 7
district with a fall enrollment of less than six hundred on the last Friday of 8
September of the previous school year, the number of resident 9
kindergarten-through-twelfth-grade students enrolled on the last Friday of 10
September of the previous school year in all nonpublic schools located 11
within this state; 12
(17) "Special education fall enrollment," fall enrollment plus nonpublic fall enrollment; 13
(18) "Local need," an amount to be determined as follows: 14
(a) Multiply the special education fall enrollment by 0.1062 and multiply the 15
result by the allocation for a student with a level one disability; 16
(b) Multiply the number of students having a level two disability as reported on 17
the child count for the previous school fiscal year by the allocation for a 18
student with a level two disability; 19
(c) Multiply the number of students having a level three disability as reported 20
on the child count for the previous school fiscal year by the allocation for a 21
student with a level three disability; 22
(d) Multiply the number of students having a level four disability as reported on 23
the child count for the previous school fiscal year by the allocation for a 24
student with a level four disability; 25
(e) Multiply the number of students having a level five disability as reported on 26
the child count for the previous school fiscal year by the allocation for a 27
student with a level five disability; 28
(f) Multiply the number of students having a level six disability as reported on 29
the child count for the previous school fiscal year by the allocation for a 30
student with a level six disability; 31
(g) When calculating local need at the statewide level, include the amount set 32
aside for extraordinary expenses defined in § 13-37-40; 33
(h) When calculating local need at the statewide level, include the amount set 34
aside for the South Dakota School for the Blind and Visually Impaired; and 35
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(i) Sum the results of subdivisions (18)(a) to (h), inclusive; and 1
(19) "Effort factor," the school district's special education tax levy in dollars per thousand 2
divided by $1.262. The maximum effort factor is 1.0. 3