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26.510.23 101st Legislative Session 1249
2026 South Dakota Legislature
House Bill 1249
ENROLLED
AN ACT
ENTITLED An Act to amend provisions pertaining to the School Finance
Accountability Board, and the process by which a recommendation of the
board is approved.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section 1. That § 1-45-38 be AMENDED:
1-45-38. There is created the School Finance Accountability Board within the
Department of Education. The board consists of five members appointed by the Governor.
The members shall serve a term of four years.
A school district may request that the School Finance Accountability Board waive
any reduction to the district's state aid for general education, imposed under § 13-13-
73.5, or the penalty imposed upon a school district, pursuant to § 13-13-73.9.
The board may:
(1) Reduce a school district's state aid for general education, as provided in § 13-13-
73.5;
(2) Impose the penalty, as provided in § 13-13-73.9, upon a school district for failing
to comply with § 13-13-73.6 or 13-13-73.8;
(3) Require a review of the school district's accreditation if:
(a) The district's lowest general fund monthly cash balance exceeds the
district's allowable general fund cash balance; or
(b) The district has failed to comply with § 13-13-73.6 or 13-13-73.8; or
(4) Waive, in whole or in part:
(a) The reduction to a school district's state aid for general education required
under § 13-13-73.5, if the district demonstrates that the lowest monthly
general cash fund balance exceeded the allowable general fund cash
balance as the result of special circumstances; or
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(b) A penalty imposed upon a school district by § 13-13-73.9, if the district
demonstrates that the district's failure to comply with § 13-13-73.6 or 13-
13-73.8 was the result of special circumstances.
The board may condition any waiver granted to a school district pursuant to
subsection (4)(a) upon the school district's annual lowest general fund monthly cash
balance equaling an amount less than the district's allowable general fund cash balance,
for at least three years. If the school district's lowest general fund monthly cash balance
exceeds the district's allowable general fund cash balance at any point during the three
years, the board may rescind the waiver and impose the penalty required under § 13-13-
73.5.
The board may condition any waiver granted to a school district pursuant to
subsection (4)(b) upon the school district increasing the district's average teacher
compensation in accordance with § 13-13-73.6 and paying each full -time equivalent
teacher a salary equal to the state minimum salary, as defined in § 13-13-73.8, for at
least three years. If a school district fails to increase the district's average teacher
compensation or fails to pay each full-time equivalent teacher a salary equal to the state
minimum salary at any point during the three years, the board may r escind the waiver
and impose the penalty required under § 13-13-73.9.
The School Finance Accountability Board shall promulgate rules, pursuant to
chapter 1-26, to establish the process by which a school district may request a waiver,
pursuant to this section, and the factors that the board may consider in granting a waiver
request from a school district. The factors must address the impact of employee
retirements on the district.
The Department of Education shall annually report to the Governor and the
Legislature the information collected pursuant to §§ 13-8-47 and 13-13-73.6.
Section 2. That § 13-13-73.5 be AMENDED:
13-13-73.5. If a school district's lowest general fund monthly cash balance
exceeds the district's allowable general fund cash balance, the Department of Education
shall reduce a school district's state aid for general education, as calculated pursuant to
§ 13-13-73, by an amount equal to the difference of the district's allowable general fund
cash balance subtracted from the district's lowest general fund monthly cash balance. If
the difference is less than zero, the reduction to the district's state aid for general
education is zero.
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A school district created or reorganized after July 1, 2016, is exempt from the
reduction provided by this section for a period of three years immediately following its
creation.
Section 3. That § 13-13-73.9 be AMENDED:
13-13-73.9. The Department of Education must decrease state aid to general
education funding to the school district in the following fiscal year by five hundred dollars
for each full-time equivalent teacher employed in the school district if:
(1) The school district does not increase the school district's average teacher
compensation in accordance with § 13-13-73.6; or
(2) The school district does not pay each full-time equivalent teacher a salary at least
equal to the state minimum salary as defined in § 13-13-73.8.
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An Act to amend provisions pertaining to the School Finance Accountability Board, and the
process by which a recommendation of the board is approved.
I certify that the attached Act originated in
the:
House as Bill No. 1249
Chief Clerk of the House
Speaker of the House
Attest:
Chief Clerk of the House
President of the Senate
Attest:
Secretary of the Senate
House Bill No. 1249
File No. ____
Chapter No. ______
Received at this Executive Office
this _____ day of _____________,
2026 at ____________M.
By
for the Governor
The attached Act is hereby
approved this ________ day of
______________, A.D., 2026
Governor
STATE OF SOUTH DAKOTA,
ss.
Office of the Secretary of State
Filed ____________, 2026
at _________ o'clock __M.
Secretary of State
By
Asst. Secretary of State