Read the full stored bill text
26.860.10 101st Legislative Session 157
2026 South Dakota Legislature
Senate Bill 157
Introduced by: Senator Duhamel
Underscores indicate new language.
Overstrikes indicate deleted language.
An Act to amend the school funding formula to provide for the use of an average fall 1
enrollment when determining local need. 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 § 13-13-73, the 22
secretary of the Department of Education shall use the school district's fall 23
enrollment; 24
(3) "Target teacher ratio factor," is: 25
26.860.10 2 157
Underscores indicate new language.
Overstrikes indicate deleted language.
(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 school 9
district may not include any students residing in a residential treatment facility 10
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
(6) "Target teacher salary," for the school fiscal year beginning July 1, 2025, is 21
$62,821.19. Each school fiscal year thereafter, the target teacher salary is the 22
previous fiscal year's target teacher salary increased by the index factor; 23
(7) "Target teacher benefits," is the target teacher salary multiplied by twenty -nine 24
percent; 25
(8) "Target teacher compensation," is the sum of the target teacher salary and the 26
target teacher benefits; 27
(9) "Overhead rate," is thirty-eight and seventy-eight-hundredths percent. Beginning 28
in school fiscal year 2018, the overhead rate must be adjusted to take into account 29
the sum of the amounts that districts exceed the other revenue base amount; 30
(10) "Local need," is calculated as follows: 31
(a) Divide the average fall enrollment or the fall enrollment for the current 32
school year, whichever is greater, 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
26.860.10 3 157
Underscores indicate new language.
Overstrikes indicate deleted language.
(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); 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
26.860.10 4 157
Underscores indicate new language.
Overstrikes indicate deleted language.
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 wind energy 2
tax revenue apportioned to a school district from a wind farm producing power for 3
the first time after June 30, 2016, one hundred percent must be retained by the 4
school district to which the tax revenue is apportioned for the first five years of 5
producing power, eighty percent for the sixth year, sixty percent for the seventh 6
year, forty percent for the eighth year, twenty percent for the ninth year, and zero 7
percent thereafter. If a wind farm begins producing power for the first time 8
between October first and December thirty -first in a calendar year, any revenues 9
generated for that time period must be retained by the school district and that time 10
period may not be counted against the first five-year period; 11
(16) "Per student equivalent," for funding calculations that are determined on a per 12
student basis, the per student equivalent is calculated as follows: 13
(a) Multiply the target teacher compensation times the sum of one plus the 14
overhead 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 17
district's general fund, calculated by adding all deposits made during the month to 18
the beginning cash balance and deducting all disbursements or payments made 19
during 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 22
subdivision (2) of two hundred or less; 23
(b) Thirty percent for a school district with fall enrollment as defined in 24
subdivision (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 26
subdivision (2) greater than or equal to six hundred. 27
When determining the general fund base percentage, the secretary of the 28
Department of Education shall use the lesser of the school district's fall enrollment 29
as defined in subdivision (2) for the current school year or the school district's fall 30
enrollment from the previous two years; 31
(19) "Allowable general fund cash balance," the general fund base percentage multiplied 32
by the district's general fund expenditures in the previous school year; and 33
(20) "Alternative instruction participation adjustment," is calculated by multiplying 0.10 34
times the number of children who participated in the prior school year in high 35
26.860.10 5 157
Underscores indicate new language.
Overstrikes indicate deleted language.
school interscholastic activities sanctioned or sponsored by the South Dakota High 1
School Activities Association, as permitted by § 13-36-7, while receiving 2
alternative instruction pursuant to § 13-27-3, multiplied by the per student 3
equivalent defined in this section; and 4
(21) "Average fall enrollment," the sum of the fall enrollments for each of the two school 5
years immediately prior to the current school year, divided by two. 6