SDLRC - 2020 House Bill 1043 - SD Legislature revise the property tax levies for the general fund of school districts and to revise the state aid to education formula.
**An Act to**** ****revise the property tax levies for the
general fund of school districts and to revise the state aid to
education formula.**

Be
it enacted
by the Legislature of the State of South Dakota:

**Section 1.**
That § 10-12-42 be AMENDED:

**10-12-42.
General fund of a school district--Annual levy. **

For taxes payable in~~ 2020~~__ 2021__ and each year
thereafter, the levy for the general fund of a school district shall
be as follows:

(1) The maximum tax levy shall be six dollars and~~ eighty-two
and one tenth~~__ fifty-five and six tenths__ cents per
thousand dollars of taxable valuation subject to the limitations on
agricultural property as provided in subdivision (2) of this section
and owner-occupied property as provided in subdivision (3) of this
section;

(2) The maximum tax levy on agricultural property for the school
district shall be one dollar and~~ forty-seven and three~~__
forty-one and six__ tenths cents per thousand dollars of taxable
valuation. If the district's levies are less than the maximum levies
as stated in this section, the levies shall maintain the same
proportion to each other as represented in the mathematical
relationship at the maximum levies; and

(3) The maximum tax levy for an owner-occupied single-family dwelling
as defined in § 10-13-40
for the school district shall be three dollars and~~
twenty-nine and six~~__ sixteen and eight__ tenths cents
per thousand dollars of taxable valuation. If the district's levies
are less than the maximum levies as stated in this section, the
levies shall maintain the same proportion to each other as
represented in the mathematical relationship at the maximum levies.

All levies in this section shall be imposed on valuations where the
median level of assessment represents eighty-five percent of market
value as determined by the Department of Revenue. These valuations
shall be used for all school funding purposes. If the district has
imposed an excess levy pursuant to § 10-12-43,
the levies shall maintain the same proportion to each other as
represented in the mathematical relationship at the maximum levies in
this section. The school district may elect to tax at less than the
maximum amounts set forth in this section.

**Section ****2.**
That § 13-13-10.1 be AMENDED:

**13-13-10.1.
Definitions. **

The education funding terms and procedures referenced in this chapter
are defined as follows:

(1) Repealed by SL 2016, ch 83, § 4;

(1A) Nonresident students who are in the care and custody of the
Department of Social Services, the Unified Judicial System, the
Department of Corrections, or other state agencies and are attending
a public school may be included in the fall enrollment of the
receiving district when enrolled in the receiving district;

(2) Repealed by SL 2016, ch 83, § 4;

(2A) "Fall enrollment," is calculated as follows:

(a) Determine the number of kindergarten through twelfth grade
students enrolled in all schools operated by the school district on
the last Friday of September of the current school year;

(b) Subtract the number of students for whom the district receives
tuition except for:

(i) Nonresident students who are in the care and custody of a state
agency and are attending a public school district; and

(ii) Students who are being provided an education pursuant to
§ 13-28-11;

(c) Add the number of students for whom the district pays tuition.

When computing state aid to education for a school district pursuant
to § 13-13-73,
the secretary of the Department of Education shall use the school
district's fall enrollment;

(2B) Repealed by SL 2010, ch 84, § 1;

(2C) "Target teacher ratio factor," is:

(a) For school districts with a fall enrollment of two hundred or
less, the target teacher ratio factor is 12;

(b) For districts with a fall enrollment of greater than two hundred,
but less than six hundred, the target teacher ratio factor is
calculated as follows:

(1) Multiplying the fall enrollment by .00750;

(2) Adding 10.50 to the product of subsection (b)(1);

(c) For districts with a fall enrollment of six hundred or greater,
the target teacher ratio factor is 15.

The fall enrollment used for the determination of the target teacher
ratio for a school district may not include any students residing in
a residential treatment facility when the education program is
operated by the school district;

(2D) "Limited English proficiency (LEP) adjustment," is
calculated by multiplying 0.25 times the number of kindergarten
through twelfth grade students who, in the prior school year, scored
below level four on the state-administered language proficiency
assessment as required in the state's consolidated state application
pursuant to 20 USC § 6311(b)(7) as of January 1, 2013;

(3) "Index factor," is the annual percentage change in the
consumer price index for urban wage earners and clerical workers as
computed by the Bureau of Labor Statistics of the United States
Department of Labor for the year before the year immediately
preceding the year of adjustment or three percent, whichever is less;

(4) "Target teacher salary," for the school fiscal year
beginning July 1, ~~2019 ~~__ 2020 __is $50,360.26.
Each school fiscal year thereafter, the target teacher salary is the
previous fiscal year's target teacher salary increased by the index
factor;

(4A) "Target teacher benefits," is the target teacher
salary multiplied by twenty-nine percent;

(4B) "Target teacher compensation," is the sum of the
target teacher salary and the target teacher benefits;

(4C) "Overhead rate," is~~ thirty-three and six~~__
thirty-four and ninety-seven__ hundredths percent.

Beginning in school fiscal year 2018, the overhead rate shall be
adjusted to take into account the sum of the amounts that districts
exceed the other revenue base amount;

(5) "Local need," is calculated as follows:

(a) Divide the fall enrollment by the target teacher ratio factor;

(b) If applicable, divide Limited English proficiency (LEP)
adjustment pursuant to subdivision (2D) by the target teacher ratio
factor;

(c) Add the results of subsections (a) and (b);

(d) Multiply the result of subsection (c) by the target teacher
compensation;

(e) Multiply the product of subsection (d) by the overhead rate;

(f) Add the products of subsections (d) and (e);

(g) When calculating local need at the statewide level, include the
amounts set aside for costs related to technology in schools and
statewide student assessments; and

(h) When calculating local need at the statewide level, include the
amounts set aside for sparse school district benefits, calculated
pursuant to §§ 13-13-78
and 13-13-79;

(5A) "Alternative per student need," is calculated as
follows:

(a) Add the total need for each school district for school fiscal
year 2016, including the small school adjustment and the limited
English proficiency adjustment, to the lesser of the amount of funds
apportioned to each school district in the year preceding the most
recently completed school fiscal year or school fiscal year 2015
pursuant to §§ 13-13-4,
23A-27-25,
10-33-24,
10-36-10,
11-7-73,
10-35-21,
and 10-43-77;

(b) Divide the result of (a) by the September 2015 fall enrollment,
excluding any adjustments based on prior year student counts;

(5B) "Alternative local need," is the alternative per
student need multiplied by the fall enrollment, excluding any
adjustments based on prior year student counts;

(6) "Local effort," the amount of ad valorem taxes
generated in a school fiscal year by applying the levies established
pursuant to § 10-12-42.
Beginning on July 1, 2017, local effort will include the amount of
funds apportioned to each school district in the year preceding the
most recently completed school fiscal year pursuant to §§ 10-33-24,
10-35-21
as provided by subdivision (6B), 10-36-10,
10-43-77,
11-7-73,
13-13-4,
and 23A-27-25
and that exceeds the other revenue base amount. For the period July
1, 2016, through December 31, 2016, inclusive, local effort includes
the amount of ad valorem taxes generated by applying the levies
established pursuant to § 13-10-6
during this period;

(6A) "Other revenue base amount," for school districts not
utilizing the alternative local need calculation is the amount of
funds apportioned to each school district pursuant to §§ 10-33-24,
10-35-21
as provided by subdivision (6B), 10-36-10,
10-43-77,
11-7-73,
13-13-4,
and 23A-27-25
calculated as follows:

(a) Beginning on July 1, 2017, equals the greatest of the amounts of
the funds apportioned to each school district pursuant to
§§ 10-33-24,
10-35-21
as provided by subdivision (6B), 10-36-10,
10-43-77,
11-7-73,
13-13-4,
and 23A-27-25
for school fiscal years 2013, 2014, and 2015;

(b) Beginning on July 1, 2018, multiply eighty percent times
subsection (a);

(c) Beginning on July 1, 2019, multiply sixty percent times
subsection (a);

(d) Beginning on July 1, 2020, multiply forty percent times
subsection (a);

(e) Beginning on July 1, 2021, multiply twenty percent times
subsection (a);

(f) Beginning on July 1, 2022, is zero.

For school districts utilizing the alternative local need
calculation, the other revenue base amount is zero until such time
the school district chooses to no longer utilize the alternative
local need calculation. At that time, the other revenue base amount
is calculated as defined above.

For a school district created or reorganized after July 1, 2016, the
other revenue base amount is the sum of the other revenue base amount
for each district before reorganization, and the new school district
may not utilize the alternative local need calculation.

In the case of the dissolution and annexation of a district, the
other revenue base amount of the dissolved school district will be
prorated based on the total number of students in the fall enrollment
as defined in subdivision (2A) who attend each district to which area
of the dissolved district were annexed to in the first year of
reorganization. The amount apportioned for each district will be
added to the annexed districts' other revenue base;

(6B) "Wind energy tax revenue," any wind energy tax revenue
apportioned to school districts pursuant to § 10-35-21
from a wind farm producing power for the first time before July 1,
2016, shall be considered local effort pursuant to subdivision (6)
and other revenue base amount pursuant to subdivision (6A). However,
any wind energy tax revenue apportioned to a school district from a
wind farm producing power for the first time after June 30, 2016, one
hundred percent shall be retained by the school district to which the
tax revenue is apportioned for the first five years of producing
power, eighty percent for the sixth year, sixty percent for the
seventh year, forty percent for the eighth year, twenty percent for
the ninth year, and zero percent thereafter;

(7) "Per student equivalent," for funding calculations that
are determined on a per student basis, the per student equivalent is
calculated as follows:

(a) Multiply the target teacher compensation times the sum of one
plus the overhead rate;

(b) Divide subsection (a) by 15;

(8) "Monthly cash balance," the total amount of money for
each month in the school district's general fund, calculated by
adding all deposits made during the month to the beginning cash
balance and deducting all disbursements or payments made during the
month;

(9) "General fund base percentage," is determined as
follows:

(a) Forty percent for a school district with a fall enrollment as
defined in subdivision (2A) of two hundred or less;

(b) Thirty percent for a school district with fall enrollment as
defined in subdivision (2A) of more than two hundred but less than
six hundred; and

(c) Twenty-five percent for a school district with fall enrollment as
defined in subdivision (2A) greater than or equal to six hundred.

When determining the general fund base percentage, the secretary of
the Department of Education shall use the lesser of the school
district's fall enrollment as defined in subdivision (2A) for the
current school year or the school district's fall enrollment from the
previous two years;

(10) "Allowable general fund cash balance," the general
fund base percentage multiplied by the district's general fund
expenditures in the previous school year.

Catchlines are not law.
(§ 2-16-13.1) __Underscores__
indicate new language.

~~Overstrikes~~
indicate deleted language.