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.
ENTITLED 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 § 101242 be AMENDED:
101242.
General fund of a
school districtAnnual
levy.
For taxes payable in 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 sixtyeight and twotenths cents per thousand dollars
of taxable valuation subject to the limitations on agricultural
property as provided in subdivision (2) of this section and
owneroccupied 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
fortyfour and threetenths 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
owneroccupied singlefamily dwelling as defined in § 101340
for the school district shall be three dollars and twentytwo and
ninetenths 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 eightyfive 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 § 101243,
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 § 131310.1 be AMENDED:
131310.1.
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(1) Repealed by SL 2016, ch 83,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 § 132811;
(c) Add the number of students
for whom the district pays tuition.
When computing state aid to
education for a school district pursuant to § 131373,
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
stateadministered 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, 2020 is $51,367.47. 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
twentynine percent;
(4B) "Target teacher
compensation," is the sum of the target teacher salary and the
target teacher benefits;
(4C) "Overhead rate,"
is thirtyfour and ninetythree 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 §§ 131378
and 131379;
(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 §§ 13134,
23A2725,
103324,
103610,
11773,
103521,
and 104377;
(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 § 101242.
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 §§ 103324,
103521
as provided by subdivision (6B), 103610,
104377,
11773,
13134,
and 23A2725
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 § 13106
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 §§ 103324,
103521
as provided by subdivision (6B), 103610,
104377,
11773,
13134,
and 23A2725
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 §§ 103324,
103521
as provided by subdivision (6B), 103610,
104377,
11773,
13134,
and 23A2725
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 § 103521
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) Twentyfive 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.
An Act to revise the property tax
levies for the general fund of school districts and to revise the
state aid to education formula.
I
certify that the attached Act
originated in the:
House
as Bill
No. 1043
Chief
Clerk
Speaker
of the House
Attest:
Chief
Clerk
President
of the Senate
Attest:
Secretary
of the Senate
House
Bill
No. 1043
File
No. ____
Chapter
No. ______

Received
at this Executive Office
this
_____
day of _____________,
2020
at ____________M.
By
for
the Governor
The
attached Act is hereby
approved
this ________
day of
______________,
A.D., 2020
Governor
STATE
OF SOUTH DAKOTA,
ss.
Office
of the Secretary of State
Filed
____________,
2020
at _________
o'clock __M.
Secretary
of State
By
Asst.
Secretary of State
