FOR AN ACT ENTITLED, An Act to  make an appropriation to the Department of Education and Cultural Affairs to reimburse fees and provide a stipend for National Board for Professional Teaching Standards certified teachers, to provide for a teacher enhancement program, and to revise the calculation of state aid to education.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
     Section  1.  There is hereby appropriated from the general fund the sum of forty-eight thousand dollars ($48,000), or so much thereof as may be necessary, to the Department of Education and Cultural Affairs for the purpose of making the payments in accordance with §  13- 42-26.
     Section  2.  The secretary of the Department of Education and Cultural Affairs shall approve vouchers and the state auditor shall draw warrants to pay expenditures authorized by this Act.
     Section  3.  Any amounts appropriated in this Act not lawfully expended or obligated by June 30, 2003, shall revert in accordance with §  4-8-21.
     Section  4.  There is hereby established an education enhancement program within the Department of Education and Cultural Affairs. The education enhancement program shall

distribute money to school districts to be used to reward teachers who have demonstrated their excellence in the teaching profession.
     Section  5.  Any money appropriated to the Department of Education and Cultural Affairs for education enhancement shall be distributed to school districts as provided by this Act.
     Section  6.  If a school district meets the criteria established by this Act, the Department of Education and Cultural Affairs shall allocate money which may be appropriated for education enhancement to each school district based on the school district's pro rata share of statewide average daily membership.
     Section  7.  Criteria established by the Department of Education and Cultural Affairs for school districts to receive money appropriated for education enhancement include but are not limited to:

             (1)    A school district may not reduce or offset the salary of a teacher with money received for the purpose of education enhancement;

             (2)    A school district shall develop a plan to reward teachers with money received for the purpose of education enhancement; and

             (3)    The plan to reward teachers with money received for the purpose of education enhancement shall be developed with the advice and counsel of members of the community, administration, and teachers.
     Section  8.  The Department of Education and Cultural Affairs shall promulgate rules pursuant to chapter 1-26 to implement the provisions of this Act.
     Section  9.  That § 13-13-10.1 be amended to read as follows:
     13-13-10.1.   Terms used in this chapter mean:

             (1)      "Average daily membership," the average number of resident and nonresident kindergarten through twelfth grade pupils enrolled in all schools operated by the

school district during the previous regular school year, minus average number of pupils for whom the district receives tuition, except pupils described in subdivision (1A) and pupils for whom tuition is being paid pursuant to §  13-28-42 and plus the average number of pupils for whom the district pays tuition;

             (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 average daily membership of the receiving district when enrolled in the receiving district. When counting a student who meets these criteria in its general enrollment average daily membership, the receiving district may begin the enrollment on the first day of attendance. The district of residence prior to the custodial transfer may not include students who meet these criteria in its general enrollment average daily membership after the student ceases to attend school in the resident district;

             (2)      "Adjusted average daily membership," calculated as follows:

             (a)      For districts with an average daily membership of two hundred or less, multiply 1.2 times the average daily membership;

             (b)      For districts with an average daily membership of less than six hundred, but greater than two hundred, raise the average daily membership to the 0.8293 power and multiply the result times 2.98 multiply the average daily membership times 0.9 and add 60 to the product ;

             (c)      For districts with an average daily membership of six hundred or more, multiply 1.0 times their average daily membership;

             (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;

             (3A)      "Enrollment adjustment," is one-half of the negative of the annual percent change in the statewide general enrollment average daily membership for the year before the year immediately preceding the year of adjustment;

             (4)      "Per student allocation," for the period January 1, 1997, to June 30, 1997, inclusive, is $1,675. For school fiscal year 1998, beginning on July 1, 1997, the per student allocation shall be $3,350 increased by the index factor. Each school fiscal year thereafter, the per student allocation shall be the previous fiscal year's per student allocation increased by the index factor, plus the enrollment adjustment;

             (5)      "Local need," the per student allocation multiplied by the adjusted average daily membership;

             (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;

             (7)      "General fund balance," the unreserved fund balance of the general fund, less general fund exclusions plus, beginning with transfers made in fiscal year 2001, any transfers out of the general fund for the previous school fiscal year;

             (8)      "General fund balance percentage," is a school district's general fund balance divided by the school district's total general fund expenditures for the previous school fiscal year, the quotient expressed as a percent;

             (9)      "General fund base percentage," is the general fund balance percentage as of June 30, 2000. However, the general fund base percentage can never increase and can never be less than twenty percent;

             (10)      "Allowable general fund balance," the fund base percentage multiplied by the district's

general fund expenditures in the previous school fiscal year;

             (11)      "Imputed interest rate," the average prime rate for the preceding fiscal year minus 2.5 percentage points;

             (12)      "General fund exclusions," revenue a school district has received from the imposition of the excess tax levy pursuant to §  10-12-43; revenue a school district has received from gifts, contributions, grants, or donations; revenue a school district has received under the provisions of § §  13-6-92 to 13-6-96, inclusive; and any revenue in the general fund set aside for a noninsurable judgment.