FOR AN ACT ENTITLED, An Act to revise how certain kindergarten students are counted for the purpose of state aid to education funding, to establish in statute the minimum number of hours required in a school term for grades one through three, and to provide for the redistribution of certain funds appropriated for state aid to education.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
    Section 1. 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 § 13-28-42.1 and plus the average number of pupils for whom the district pays tuition;

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            (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;

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

            (2A)    "Fall enrollment," 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 minus the number of students for whom the district receives tuition, except nonresident students who are in the care and custody of a state agency and are attending a public school and students for whom tuition is being paid pursuant to § 13-28-42.1, plus the number of students for whom the district pays tuition. Any student enrolled in a kindergarten program operating for less than eight

hundred and seventy-five hours, exclusive of intermissions, in a school term shall be counted on a pro rata basis as follows:

                When computing state aid to education for a school district under the foundation program pursuant to § 13-13-73, the secretary of the Department of Education shall use either the school district's fall enrollment or the average of the school district's fall enrollment from the previous two years, whichever is higher;

            (2B)    Repealed by SL 2010, ch 84, § 1.

            (2C)    "Small school adjustment," calculated as follows:

            (a)    For districts with a fall enrollment of two hundred or less, multiply 0.2 times $4,237.72;

            (b)    For districts with a fall enrollment of greater than two hundred, but less than six hundred, multiply the fall enrollment times negative 0.0005; add 0.3 to that result; and multiply the sum obtained times $4,237.72;

                The determination of the small school adjustment 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;

            (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)    "Per student allocation," for school fiscal year 2011 is $4,804.60. Each school fiscal year thereafter, the per student allocation is the previous fiscal year's per student allocation increased by the index factor;

            (5)    "Local need," is the sum of:

            (a)    The per student allocation multiplied by the fall enrollment; and

            (b)    The small school adjustment, if applicable, multiplied by the fall enrollment;

            (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 lesser of:

            (a)    The general fund balance percentage as of June 30, 2011; or

            (b)    The maximum allowable percentage for that particular fiscal year as stated in this subsection.

                For fiscal year 2008, the maximum allowable percentage is one hundred percent; for fiscal year 2009, eighty percent; for fiscal year 2010, sixty percent; for fiscal years 2011 to 2014, inclusive, forty percent for each fiscal year; for fiscal year 2015 and subsequent fiscal years, twenty-five percent. However, the general fund base percentage may always be at least twenty-five percent;

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

            (11)    "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; revenue a school district has received as compensation for being a sparse school district under the terms of §§ 13-13-78 and 13-13-79; any revenue a school district has received under the provisions of the American Recovery and Reinvestment Act of 2009 (P.L. 111-5); and any revenue in the general fund set aside for a noninsurable judgment.
    Section 2. That § 13-26-1 be amended to read as follows:
    13-26-1. The school fiscal year shall begin July first and end June thirtieth. Each local school board shall set the number of days in a school term, the length of a school day, and the number of school days in a school week. The local school board or governing body shall establish the number of hours in the school term for kindergarten programs, which may not be less than four hundred thirty-seven and one-half hours. The Board of Education shall promulgate rules pursuant to chapter 1-26 setting the minimum number of hours in the school term for grades one through three. The number of hours in the school term for grades one, two, and three may not be less than eight hundred seventy-five hours, exclusive of intermissions. The number of hours in the school term for grades four through twelve may not be less than nine hundred sixty-two and one-half hours, exclusive of intermissions. An intermission is the time when pupils are at recess or lunch.
    Section 3. That chapter 13-13 be amended by adding thereto a NEW SECTION to read as follows:

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    Any money appropriated for state aid to general education that is in excess of the amount of money necessary to meet the entitlement provided for in this chapter and to meet any shortfall pursuant to subdivision 13-13-73(4) is not subject to reversion pursuant to § 4-8-19 and shall be distributed to all school districts receiving state aid pursuant to this chapter on a pro rata basis according to each eligible school district's fall enrollment compared to the total fall enrollment of all eligible school districts.