81st Legislative Session _ 2006

Committee: Senate Education
Thursday, February 02, 2006

                                            P - Present
                                            E - Excused
                                            A - Absent

Roll Call
P    Duenwald
P    Knudson
P    Kooistra
P    Nesselhuf
P    Peterson (Jim)
P    Bogue, Vice-Chair
P    Olson (Ed), Chair

OTHERS PRESENT: See Original Minutes

The meeting was called to order by Senator Ed Olson, Chair

MOTION:     TO APPROVE THE MINUTES OF TUESDAY, JANUARY 31, 2006

Moved by:    Bogue
Second by:    Knudson
Action:    Prevailed by voice vote.

         SB 120: increase general funding for school districts, to impose a temporary limit on the growth of state general fund spending, and to suspend the transfer of moneys from the general fund to the budget reserve fund and to the property tax reduction fund.

Presented by:    Senator Ben Nesselhuf
Proponents:    Bill Lynch, Associated School Boards of South Dakota
        Jim Hutmacher, SD Coalition of Schools (Document #1)
        Donna DeKraai, SDEA
        Christie Johnson, School Administrators of SD
        Shayne McIntosh, self, Parkston
        Dave Peters, self, Spearfish (Document #2)

        Brian Heupel, self, DeSmet
Opponents:    Tamara Darnall, Bureau of Finance and Management
        Rick Melmer, Department of Education

MOTION:     AMEND SB 120

120ca
     On page 4, line 5 of the printed bill, after " . " insert "In addition, any moneys used to provide medical services pursuant to chapter 28-6 shall also be excluded from this calculation.".

     On page 8 , after line 17, insert:

"
     Section 11. Beginning one year following the date when the commissioner of the Bureau of Finance and Management determines that the ongoing education adequacy fund established in section 1 of this Act is sufficient to provide funding to each school district in an amount equal to the supplemental base allotment, all existing excess tax levies authorized pursuant to § 10-12-43 are hereby revoked, and no new excess tax levies pursuant to § 10-12-43 may be imposed for a period of one year.".


Moved by:    Peterson (Jim)
Second by:    Duenwald
Action:    Prevailed by voice vote.

MOTION:     DO PASS SB 120 AS AMENDED

Moved by:    Peterson (Jim)
Second by:    Nesselhuf
Action:    Was not acted on.

MOTION:     SUBSTITUTE MOTION DEFER SB 120 TO THE 36TH LEGISLATIVE DAY

Moved by:    Bogue
Second by:    Duenwald
Action:    Prevailed by roll call vote.(5-2-0-0)

Voting Yes:    Duenwald, Knudson, Kooistra, Bogue, Olson (Ed)

Voting No:    Nesselhuf, Peterson (Jim)


         SB 169: require the development of school safety plans and to require the conduct of lockdown drills in schools.

Presented by:    Senator Orville Smidt
Proponents:    David Osterquist, self, Sioux Falls (Document #3)
        Joe Fishbaugher. Self, Brookings (Document #4)
Opponents:    Dick Tieszen, Sioux Falls School District
        Dianna Miller, ESD + 6

MOTION:     DEFER SB 169 TO THE 36TH LEGISLATIVE DAY

Moved by:    Knudson
Second by:    Nesselhuf
Action:    Prevailed by roll call vote.(5-2-0-0)

Voting Yes:    Knudson, Kooistra, Nesselhuf, Peterson (Jim), Bogue

Voting No:    Duenwald, Olson (Ed)

         SB 170: establish and appropriate money to the 21st Century Education Fund, to increase funding for education, and to revise the index factor in the state aid to education formula.

Presented by:    Senator Dave Knudson (Document #5)
Proponents:    Susan Randall, SD Voices For Children
Opponents:    Cindy Flakoll, Concerned Women For America
        Kitty Werthmann, Eagle Forum

The Chair deferred SB 170 until Tuesday, February 7, 2006.

         SB 134: revise state aid to education to include aid to sparse school districts.

Presented by:    Senator Eric Bogue (Document #6)
Proponents:    Ken Knuppe, SD Stockgrowers Assn.

MOTION:     AMEND SB 134

134ca
     On the printed bill, delete everything after the enacting clause and insert:

"

     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 greater of (1) 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 or (2) the average of 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 and the school year prior to the previous regular school year, minus the 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 times 1.16 in fiscal year 2007, 1.12 in fiscal year 2008, 1.08 in fiscal year 2009, 1.04 in fiscal year 2010, and 1.0 in fiscal year 2011 ;
             (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 . In fiscal year 2007, subtract average daily membership from that result, multiply the difference times .8 and add the product to average daily membership. In fiscal year 2008, subtract average daily membership from that result, multiply the difference times .6 and add the product to average daily membership. In fiscal year 2009, subtract average daily membership from that result, multiply the difference times .4 and add the product to average daily membership. In fiscal year 2010, subtract average daily membership from that result, multiply the difference times .2 and add the product to average daily membership. In fiscal year 2011, subtract average daily membership from that result, multiply the difference times zero and add the product to average daily membership ;
             (c)      For districts with an average daily membership of six hundred or more, multiply 1.0 times their average daily membership;
             (2A)    "Sparse school district," a school district which, during the previous school year: has a general fund balance percentage as defined in this section of twenty percent or less; levies ad valorem taxes at the maximum rates allowed pursuant to § 10-12-42 or more; has an average daily membership of less than six hundred; has a geographical area of more than five hundred square miles; provides at least fifteen percent of its secondary program offerings via distance learning technology; has at least fifteen miles between its attendance center or centers and that of an adjoining district; and has an average daily membership per square mile of 0.6 or less;
             (2B)    "Sparsity average daily membership," calculated as follows:
        (a)    For sparse school districts, divide the average daily membership by the area of the school district in square miles;
        (b)    If the result of subsection (a) of this subdivision is 0.6 or less, multiply the quotient obtained in subsection (a) times negative 0.014;
        (c)    Add 0.14 to the result of subsection (b) of this subdivision; and
        (d)    Multiply the result of subsection (c) of this subdivision times the 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;
             (4)      "Per student allocation," for school fiscal year 2006 is $4,237.72. 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," the per student allocation multiplied by the sum of the adjusted average daily membership plus the sparsity 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.

     Section 2. There is hereby appropriated from the state general fund the sum of three million dollars ( $3,000,000 ), or so much thereof as may be necessary, to the Department of Education for distribution to sparse school districts pursuant to this Act.

     Section 3. The secretary of the Department of Education shall approve vouchers and the state auditor shall draw warrants to pay expenditures authorized by this Act."


Moved by:    Duenwald
Second by:    Knudson
Action:    Failed by roll call vote.(3-4-0-0)

Voting Yes:    Duenwald, Knudson, Bogue

Voting No:    Kooistra, Nesselhuf, Peterson (Jim), Olson (Ed)

MOTION:     AMEND SB 134

134cb
     On the printed bill, delete everything after the enacting clause and insert:

"
     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 greater of (1) 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 or (2) the average of 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 and the school year prior to the previous regular school year, minus the 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;
             (c)      For districts with an average daily membership of six hundred or more, multiply 1.0 times their average daily membership;
             (2A)    "Sparse school district," a school district which, during the previous school year: levies ad valorem taxes at the maximum rates allowed pursuant to § 10-12-42 or more; has an average daily membership of less than six hundred; has a geographical area of more than five hundred square miles; has at least five miles between its attendance center or centers and that of an adjoining district; and has an average daily membership per square mile of 0.6 or less;
             (2B)    "Sparsity average daily membership," calculated as follows:
        (a)    For sparse school districts, divide the average daily membership by the area of the school district in square miles;
        (b)    If the result of subsection (a) of this subdivision is 0.6 or less, multiply the quotient obtained in subsection (a) times negative 0.014;
        (c)    Add 0.14 to the result of subsection (b) of this subdivision; and
        (d)    Multiply the result of subsection (c) of this subdivision times the 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;
             (4)      "Per student allocation," for school fiscal year 2006 is $4,237.72. 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," the per student allocation multiplied by the sum of the adjusted average daily membership plus the sparsity 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.

     Section  2.  That § 4-5-29.2 be amended to read as follows:

     4-5-29.2.   Pursuant to S.D. Const., Art. XII, § 6, the state investment officer shall determine the market value of the education enhancement trust fund as of December 31, 2003, and each calendar year thereafter less the investment expenses transferred pursuant to § 4-5-30. The state investment officer shall calculate an amount equal to four and eight tenths percent of that market value, without invading principal, as eligible for distribution. For the purpose of this section, the term, principal, means the sum of all contributions to the fund. Beginning with the distribution in fiscal year 2007, the market value shall be determined by adding the market value of the trust fund at the end of the sixteen most recent calendar quarters as of December thirty-first, and dividing the sum by sixteen. Upon notice of that amount by the state investment officer, the state treasurer shall transfer the amount from the education enhancement trust fund to the state general fund as soon as practicable after July first of the next fiscal year.

     Section  3.  The state treasurer shall transfer from the state general fund an amount equal to eight tenths percent of the fair value of the education enhancement trust fund calculated in § 4-5-29.2 from the education enhancement trust fund to the sparse school district fund which is hereby created in the state treasury. The purpose of the fund is to provide funding to sparse school districts as defined in subdivision 13-13-10.1 (2A).

     Section  4.  There is hereby appropriated from the sparse school district fund the sum of three million dollars ($3,000,000), or so much thereof as may be necessary, to the Department of Education for distribution to sparse school districts pursuant to this Act.

     Section  5.  The secretary of the Department of Education shall approve vouchers and the state auditor shall draw warrants to pay expenditures authorized by this Act."


Moved by:    Nesselhuf
Second by:    Peterson (Jim)
Action:    Prevailed by voice vote.

The Chair deferred SB 134 until Tuesday, February 7, 2006.

MOTION:     ADJOURN

Moved by:    Kooistra
Second by:    Nesselhuf
Action:    Prevailed by voice vote.

Nancy Benson

____________________________

Committee Secretary
Ed Olson, Chair

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