2008 Legislative Session _ 2008

Committee: Joint Appropriations
Wednesday, January 23, 2008

                                            P - Present
                                            E - Excused
                                            A - Absent

Roll Call
P    Smidt (Orville)
P    Bartling
P    Carson
P    Davis
P    Dennert
P    Glenski
P    Burg
P    Greenfield
E    Gray
P    Hoerth
P    Haverly
P    Maher
P    Hundstad
P    Rausch
P    Putnam, Vice-Chair
P    Hunhoff, Vice-Chair
P    Tidemann, Chair
P    Apa, Chair

OTHERS PRESENT: See Original Minutes

The meeting was called to order by Senator Jerry Apa.

Board of Regents            

Black Hills State University
Dr. Kay Schallenkamp, President of Black Hills State University, introduced Dr. Dean Meyers, Vice President for Academic Affairs; Kathy Johnson, Vice President for Finance and Administration; Dr. Shane Sarver, Associate Professor of Biology; and Dr. Holly Downing, Dean of the College of Arts and Sciences.

The mission of Black Hills State University is to provide programs in: the liberal arts and sciences, education, human services, wellness, business, travel industries management, and tourism; to complement these programs with a series of preprofession, one-year and two-year

terminal, and junior college programs; and to authorize degrees at the associate, baccalaureate, and masters level.

The Governor recommends a total appropriation of $52,435,632 and 444.4 FTEs for FY09. The recommended changes include $404,080 increase from the general fund, $129,042 increase in federal fund expenditure authority, and $891,859 increase in other fund expenditure authority.

Dr. Schallenkamp said that February 27, 2008, is the kick-off for the 125th anniversary of the Black Hills State University (BHSU). The university was founded to prepare teachers for the workplace, and over the years has changed to a multi-purpose university with many majors and minors. With strategic planning, BHSU transforms the lives of students with academic programs.

Currently, BHSU is the third largest university in the state with 4,004 students enrolled for the fall of 2007. The university serves the highest percentages of adult learners (32% of undergraduate students). The top three majors at the university are business, education, and biology.

Through aggressive efforts of the science faculty, external grants have increased from $519,046 in 1997 to $5,365,060 in 2007. BHSU has received grant funding from a number of agencies including:

1 .      National Science Foundation;
2 .      National Institute of Health;
3 .      Environmental Protection Agency;
4 .      National Oceanic and Atmospheric Administration;
5 .      U.S. Department of Agriculture;
6 .      U.S. Fish and Wildlife Services;
7 .      U.S. Department of Education; and
8 .      Small Business Administration.

Dr. Schallenkamp said that the Black Hills area has a rich, diverse biology and geography which the university is taking advantage of. Current BHSU research includes the following projects:
9 .      DNA sequencing of organisms found in water samples collected at SUSEL;
10 .      Plant response to drought and developing drought resistant varieties;
11 .      DNA sequencing for genomic analysis to control invasive plants;
12 .      Genetic analysis of Native bison and South Dakota fish and wildlife as well as for resistance to mad cow disease and for evidence for criminal investigation;
13 .      Economic impact and tourism studies for cities throughout the state;
14 .      Development of the South Dakota Travel Monitoring System;
15 .      Study of serotonin and its affect on addictive behavior;
16 .      Study the use of reading fluency measures to predict reading comprehension on the Dakota State Test of Education Performance (STEP Test) for elementary students; and
17 .      Air quality of the Black Hills including the Rapid City area.

The proposed science research building is needed to meet the growing demand of science students and to accommodate the increasing number of research projects at BHSU. The current

building was built in 1968 and was constructed to serve the needs of the students at that time. Over the past 12 years, science majors have increased by 310%, and the new building is needed to provide the physical resources necessary to prepare the students. Currently, the university is 1% below the average space for science students. The university has lost professors and had to turn down gifts of equipment due to the lack of space. There is also a risk of contamination with the research projects in the current space.

Dr. Schallenkamp said that there is a high need for the REED network at BHSU. Faculty, staff, and students are already making plans for the high speed network system and anticipate that the higher speed network will also open doors for cutting-edge research and a number of economic possibilities.

To address utility costs, BHSU is taking a leadership role with a campus-wide effort to reduce energy costs. The university was the first South Dakota university to join the American College and University President's Climate Commitment. The major addition and renovation to the Student Union is being designed with several energy efficiencies and has a goal of a Silver certification from the Leadership in Energy and Environmental Design. BHSU also replaced the light bulbs across the campus with energy efficient light bulbs, and is reviewing the idea of installing a wood-fire boiler.

Senator Hunhoff asked about the 275 BHSU students that transfer to nursing. In response, Dr. Dean Meyers, said that the students get their general education courses from BHSU and then most students transfer to South Dakota State University (SDSU) to complete the nursing degree.

In response to Senator Apa's question, Dr. Schallenkamp said that 12% of the students enrolled at BHSU are from Wyoming. The last class decreased by about 50 Wyoming students. There is the Hathaway Merit Scholarship offered in Wyoming. The colleges in Wyoming now have endowed funds available for students, which allows Wyoming to cherry_pick the students at BHSU. The students at BHSU are offered scholarships to attend Wyoming universities.

Dr. Meyers said, in response to Representative Tidemann's question, that about one-third of the students that attend BHSU receive remedial courses.

In response to Senator Smidt's question, Dr. Schallenkamp said that the university is proud of the mobile science lab, and featured it in the university's holiday card. The project is going well and she has received fantastic feedback from the students. With 2009 being the Year of Science, the university will embrace the concept with great enthusiasm and will promote that science is fun, important, and able to be performed.

Representative Glenski asked about the reason for the decrease in 2.5 FTEs. In response, Kathy Johnson said that the food service has changed to a contract and therefore FTEs are no longer needed.

Dr. Schallenkamp said, in response to Senator Hunhoff's question, that 43% of the BHSU graduates remain in South Dakota. When the graduates from Wyoming are included, the percentage increases to 65% of the graduates remain in the region.



Dr. Meyers said, in response to Representative Tidemann's question, that about 1,200 students at the university are non-traditional students.

Representative Tidemann asked about the university's retention rate. In response, Dr. Schallenkamp said that it is important for the university to think about retention. There was an increase of 8% in student retention for one year. The previous president of BHSU had different beliefs in retention, and there were changes to the university's retention policy this year. BHSU will have five special admits this year, which is an admission to the university for a person that does not meet all the requirements for regular admission. The other issue directly related with retention is funding.

In response to Senator Smidt's question about federal grants and contracts, Dr. Schallenkamp said that the university had a grant with the American Indian Health, when the grant transferred to Sanford Health, the BHSU employee who secured the grant transferred to Sanford Health as well.

South Dakota School for the Deaf
Mr. Terry Gregersen, Superintendent, said that every child makes a difference in the program. The mission of the School for the Deaf is to provide statewide services to the sensory impaired children and youth of the state of South Dakota; to serve in a dual leadership and resource model in the statewide efforts to meet the educational needs of sensory impaired children from birth through age twenty-one; and to carry out this mission through cooperative efforts with all appropriate state agencies, educational cooperatives, local education agencies, colleges, and universities.

The total recommended budget for this program includes increases of $74,541 from general funds, $1,743 from federal funds, and $1,789 from other funds. The School's request and the Governor's recommendation are identical with the exception of the recommended salary policy.

The South Dakota School for the Deaf (SDSD) offers four programs to students. They include:

1 1.      Auditory/Oral Program;
2 2.      Bilingual/Bicultural Program;
3 3.      Outreach Program; and
4 4.      Audiology Program.

Mr. Gregersen said that the bilingual/bicultural program is very unique and SDSD is probably the only school to adopt this type of program.

Currently, there are 364 students that receive services from the Outreach Program. The program affects 57 of the 66 counties in the state. Last year, there was about 187 students served, and Mr. Gregerson believes the staff has done a good job identifying the students that would benefit from the program. To implement this program, the staff members travel a lot, and that is a concern for retention in the staff position.

SDSD did 900 audiology exams last year. Mr. Gregersen was surprised by the growth in number of students receiving the exams, and attributes much of the success to the method the staff used

to locate the students. He informed the committee that a person may have a profound hearing loss and be able to interact well in society. There is not another outreach program as large as this, and it helps prepare students for the real world.

Mr. Gregersen said that he is concerned about the appropriation for energy costs because the utility costs are increasing. There are no other concerns for other budget areas.

There is a request for additional other fund expenditure authority for the Myklebust Recreational Center Renovation Project. The Myklebust gymnasium is not going to be condemned but is salvageable with some redesign and reinforcement of the wall areas. With additional reinforcement of the wall, the total project cost increased by $32,000 to a total of $424,095. SDSD has sufficient funding to see the gymnasium renovated so that some “sense of history” is preserved at the school. This will allow for normal PE activities and for SDSD to offer community services as well. The project is slated to be completed by the beginning of the 2008- 2009 school year.

Representative Dennert asked when the last non-resident student was served by SDSD. In response, Mr. Gregersen said the he thinks it was in 2005, and they have taken from students Iowa, North Dakota, and Minnesota.

In response to Senator Hunhoff's questions, Mr. Gregersen said that the outreach center now checks with the hospitals to review the records of students with a hearing loss. From that new process SDSD has found students that have a hearing loss and were not receiving services. The SDSD is able to use the DDN to access many of the students at no cost to the state. However, this capability does not reduce the amount of time the staff is required to travel for the outreach program.

Northern State University
Dr. Patrick Schloss, President of Northern State University (NSU) introduced Dr. Clyde Arnold, Provost and Vice President of Academic Affairs; Dr. Tom Hawley, Dean of the School of Education; and Don Erlenbusch, Vice President for Finance and Administration.

The mission of Northern State University is to serve as a multi-purpose, regional institution of higher education; to continue to diversify offerings to address the emerging needs of the students, community, and region; to continue to include teacher preparation as an important feature of the institutional mission, as well as programs in the arts and sciences, business, and fine arts; to provide quality teaching and learning through undergraduate and graduate programs; to provide distance delivery technology in all degree programs, especially all levels of teacher preparation; to offer students a breadth and depth in the liberal arts and in professional studies to ensure development of effective and productive professionals and citizens; to create and nurture a community of students, faculty, and staff; to support communication, student and faculty research, and professional growth; to design programs to meet academic, social, cultural, and economic needs of the community and area in order to provide lifelong learning opportunities; to provide a center for the arts and recreation; and to support regional development.


The Governor recommends a total appropriation of $33,982,355 and 345.5 FTEs for FY09. The recommended changes include $394,710 increase from the general fund, $27,331 increase in federal fund expenditure authority, and $972,227 increase in other fund expenditure authority.

Dr. Schloss said that NSU is providing a premier residential experience characterized by outstanding instruction, extraordinary community relations and unparalleled extracurricular opportunities. Some of the highlights from the last year include:

5 .      Headcount enrollment increased by 9%;
6 .      Retention increased from 58% to 62%;
7 .      Received an unqualified accreditation for ten years from the Higher Learning Commission;
8 .      Three new programs were developed (Banking and Financial Services, Musical Theater, and Sports Marketing);
9 .      Identified by “Sports Illustrated” to have the largest average attendance for Division II basketball program in the nation;
10 .      Two basketball games nationally televised;
11 .      Maintained an average GPA of over 3.0 for all sport athletes; and
12 .      Statewide e-learning enrollment is at a record high of 900 students in more than 80 school districts.

Dr. Schloss stated that there were budgetary and financial achievements over the previous year. Some include:
13 .      Reversed an accumulated debt in Auxiliaries;
14 .      Second residence hall suite project in progress;
15 .      Planning and budget process provides redistribution of $600,000 annually to advance goals of the Margin of Excellence strategic plan; and
16 .      New revenues generated shared with units to further fund strategic plan goals.

The fundraising and growth of the Northern State Foundation is $12.1 million for 2007 which is the largest in the universities history. Dr. Schloss said that the Wolf PACT scholarships have increased this year. The award amounts are as follows:
17 .      $1,000 for students with ACT score of 21 to 23;
18 .      $2,000 for students with ATC scores of 24 to 27; and
19 .      $2,500 for students with ATC scores of 28 and above.
Dr. Schloss said that the Wolf PACT scholarships can be received in addition to the Opportunity Scholarship. With the Opportunity Scholarship and the Wolf PACT scholarship, students with an ACT of 24 or higher are close to having the entire school year paid for.

In response to Senator Hunhoff's question, Dr. Schloss said that students taking courses from the University of Sioux Falls would be considered self-support students at NSU.

Senator Hunhoff asked about the retention rate of graduates. In response, Mr. Arnold said that about 80% of NSU graduates remain in South Dakota.


Dr. Schloss said, in response to committee questions, that there are 105 international students at NSU, which accounts for about 4% of the student population. This is an increase of about 30 to 40 students from a year ago.

Representative Dennert asked about the limit for the E-learning center. In response, Dr. Hawley said that a study was performed last summer and it was determined that the E-learning center is operating at 86% of its capacity. He thinks that NSU could take on more students, but more students may result in the need to develop another studio or two. A survey was sent to school districts and it was determined that there is a demand for more Spanish courses because of the criteria for the Opportunity Scholarship. The survey showed that there is a decline in the demand for French courses and an increase in the demand for a Spanish III course.

Representative Rausch asked about the remedial courses offered by the university. In response, Dr. Schloss said that statistics have shown that students with an ACT score of 15 or lower do not survive the first year of higher education. To offer the higher education opportunity to everyone, three years ago, NSU began a summer bridge program where people with an ACT score between 12 and 15 were able to attend the summer course and prepare themselves for the school year. This remedial summer program has become a recruiting tool and families are happy knowing that their child is receiving the extra help. From this program, one-fourth of the students with lower ACT scores are finishing the first year.

In response to Representative Tidemann's question, Dr. Schloss said that the university is completely wireless.

Representative Burg asked about the courses taught in Huron. In response, Dr. Schloss said NSU hosted two town meetings in Huron, and recently offered three courses there. He has been to meetings to promote higher education, but the biggest challenge is the enrollment. NSU will offer a course if they receive permission and enroll a minimum of eight students in the course.

In response to committee questions, Dr. Schloss said that the goals of the Wolf PACT Scholarship are consistent with the Opportunity Scholarship. A student must maintain fulltime enrollment (15 credit hours per semester) and 3.0 GPA. If the Opportunity Scholarship criteria changes, NSU will make any necessary changes and try to maintain consistency between the Wolf PACT Scholarship and the Opportunity Scholarship. One important aspect of the Wolf PACT Scholarship is that it is based solely on the students' ACT score, and not family income.

Dakota State University
Dr. Douglas D. Knowlton, President of Dakota State University (DSU), introduced Dr. Cecelia Whitmeyer, Vice President of Academics, and Stacy Krusemark, Vice President of Business and Administrative Services.

The mission of Dakota State University is to specialize in programs of computer management, computer information systems, and other related undergraduate and graduate programs outlined in SDCL 13-59-2.2; to place special emphasis on the preparation of elementary and secondary teachers with expertise in the use of computer technology and information processing in the

teaching and learning process; and to offer two-year and one-year programs as well as short courses for application and operator training in areas authorized.

The Governor recommends a total appropriation of $28,026,294 and 282.0 FTEs for FY09. The recommended changes include $465,331 increase from the general fund, $221,371 increase in federal fund expenditure authority, and $517,994 increase in other fund expenditure authority.

In response to Representative Rausch's question pertaining to the REED Network, Dr. Knowlton said that DSU has the space to house the equipment and the FTEs, but the equipment will need to be upgraded. The changes for the REED Network are really not an issue of space, but an issue of temperature. Stacy Krusemark said that these issues are addressed in the Governor's recommendation. DSU is the core site for the DDN, and this is the only one at the higher education institutions.

In response to committee questions, Mr. Krusemark said that the REED Network technical support could be located anywhere, but it best fits with the IT majors at DSU. Currently, DSU has a program on campus and it will be able to transition FTEs to accommodate the network support. The original request was to have FTEs located at multiple locations. The Governor reduced the FTEs and recommended all the FTEs be placed at DSU for economic efficiencies. There will also be more efficiencies by having the technical support located in one place, and DSU is the best option.

Dr. Knowlton said that in 2005, an agency was asked to come to the university and estimate the cost of all upgrades. The total cost of upgrades was $6.4 million. The university placed a HEFF fund request of $3 million to accomplish part of the M&R projects.

There is a request for an increase in federal funding and other funding expenditure authority to renovate Beadle Hall. Mr. Krusemark said that project should be completed this summer.

In response to Senator Hunhoff's question, Dr. Cecelia Whitmeyer said that the percentage of DSU graduates that attend graduate school at DSU is decreasing. The exact number of students will be presented to the committee.

Representative Rausch asked about the students needing remedial courses at DSU. In response, Ms. Whitmeyer said that about 18.5% of the students are in remedial math (MATH 021). DSU is also responsible for the math courses offered at the university centers. Dr. Knowlton said that the university has experienced tremendous results by creating a pilot program and having students complete the on-line program. The students' confidence level rose and many students no longer needed the remedial math after the pilot program.

South Dakota State University
Dr. David Chicoine, President of South Dakota State University (SDSU), introduced Mike Reger, Executive Vice President for Administration; Carol Peterson, Provost and Vice President for Academic Affairs; Wes Tschetter, Assistant Vice President of Finance and Business; and Gary Lemme, Dean of Agriculture and Biological Sciences.


The mission of the South Dakota State University is to serve through teaching, research, and extension activities as the state's land-grant institution; to provide undergraduate and graduate education from the freshmen to doctoral level through selected high quality academic, professional, extracurricular and recreational programs; to conduct nationally competitive strategic research, scholarly, and creative activities; and to transfer the knowledge, especially to the citizens of South Dakota, through the Cooperative Extension Service and other entities.

The Governor recommends a total appropriation of $176,099,241 and 1,711.8 FTEs for FY09. The recommended changes include $1,710,652 increase from the general fund, $6,348,753 increase in federal fund expenditure authority, and $5,060,616 increase in other fund expenditure authority.

Dr. Chicoine reviewed some of SDSU's highlights:

20 .      11 Ph.D. programs, a professional doctoral program, tow more new programs awaiting BOR's approval, and 20 new master's degree programs;
21 .      631 faculty, 45 administrators, 354 professional staff, 106 extension educators, 768 career service personas and 211 part-time and temporary personnel;
22 .      a contiguous campus of 272 acres in Brookings;
23 .      Nearly 15,000 acres in seven locations from Buffalo to Beresford for agricultural research and demonstrations;
24 .      158 buildings with a replacement value of $400.5 million; and
25 .      South Dakota's first and only university-affiliated research park, The Innovation Campus.

SDSU enrolls students from all 66 counties in the state and accounts for 40% of the enrollment at the Board of Regents' institutions. The university's enrollment includes:
26 .      11,706 students, including 10,198 undergraduates;
27 .      8,124 students from South Dakota, comprising 69% of the student body;
28 .      3,200 students living on campus on residential facilities;
29 .      An average enrollment increase of 4% each year since 1998;
30 .      The average ACT score is 23; and
31 .      About 70% of the graduates remain in South Dakota after graduation.

Dr. Chicoine stated the core business elements. They are:
31.1 1.      To educate the leaders of tomorrow to drive economic growth and development;
31.2 2.      Create new innovations and technology for development; and
31.3 3.      Place the knowledge to work that will drive economic growth and activity.

The faculty, staff, and administrators are essential to ensuring the best education for the students. Currently, the salaries for SDSU professors are about 80% of the market value compared to its peers. Dr. Chicoine said that it is hard to recruit and retain professors with the current market position. The university is dependent on the quality of faculty and staff, which requires competitive compensation.

The Governor's recommendation for a four year increase in funding for M&R is needed. SDSU needs M&R funding for lab renovations. There are also two projects that need renovations _ the

dairy micro-biology building and the agricultural building. The replacement cost of the dairy micro-biology building is about $12 million. The agricultural building was constructed in 1953 and would cost about $20 million to be constructed today. The renovation project will provide 11,000 sq. feet for the students in the areas of nursing, bio-chemistry, medical engineering, animal science, and bio-technology.

Dr. Chicoine said that it is important to have the high speed network at the university to compete with other universities in the research arena.

Currently, there is a gap of about $800,000 in utility costs. The university uses funds from the academic side to pay for the utilities.

Cooperative Extension Service
Dr. Gregg Carlson, Interim Director, said that the mission of the Cooperative Extension Service is to disseminate and encourage the application of research-generated knowledge and leadership techniques to individuals, families, and communities in order to improve agriculture and strengthen the South Dakota family and community.

The total recommended budget for this program includes increases of $248,927 from the general fund, $130,504 in federal fund expenditure authority, and $17,992 in other fund expenditure authority. The University's request and the Governor's recommendation are identical with the exception of the recommended salary policy.

In response to Representative Tidemann's question, it was stated that there currently are six to seven positions in the search process. The number accumulated when the university went to the new human resources system. SDSU has implemented a program where local county input is received. The university hopes to have the number decreased to three or four in the next year, but is having a hard time competing in some disciplines.

Greg Carlson said, in response to Representative Tidemann's question that the starting salary for the interim director of the Extension Service is $31,073 and he is trying to have it increased to $33,000.

Representative Tidemann asked what the available money from the open positions was used for. In response, it was stated that the funds remained in the system, and were used last year for a one-time expense for laptops and printers.

Agricultural Experiment Station
Dr. John D. Kirby, Associate Dean and AES Director, said that the mission of the Agricultural Experiment Station is to conduct research to enhance the quality of life in South Dakota through the beneficial use and development of human, economic, and natural resources.

The total recommended budget for this program includes increases of $304,143 from the general fund, $937,852 in federal fund expenditure authority, and $657,795 in other fund expenditure authority. There is no change to the FTE level.


The SDSU College of Agriculture and Biological Sciences identified five multidisciplinary areas of excellence, involving research, teaching, and extension efforts. The areas include:
1 1.      Biorenewable Economic Development;
2 2.      Applied Genome Technology Solutions;
3 3.      Natural Resource Stewardship;
4 4.      Community Innovation and Leadership;
5 5.      Enhancing Economic Development of Grain, Livestock and Food Systems.
These areas extend beyond the College of Agriculture and Biological Sciences to the Colleges of Engineering and Family and Consumer Sciences. The grants and contracts received in these areas comprise 66% of all SDSU grants and contracts.

Three of the states' five 2010 centers are located in the College of Agriculture and Biological Sciences, including the Center for Infectious Disease Research and Vaccinology, the Center for Bioprocessing Research and Development with SDSM&T, and the Center for Drought Tolerance Biotechnology. Agriculture remains a major contributor to the economic health of the state, with $19.2 billion in annual economic impact in 2007. This year, agriculture employed 150,459 people and contributed $593,333,046 in tax revenues to the state. In addition, each dollar of revenue generated in the state creates another $1,099 in additional economic activity.

In response to Senator Hunhoff's question about the potential growth of the doctorial program at SDSU, Dr. Chicoine said that each program mush have eight new Ph.D. students each year to have a program considered viable. He said that he would like to have 330 students in the doctorial programs with 30 students in each of the 11 programs.

Representative Tidemann asked about the decision process in determining to renovate buildings or construct new building. If the structure is fundamentally sound, the university should renovate the current building.

Senator Hunhoff asked about the revenue from student tuition being less than projected for FY08. In response, Wes Tschetter said that the student fees were adjusted because the projected fees were less than the approved fees.

In response to Representative Tidemann's inquiry about an article that stated SDSU would be shorted funds, Dr. Chicoine said that the formula was supposed to be recalculated in 2008. The enrollment trend recalibration will now allow for the funds to be dispersed to other places. Resources will be added to the budget and will help with the faculty positions that would have come to the university with the recalibration.

Representative Rausch asked about the percentage of students that require remedial courses. In response, Carol Peterson said that 25% of the students need remedial coursework in math. This percentage has been slowly decreasing and should continue to decrease due to the higher ACT requirement. About 16% of the students at SDSU require remedial English, and that percentage is fairly stable.

In response to Representative Tidemann's question about the decreasing funds from the U.S. Department of Agriculture, it was stated that the funds to SDSU from the U.S. Department of

Agriculture is dependent upon the farm bills in Congress. If the package is passed the way the university anticipates, it would result in a slight increase in formula funds. There was a bump last year because grants were eliminated and placed in the formula. As anticipated from two years ago, there will be a slight increase in formula funds and a larger increase in competitive funds. The university will not know for certain until the farm bills get passed.

Senator Hunhoff requested the university provide to the committee the percentage of pharmaceutical graduates that remain in South Dakota. Ms. Peterson responded that there is a nursing shortage due to the aging population. The university has received a grant to help educate faculty and it focuses on bringing more people into the masters program. Dr. Chicoine said that the there are about 18 students in the Ph.D. program and the program was designed to train the next level of faculty.

Other information
Senator Greenfield asked about the CPA exams. In response, Mr. Jewett said that the certifiable public accountants made the decision to change to 150 credits. By passing the test, they are receiving their masters in accountancy. It is not unusual for a student to only pass parts of the four part test at a time. Dr. Perry said that the accounting licensing board does not report to the BOR about the exams.

Dr. Perry said that to address remedial work, the Department of Education and Board of Regents met and decided to change the high school graduation requirements. Through time, the committee should see a decline in the percentage of students needing remedial courses. There has been about a 1% decline in the last five years. An annual transition report is sent to all the districts to show how the high school graduates are performing in higher education. The annual report will be presented to the committee.

Dr. Perry said the BOR went off the formula 10 years ago, because enrollment was thought to be flat. However, enrollment has increased by 5% and BOR does not have the funding for these students. Mr. Jewett said that BOR is trying to allocate money based on projections without increasing funding.

Senator Apa asked about the result if the state subsidized all the current self-support students in the universities and the learning centers. In response, Mr. Jewett said that there would not be any new money for the BOR. Previous experience has shown that the learning centers are not negatively impacting the universities. The universities are increasing in retention, but self- support students at the centers are needed to obtain the missing number of people with degrees.

Mr. Jewett said that the west river center is critical to reaching the goal of the 2010 Initiative. The problem is retaining the 1,600 people there. BOR submitted a bill that would allow the agency to accept the gift of 12 acres, which would allow the west river center to replace the facility a tornado and no insurance. The center needs to have a place that the students feel comfortable attending.

Representative Burg asked about the Rapid City learning center courses and if they could be taught in the evenings at a current state paid facility. In response, Mr. Jewett said that the nursing

program would be taught like most other programs throughout the day. Although it seems like a good idea to have the classes taught at another state funded facility, the classes taught by the center are always canceled if there are other events occurring at the facility.

In response to Senator Hunhoff's question about Capitol Center University (CUC), Dr. Perry said that the Capitol Foundation would be the owner of the new facility. The hospital donated the property to the foundation and a building will need to be constructed. Mr. Jewett said that the BOR would not being paying rent for the new CUC building, but will pay for other services in the facility.

It was stated in response to Senator Hunhoff's question that the self-support students are only charged a fee for M&R when BOR has ownership and responsibility of the facility. The fee is figured into the students' tuition and fees each year. Currently, the center in Sioux Falls is the only self-support center that has an M&R fee.

Senator Maher asked, in reaction to HB 1085 and HB 1251, if it would be cheaper to add stories on to the current buildings for class room space. In response, Mr. Jewett said the paleontology building would be constructed with the bond issue bill, and BOR is not able to finance the building without the bond.

Dr. Perry informed the committee that there are four component changes to the Opportunity Scholarship. They include:

6 .      Cost of the program _ proposing to raise the scholarship to $1,200 for the first three years and $2,400 for the fourth year;
7 .      Credit hour requirements _ proposing to reduce the number of required credit hours from 15 to 12 per semester, which is equivalent to the federal definition of a full-time student;
8 .      Regent Scholarship curriculum _ proposing a change to match the new high school graduation requirements; and
9 .      The current law will be changed to allow a person to receive the scholarship for four years, even if they graduate from a technical institute in two years and returns to a four- year university.

Senator Apa said that the decrease in required credit hours is counter-productive. Many people oppose 12 credit hours, and students are more focused when taking more credit hours. He asked why the BOR wants to do something that could be detrimental to the students. In response, Mr. Jewett said the current law of 15 credit hours per semester does not allow for the flexibility for specific majors in a given semester. The minimum GPA requirement will remain, but the credit hour change will allow flexibility for students that take internships or other demanding courses.

Senator Apa asked if the students are able to apply for a wavier if they are not able to take the minimum 15 credit in a semester. In response, Dr. Perry said that waivers are a current option, and the BOR is receiving close to 100 applications a semester. Students in pharmaceutical, teacher education, and engineering majors have special quirks that do not require the students to take 15 credits in a semester to graduate.


Currently, 3,816 students receive the Opportunity Scholarship. In response, Senator Apa asked why the credit hour requirement needs to be changed to accommodate 3% of the recipients. Dr. Perry said that there probably are more students that are affected by the requirement, but the students are able to adjust the schedules and take more credits to fulfill the requirements.

MOTION:     ADJOURN

Moved by:    Smidt (Orville)
Second by:    Bartling
Action:    Prevailed by voice vote.

Barb Bjorneberg and Lisa Shafer

____________________________

Committee Secretary
Jerry Apa, Chair


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