ENTITLED, An Act to establish the public purpose and goals of postsecondary education, to provide
for the funding of higher education, and to create the Council on Higher Education Policy Goals,
Performance, and Accountability.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section 1. Terms used in this Act mean:
(1) "Average state appropriation per higher education student," the average state general fund
appropriation for each student enrolled in an institution of higher education under the
control of the Board of Regents for the previous fiscal year as determined by the Bureau
of Finance and Management;
(2) "Full-time equivalent," at the postsecondary technical institutes equals thirty credit hours
of instruction per year, and at the institutions under the control of the Board of Regents
equals thirty credit hours of instruction per year for undergraduates, twenty-four credit
hours of instruction per year for students seeking master's and doctoral degrees, thirty
credit hours of instruction per year for students in law school, and thirty-eight credit hours
of instruction per year for students in medical school;
(3) "Projected state general fund increase," the estimated percentage change in state general
fund revenue, as submitted by the Governor pursuant to § 4-7-10 or as adopted by the
standing committees on appropriations;
(4) "Public postsecondary education institutions," the postsecondary technical institutes under
the control of the Board of Education and the institutions of higher education under the
control of the Board of Regents; and
(5) "Public postsecondary education systems," the system of postsecondary technical
institutes under the control of the Board of Education and the system of institutions of
higher education under the control of the Board of Regents.
Section 2. The Legislature hereby finds, and declares to be the public policy of this state, that the
purpose of public postsecondary education is to provide the following:
(1) A workforce that meets the current and prospective needs of the state's economy;
(2) Affordable postsecondary educational opportunities for all state citizens;
(3) Access to postsecondary education programs that serve to increase the educational
attainment of the state's citizenry and thereby enable citizens to provide leadership in all
sectors of life in the state; and
(4) A foundation upon which the state can grow the development and innovation capacities
of the state's economy.
Section 3. The Legislature hereby recognizes that the current goals for public postsecondary
education systems and institutions are as follows:
(1) To increase the number of graduates for the state's workforce; and
(2) To increase the growth capacity of the state's economy by increasing the innovation and
development capacity of the state and by increasing the skills of the state's current
workforce.
Section 4. The Council on Higher Education Policy Goals, Performance, and Accountability,
established in section 6 of this Act, shall use the following performance metrics to monitor the
institutional progress toward the goals declared in section 3 of this Act:
(1) For the goal in section 3, subdivision (1) of this Act:
(a) Increases in the number of graduates at all postsecondary education institutions,
particularly those graduates in select disciplines and at certain levels, and those
graduates who remain in the state for employment or further study;
(b) Increases in the number of undergraduate degrees earned by at-risk students,
including low-income students, Native American students, nontraditional students,
and those students underprepared for higher education;
(c) Increases in credit hour completions at all public postsecondary education
institutions; and
(d) Increases in the retention of students from their first year of postsecondary
education to their second year of postsecondary education at all public
postsecondary education institutions;
(2) For the goal stated in section 3, subdivision (2) of this Act, increases in the expenditures
in research at postsecondary institutions under the control of the Board of Regents.
Section 5. Sections 3 and 4 of this Act are repealed on June 30, 2015.
Section 6. There is hereby created the Council on Higher Education Policy Goals, Performance,
and Accountability. The council shall consist of the following members:
(1) The Governor or the Governor's designee;
(2) The secretary of the Department of Labor and Regulation;
(3) The commissioner of the Governor's Office of Economic Development;
(4) The commissioner of the Bureau of Finance and Management;
(5) Three members of the House of Representatives, appointed by the speaker of the House
of Representatives. No more than two of the members may be from the same political
party;
(6) Three members of the Senate, appointed by the president pro tempore of the Senate. No
more than two of the members may be from the same political party;
(7) Two members of the Board of Regents;
(8) The executive director of the Board of Regents;
(9) The secretary of the Department of Education;
(10) One member of the State Board of Education who shall serve for one year and be
appointed by the secretary of the Department of Education;
(11) One local school board member from a school district where a postsecondary technical
institute is located who shall serve for one year and be appointed by the secretary of the
Department of Education;
(12) One superintendent from a school district where a postsecondary technical institute is
located who shall serve for one year and be appointed by the secretary of the Department
of Education;
(13) A president of an institution of higher education under the control of the Board of Regents
who shall serve for one year and be determined by a rotating order based on the year of
the establishment of the institution; and
(14) A president of a public postsecondary technical institute who shall serve for one year and
be determined by a rotating order based on the year of the establishment of the
postsecondary technical institute.
The Governor or the Governor's designee shall serve as the chair of the council. In 2013 and
2014, the council shall meet once each year to monitor the progress of the public postsecondary
education systems and institutions toward the goals established in section 3 of this Act.
Section 7. Beginning in 2015, and in every year immediately following a gubernatorial election
thereafter, the Council on Higher Education Policy Goals, Performance, and Accountability shall
meet to review, endorse, and recommend to the executive branch, the Legislature, and the respective
postsecondary education governing boards the four-year goals for the public postsecondary education
systems and institutions and the performance metrics by which the council will monitor the progress
toward those goals. The initial goals established by the council shall take effect on July 1, 2015, and
subsequent goals will take effect every four years thereafter. In intervening years, the council shall
meet annually to monitor the progress toward the goals. When establishing goals and performance
metrics, the council shall draw upon public input from any persons who may be concerned or
knowledgeable in these areas. A majority of the members appointed to the council constitutes a
quorum for the purposes of conducting business. Any action may be taken by a vote of the majority
of the members present at a meeting. The duties of the council include only those stipulated in this
Act and do not impinge on the constitutional powers and duties of the Board of Regents or the
legislative powers and duties of the Board of Education or include participation in the operation,
management, or oversight of any postsecondary education institution in the state.
Section 8. The Board of Regents and the Board of Education shall each provide to the Council
on Higher Education Policy Goals, Performance, and Accountability an annual accountability report.
The initial accountability report, to be provided to the council in 2013, shall contain, for each of the
postsecondary education institutions under the respective board's control, information on the
following:
(1) Improvements in on-time degree completions;
(2) Affordability for students;
(3) The placement of graduates in jobs or further study in South Dakota; and
(4) Improvements in the percentages of graduates who are successful in passing licensure,
certification, or exit exams administered by third parties.
The council shall determine the content of subsequent accountability reports.
Section 9. To achieve the public purpose and goals established for postsecondary education in
the state pursuant to this Act, the state funding for the higher education system may be calculated
as follows:
(1) If the projected state general fund increase allows, the higher education system may
receive funding through the normal budgeting process for performance funding. Any sum
appropriated from the general fund for the purpose of performance funding shall be
provided to the Board of Regents. The Board of Regents shall then determine the
allocation of funds to the institutions it governs that reflect institutional performance and
system strategic investments. For fiscal years 2014 and 2015, funds appropriated for
performance funding shall be awarded to the higher education institutions based on
improvements in the following areas:
(a) One-half of the performance funding shall be based on the number of new
graduates with special emphasis on those graduates with degrees in science,
technology, engineering, and mathematics or other critical need areas as
determined by the Council on Higher Education Policy Goals, Performance, and
Accountability established in section 6 of this Act; and
(b) One-half of the funding shall be based on the growth of expenditures for research;
For fiscal year 2016 and in subsequent fiscal years, the performance funding shall be
awarded to the Board of Regents based on criteria established by the Council of Higher
Education Policy Goals, Performance and Accountability; and
(2) If the higher education system receives the performance funding in subdivision (1), and
the cost of the performance funding is less than the projected state general fund increase,
the higher education institutions may also receive, through the normal budgeting process,
a mission expansion increase calculated pursuant to this subsection to reflect expanded
student services and increases in enrollments and credit hour completions. If the
performance funding provided pursuant to subdivision (1), and the amount calculated in
this subdivision for a mission expansion increase is greater than the projected state
general fund increase, each higher education institution shall receive a pro rata share of
the total amount calculated. The mission expansion increase shall be calculated as
follows:
(a) Each institution of higher education shall receive a payment equal to one-half of
the average state appropriation per higher education student for each full-time
equivalent enrollment in the previous fiscal year that exceeded the total full-time
equivalent enrollment in the year preceding the previous fiscal year; and
(b) Each institution of higher education shall also receive a payment equal to one-half
of the average state appropriation per higher education student for each full-time
equivalent of credit hour completions in the previous fiscal year that exceeded the
total full-time equivalent of credit hour completions in the year preceding the
previous fiscal year. The full-time equivalent of credit hour completions for which
an institution is entitled to a payment pursuant to this section shall be calculated
as follows:
(i) For the previous fiscal year, at each degree level, divide the total number of
credit hours completed at that institution by the number of credit hours
required to be a full-time equivalent student;
(ii) For the year prior to the previous fiscal year, at each degree level, divide the
total number of credit hours completed at that institution by the number of
credit hours required to be a full-time equivalent student;
(iii) If the product of subsection (i) is greater than the product of subsection (ii),
calculate the difference between the two at each degree level; and
(iv) Add together the results for each degree level.
In addition to the mission expansion funding calculated pursuant to this subsection, the
Legislature may also provide additional funding to institutions of higher education for the
expansion of program mission; and
(3) If the higher education system receives the performance funding in subdivision (1) and
the mission expansion increase in subdivision (2), and the cost of both of the increases is
less than the projected state general fund increase, the higher education system may
receive, through the normal budgeting process, an operating budget inflationary increase
equal to 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. For the purpose of this section, the
operating budget does not include any portion of the budget that contains funding for
salaries and benefits for any employees provided by the Legislature through the General
Appropriations Act.
An Act to establish the public purpose and goals of postsecondary education, to provide for the
funding of higher education, and to create the Council on Higher Education Policy Goals,
Performance, and Accountability.
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I certify that the attached Act
originated in the
SENATE as Bill No. 5
____________________________
Secretary of the Senate
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____________________________
President of the Senate
____________________________
Secretary of the Senate
____________________________
Speaker of the House
____________________________
Chief Clerk
Senate Bill No. 5
File No. ____
Chapter No. ______
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Received at this Executive Office
this _____ day of _____________ ,
20____ at ____________ M.
By _________________________
for the Governor
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The attached Act is hereby
approved this ________ day of
______________ , A.D., 20___
____________________________
Governor
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STATE OF SOUTH DAKOTA,
ss.
Office of the Secretary of State
Filed ____________ , 20___
at _________ o'clock __ M.
____________________________
Secretary of State
By _________________________
Asst. Secretary of State
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