An Act to delete or revise certain outdated language relating to education.
Be it enacted by the Legislature of the State of South Dakota:
Section 1. That § 1-45-6.2 be AMENDED.
1-45-6.2. Vacancies on board--Meetings of board.
The initial term of office shall
be designated by the Governor. Any member appointed to fill a
vacancy arising from other than the natural expiration of a term
shall serve only the unexpired portion of the term. The South Dakota
Board of Education Standards shall meet at least four times
annually. Special meetings may be held at the call of the president
or,
in
his
the president's
absence,
a majority of the board,
or at the call of the state superintendent,
or at the call of the secretary of the Department of Education.
Section 2. That § 1-45-27.1 be AMENDED.
1-45-27.1. Functions of planning commission transferred to secretary of education.
The functions of the Education
and Cultural Affairs Planning Commission
created by § 1-45-27
are transferred to the secretary of education.
Section 3. That § 13-6-13.1 be AMENDED.
13-6-13.1. Former school district representation areas for consolidated districts--Establishment--Election of board members.
When the reorganization plan is
submitted, the school board or the electors of the district may
establish school board representation areas to represent each former
school district
which
that
consolidated to form the reorganized school district. Each former
school district representation area shall be formed by adhering to
standards of population deviance as established by judicial
precedence. The former school district representation areas shall be
established after an election is called and held pursuant to
§§ 13-8-3
to 13-8-5,
inclusive, by a majority vote of the electors voting at the
election. The former school district representation areas, if
established, shall become effective January first of the following
year.
If so established, the representation areas supersede the provisions
of § 13-8-7 regarding representation from incorporated and
nonincorporated areas.
If former board member representation areas are established, the
school board member candidate shall be a resident voter and reside
within the representation area to qualify. The reorganization plan
shall state whether the school board member candidates shall be
elected at large or elected by the voters who reside within the
representation area.
Any current board members shall serve the balance of their term. At the time of an election or vacancy, board members shall be elected or appointed in order that each representation area shall have a resident board member.
Section 4. That § 13-13-10.1 be AMENDED.
13-13-10.1. Definitions.
The education funding terms and procedures referenced in this chapter are defined as follows:
(1) Repealed
by SL 2016, ch 83, § 4;
(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 fall enrollment of the receiving
district when enrolled in the receiving district;
(2) Repealed
by SL 2016, ch 83, § 4;
(2A) "Fall
enrollment," is calculated as follows:
(a) Determine 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;
(b) Subtract the number of students for whom the district receives tuition except for:
(i) Nonresident students who are in the care and custody of a state agency and are attending a public school district; and
(ii) Students who are being provided an education pursuant to § 13-28-11;
(c) Add the number of students for whom the district pays tuition.
When computing state aid to education for a school district pursuant to § 13-13-73, the secretary of the Department of Education shall use the school district's fall enrollment;
(2B) Repealed
by SL 2010, ch 84, § 1;
(2C)(3) "Target
teacher ratio factor," is:
(a) For school districts with a fall enrollment of two hundred or less, the target teacher ratio factor is 12;
(b) For districts with a fall enrollment of greater than two hundred, but less than six hundred, the target teacher ratio factor is calculated as follows:
(1) Multiplying the fall enrollment by .00750;
(2) Adding 10.50 to the product of subsection (b)(1);
(c) For districts with a fall enrollment of six hundred or greater, the target teacher ratio factor is 15.
The fall enrollment used for the determination of the target teacher ratio 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;
(2D)(4) "Limited
English proficiency (LEP) adjustment," is calculated by
multiplying 0.25 times the number of kindergarten through twelfth
grade students who, in the prior school year, scored below level
four on the state-administered language proficiency assessment as
required in the state's consolidated state application pursuant to
20 USC § 6311(b)(7) as of January 1, 2013;
(3)(5) "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)(6) "Target
teacher salary," for the school fiscal year beginning July 1,
2020 is $51,367.47. Each school fiscal year thereafter, the target
teacher salary is the previous fiscal year's target teacher salary
increased by the index factor;
(4A)(7) "Target
teacher benefits," is the target teacher salary multiplied by
twenty-nine percent;
(4B)(8) "Target
teacher compensation," is the sum of the target teacher salary
and the target teacher benefits;
(4C)(9) "Overhead
rate," is thirty-four and ninety-three hundredths percent.
Beginning in school fiscal year 2018, the overhead rate shall be adjusted to take into account the sum of the amounts that districts exceed the other revenue base amount;
(5)(10) "Local
need," is calculated as follows:
(a) Divide the fall enrollment by the target teacher ratio factor;
(b) If applicable, divide
Limited English proficiency (LEP) adjustment pursuant to subdivision
(2D)(4)
by the target teacher ratio factor;
(c) Add the results of subsections (a) and (b);
(d) Multiply the result of subsection (c) by the target teacher compensation;
(e) Multiply the product of subsection (d) by the overhead rate;
(f) Add the products of subsections (d) and (e);
(g) When calculating local need at the statewide level, include the amounts set aside for costs related to technology in schools and statewide student assessments; and
(h) When calculating local need at the statewide level, include the amounts set aside for sparse school district benefits, calculated pursuant to §§ 13-13-78 and 13-13-79;
(5A)(11) "Alternative
per student need," is calculated as follows:
(a) Add the total need for each school district for school fiscal year 2016, including the small school adjustment and the limited English proficiency adjustment, to the lesser of the amount of funds apportioned to each school district in the year preceding the most recently completed school fiscal year or school fiscal year 2015 pursuant to §§ 13-13-4, 23A-27-25, 10-33-24, 10-36-10, 11-7-73, 10-35-21, and 10-43-77; and
(b) Divide the result of (a) by the September 2015 fall enrollment, excluding any adjustments based on prior year student counts;
(5B)(12) "Alternative
local need," is the alternative per student need multiplied by
the fall enrollment, excluding any adjustments based on prior year
student counts;
(6)(13) "Local
effort," the amount of ad valorem taxes generated in a school
fiscal year by applying the levies established pursuant to
§ 10-12-42.
Beginning on July 1, 2017, local effort will include the amount of
funds apportioned to each school district in the year preceding the
most recently completed school fiscal year pursuant to §§ 10-33-24,
10-35-21
as provided by subdivision (6B)(15),
10-36-10,
10-43-77,
11-7-73,
13-13-4,
and 23A-27-25
and that exceeds the other revenue base amount.
For the period July 1, 2016, through December 31, 2016, inclusive,
local effort includes the amount of ad valorem taxes generated by
applying the levies established pursuant to § 13-10-6 during
this period;
(6A)(14) "Other
revenue base amount," for school districts not utilizing the
alternative local need calculation is the amount of funds
apportioned to each school district pursuant to §§ 10-33-24,
10-35-21
as provided by subdivision (6B)(15),
10-36-10,
10-43-77,
11-7-73,
13-13-4,
and 23A-27-25,
calculated as follows:
(a) Beginning on July 1, 2017,
equals the greatest of the amounts of the funds apportioned to each
school district pursuant to §§ 10-33-24,
10-35-21
as provided by subdivision (6B)(15),
10-36-10,
10-43-77,
11-7-73,
13-13-4,
and 23A-27-25
for school fiscal years 2013, 2014, and 2015;
(b) Beginning on July 1, 2018, multiply eighty percent times subsection (a);
(c) Beginning on July 1, 2019, multiply sixty percent times subsection (a);
(d) Beginning on July 1, 2020, multiply forty percent times subsection (a);
(e) Beginning on July 1, 2021, multiply twenty percent times subsection (a); and
(f) Beginning on July 1, 2022,
is zero.;
For school districts utilizing the alternative local need calculation, the other revenue base amount is zero until such time the school district chooses to no longer utilize the alternative local need calculation. At that time, the other revenue base amount is calculated as defined above.
For a school district created or reorganized after July 1, 2016, the other revenue base amount is the sum of the other revenue base amount for each district before reorganization, and the new school district may not utilize the alternative local need calculation.
In the case of the dissolution
and annexation of a district, the other revenue base amount of the
dissolved school district will be prorated based on the total number
of students in the fall enrollment as defined in subdivision (2A)(2)
who attend each district to which area of the dissolved district
were annexed to in the first year of reorganization. The amount
apportioned for each district will be added to the annexed
districts' other revenue base;
(6B)(15) "Wind
energy tax revenue," any wind energy tax revenue apportioned to
school districts pursuant to § 10-35-21
from a wind farm producing power for the first time before July 1,
2016, shall be considered local effort pursuant to subdivision
(6)(13)
and other revenue base amount pursuant to subdivision (6A)(14).
However, any wind energy tax revenue apportioned to a school
district from a wind farm producing power for the first time after
June 30, 2016, one hundred percent shall be retained by the school
district to which the tax revenue is apportioned for the first five
years of producing power, eighty percent for the sixth year, sixty
percent for the seventh year, forty percent for the eighth year,
twenty percent for the ninth year, and zero percent thereafter;
(7)(16) "Per
student equivalent," for funding calculations that are
determined on a per student basis, the per student equivalent is
calculated as follows:
(a) Multiply the target teacher compensation times the sum of one plus the overhead rate; and
(b) Divide subsection (a) by 15;
(8)(17) "Monthly
cash balance," the total amount of money for each month in the
school district's general fund, calculated by adding all deposits
made during the month to the beginning cash balance and deducting
all disbursements or payments made during the month;
(9)(18) "General
fund base percentage," is determined as follows:
(a) Forty percent for a school
district with a fall enrollment as defined in subdivision (2A)(2)
of two hundred or less;
(b) Thirty percent for a school
district with fall enrollment as defined in subdivision (2A)(2)
of more than two hundred but less than six hundred; and
(c) Twenty-five percent for a
school district with fall enrollment as defined in subdivision
(2A)(2)
greater than or equal to six hundred.
When determining the general
fund base percentage, the secretary of the Department of Education
shall use the lesser of the school district's fall enrollment as
defined in subdivision (2A)(2)
for the current school year or the school district's fall enrollment
from the previous two years;
and
(10)(19) "Allowable
general fund cash balance," the general fund base percentage
multiplied by the district's general fund expenditures in the
previous school year.
Section 5. That § 13-13-71 be AMENDED.
13-13-71. Equalizing increase in local effort with increase in need.
If local effort increases on a
statewide aggregate basis by a greater percentage than local need on
a statewide aggregate basis from any one year to the next, for the
following year each of the levies specified in subdivision
13-13-10.1(6)
13-13-10.1(13)
shall be reduced proportionally so that the percentage increase in
local effort on a statewide aggregate basis equals the percentage
increase in need on a statewide aggregate basis.
Section 6. That § 13-13-73 be AMENDED.
13-13-73. Calculation of state aid for each school district.
No later than July 1, 2016, a school district shall notify the secretary of education in writing as to whether the school district's state aid is to be calculated using the alternative local need calculation. If a school district chooses the alternative local need calculation, the school district shall notify the secretary in writing no later than July first of each subsequent fiscal year as to whether to continue to use the alternative local need calculation for that fiscal year. If a school district chooses not to use the alternative local need calculation, the school district may not use that calculation in any subsequent school year. The secretary of the Department of Education shall compute state aid to education for each school district according to the following calculations:
(1) For school districts not utilizing the alternative local need calculation, state aid is local need as defined in § 13-13-10.1 minus local effort, or zero if the calculation is a negative number;
(2) For school districts
utilizing the alternative local need calculation, state aid is the
alternative local need as defined in subdivision
13-13-10.1(5B)
13-13-10.1(12)
minus local effort, or zero if the calculation is a negative number;
(3) If the state aid appropriation for the general support of education is in excess of the entitlement provided for in this section and the entitlement provided for in § 13-13-85, the excess shall be used to fund any shortfall of the appropriation as provided for in § 13-37-36.3. The secretary shall report to the Governor by January seventh of each year, the amount of state aid necessary to fully fund the general aid formula in the current year. If a shortfall in the state aid appropriation for general education exists that cannot be covered by § 13-37-45, the Governor shall inform the Legislature and provide a proposal to eliminate the shortfall.
Section 7. That § 13-13-11 be AMENDED.
13-13-11. Purpose and policy of general school aid.
It is the purpose of §§ 13-13-10.1 to 13-13-41, inclusive, to establish a procedure for the distribution of state funds to local school districts. The following subdivisions are hereby declared to be the policy of this state:
(1) Education is a state and
local function.;
(2) No one source of taxation
should bear an excessive burden of the costs of education.;
(3) In order to provide
reasonable equality in school tax rates among the various school
districts in the state and to provide reasonable equality of
educational opportunity for all the children in the state, the state
shall assist in giving a basic educational opportunity to each
student by contributing state aid to education funds toward the
support of
his
the student's
educational program.;
(4) State aid to education funds
should be distributed to school districts in accordance with the
formula as provided in §§ 13-13-10.1
to
13-13-46
13-13-41,
inclusive.;
(5) A minimum of twenty-five
percent of the total general fund expenditures of the school
districts of the state for the preceding school fiscal year should
be distributed annually to school districts as state aid to
education funding.;
and
(6) No school district should be
eligible to receive state aid
which
that does not
provide an educational program
which
that meets the
requirements and standards as provided in §§ 13-13-10.1
to 13-13-41,
inclusive.
Section 8. That § 13-25-9 be AMENDED.
13-25-9. Authority to close or vacate school.
If any school governing body,
or other agency operating a school,
fails to comply with the order provided by § 13-25-7,
and fails to
appeal from the order
demand a hearing,
as is provided in
§ 13-25-8
§ 13-25-8.1,
after the time for appeal
the
hearing demand has
expired, or the time to comply with the order has passed, whichever
is later, the
State Fire Marshal
state fire marshal
may immediately close the school or school facility to further use
or occupancy, and may vacate and place out of service
said
the school or
school building, or facility until such time as
its
the order's
requirements are fulfilled.
Section 9. That § 13-25-12 be AMENDED.
13-25-12. Fire alarm provisions--Exemption by state fire marshal.
If the state fire marshal finds
that due to the remote location of the public school attendance
center the response time of the local fire department makes saving
the attendance center from extensive fire damage unlikely, he may
exempt certain remote small public school attendance centers from
the provisions of §§ 13-25-11 and 13-25-8
§ 13-25-11.
Section 10. That § 13-33A-8 be AMENDED.
13-33A-8. Immunity from liability--Administering epinephrine.
No school district,
administrator, school board, school nurse, or designated school
personnel that possess or make available epinephrine auto-injectors
pursuant to §§ 13-33A-4
to
13-33-8
13-33A-8,
inclusive; authorized health care provider that prescribes
epinephrine auto-injectors to a school; or a health care
professional that provides training pursuant to § 13-33A-7
may be held liable for any injury or related damage that results
from the administration of, self-administration of, or failure to
administer an epinephrine auto-injector that may constitute ordinary
negligence. This immunity does not apply to an act or omission
constituting gross, willful, or wanton negligence. The
administration of an epinephrine auto-injector in accordance with
the provisions of §§ 13-33A-4
to
13-33-8
13-33A-8,
inclusive, does not constitute the practice of medicine. The
immunity from liability provided under this section is in addition
to, not in lieu of, that provided in any other law.
Section 11. That § 13-36-4 be AMENDED.
13-36-4. High school interscholastic activities--Delegation of control to association.
The school board of a public
school, approved and accredited by the secretary of the Department
of Education, may delegate, on a year to year basis, the control,
supervision, and regulation of any high school interscholastic
activities to any association
which
that is
voluntary and nonprofit if:
(1) Membership in the association is open to all high schools approved and accredited pursuant to this section, including any school that allows participation by students receiving alternative instruction as set forth in § 13-27-3, pursuant to the provisions of this title;
(2) The constitution, bylaws, and rules of the association are subject to ratification by the school boards of the member public school districts and the governing boards of the member nonpublic schools and include a provision for a proper review procedure and review board;
(3) The report of any audit
required by
§ 13-26-5
§ 13-36-5
is made public on the association's website as well as the
Department of Legislative Audit's website;
(4) The association complies with the provisions of chapter 1-25 and chapter 1-27. However, the association, and its employees, meetings, and records, are afforded the same exemptions and protections as a political subdivision or public body is provided under chapter 1-25 and chapter 1-27; and
(5) The association shall report to the Government Operations and Audit Committee annually, or at the call of the chair.
The governing body of a
nonpublic school, approved and accredited by the secretary of the
Department of Education, or AdvancED, or the Association of
Christian Schools International (ACSI), or the Association of
Classical and Christian Schools (ACCS), or Christian Schools
International (CSI), or National Lutheran School Accreditation
(NLSA), or Commission for Oceti Sakowin Accreditation (COSA), or
Wisconsin Evangelical Lutheran Synod School Accreditation, may also
delegate, on a year to year basis, the control, supervision, and
regulation of any high school interscholastic activities to any
association
which
that is
voluntary and nonprofit if membership in such association is open to
all high schools approved and accredited pursuant to this section,
including any school that allows participation by students receiving
alternative instruction as set forth in § 13-27-3,
pursuant to the provisions of this title, and if the constitution,
bylaws, and rules of the association are subject to ratification by
the school boards of the member public school districts and the
governing boards of the member nonpublic schools and include a
provision for a proper review procedure and review board.
Any association
which
that complies
with this section may exercise the control, supervision, and
regulation of interscholastic activities, including interscholastic
athletic events of member schools. The association may promulgate
reasonable uniform rules, to make decisions and to provide and
enforce reasonable penalties for the violation of the rules.
Section 12. That § 13-36-14 be AMENDED.
13-36-14. Cause of action not created.
Sections
to §§ 13-36-9
to
13-35-13
13-36-13,
inclusive, do not create any liability for, or create any cause of
legal action against, a school, a school district, or any officer or
employee of a school or school district.
Section 13. That § 13-37-16 be AMENDED.
13-37-16. District tax levy for special education--School district special education fund.
For taxes payable in 2021, and
each year thereafter, the school board shall levy no more than one
dollar and sixty-eight and four-tenths cents per thousand dollars of
taxable valuation, as a special levy in addition to all other levies
authorized by law for the amount so determined to be necessary, and
the levy shall be spread against all of the taxable property of the
district. The proceeds derived from the levy shall constitute a
school district special education fund of the district for the
payment of costs for the special education of all children in need
of special education or special education and related services who
reside within the district pursuant to the provisions of
§§ 13-37-8.2 to 13-37-8.10
§§ 13-37-8.4 to 13-37-8.10,
inclusive. The levy in this section shall be based on valuations
such that the median level of assessment represents eighty-five
percent of market value as determined by the Department of Revenue.
The total amount of taxes that would be generated at the levy
pursuant to this section shall be considered local effort. Money in
the special education fund may be expended for the purchase or lease
of any assistive technology that is directly related to special
education and specified in a student's individualized education
plan. This section does not apply to real property improvements.
Section 14. That § 13-37-40.1 be AMENDED.
13-37-40.1. Certification required for funding.
A school district is not
eligible for funding from the money set aside in
§§ 13-37-38 to 13-37-40, inclusive,
§ 13-37-40
unless the school district certifies to the secretary of education
that its ending special education fund balance will not exceed ten
percent of its special education expenditures for the current fiscal
year.
Section 15. That § 13-37-44 be AMENDED.
13-37-44. Reduction of district's aid for special education for excess balance in fund.
A school district's state aid
for special education as calculated pursuant to § 13-37-36.1
shall be reduced by the amount
which
that its
ending special education fund balance exceeds twenty-five percent of
its special education expenditures for the prior fiscal year or one
hundred thousand dollars, whichever is greater, if the school
district did not receive money set aside in § 13-37-40
during the prior fiscal year; or the amount
which
that its
ending special education fund balance exceeds ten percent of its
special education expenditures for the prior fiscal year if the
school district received money set aside in
§§ 13-37-38 to 13-37-40, inclusive,
§ 13-37-40
during the prior fiscal year.
Section 16. That § 13-37-45 be AMENDED.
13-37-45. Allocation of undistributed appropriations.
Any funds appropriated as state
aid for special education
which
that are not
distributed according to § 13-37-36.3
or 13-37-43
shall be used to fund any shortfall of the appropriation provided
for in § 13-13-73.
The remaining funds shall be allocated by the secretary of the
Department of Education for the purposes specified in
§ 13-37-38, 13-37-39, or
§
13-37-40.
The secretary shall report to the Governor by January seventh of
each year, the amount of state aid necessary to fully fund the
special education formula in the current year. If a shortfall in the
state aid appropriation for special education exists that cannot be
covered by § 13-13-73,
the Governor shall inform the Legislature and provide a proposal to
eliminate the shortfall.
Section 17. That § 13-42-5.1 be AMENDED.
13-42-5.1. Use of institute funds--Vouchers and warrants.
The state institute fund,
formerly provided for by § 13-42-5,
shall be used for the purpose of writing and publishing bulletins,
accreditation rules, and materials essential to the school systems
of this state, and to support activities related to school
accreditation and teacher training and retention, and as otherwise
may be provided by law; and the state institute fund is hereby
appropriated for such purposes and shall be paid out upon warrants
drawn by the state auditor on duly itemized vouchers approved by the
secretary of the Department of Education.
Section 18. That § 13-13-73.6 be AMENDED.
13-13-73.6. Increases in teacher compensation.
The Department of Education shall calculate the following for each school district:
(1) The average teacher salary,
based on data collected pursuant to §§
13-8-47 and
13-3-51
and 13-8-47;
(2) The increase in local need
pursuant to § 13-13-10.1,
excluding any effect due to change in the school district's fall
enrollment and less the amount of revenue generated in school fiscal
year 2016
pursuant to § 13-10-6
as a percentage increase, from fiscal year 2016 to fiscal year 2017;
and
(3) The increase in average teacher compensation as a percentage increase, as defined in § 13-8-47, from fiscal year 2016 to fiscal year 2017.
For each school district, the
district's increase in average teacher compensation from fiscal year
2016 to 2017 shall be equal to at least eighty-five percent of the
district's increase in local need, as defined in subdivision (2),
from fiscal year 2016 to fiscal year 2017 and, notwithstanding any
negotiated agreement, at least eighty-five percent of the increase
in state aid to general education funding the school district
receives for fiscal year 2017,
less the amount of revenue generated in fiscal year 2016
pursuant to § 13-10-6,
shall be used to increase instructional salaries and benefits for
certified instructional staff.
If a district fails to comply with the requirements of this section, state aid to general education funding to the district in fiscal year 2018 shall be decreased by an amount equal to fifty percent of the amount calculated in subdivision (2). For fiscal years 2019, 2020, and 2021, if a district's average teacher compensation is less than the district's average teacher compensation in fiscal year 2017, state aid to general education funding to the district in the following fiscal year shall be reduced by an amount equal to five hundred dollars for each teacher employed in the school district.
A school district may request a waiver from any penalty imposed under this section from the School Finance Accountability Board.
Section 19. That § 13-6-85.2 be AMENDED.
13-6-85.2. Amendment, addition, or deletion of information--Time limits.
The information required
in §§ 13-6-85 and 13-6-85.1
as part of a petition for a minor boundary change must be final with
no amendments, additions, or deletions. If the petition is amended
or the information to support it is added or deleted in any way, the
requirement for a school board to approve or disapprove the petition
by resolution within sixty days of receipt
if
of the
petition is suspended. The sixty-day timeframe begins to run again
beginning with the date of the amendment, addition, or deletion of
information to the original petition.
The provisions of SL 2015, ch 83 apply to any petition delivered to
a school board within sixty days of July 1, 2015.
Section 20. That § 13-19-2.1 be REPEALED.
13-19-2.1. Promissory note in anticipation of special education funds limited.
Section 21. That § 13-37-24.3 be REPEALED.
13-37-24.3. Notice of amount of entitlement.
Section 22. That § 3-23-1.1 be AMENDED.
3-23-1.1. Definitions.
Terms used in this chapter mean:
(1) "Board member," an elected or appointed member of the governing board;
(2) "Cooperative education
service unit," a legal entity created pursuant to §§ 13-5-31
through
to 13-5-33,
inclusive, including subcontractors, agents or assigns of the
cooperative education service unit;
(3) "Disgorgement," the act of giving up on demand or by legal compulsion something that was obtained by illegal or unethical acts; and
(4) "Local
service agency," an entity created pursuant to § 13-15A-1;
and
(5) "School
district," a school district as defined in § 13-5-1.
Section 23. That § 3-23-6 be AMENDED.
3-23-6. School districts and cooperative education service units--Officials with contract authority--Prohibitions on interest in or direct benefit from contract.
No board member, business
manager, chief financial officer, superintendent, chief executive
officer, or other person with the authority to enter into a contract
or spend money in an amount greater than five thousand dollars of a
local service agency,
school district, cooperative education service unit, or jointly
governed education service entity that receives money from or
through the state may have an interest in a contract nor receive a
direct benefit from a contract in amount greater than five thousand
dollars or multiple contracts in an amount greater than five
thousand dollars with the same party within a twelve-month period to
which the
local service agency,
school district,
or cooperative education service unit is a party except as provided
in § 3-23-8.
Section 24. That § 3-23-7 be AMENDED.
3-23-7. Officials with contract authority--Description of direct benefit from contract.
A person described in § 3-23-6 derives a direct benefit from a contract if the person, the person's spouse, or any other person with whom the person lives and commingles assets:
(1) Is a party to or intended
beneficiary of any contract held by the
local service agency,
school district,
or cooperative education service unit;
(2) Has more than a five percent
ownership interest in an entity that is a party to any contract held
by the
local service agency,
school district,
or cooperative education service unit;
(3) Acquires property under the contract; or
(4) Will receive compensation,
commission, promotion, or other monetary benefit directly
attributable to any contract with the
local service agency,
school district,
or cooperative education service unit.
Section 25. That § 3-23-7.1 be AMENDED.
3-23-7.1. Officials with contract authority--Description of interest in contract.
A person described in § 3-23-6 has an interest in a contract if the person, the person's spouse, or any other person with whom the person lives and commingles assets:
(1) Is employed by a party to
any contract with the
local service agency,
school district,
or cooperative education service unit; or
(2) Receives more than nominal compensation or reimbursement for actual expenses for serving on the board of directors of an entity that derives income or commission directly from the contract or acquires property under the contract.
Section 26. That § 3-23-7.2 be AMENDED.
3-23-7.2. Officials with contract authority--Exclusions from interest in or direct benefit from contract.
A person described in § 3-23-6 does not derive a direct benefit from or have an interest in a contract:
(1) Based solely on the value associated with the person's publicly-traded investments or holdings, or the investments or holdings of any other person with whom the board member, business manager, chief financial officer, superintendent, or chief executive officer lives or commingles assets;
(2) By participating in a vote or a decision in which the person's only interest arises from an act of general application;
(3) Based on the person
receiving income as an employee or independent contractor of a party
with whom the
local service agency,
school district,
or cooperative education service unit has a contract, unless the
person receives compensation or a promotion directly attributable to
the contract, or unless the person is employed by the party as a
board member, executive officer, or other person working for the
party in an area related to the contract;
(4) If the contract is for the sale of goods or services, or for maintenance or repair services, in the regular course of business at a price at or below a price offered to all customers;
(5) If the contract is subject to a public bidding process;
(6) If the contract is with the official depository as set forth in § 6-1-3;
(7) Based solely on the person receiving nominal income or compensation, a per diem authorized by law or reimbursement for actual expenses incurred; or
(8) If the contract or multiple
contracts with the same party within a twelve-month period with whom
the
local service agency,
school district,
or cooperative education service unit contracts is
in an amount
less than five thousand dollars.
Section 27. That § 3-23-8 be AMENDED.
3-23-8. Officials with contract authority--Authorizing interest in or direct benefit from contract.
A
local service agency,
school district,
or cooperative education service unit,
may authorize a person described in § 3-23-6
to derive a direct benefit from a contract if:
(1) The person has provided full written disclosure to the agency, district, or unit governing board of all parties to the contract, the person's role in the contract, the purpose or objective of the contract, the consideration or benefit conferred or agreed to be conferred upon each party, and the duration of the contract;
(2) The governing board finds that the terms of the contract are fair, reasonable, and not contrary to the public interest; and
(3) Any request for authorization or governing board action are public records. The official minutes of the governing board shall include any governing board action on each request for authorization and shall be filed with the auditor-general and attorney general.
A person described in § 3-23-6 who has an interest in a contract pursuant to § 3-23-7.1 shall disclose the existence of a contract in which the person has an interest and the person's role in the contract but no governing board authorization is required for the person to have an interest in the contract. Disclosure shall also be made at the annual reorganization meeting if the contract extends into consecutive fiscal years. The interest disclosure shall be included in the official minutes of the governing board.
Any person receiving a direct
benefit from a contract and requesting an authorization pursuant to
§ 3-23-8
shall make the request prior to entering into any contract that
requires disclosure or within forty-five days after entering into
the contract that requires disclosure. Any authorization by the
governing board requires no further disclosure or authorization
unless the contract extends into consecutive fiscal years. If the
contract extends into consecutive fiscal years, disclosure shall be
made annually at the annual reorganization meeting but no new
authorization is required. If the entity rejects any request for
authorization, the contract is voidable and subject to disgorgement
pursuant to § 3-23-9
or the person may resign from the
local service agency,
school district,
or cooperative education service unit.
No board member of a
local service agency,
school district,
or cooperative education service unit may participate in or vote
upon a decision of a
local service agency,
school district,
or cooperative education service unit relating to a matter in which
the member derives a direct benefit.
Section 28. That § 3-23-8.1 be AMENDED.
3-23-8.1. Written conflict of interest policy.
Each
local service agency,
school district,
or cooperative education service unit shall develop a written
conflict of interest policy, including any disclosure and
authorization form that includes the list of any disclosable
interest in contracts or direct benefits covered by this chapter.
Signed February 12, 2021
