This bill amends existing provisions related to the School Finance Accountability Board within the Department of Education in South Dakota. It establishes that the board, composed of five members appointed by the Governor, has the authority to waive reductions in state aid for general education imposed on school districts under specific circumstances. The board can condition waivers on the school district maintaining a general fund monthly cash balance below the allowable limit for three consecutive years or increasing average teacher compensation to meet state minimum salary requirements. Additionally, the board is tasked with promulgating rules to outline the waiver request process and factors to consider, including the impact of employee retirements.

The bill also modifies sections 13-13-73.5 and 13-13-73.9, which govern the reduction of state aid based on a school district's cash balance and teacher compensation. It clarifies that if a district's lowest general fund monthly cash balance exceeds the allowable amount, the Department of Education must reduce state aid accordingly, while also providing a three-year exemption for newly created or reorganized districts. Furthermore, it stipulates that if a district fails to increase average teacher compensation or meet minimum salary standards, state aid will be decreased by $500 for each full-time equivalent teacher in the following fiscal year.

Statutes affected:
Introduced, 02/02/2026: 1-45-38, 13-13-73.5, 13-13-73.9
House Appropriations Engrossed, 02/20/2026: 1-45-38, 13-13-73.5, 13-13-73.9
Enrolled, 03/10/2026: 1-45-38, 13-13-73.5, 13-13-73.9