Authorize the provision of charitable contributions to a scholarship granting organization.
Summary
HB1306 creates a new framework in Title 13 allowing charitable donations to be made to registered scholarship granting organizations. These organizations would be nonprofit entities exempt from federal taxation, registered with the Department of Education, and contractually required to distribute scholarships to eligible students who are South Dakota residents, under age 19, and from households at or below 300% of area median income. The bill is aimed at students who are not enrolled full-time in a public school district and includes students receiving alternative instruction, nonpublic school students, and microschool students.
The scholarships could be used for tuition and fees at accredited nonpublic schools or microschools, approved virtual coursework not provided by a school district, curricula and instructional materials, educational technology, transportation to school or higher education, and standardized college entrance exam fees. The scholarship amount would be capped at the lesser of 82.5% of the state’s per-student equivalent share or the student’s actual eligible expenses. The Department of Education would be required to adopt rules governing organization registration, scholarship applications, distribution procedures, verification of spending, appeals, and recovery of improperly used funds.
Impact
The bill would add a new chapter to Title 13 and create a state-regulated charitable scholarship donation system for private education expenses. It would not directly appropriate state funds, but it would establish eligibility standards, reporting requirements, and oversight by the Department of Education for scholarship granting organizations. The measure also affects nonpublic schools, microschools, families using alternative instruction, and donors who want to support private education through tax-exempt scholarship organizations.
Sentiment
The available voting history suggests the bill had no recorded opposition at the committee vote shown, passing 14-0 before being deferred to the 41st legislative day. With no committee transcript available, there is limited direct evidence of debate, but the structure of the bill indicates a policy approach generally supportive of private-school and alternative-education scholarship access. The lack of nay votes suggests at least procedural agreement in committee, though the deferral indicates the bill was not immediately advanced to final passage at that point.
Contention
The main points of potential contention are likely to be the bill’s support for private and alternative education using scholarship donations, the income-based eligibility threshold, and the administrative oversight placed on scholarship organizations. Supporters would likely emphasize expanded educational choice and assistance for lower- and middle-income families, while critics may focus on whether the program diverts attention from public schools, how effectively the Department of Education can monitor compliance, and whether the 10% administrative cap and reimbursement/recovery rules are sufficient to prevent misuse.