SF5124

Purpose

This bill would authorize Koochiching County to divide Independent School District No. 363 (South Koochiching) into separate, independent school districts. It lays out the process, timelines, and governance for how a division could happen, including how assets, debts, and students would be handled, and how new district boards would be elected.

Main Provisions

• Initiating the division

  • A petition to divide the district can be filed by at least a specified percentage of eligible voters and must be sent to the county board.
  • The petition must be filed with the county auditor by July 1, 2027.
  • Petition contents include the petitioners’ desire to divide, identification of the district, and reasons supporting the petition (advisory recommendations on territory disposition).

• Petition circulation and hearing

  • Circulators must attach affidavits affirming signer eligibility.
  • The auditor presents the petition to the county board, which must set a hearing date within 20 to 60 days.
  • Notice of the hearing must be given by posted, published, and mailed notices to affected parties.

• County board decision (order for division)

  • Within 90 days after the hearing, the county board may dismiss the proceedings or issue an order providing for the division.
  • If no order is issued in time, the proceedings are dismissed.
  • The division order must describe the division, show how territory will be allocated, include consideration of debt and loans, and set an effective date (usually July 1 of an odd-numbered year unless an alternate date is agreed in writing with the teachers’ exclusive representative and approved by the state.

• State education department involvement

  • The order must be prepared with input from the Commissioner of Education and must also be approved by the Commissioner.

• Local district actions and voter approval

  • The existing district’s board has up to 60 days to approve or disapprove the division order.
  • If approved, the order becomes final and no vote is required.
  • If not approved or if required, voters in the district proposed for division vote on the order in a district election.
  • The voter ballot asks whether the division order should be approved.
  • If a majority votes in favor, the order becomes final on the date stated; if not, the proceedings are dismissed.

• Assets, liabilities, and property

  • After final approval, the Commissioner of Education issues an order distributing current assets and liabilities (real and personal property transfers to the newly created district).
  • All real and personal property located in the new district passes to the new district on the effective date.
  • Taxable property in the new district is taxed to pay existing debt of the preexisting district in proportion to the new district’s net tax capacity share.

• Governance and elections in the divided districts

  • A special election is held in each new district to elect a six-member board for four-year terms.
  • The first three directors’ terms expire after the first regularly scheduled election more than six months after the initial election; the remaining three terms expire after the second regularly scheduled election more than six months later.
  • Election logistics (notice, ballots, polling places, etc.) are handled by the county auditor, with standard procedures for filing candidacy and certifying results.

• Staffing and negotiations

  • The school boards of the divided districts may negotiate plans for assigning teachers and nonlicensed employees between the new districts.

• Funding and aid

  • Compensatory and other aid amounts for each site in the divided districts would be calculated using data from the current fiscal year, with the commissioner allowed to recalculate other aid amounts as needed.

Significant Changes to Existing Law

• Establishes a formal, state-supervised framework to divide a local school district into two independent districts, including petitioning, hearings, voter approvals, and the state’s role in approving the division.
• Creates a mechanism to allocate assets, liabilities, and bonded debt between new districts, and to transfer property title accordingly.
• Introduces a defined process for the election and terms of a six-member board in each new district.
• Sets rules for how staffing (teachers and nonlicensed employees) can be planned and negotiated across the divided districts.
• Requires involvement and approval by the Commissioner of Education in key steps of the division process.
• Ties funding and aid calculations to the current fiscal year data and provides for adjustments by the commissioner.

Implications to Note

• The division creates two separate districts with potentially different tax bases and debt obligations.
• Property taxes and bonded debt are reallocated based on each new district’s net tax capacity.
• Governance shifts from one district board to two new boards, with new election timelines and terms.
• State involvement is substantial, requiring commissioner approvals and calculations for funding and assets/liabilities.

Relevant Terms - Independent School District No. 363 South Koochiching - Division of the district - Order for division - Effective date - Assets and liabilities - Real and personal property - Bonded debt - Net tax capacity - Current assets and liabilities - Commissioner of Education - Special election - Voter approval - Exclusive representative of teachers - Nonlicensed employees - Compensatory aid - Current fiscal year - Disposition of territory - Graduation of terms for new board members