First Substitute H.B. 84

Representative Craig Hall proposes the following substitute bill:


             1     
SCHOOL DISTRICT AMENDMENTS

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Craig Hall

             5     
Senate Sponsor: Wayne A. Harper

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends certain provisions related to the creation of a new school district.
             10      Highlighted Provisions:
             11          This bill:
             12          .    provides that a qualifying city or interlocal agreement participant may not submit
             13      for voter approval a measure to create a new school district if the results of a
             14      feasibility study show that the five-year projected average annual revenue of the
             15      proposed new school district exceeds the five-year projected average annual cost of
             16      the proposed new school district by more than 5%;
             17          .    defines terms; and
             18          .    makes technical and conforming changes.
             19      Money Appropriated in this Bill:
             20          None
             21      Other Special Clauses:
             22          None
             23      Utah Code Sections Affected:
             24      AMENDS:
             25           53A-2-117 , as last amended by Laws of Utah 2011, Chapters 300 and 369


             26           53A-2-118 , as last amended by Laws of Utah 2010, Chapter 230
             27           53A-2-118.1 , as last amended by Laws of Utah 2011, Chapter 300
             28           53A-2-120 , as last amended by Laws of Utah 2011, Chapter 295
             29     
             30      Be it enacted by the Legislature of the state of Utah:
             31          Section 1. Section 53A-2-117 is amended to read:
             32           53A-2-117. Definitions.
             33          As used in Sections 53A-2-117 through 53A-2-122 , except Section 53A-2-118.4 :
             34          (1) "Allocation date" means:
             35          (a) June 30 of the second calendar year after the local school board general election
             36      date described in Subsection 53A-2-118.1 [(3)](5)(a)(i); or
             37          (b) another date that the transition teams under Section 53A-2-118.1 mutually agree to.
             38          (2) "Canvass date" means the date of the canvass of an election under Subsection
             39      53A-2-118 (5) at which voters approve the creation of a new school district under Section
             40      53A-2-118.1 .
             41          (3) "Creation election date" means the date of the election under Subsection
             42      53A-2-118 (5) at which voters approve the creation of a new school district under Section
             43      53A-2-118.1 .
             44          (4) "Divided school district, "existing district," or "existing school district" means a
             45      school district from which a new district is created.
             46          (5) "New district" or "new school district" means a school district created under
             47      Section 53A-2-118 or 53A-2-118.1 .
             48          (6) "Remaining district" or "remaining school district" means an existing district after
             49      the creation of a new district.
             50          Section 2. Section 53A-2-118 is amended to read:
             51           53A-2-118. Creation of new school district -- Initiation of process -- Procedures
             52      to be followed.
             53          (1) A new school district may be created from one or more existing school districts, as
             54      provided in this section.
             55          (2) (a) The process to create a new school district may be initiated:
             56          (i) through a citizens' initiative petition;


             57          (ii) at the request of the board of the existing district or districts to be affected by the
             58      creation of the new district; or
             59          (iii) at the request of a city within the boundaries of the school district or at the request
             60      of interlocal agreement participants, pursuant to Section 53A-2-118.1 .
             61          (b) (i) Each petition submitted under Subsection (2)(a)(i) shall be signed by qualified
             62      electors residing within the geographical boundaries of the proposed new school district equal
             63      in number to at least 15% of the number of electors in the area who voted for the office of
             64      governor at the last regular general election.
             65          (ii) Each request or petition submitted under Subsection (2)(a) shall:
             66          (A) be filed with the clerk of each county in which any part of the proposed new school
             67      district is located;
             68          (B) indicate the typed or printed name and current residence address of each governing
             69      board member making a request, or registered voter signing a petition, as the case may be;
             70          (C) describe the proposed new school district boundaries; and
             71          (D) designate up to five signers of the petition or request as sponsors, one of whom
             72      shall be designated as the contact sponsor, with the mailing address and telephone number of
             73      each.
             74          (c) A signer of a petition under Subsection (2)(a)(i) may withdraw or, once withdrawn,
             75      reinstate the signer's signature at any time before the filing of the petition by filing a written
             76      withdrawal or reinstatement with the county clerk.
             77          (d) The process under Subsection (2)(a)(i) may only be initiated once during any
             78      four-year period.
             79          (e) A new district may not be formed pursuant to Subsection (2)(a) if the student
             80      population of the proposed new district is less than 3,000 or the existing district's student
             81      population would be less than 3,000 because of the creation of the new school district.
             82          (f) Within 45 days after the filing of a petition under Subsection (2)(a)(i) or five
             83      business days after the filing of a request under Subsection (2)(a)(ii) or (iii), the clerk of each
             84      county with which a request or petition is filed shall:
             85          (i) determine whether the request or petition complies with Subsections (2)(a), (b), (d),
             86      and (e), as applicable; and
             87          (ii) (A) if the county clerk determines that the request or petition complies with the


             88      applicable requirements:
             89          (I) certify the request or petition and deliver the certified request or petition to the
             90      county legislative body; and
             91          (II) mail or deliver written notification of the certification to the contact sponsor; or
             92          (B) if the county clerk determines that the request or petition fails to comply with any
             93      of the applicable requirements, reject the request or petition and notify the contact sponsor in
             94      writing of the rejection and reasons for the rejection.
             95          (g) If the county clerk fails to certify or reject a request or petition within the time
             96      specified in Subsection (2)(f), the request or petition shall be considered to be certified.
             97          (h) (i) If the county clerk rejects a request or petition, the request or petition may be
             98      amended to correct the deficiencies for which it was rejected and then refiled.
             99          (ii) Subsection (2)(d) does not apply to a request or petition that is amended and refiled
             100      after having been rejected by a county clerk.
             101          (i) If a county legislative body receives a request from a school board under Subsection
             102      (2)(a)(ii) or a petition under Subsection (2)(a)(i) which is certified by the county clerk on or
             103      before December 1:
             104          (i) the county legislative body shall appoint an ad hoc advisory committee, as provided
             105      by Subsection (3), on or before January 1;
             106          (ii) the ad hoc advisory committee shall submit its report and recommendations to the
             107      county legislative body, as provided by Subsection (3), on or before July 1; and
             108          (iii) if the legislative body of each county with which a request or petition is filed
             109      approves a proposal to create a new district, the proposal shall be submitted to the respective
             110      county clerk to be voted on by the electors of each existing district at the regular general or
             111      municipal general election held in November.
             112          (3) (a) The legislative body of each county with which a request or petition is filed
             113      shall appoint an ad hoc advisory committee to review and make recommendations on a request
             114      for the creation of a new school district submitted under Subsection (2)(a)(i) or (ii).
             115          (b) The advisory committee shall:
             116          (i) seek input from:
             117          (A) those requesting the creation of the new school district;
             118          (B) the school board and school personnel of each existing school district;


             119          (C) those citizens residing within the geographical boundaries of each existing school
             120      district;
             121          (D) the State Board of Education; and
             122          (E) other interested parties;
             123          (ii) review data and gather information on at least:
             124          (A) the financial viability of the proposed new school district;
             125          (B) the proposal's financial impact on each existing school district;
             126          (C) the exact placement of school district boundaries; and
             127          (D) the positive and negative effects of creating a new school district and whether the
             128      positive effects outweigh the negative if a new school district were to be created; and
             129          (iii) make a report to the county legislative body in a public meeting on the committee's
             130      activities, together with a recommendation on whether to create a new school district.
             131          (4) For a request or petition submitted under Subsection (2)(a)(i) or (2)(a)(ii):
             132          (a) The county legislative body shall provide for a 45-day public comment period on
             133      the report and recommendation to begin on the day the report is given under Subsection
             134      (3)(b)(iii).
             135          (b) Within 14 days after the end of the comment period, the legislative body of each
             136      county with which a request or petition is filed shall vote on the creation of the proposed new
             137      school district.
             138          (c) The proposal is approved if a majority of the members of the legislative body of
             139      each county with which a request or petition is filed votes in favor of the proposal.
             140          (d) If the proposal is approved, the legislative body of each county with which a
             141      request or petition is filed shall submit the proposal to the county clerk to be voted on:
             142          (i) by the legal voters of each existing school district;
             143          (ii) in accordance with the procedures and requirements applicable to a regular general
             144      election under Title 20A, Election Code; and
             145          (iii) at the next regular general election or municipal general election, whichever is
             146      first.
             147          (e) Creation of the new school district shall occur if a majority of the electors within
             148      both the proposed school district and each remaining school district voting on the proposal vote
             149      in favor of the creation of the new district.


             150          (f) Each county legislative body shall comply with the requirements of Section
             151      53A-2-101.5 .
             152          (g) If a proposal submitted under Subsection (2)(a)(i) or (ii) to create a new district is
             153      approved by the electors, the existing district's documented costs to study and implement the
             154      proposal shall be reimbursed by the new district.
             155          (5) (a) If a proposal submitted under Subsection (2)(a)(iii) is certified under Subsection
             156      (2)(f) or (g), the legislative body of each county in which part of the proposed new school
             157      district is located shall submit the proposal to the respective clerk of each county to be voted
             158      on:
             159          (i) by the legal voters residing within the proposed new school district boundaries;
             160          (ii) in accordance with the procedures and requirements applicable to a regular general
             161      election under Title 20A, Election Code; and
             162          (iii) at the next regular general election or municipal general election, whichever is
             163      first.
             164          (b) (i) If a majority of the legal voters within the proposed new school district
             165      boundaries voting on the proposal at an election under Subsection (5)(a) vote in favor of the
             166      creation of the new district:
             167          (A) each county legislative body shall comply with the requirements of Section
             168      53A-2-101.5 ; and
             169          (B) upon the lieutenant governor's issuance of the certificate under Section 67-1a-6.5 ,
             170      the new district is created.
             171          (ii) Notwithstanding the creation of a new district as provided in Subsection
             172      (5)(b)(i)(B):
             173          (A) a new school district may not begin to provide educational services to the area
             174      within the new district until July 1 of the second calendar year following the school board
             175      general election date described in Subsection 53A-2-118.1 [(3)](5)(a)(i);
             176          (B) a remaining district may not begin to provide educational services to the area
             177      within the remaining district until the time specified in Subsection (5)(b)(ii)(A); and
             178          (C) each existing district shall continue, until the time specified in Subsection
             179      (5)(b)(ii)(A), to provide educational services within the entire area covered by the existing
             180      district.


             181          Section 3. Section 53A-2-118.1 is amended to read:
             182           53A-2-118.1. Proposal initiated by a city or interlocal agreement participants to
             183      create a school district -- Boundaries -- Election of local school board members --
             184      Allocation of assets and liabilities -- Startup costs -- Transfer of title.
             185          (1) As used in this section a "qualifying city" means a city with a population of at least
             186      50,000, as determined by the lieutenant governor using the process described in Subsection
             187      67-1a-2 (3).
             188          [(1)] (2) (a) [After conducting a feasibility study, a city with a population of at least
             189      50,000, as determined by the lieutenant governor using the process described in Subsection
             190      67-1a-2 (3),] A qualifying city may, by majority vote of the legislative body, submit for voter
             191      approval a measure to create a new school district with boundaries contiguous with that city's
             192      boundaries, in accordance with Section 53A-2-118 .
             193          (b) Prior to submitting for voter approval a measure to create a new school district, a
             194      qualifying city shall conduct a feasibility study in accordance with Subsection (4).
             195          (c) A qualifying city may not submit for voter approval a measure to create a new
             196      school district if the results of a feasibility study described in Subsection (2)(b) show that the
             197      five-year projected average annual revenue calculated under Subsection (4)(a) exceeds the
             198      five-year projected average annual cost under Subsection (4)(b) by more than 5%.
             199          [(b)] (d) (i) [The] Subject to Subsections (2)(c) and (4), the determination of all matters
             200      relating to the scope, adequacy, and other aspects of a feasibility study [under Subsection
             201      (1)(a)] is within the exclusive discretion of the city's legislative body.
             202          (ii) An inadequacy of a feasibility study under Subsection [(1)(a)] (4) may not be the
             203      basis of a legal action or other challenge to:
             204          (A) an election for voter approval of the creation of a new school district; or
             205          (B) the creation of the new school district.
             206          [(2)] (3) (a) By majority vote of the legislative body, a city of any class, a town, or a
             207      county, may, together with one or more other cities, towns, or the county enter into an
             208      interlocal agreement, in accordance with Title 11, Chapter 13, Interlocal Cooperation Act, for
             209      the purpose of submitting for voter approval a measure to create a new school district.
             210          (b) (i) In accordance with Section 53A-2-118 , interlocal agreement participants under
             211      Subsection [(2)] (3)(a) may submit a proposal for voter approval if:


             212          (A) the interlocal agreement participants conduct a feasibility study, in accordance with
             213      Subsection (4), prior to submitting the proposal [to the county] for voter approval;
             214          (B) the results of the feasibility study described in Subsection (3)(b)(i)(A) show that
             215      the five-year projected average annual revenue calculated under Subsection (4)(a) does not
             216      exceed the five-year projected average annual cost calculated under Subsection (4)(b) by more
             217      than 5%;
             218          [(B)] (C) the combined population within the proposed new school district boundaries
             219      is at least 50,000;
             220          [(C)] (D) the new school district boundaries:
             221          (I) are contiguous;
             222          (II) do not completely surround or otherwise completely geographically isolate a
             223      portion of an existing school district that is not part of the proposed new school district from
             224      the remaining part of that existing school district, except as provided in Subsection [(2)]
             225      (3)(d)(iii);
             226          (III) include the entire boundaries of each participant city or town, except as provided
             227      in Subsection [(2)] (3)(d)(ii); and
             228          (IV) subject to Subsection [(2)] (3)(b)(ii), do not cross county lines; and
             229          [(D)] (E) the combined population within the proposed new school district of interlocal
             230      agreement participants that have entered into an interlocal agreement proposing to create a new
             231      school district is at least 80% of the total population of the proposed new school district.
             232          (ii) [The] Subject to Subsections (3)(b)(i)(A) and (4), the determination of all matters
             233      relating to the scope, adequacy, and other aspects of a feasibility study [under Subsection
             234      (2)(b)(i)(A)], including whether to conduct a new feasibility study or revise a previous
             235      feasibility study due to a change in the proposed new school district boundaries, is within the
             236      exclusive discretion of the legislative bodies of the interlocal agreement participants that enter
             237      into an interlocal agreement to submit for voter approval a measure to create a new school
             238      district.
             239          (iii) An inadequacy of a feasibility study under Subsection [(2)(b)(i)(A)] (4) may not be
             240      the basis of a legal action or other challenge to:
             241          (A) an election for voter approval of the creation of a new school district; or
             242          (B) the creation of the new school district.


             243          (iv) For purposes of determining whether the boundaries of a proposed new school
             244      district cross county lines under Subsection [(2)(b)(i)(C)(IV)] (3)(b)(i)(D)(IV):
             245          (A) a municipality located in more than one county and entirely within the boundaries
             246      of a single school district is considered to be entirely within the same county as other
             247      participants in an interlocal agreement under Subsection [(2)] (3)(a) if more of the
             248      municipality's land area and population is located in that same county than outside the county;
             249      and
             250          (B) a municipality located in more than one county that participates in an interlocal
             251      agreement under Subsection [(2)] (3)(a) with respect to some but not all of the area within the
             252      municipality's boundaries on the basis of the exception stated in Subsection [(2)] (3)(d)(ii)(B)
             253      may not be considered to cross county lines.
             254          (c) (i) A county may only participate in an interlocal agreement under this Subsection
             255      [(2)] (3) for the unincorporated areas of the county.
             256          (ii) Boundaries of a new school district created under this section may include:
             257          (A) a portion of one or more existing school districts; and
             258          (B) a portion of the unincorporated area of a county, including a portion of a township.
             259          (d) (i) As used in this Subsection [(2)] (3)(d):
             260          (A) "Isolated area" means an area that:
             261          (I) is entirely within the boundaries of a municipality that, except for that area, is
             262      entirely within a school district different than the school district in which the area is located;
             263      and
             264          (II) would, because of the creation of a new school district from the existing district in
             265      which the area is located, become completely geographically isolated.
             266          (B) "Municipality's school district" means the school district that includes all of the
             267      municipality in which the isolated area is located except the isolated area.
             268          (ii) Notwithstanding Subsection [(2)(b)(i)(C)(III)] (3)(b)(i)(D)(III), a municipality may
             269      be a participant in an interlocal agreement under Subsection [(2)] (3)(a) with respect to some
             270      but not all of the area within the municipality's boundaries if:
             271          (A) the portion of the municipality proposed to be included in the new school district
             272      would, if not included, become an isolated area upon the creation of the new school district; or
             273          (B) (I) the portion of the municipality proposed to be included in the new school


             274      district is within the boundaries of the same school district that includes the other interlocal
             275      agreement participants; and
             276          (II) the portion of the municipality proposed to be excluded from the new school
             277      district is within the boundaries of a school district other than the school district that includes
             278      the other interlocal agreement participants.
             279          (iii) (A) Notwithstanding Subsection [(2)(b)(i)(C)(II)] (3)(b)(i)(D)(II), a proposal to
             280      create a new school district may be submitted for voter approval pursuant to an interlocal
             281      agreement under Subsection [(2)] (3)(a), even though the new school district boundaries would
             282      create an isolated area, if:
             283          (I) the potential isolated area is contiguous to one or more of the interlocal agreement
             284      participants;
             285          (II) the interlocal participants submit a written request to the municipality in which the
             286      potential isolated area is located, requesting the municipality to enter into an interlocal
             287      agreement under Subsection [(2)] (3)(a) that proposes to submit for voter approval a measure to
             288      create a new school district that includes the potential isolated area; and
             289          (III) 90 days after a request under Subsection [(2)] (3)(d)(iii)(A)(II) is submitted, the
             290      municipality has not entered into an interlocal agreement as requested in the request.
             291          (B) Each municipality receiving a request under Subsection [(2)] (3)(d)(iii)(A)(II) shall
             292      hold one or more public hearings to allow input from the public and affected school districts
             293      regarding whether or not the municipality should enter into an interlocal agreement with
             294      respect to the potential isolated area.
             295          (C) (I) This Subsection [(2)] (3)(d)(iii)(C) applies if:
             296          (Aa) a new school district is created under this section after a measure is submitted to
             297      voters based on the authority of Subsection [(2)] (3)(d)(iii)(A); and
             298          (Bb) the creation of the new school district results in an isolated area.
             299          (II) The isolated area shall, on July 1 of the second calendar year following the local
             300      school board general election date described in Subsection [(3)] (5)(a)(i), become part of the
             301      municipality's school district.
             302          (III) Unless the isolated area is the only remaining part of the existing district, the
             303      process described in Subsection [(4)] (6) shall be modified to:
             304          (Aa) include a third transition team, appointed by the local school board of the


             305      municipality's school district, to represent that school district; and
             306          (Bb) require allocation of the existing district's assets and liabilities among the new
             307      district, the remaining district, and the municipality's school district.
             308          (IV) The existing district shall continue to provide educational services to the isolated
             309      area until July 1 of the second calendar year following the local school board general election
             310      date described in Subsection [(3)] (5)(a)(i).
             311          (4) A qualifying city or interlocal agreement participant shall ensure that a feasibility
             312      study under this section:
             313          (a) considers the present revenues of the area within the proposed new school district
             314      and calculates the five-year projected average annual revenue for the proposed new school
             315      district;
             316          (b) considers the present costs of the area within the proposed new school district and
             317      calculates the five-year projected average annual cost, including overhead, of governmental
             318      services in the proposed new school district including:
             319          (i) operation and maintenance;
             320          (ii) capital outlay;
             321          (iii) debt service; and
             322          (iv) school lunch;
             323          (c) assumes a level and quality of school district services to be provided to the
             324      proposed new school district in the future that fairly and reasonably approximates the level and
             325      quality of school district services being provided to the existing school district at the time of
             326      the feasibility study; and
             327          (d) assumes the same tax categories and tax rates as currently imposed by the existing
             328      school district.
             329          [(3)] (5) (a) If a proposal under this section is approved by voters:
             330          (i) an election shall be held at the next regular general election to elect:
             331          (A) members to the local school board of the existing school district whose terms are
             332      expiring;
             333          (B) all members to the local school board of the new school district; and
             334          (C) all members to the local school board of the remaining district;
             335          (ii) the assets and liabilities of the existing school district shall be divided between the


             336      remaining school district and the new school district as provided in Subsection [(5)] (7) and
             337      Section 53A-2-121 ;
             338          (iii) transferred employees shall be treated in accordance with Sections 53A-2-116 and
             339      53A-2-122 ;
             340          (iv) (A) an individual residing within the boundaries of a new school district at the
             341      time the new school district is created may, for six school years after the creation of the new
             342      school district, elect to enroll in a secondary school located outside the boundaries of the new
             343      school district if:
             344          (I) the individual resides within the boundaries of that secondary school as of the day
             345      before the new school district is created; and
             346          (II) the individual would have been eligible to enroll in that secondary school had the
             347      new school district not been created; and
             348          (B) the school district in which the secondary school is located shall provide
             349      educational services, including, if provided before the creation of the new school district,
             350      busing, to each individual making an election under Subsection [(3)] (5)(a)(iv)(A) for each
             351      school year for which the individual makes the election; and
             352          (v) within one year after the new district begins providing educational services, the
             353      superintendent of each remaining district affected and the superintendent of the new district
             354      shall meet, together with the Superintendent of Public Instruction, to determine if further
             355      boundary changes should be proposed in accordance with Section 53A-2-104 .
             356          (b) (i) The terms of the initial members of the local school board of the new district and
             357      remaining district shall be staggered and adjusted by the county legislative body so that
             358      approximately half of the local school board is elected every two years.
             359          (ii) The term of a member of the existing local school board, including a member
             360      elected under Subsection [(3)] (5)(a)(i)(A), terminates on July 1 of the second year after the
             361      local school board general election date described in Subsection [(3)] (5)(a)(i), regardless of
             362      when the term would otherwise have terminated.
             363          (iii) Notwithstanding the existence of a local school board for the new district and a
             364      local school board for the remaining district under Subsection [(3)] (5)(a)(i), the local school
             365      board of the existing district shall continue, until the time specified in Subsection
             366      53A-2-118 (5)(b)(ii)(A), to function and exercise authority as a local school board to the extent


             367      necessary to continue to provide educational services to the entire existing district.
             368          (iv) A person may simultaneously serve as or be elected to be a member of the local
             369      school board of an existing district and a member of the local school board of:
             370          (A) a new district; or
             371          (B) a remaining district.
             372          [(4)] (6) (a) Within 45 days after the canvass date for the election at which voters
             373      approve the creation of a new district:
             374          (i) a transition team to represent the remaining district shall be appointed by the
             375      members of the existing local school board who reside within the area of the remaining district,
             376      in consultation with:
             377          (A) the legislative bodies of all municipalities in the area of the remaining district; and
             378          (B) the legislative body of the county in which the remaining district is located, if the
             379      remaining district includes one or more unincorporated areas of the county; and
             380          (ii) another transition team to represent the new district shall be appointed by:
             381          (A) for a new district located entirely within the boundaries of a single city, the
             382      legislative body of that city; or
             383          (B) for each other new district, the legislative bodies of all interlocal agreement
             384      participants.
             385          (b) The local school board of the existing school district shall, within 60 days after the
             386      canvass date for the election at which voters approve the creation of a new district:
             387          (i) prepare an inventory of the existing district's:
             388          (A) assets, both tangible and intangible, real and personal; and
             389          (B) liabilities; and
             390          (ii) deliver a copy of the inventory to each of the transition teams.
             391          (c) The transition teams appointed under Subsection [(4)] (6)(a)(i) shall:
             392          (i) determine the allocation of the existing district's assets and, except for indebtedness
             393      under Section 53A-2-121 , liabilities between the remaining district and the new district in
             394      accordance with Subsection [(5)] (7);
             395          (ii) prepare a written report detailing how the existing district's assets and, except for
             396      indebtedness under Section 53A-2-121 , liabilities are to be allocated; and
             397          (iii) deliver a copy of the written report to:


             398          (A) the local school board of the existing district;
             399          (B) the local school board of the remaining district; and
             400          (C) the local school board of the new district.
             401          (d) The transition teams shall determine the allocation under Subsection [(4)] (6)(c)(i)
             402      and deliver the report required under Subsection [(4)] (6)(c)(ii) before August 1 of the year
             403      following the election at which voters approve the creation of a new district, unless that
             404      deadline is extended by the mutual agreement of:
             405          (i) the local school board of the existing district; and
             406          (ii) (A) the legislative body of the city in which the new district is located, for a new
             407      district located entirely within a single city; or
             408          (B) the legislative bodies of all interlocal agreement participants, for each other new
             409      district.
             410          (e) (i) All costs and expenses of the transition team that represents a remaining district
             411      shall be borne by the remaining district.
             412          (ii) All costs and expenses of the transition team that represents a new district shall
             413      initially be borne by:
             414          (A) the city whose legislative body appoints the transition team, if the transition team
             415      is appointed by the legislative body of a single city; or
             416          (B) the interlocal agreement participants, if the transition team is appointed by the
             417      legislative bodies of interlocal agreement participants.
             418          (iii) The new district may, to a maximum of $500,000, reimburse the city or interlocal
             419      agreement participants for:
             420          (A) transition team costs and expenses; and
             421          (B) startup costs and expenses incurred by the city or interlocal agreement participants
             422      on behalf of the new district.
             423          [(5)] (7) (a) As used in this Subsection [(5)] (7):
             424          (i) "Associated property" means furniture, equipment, or supplies located in or
             425      specifically associated with a physical asset.
             426          (ii) (A) "Discretionary asset or liability" means, except as provided in Subsection [(5)]
             427      (7)(a)(ii)(B), an asset or liability that is not tied to a specific project, school, student, or
             428      employee by law or school district accounting practice.


             429          (B) "Discretionary asset or liability" does not include a physical asset, associated
             430      property, a vehicle, or bonded indebtedness.
             431          (iii) (A) "Nondiscretionary asset or liability" means, except as provided in Subsection
             432      [(5)] (7)(a)(iii)(B), an asset or liability that is tied to a specific project, school, student, or
             433      employee by law or school district accounting practice.
             434          (B) "Nondiscretionary asset or liability" does not include a physical asset, associated
             435      property, a vehicle, or bonded indebtedness.
             436          (iv) "Physical asset" means a building, land, or water right together with revenue
             437      derived from the lease or use of the building, land, or water right.
             438          (b) Except as provided in Subsection [(5)] (7)(c), the transition teams appointed under
             439      Subsection [(4)] (6)(a)(i) shall allocate all assets and liabilities the existing district owns on the
             440      allocation date, both tangible and intangible, real and personal, to the new district and
             441      remaining district as follows:
             442          (i) a physical asset and associated property shall be allocated to the school district in
             443      which the physical asset is located;
             444          (ii) a discretionary asset or liability shall be allocated between the new district and
             445      remaining district in proportion to the student populations of the school districts;
             446          (iii) a nondiscretionary asset shall be allocated to the school district where the project,
             447      school, student, or employee to which the nondiscretionary asset is tied will be located;
             448          (iv) vehicles used for pupil transportation shall be allocated:
             449          (A) according to the transportation needs of schools, as measured by the number and
             450      assortment of vehicles used to serve transportation routes serving schools within the new
             451      district and remaining district; and
             452          (B) in a manner that gives each school district a fleet of vehicles for pupil
             453      transportation that is equivalent in terms of age, condition, and variety of carrying capacities;
             454      and
             455          (v) other vehicles shall be allocated:
             456          (A) in proportion to the student populations of the school districts; and
             457          (B) in a manner that gives each district a fleet of vehicles that is similar in terms of age,
             458      condition, and carrying capacities.
             459          (c) By mutual agreement, the transition teams may allocate an asset or liability in a


             460      manner different than the allocation method specified in Subsection [(5)] (7)(b).
             461          [(6)] (8) (a) As used in this Subsection [(6)] (8):
             462          (i) "New district startup costs" means:
             463          (A) costs and expenses incurred by a new district in order to prepare to begin providing
             464      educational services on July 1 of the second calendar year following the local school board
             465      general election date described in Subsection [(3)] (5)(a)(i); and
             466          (B) the costs and expenses of the transition team that represents the new district.
             467          (ii) "Remaining district startup costs" means:
             468          (A) costs and expenses incurred by a remaining district in order to:
             469          (I) make necessary adjustments to deal with the impacts resulting from the creation of
             470      the new district; and
             471          (II) prepare to provide educational services within the remaining district once the new
             472      district begins providing educational services within the new district; and
             473          (B) the costs and expenses of the transition team that represents the remaining district.
             474          (b) (i) By January 1 of the year following the local school board general election date
             475      described in Subsection [(3)] (5)(a)(i), the existing district shall make half of the undistributed
             476      reserve from its General Fund, to a maximum of $9,000,000, available for the use of the
             477      remaining district and the new district, as provided in this Subsection [(6)] (8).
             478          (ii) The existing district may make additional funds available for the use of the
             479      remaining district and the new district beyond the amount specified in Subsection [(6)] (8)(b)(i)
             480      through an interlocal agreement.
             481          (c) The existing district shall make the money under Subsection [(6)] (8)(b) available
             482      to the remaining district and the new district proportionately based on student population.
             483          (d) The money made available under Subsection [(6)] (8)(b) may be accessed and spent
             484      by:
             485          (i) for the remaining district, the local school board of the remaining district; and
             486          (ii) for the new district, the local school board of the new district.
             487          (e) (i) The remaining district may use its portion of the money made available under
             488      Subsection [(6)] (8)(b) to pay for remaining district startup costs.
             489          (ii) The new district may use its portion of the money made available under Subsection
             490      [(6)] (8)(b) to pay for new district startup costs.


             491          [(7)] (9) (a) The existing district shall transfer title or, if applicable, partial title of
             492      property to the new school district in accordance with the allocation of property by the
             493      transition teams, as stated in the report under Subsection [(4)] (6)(c)(ii).
             494          (b) The existing district shall complete each transfer of title or, if applicable, partial
             495      title to real property and vehicles by July 1 of the second calendar year following the local
             496      school board general election date described in Subsection [(3)] (5)(a)(i), except as that date is
             497      changed by the mutual agreement of:
             498          (i) the local school board of the existing district;
             499          (ii) the local school board of the remaining district; and
             500          (iii) the local school board of the new district.
             501          (c) The existing district shall complete the transfer of all property not included in
             502      Subsection [(7)] (9)(b) by November 1 of the second calendar year after the local school board
             503      general election date described in Subsection [(3)] (5)(a)(i).
             504          [(8)] (10) Except as provided in Subsections [(6)] (8) and [(7)] (9), after the creation
             505      election date an existing school district may not transfer or agree to transfer title to district
             506      property without the prior consent of:
             507          (a) the legislative body of the city in which the new district is located, for a new district
             508      located entirely within a single city; or
             509          (b) the legislative bodies of all interlocal agreement participants, for each other new
             510      district.
             511          [(9)] (11) This section does not apply to the creation of a new district initiated through
             512      a citizens' initiative petition or at the request of a local school board under Section 53A-2-118 .
             513          Section 4. Section 53A-2-120 is amended to read:
             514           53A-2-120. Transfer of school property to new school district.
             515          (1) (a) (i) On July 1 of the year following the school board elections for a new district
             516      created pursuant to a citizens' initiative petition or school board request under Section
             517      53A-2-118 and an existing district as provided in Section 53A-2-119 , the board of the existing
             518      district shall convey and deliver to the board of the new district all school property which the
             519      new district is entitled to receive.
             520          (ii) Any disagreements as to the disposition of school property shall be resolved by the
             521      county legislative body.


             522          (iii) Subsection (1)(a)(ii) does not apply to disagreements between transition teams
             523      about the proper allocation of property under Subsection 53A-2-118.1 [(4)](6).
             524          (b) An existing district shall transfer property to a new district created under Section
             525      53A-2-118.1 in accordance with Section 53A-2-118.1 .
             526          (2) Title vests in the new school board, including all rights, claims, and causes of
             527      action to or for the property, for the use or the income from the property, for conversion,
             528      disposition, or withholding of the property, or for any damage or injury to the property.
             529          (3) The new school board may bring and maintain actions to recover, protect, and
             530      preserve the property and rights of the district's schools and to enforce contracts.


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