AN ACT relating to independent school districts.

Create new sections of KRS Chapter 160 to establish a process for the creation of new independent school districts from a persistently underperforming school district; define terms; establish the process for a local legislative body where a persistently underperforming school district is located to place the question of creating new independent districts and local boards of education on the ballot; specify the requirements for the questions and the board of education provisional election; establish the initial terms of office for the interim board of education; establish the transition of authorities from the originating district board of education to the boards of both the altered originating district and the new independent district; require the Kentucky Department of Education to calculate assets and liabilities of the originating district for division to the new independent districts; authorize the originating district to maintain control and use of assets until the scheduled transfer to the new independent districts and authorize the continued payments of debts; establish a negotiation process between the originating district and the new independent districts to resolve the division of the originating district's assets and liabilities; establish a deadline for the negotiation to conclude; provide a process for resolution of disagreements; establish a deadline for the transfer of all assets and debts; authorize the originating district to continue to assess and collect taxes for all districts until the close of the tax year in which the new independent districts are fully operational; provide for the distribution of collected taxes during the transition period; require the county judge/executive to call the newly elected interim boards of new independent districts to meet; allow the interim board to request assistance from the Kentucky Department of Education; establish the transition process for new independent districts to become fully functional; allow the interim board to submit a waiver request for a statute or administrative regulation to the Kentucky Board of Education; authorize the interim board to enter into service contracts with another school district during the transition; establish a process for the interim board to vote to terminate the establishment of the new independent district due to financial nonviability during the transition; establish the transition from an interim board to a fully functional board of the new independent district; require the continued collection of taxes restricted to the payment of debt or interest; waive the requirement for school-based decision making for the first year of operations of the new independent district; require the interim board of the new independent district to develop a transition plan and establish the requirements of the plan; create a new section of KRS Chapter 157, relating to state formula funding calculations, to establish a projection model for the first year of full operations of the new independent district and the altered originating district.