A bill for an act
                  relating to education; forming two separate school 
                  districts from the area currently within Independent 
                  School District No. 728, Elk River. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  [DISTRICT BOUNDARIES; ASSIGNMENT OF AREA.] 
           Subdivision 1.  [SHERBURNE, ANOKA, AND ISANTI COUNTY.] As 
        of July 1, 2007, the commissioner of education shall issue an 
        order detaching and classifying all of the area of the current 
        Independent School District No. 728, Elk River, that is located 
        in Sherburne, Anoka, or Isanti County as a new independent 
        school district and assign the district an identification number.
           Subd. 2.  [HENNEPIN AND WRIGHT COUNTY.] As of July 1, 2007, 
        the commissioner of education shall issue an order detaching and 
        classifying all of the area of the current Independent School 
        District No. 728, Elk River, that is located in Hennepin or 
        Wright County as a new independent school district and assign 
        the district an identification number. 
           Subd. 3.  [COMMISSIONER'S RECORDS.] Upon the effective date 
        of this section, the commissioner of education shall modify the 
        records and any plats, petitions, and proceedings involving the 
        former school district and the newly created school districts to 
        conform to the conditions of this act. 
           <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2006. 
           Sec. 2.  [GOVERNANCE.] 
           Subdivision 1.  [SCHOOL BOARD SIZE.] Each of the new school 
        districts created by section 1 initially shall be governed by a 
        board of directors consisting of seven members. 
           Subd. 2.  [SCHOOL BOARD ELECTIONS AND TERMS.] The board of 
        directors for each new school district described in section 1 
        shall be elected according to Minnesota Statutes, chapter 205A, 
        at an election held for that purpose at the November 2006 
        general election.  Four of the initial board members must be 
        elected for a term of four years and three of the initial 
        members shall be elected to a term of two years. 
           Subd. 3.  [START OF TERM.] The terms of the newly elected 
        board members must begin on the first Monday in January 2007, 
        and until a successor qualifies. 
           Subd. 4.  [SUBSEQUENT TERMS.] After the initial election 
        required under subdivision 2, the terms of all members shall be 
        governed under Minnesota Statutes, section 123B.09. 
           Subd. 5.  [SERVING ON TWO BOARDS.] Notwithstanding any law 
        to the contrary, an individual may serve on both the school 
        board of Independent School District No. 728, Elk River, and on 
        the board of one of the newly created school districts. 
           Subd. 6.  [END OF TERMS.] Notwithstanding any law to the 
        contrary, the terms of the board members of Independent School 
        District No. 728, Elk River, extend until July 1, 2007, at which 
        point they are dissolved. 
           <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2006. 
           Sec. 3.  [TRANSITION ACTIVITIES.] 
           Subdivision 1.  [EXISTING BOARD.] The care, management, and 
        control of Independent School District No. 728, Elk River, 
        remains with its board until July 1, 2007. 
           Subd. 2.  [NEW BOARD ACTIVITIES.] The newly elected boards 
        under section 2 may begin meeting after the first Monday in 
        January 2007.  The boards may plan for operation of their 
        districts beginning July 1, 2007.  The boards may issue letters 
        of intent to hire employees beginning July 1, 2007.  Upon 
        specific written authority of the board of Independent School 
        District No. 728, Elk River, each board may separately join with 
        the board of Independent School District No. 728, Elk River, and 
        jointly enter into contracts for the operation of the newly 
        formed school district prior to July 1, 2007. 
           Sec. 4.  [DISTRIBUTION OF ASSETS AND LIABILITIES.] 
           Subdivision 1.  [ORDER OF THE COMMISSIONER.] Under the 
        detachments authorized in section 1, the commissioner of 
        education shall issue an order for the distribution of all 
        assets and liabilities, real and personal, and the legally valid 
        and enforceable claims and contract obligations of the former 
        Independent School District No. 728, Elk River, that are 
        necessary for the new school districts to operate. 
           Subd. 2.  [REAL PROPERTY.] The commissioner shall determine 
        the value of all real property.  The commissioner's order must 
        transfer the interests in all real property to the newly created 
        school districts.  The real property must be assigned based upon 
        the borders of the newly created school districts.  If the 
        commissioner determines that the value of the real property 
        substantially favors one district or the other, the commissioner 
        may include a dollar amount as a claim against the district 
        receiving the property, and the claim shall be paid and enforced 
        in the manner provided by law for the payment of judgments 
        against a district. 
           <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2004. 
           Sec. 5.  [TAX LIABILITY FOR EXISTING BONDED DEBT.] 
           All taxable property in the areas so detached remains 
        taxable for payment of any school purpose obligations already 
        authorized by or outstanding on July 1, 2007.  The 
        commissioner's order does not relieve the taxable property from 
        the obligation of any bonded debt already incurred to which it 
        was subject prior to the order.  All taxable property in the 
        areas included in the newly created districts is taxable for 
        payment of any district obligations of its new district 
        authorized on or subsequent to July 1, 2007. 
           <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2007. 
           Sec. 6.  [EMPLOYEES.] 
           Subdivision 1.  [LICENSED EMPLOYEES.] The obligations of 
        the newly created school districts created in section 1 to 
        licensed employees are governed by Minnesota Statutes, section 
        123A.75, except that the commissioner of education shall assign 
        each teacher employed by Independent School District No. 728, 
        Elk River, to the newly created districts based upon the 
        location of the building where the teacher was employed during 
        the 2005-2006 school year.  Any licensed employee who was not 
        assigned to a building during the 2005-2006 school year must be 
        assigned according to section 123A.75. 
           Subd. 2.  [NONLICENSED EMPLOYEES.] All other employees not 
        included in subdivision 1 may apply for employment to either of 
        the newly created school boards by February 15, 2007.  Employees 
        who have not received a letter of intent to hire from either of 
        the boards of the newly created districts by April 15, 2007, may 
        place their names on a roster maintained by the commissioner of 
        education.  On June 15, 2007, the commissioner shall assign all 
        of the employees on the roster to unfilled positions in the 
        newly created school districts in order of seniority.  All of 
        the rights and obligations of the nonlicensed employees must 
        continue in the same manner as before July 1, 2007. 
           <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2006. 
           Sec. 7.  [ENROLLMENT OPTIONS.] 
           Regardless of the new districts' borders, a student who is 
        enrolled in Independent School District No. 728, Elk River, 
        during the 2005-2006 school year may continue to attend the 
        school in which that student was enrolled until the student 
        completes the last grade offered by that school.  Funding for a 
        student under this section is governed by Minnesota Statutes, 
        section 124D.03. 
           <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2007.