A. The state board [department] may order the creation of a new school district:

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(1)     upon receipt of and according to a resolution requesting the creation of the new school district by the local school board of the existing school district;

(2)     after review by the local school board and upon receipt of a petition bearing signatures verified by the county clerk of the affected area of sixty percent of the registered voters residing within the geographic area desiring creation of a new school district; or

(3)     upon recommendation of the state superintendent [secretary] and upon a determination by the state board [department] that creation of a new district would meet the standards set forth in Subsection B of this section.

B. Within ninety days of receipt of the local school board resolution, receipt of the voters’ petition or receipt of a recommendation by the state superintendent [secretary], the state board [department] shall conduct a public hearing to determine whether:

(1)     the existing school district and the new school district to be created will each have a minimum membership of five hundred;

(2)     a high school program is to be taught in the existing school district and in the new school district to be created unless an exception is granted to this requirement by the state board [department]; and

(3)     creating the new school district is in the best interest of public education in the existing school district and in the new school district to be created and in the best interest of public education in the state.