The state board of education may, by resolution adopted by majority vote of its full membership, propose the creation of a new local school district from one or more local school districts or parts thereof, including the creation of a local district with noncontiguous territory from one or more local school districts if one of those districts has entered into an agreement under section 3313.42 of the Revised Code. Such proposal shall include an accurate map showing the territory affected. After the adoption of the resolution, the state board shall file a copy of such proposal with the board of education of each school district whose boundaries would be altered by such proposal.

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Upon the creation of a new district under this section, the state board shall at its next regular meeting that occurs not earlier than thirty days after the adoption by the state board of the resolution proposing such creation, adopt a resolution making the creation effective prior to the next succeeding first day of July, unless, prior to the expiration of such thirty-day period, qualified electors residing in the area included in such proposed new district, equal in number to thirty-five per cent of the qualified electors voting at the last general election, file a petition of referendum against the creation of the proposed new district.

A petition of referendum filed under this section shall be filed at the office of the state superintendent of public instruction. The person presenting the petition shall be given a receipt containing thereon the time of day, the date, and the purpose of the petition.

If a petition of referendum is filed, the state board shall, at the next regular meeting of the state board, certify the proposal to the board of elections for the purpose of having the proposal placed on the ballot at the next general or primary election which occurs not less than ninety days after the date of such certification, or at a special election, the date of which shall be specified in the certification, which date shall not be less than ninety days after the date of such certification.

Upon certification of a proposal to the board or boards of elections pursuant to this section, the board or boards of elections shall make the necessary arrangements for the submission of such question to the electors of the county or counties qualified to vote thereon, and the election shall be conducted and canvassed and the results shall be certified in the same manner as in regular elections for the election of members of a board of education.

The persons qualified to vote upon a proposal are the electors residing in the proposed new districts.

If the proposed district be approved by at least a majority of the electors voting on the proposal, the state board shall then create such new district prior to the next succeeding first day of July.

Upon the creation of such district, the indebtedness of each former district becoming in its entirety a part of the new district shall be assumed in full by the new district. Upon the creation of such district, that part of the net indebtedness of each former district becoming only in part a part of the new district shall be assumed by the new district which bears the same ratio to the entire net indebtedness of the former district as the assessed valuation of the part taken by the new district bears to the entire assessed valuation of the former district as fixed on the effective date of transfer. As used in this section, “net indebtedness” means the difference between the par value of the outstanding and unpaid bonds and notes of the school district and the amount held in the sinking fund and other indebtedness retirement funds for their redemption. Upon the creation of such district, the funds of each former district becoming in its entirety a part of the new district shall be paid over in full to the new district. Upon the creation of such district, the funds of each former district becoming only in part a part of the new district shall be divided equitably by the state board between the new district and that part of the former district not included in the new district as such funds existed on the effective date of the creation of the new district.

The state board shall, following the election, file with the county auditor of each county affected by the creation of a new district an accurate map showing the boundaries of such newly created district.

When a new local school district is so created, a board of education for such newly created district shall be appointed by the state board. The members of such appointed board of education shall hold their office until their successors are elected and qualified. A board of education shall be elected for such newly created district at the next general election held in an odd numbered year occurring more than ninety days after the appointment of the board of education of such newly created district. At such election two members shall be elected for a term of two years and three members shall be elected for a term of four years, and, thereafter, their successors shall be elected in the same manner and for the same terms as members of the board of education of a local school district.

When the new district consists of territory lying in two or more counties, the state board shall determine to which educational service center the new district shall be assigned.

The legal title of all property of the board of education in the territory taken shall become vested in the board of education of the newly created school district.

Foundation program moneys accruing to a district created under the provisions of this section or previous section 3311.26 of the Revised Code, shall not be less, in any year during the next succeeding three years following the creation, than the sum of the amounts received by the districts separately in the year in which the creation of the district became effective.

If, prior to September 26, 2003, a local school district board of education or a group of individuals requests the governing board of an educational service center to consider proposing the creation of a new local school district, the governing board, at any time during the one-year period following the date that request is made, may adopt a resolution proposing the creation of a new local school district in response to that request and in accordance with the first paragraph of the version of this section in effect prior to September 26, 2003. If the governing board so proposes within that one-year period, the governing board may proceed to create the new local school district as it proposed, in accordance with the version of this section in effect prior to September 26, 2003, subject to the provisions of that version authorizing a petition and referendum on the matter.

Consolidations of school districts which include all of the schools of a county and which become effective on or after July 1, 1959, shall be governed and included under this section.