(a) Unless otherwise specified by law, rule, court order, or agreement between the parties approved by the State Board of Education, the provisions in this section apply only to the first year of disbursement of funding for the:

1. (1) New school district created by detachment; and
2. (2) Remaining original school district.

(b)

1. (1) The provisions in this section may be modified, in whole or in part, by a court order or an agreement between the parties approved by the state board.

2. (2) Absent such an agreement, the following funding methodology shall be used:

   1. (A) To establish the prior-year three-quarter average daily membership for the new school district created by detachment:

(b) (b) The total current-year October 1 enrollment of the two (2) school districts; and

1. (ii) To allow for allocation and disbursement of funds pending receipt of October 1 current-year enrollment data, current-year July 1 enrollment shall be used to calculate an estimated enrollment ratio for each school district;

   1. (B) To the extent necessary for other purposes, a history of prior-year average daily membership shall be established for the new school district created by detachment, for the remaining original school district, and for the original school district using the current-year enrollment ratio;

   2. (C) The Educational Excellence Trust Fund obligation will be calculated for the new school district created by detachment and the remaining original school district using:

      1. (i) Prior-year three-quarter average daily membership from fiscal years 1991 – 1992 through the most recent school year for the original school district; multiplied by
      2. (ii) Each school district’s enrollment ratio;

   3. (D) To establish the prior-year October 1 Enhanced Student Achievement Funding student counts and percentage for the new school district created by detachment and the remaining original school district:

      1. (i) Allocate the total prior-year October 1 Enhanced Student Achievement Funding free and reduced lunch student counts for the original school district to the new school district created by detachment and the remaining original school district by calculating an enrollment ratio for each school district using:

(b) (b) The total current-year October 1 enrollment of the two school districts;

1. (ii) Both the new school district and the original school district will:

(b) (b) Instead use the rate outlined in Arkansas Code § 6-20-2305(b)(4)(A);

1. (iii)

(b) (b) Eligibility for national school lunch state categorical growth funding requires a three-consecutive-year enrollment growth trend of one percent (1%) or more; and

1. (iv)

(b) (b) The new school district created by detachment will be subject to analysis once the applicable expenditures and revenue are available for analysis;

1. (E) To allow for allocation and disbursement of funds pending receipt of October 1 current-year enrollment data, current-year July 1 enrollment may be used to calculate an estimated enrollment ratio for each school district;

   1. (F)

      1. (i) The original school district will receive the amount of alternative learning environment (ALE) funding for which it qualifies based on eligible ALE students’ full-time equivalents (FTE) in the previous school year as defined in rules.
      2. (ii) To be eligible for ALE funding, the new school district created by detachment shall have established an eligible ALE approved as being in compliance with:

(b) (b) The Rules Governing Student Special Needs Funding, 6 CAR pt. 272.

1. (iii) The ALE funding, disbursed in the following year, shall be:

(b) (b) The new school district’s eligible ALE students’ FTE in the previous school year as defined in rules;

1. (G)

   1. (i) For a new school district created by detachment and the remaining original school district, declining enrollment and student growth funding will be calculated excluding any increase or decrease resulting from the detachment.

      1. (ii)

(a) (a) Declining enrollment funding equals:

1. (1) (1) The difference between the average of the two (2) immediately preceding years’ average daily memberships and the average daily membership for the previous school year; multiplied by
2. (2) (2) The amount of foundation funding set forth in Arkansas Code § 6-20-2305(a).

(b) (b) In the first and second years of disbursement of state funding to the new school district created by detachment, declining enrollment funding will be calculated based on the average daily membership of the original school district.

1. (c) (c) The declining enrollment funding amount for one (1) or both years may be prorated between the new school district and the remaining original school district using the current-year enrollment ratios for each school district, calculated in the first year state funding is disbursed to the new school district created by detachment.

   1. (iii)

(a) (a) In the first year of disbursement of state funding to the new school district, student growth funding will be calculated using:

1. (1) (1) The prior-year average daily membership of the original school district; compared to

2. (2) (2) The combined current-year average daily membership for each quarter for the:

   1. (A) (A) New school district created by detachment; and
   2. (B) (B) Remaining original school district.

(b) (b) The student growth funding amount will be prorated between the new school district created by detachment and the remaining original school district using the current-year enrollment ratios for each school district; and

1. (H) Any adjustments for bonded debt assistance will be handled on a case-by-case basis.