A school district shall be divided by annexation of a part of its area consisting of not less than 50% of its assessed value to another school district and the transfer of the remaining area of the school district to 1 or more school districts contiguous to the dividing school district if the boards of the school district to be divided, the annexing school district, and the school district or districts to which territory will be transferred each adopt a resolution approving the annexation and transfer and, except as provided in this section, a majority of the school electors of the school district to be divided approve the annexation and transfer at a regular or special election to be called by the board of the dividing school district. The vote on the question shall be by ballot. Before the election is held, the boards of the school district to be divided and the annexing school district shall obtain the approval of the state superintendent of public instruction pursuant to section 944. The election shall be held not more than 180 days after the last date of passage of a resolution by the board of either the dividing school district or the annexing school district. Effective January 1, 1986, a school district shall not be divided by annexation and transfer unless a majority of the school electors of each school district which receives 25% or more of the state equalized value of the school district being annexed and transferred approve the annexation and transfer at a regular or special election to be called by the board of the appropriate school district.

     The resolution adopted by the boards of the school district being divided and the annexing school district pursuant to section 941 shall specify at a minimum all of the following:

    (a) The effective date of the division, annexation, and transfer.

    (b) The territory that is to be annexed to the annexing school district.

    (c) The territory or territories that are to be transferred and the school districts to which they are to be transferred.

    (d) A finding that the division, annexation, and transfer are in the best interests of the education of the pupils within the affected school districts.

    (e) The manner in which the annexing and dividing school districts propose to assign employees of the dividing school district to bargaining units pursuant to section 948.

     Upon adoption, a copy of the resolutions adopted by the annexing and the dividing school districts pursuant to section 941 promptly shall be filed with the superintendent of public instruction. Upon receipt of the resolutions, the superintendent of public instruction shall schedule and hold or cause to be held a hearing concerning the division of the school district by annexation and transfer. The hearing shall be held within 30 days after receipt by the superintendent of public instruction of the resolutions from the boards of the annexing and dividing school districts. The superintendent of public instruction shall give 10 days' notice of the time and place of the hearing and of the proposed division and alterations in school district boundaries to be considered by posting notice in at least 5 public places in each of the school districts whose territory will be affected, by publication at least once before the meeting in a newspaper of general circulation in the territory of the affected school districts, and by mailing a copy of the notice to the secretary of the board of each school district whose territory will be affected. The board of each school district whose territory will be affected by the proposed division and transfer shall designate a representative to attend the hearing.

     If, within 30 days after the hearing, the superintendent of public instruction determines that the division would be in the best interest of the education of the pupils in the school districts affected by the division, including but not limited to consideration of such matters as class size, certified and noncertified staff, physical plants, transportation, curriculum, administration, labor relations, racial makeup, and cost effectiveness, he or she shall issue a written order approving the division of the school district. If the superintendent of public instruction determines that the division would not be in the best interest of the education of the pupils in the school districts affected by the division, he or she shall issue a written order disapproving the division. A copy of the order shall be transmitted to the secretary of the board of education of each school district whose boundaries are to be affected by the division.

     Upon receipt of an order transmitted as prescribed by section 944 and approving the division of the school district, the board of the school district to be annexed, divided, and transferred shall provide by resolution for the election on the question of annexing, dividing, and transferring the school district. The election shall be conducted and canvassed in the dividing district as provided in the Michigan election law. The question to be submitted to the electors shall be whether the territory of the dividing school district shall be annexed and transferred in the manner specified in the resolution of the dividing school district.

     Within 10 days after the election required by section 945, the secretary of the board of the school district in which the election was held shall file a certified statement of the vote for annexation and transfer with the secretary of the board of the annexing school district and with the secretary of the board of each school district to which some portion of the dividing school district is to be transferred.

    (1) If the dividing school district has bonded indebtedness at the time of annexation and transfer, the identity of the school district shall not be lost by virtue of annexation or transfer. The territory of the dividing school district shall remain as a separate assessing unit for purposes of bonded indebtedness until the indebtedness has been retired or the outstanding bonds refunded by the annexing school district. The board of the annexing school district shall constitute the board of trustees for the divided school district having bonded indebtedness. The officers of the annexing school district shall be the officers for the divided district for the purpose of bonded indebtedness.

    (2) The board of the annexing school district shall certify and order the levy of taxes for bonded indebtedness in the name of the dividing school district, shall not commingle the debt retirement funds of the dividing school district with those of the annexing school district, and shall do all things relating to the indebtedness required by law and by the terms under which the issuance and sale of the bonds originally were authorized.

    (3) Other taxes of any nature levied for the purposes of any of the combined school districts formed by annexation or transfer shall be spread uniformly over the entire area of the combined school district levying the tax.

    (4) If the electors of the dividing school district approve the annexation and transfer after September 15 but before December 1 of any year, the boards of the newly formed school districts by resolution shall recertify the taxes to be levied on the taxable property within the newly formed district to reflect any resulting reduction or increase in millage caused or authorized by the division, annexation, and transfer. The secretary of the board shall file a certified copy of the resolution with the county clerk and each city and township clerk in which the newly formed district is situated. If a dividing school district, an annexing school district, or a transferee school district has collected a portion of the taxes for the year in which the reduction occurs, the amount of the reduction shall be applied in whole to the second levy for that year in that affected school district.

    (1) Upon the effective date of the division of the school district, all assets and liabilities of the divided school district, with the exception of its bonded indebtedness, shall become the assets and liabilities of the annexing school district except as provided in subsection (2).

    (2) Except as provided in subsection (3), all employment contracts and agreements with authorized bargaining agents in effect at the time of the annexation-transfer election with the annexing school district, the annexed school district, and the school district or districts to which portions of the territory of the dividing school district are to be transferred shall remain in full force and effect for the duration of those contracts for the employees covered by them even after division of the district until representatives of employees, for the purposes of collective bargaining, have been certified by the Michigan employment relations commission and a successor agreement has been ratified by the bargaining agent of each bargaining unit and the boards of education of the annexing school district or the district or districts to which portions of the territory of the dividing school district have been transferred, as the case may be.

    (3) In the event of an agreement of the authorized bargaining agents and the board of a district in which employees are to be employed, not less than 60 days prior to the annexation-transfer election, the provisions of subsection (2) shall not apply. All personnel employed under the provisions of this act shall be entitled to all the rights and benefits to which they otherwise would be entitled had they been employed by the newly formed school district originally.

    (4) Employees of the dividing school district employed by the annexing school district or any district to which a portion of the territory of the dividing school district has been transferred shall be entitled to all rights provided by Act No. 4 of the Public Acts of the Extra Session of 1937, being sections 38.71 to 38.191 of the Michigan Compiled Laws, to which they would have been entitled if they had been employed originally by the annexing school district or any school district to which a portion of the territory of the dividing school has been transferred, as the case may be, including tenure status.

     If the division of a school district becomes effective at a time when school is in session, each pupil may complete the school year at the school the pupil was attending before the division occurred without payment of tuition, regardless of the school district to which that school may have been annexed or transferred. The boards of the newly formed school districts may agree to permit nonresident pupils who attended school in the dividing school district to attend school in the newly formed school districts without payment of tuition for the 2 school fiscal years after the effective date of the division. This section shall not prevent the annexing school district from closing any schools included in the annexation the fiscal year immediately following the effective date of the division.