(a) The General Assembly finds that school districts that contain isolated schools need additional funding to provide an adequate education for students attending schools in those school districts.

(b) A school district shall receive special needs funding under subsection (c), (d), or (e) of this section if the school district meets the requirements of subsection (c), (d), or (e), respectively, of this section and if:

(1) The school district was consolidated or annexed or received an annexed school under the Public Education Reorganization Act, § 6-13-1601 et seq.;

(2) The local school district board of directors by majority vote determines that the isolated school is so isolated that to combine its operation to one (1) school district campus would be impractical or unwise; and

(3) The isolated school or school district:

(A) Meets the requirements of § 6-20-601 and filed an affidavit of isolated school status with the State Board of Education during the consolidation or annexation process, and the facts of the affidavit are verified by the state board or its designee;

(B) Meets the requirements of § 6-20-601 and filed an affidavit of isolated school status with the state board after the consolidation or annexation process or with regard to the 2006-2007 school year no later than June 1, 2006, and the facts of the affidavit are verified by the state board or its designee; or

(C) Meets the requirements of § 6-20-601 but for the prior-year three-quarter average daily membership requirement of fewer than three hundred fifty (350) students and filed an affidavit of isolated school status with the state board after the consolidation or annexation process and the facts of the affidavit are verified by the state board or its designee.

(c) A school district meeting the requirements of subsection (b) of this section shall receive an additional amount equal to twenty percent (20%) of the per-student foundation funding amount under § 6-20-2305(a)(2) multiplied by the prior-year three-quarter average daily membership for the school district to be used for the operation of the isolated school areas if the school district has:

(1) School facilities serving students in any grade in kindergarten through grade twelve (K-12), in one (1) or more isolated schools meeting the requirements of subsection (b) of this section;

(2) A prior-year three-quarter average daily membership for the school district of five hundred (500) or less; and

(3) A density ratio of one and five-tenths (1.5) students or less per square mile.

(d) (1) A school district meeting the requirements of subsection (b) of this section shall receive an additional amount equal to fifteen percent (15%) of the per-student foundation funding amount under § 6-20-2305(a)(2) multiplied by the prior-year three-quarter average daily membership for the school district to be used for the operation of the isolated school areas if the school district has:

(A) School facilities open for kindergarten through grade twelve (K-12) in two (2) or more isolated schools meeting the requirements of subsection (b) of this section and meeting the requirements of § 6-20-601 and if both isolated schools were annexed under the Public Education Reorganization Act, § 6-13-1601 et seq.;

(B) A prior-year three-quarter average daily membership for the school district of five hundred one (501) to one thousand (1,000); and

(C) A density ratio of one and five-tenths (1.5) students or less per square mile.

(2) A school district meeting the requirements of subsection (b) of this section with a three-quarter average daily membership of one thousand one (1,001) or greater is entitled to receive the funding under this section for an isolated school area received by the school district in:

(A) A consolidation under § 6-13-1401 et seq. or the Public Education Reorganization Act, § 6-13-1601 et seq.; or

(B) An annexation under § 6-13-1401 et seq. or the Public Education Reorganization Act, § 6-13-1601 et seq.

(e)

(1) Except as provided in subdivision (e)(2) of this section, a school district meeting the requirements of subsection (b) of this section shall receive an additional amount equal to ten percent (10%) of the per-student foundation funding amount under § 6-20-2305(a)(2) multiplied by the prior-year three-quarter average daily membership of the isolated school area to be used for the operation of the isolated school area if the school district has school facilities open for kindergarten through grade twelve (K-12) in one (1) or more isolated school areas meeting the requirements of subsection (b) of this section.

(2) A school district shall receive an additional amount equal to ten percent (10%) of the per-student foundation funding amount under § 6-20-2305(a)(2) multiplied by the prior-year three-quarter average daily membership of the isolated school area to be used for the operation of the isolated school area if:

(A) The school district has school facilities serving students in any grade in kindergarten through grade twelve (K-12) in one (1) or more isolated school areas meeting the requirements of subsection (b) of this section; and

(B) The school district closed an isolated facility serving students in grades seven through twelve (7-12).

(C) A school district that is eligible to receive funding under subdivision (e)(2) of this section must also meet the requirements of subsection (b) of this section.

(f) A school district shall receive an additional amount equal to five percent (5%) of the per-student foundation funding amount under § 6-20-2305(a)(2) multiplied by the prior-year three-quarter average daily membership of the school district if the school district has a:

(1) Prior-year three-quarter average daily membership of less than five hundred (500) students; and

(2) Density ratio of two (2) students or less per square mile.

(g) A school district eligible for special needs funding under this section shall continue to be eligible to receive isolated school funding provided under § 6-20-603 but shall only receive funding under one (1) of the categories established under subsections (c)-(f) of this section.

(h)

(1) This section is contingent on the appropriation and availability of funding for its purposes.

(2)

(A) Undistributed funds under this section and §§ 6-20-601 and 6-20-603 shall be distributed on an equal basis per school district to each school district that is eligible to receive funds under subsection (c), (d), or (e) of this section.

(B) Funds distributed under subdivision (h)(2)(A) of this section shall be used by the school district only for transportation costs of the isolated school areas in the school district.

(3) Funding provided under this section is in addition to and in excess of the amount of funds necessary to provide an adequate education as required by the Arkansas Constitution and cannot be relied upon beyond the expiration date of an appropriation made for the purposes of this section.