(2) An education service district board shall expend at least 90 percent of all amounts received from the State School Fund and at least 90 percent of all amounts considered to be local revenues of an education service district on services or programs that have been approved by the component school districts of the education service district through the resolution process described in ORS 334.175.

(3)(a) Notwithstanding subsection (2) of this section, the school district board of a school district that is located in a region described in ORS 334.013 (1)(a), (e) or (i) may request in writing that a percentage of the amounts identified in subsection (2) of this section be distributed to the school district for any purpose identified by the school district board.

(b) A school district board that makes a request under paragraph (a) of this subsection:

(A) Must make the request to the education service district board by November 1 of the year prior to the school year for which the request is being made; and

(B) Must designate the percentage of the amounts identified in subsection (2) of this section that will be distributed to the school district.

(c) The education service district board:

(A) Shall approve a request submitted as provided by this subsection; and

(B) Shall determine the amounts attributable to the school district and eligible for distribution based on the weighted average daily membership (ADMw) of the school district for which the request was made.

(d) For each school year for which a school district receives a distribution as provided by this subsection:

(A) The school district may act only in an advisory capacity for decisions made in relation to the governance of the education service district if the school district board designates a percentage under paragraph (a) of this subsection that is greater than 50 percent but less than 100 percent; and

(B) Notwithstanding ORS 334.015 and 334.019, the school district shall be considered to have withdrawn from the education service district in the manner provided by ORS 334.015 if the school district board designates a percentage under paragraph (a) of this subsection that is 100 percent.

(4) An education service district board shall expend 100 percent of all amounts received from the School Improvement Fund on services or programs that have been approved by the component school districts of the education service district through the resolution process described in ORS 334.175.

(5) The expenditure requirements of this section apply only to amounts retained by the education service district after making any distributions required under ORS 327.019 (9). [2001 c.695 §27; 2001 c.695 §29; 2007 c.578 §4; 2009 c.705 §1; 2011 c.705 §11; 2013 c.751 §§1,3,5]