A. The State Board of Education shall determine and fix definite boundaries of the area in which each school district shall provide transportation for each school. When an elementary school district is surrounded by an independent school district, the independent school district must be designated as the transportation area for the high school students in the elementary school district.

B. The State Board of Education is authorized to establish definite routes in each transportation area, and it shall be the further duty of said Board to make rules and regulations as to the manner in which said area and routes may be established or changed. Except as otherwise provided in this section, state funds payable to a district shall be withheld for a failure or refusal to confine its transportation to the area and routes designated by the State Board of Education or to comply with the rules and regulations of the State Board of Education. State funds payable to a school district shall not be withheld in the following circumstances:

1. When, based upon the mutual agreement of the two participating school districts, a school district offering special education classes extends its transportation program to include the transportation of students qualifying for special education in an adjacent school district which does not offer special education classes, for the purpose of offering its special education classes to said students; or

2. When, by resolutions of the boards of education of two participating districts, the districts agree that one or both of the districts may extend its transportation program into the other participating district to provide transportation for students who reside in such other participating district and who, by agreement of the participating districts, are, or will be, attending school in the district that has agreed to furnish transportation for the students.

C. The State Board shall promulgate rules as are necessary to implement the provisions of this section.

Laws 1971, c. 281, § 9-105, eff. July 2, 1971; Laws 1976, c. 273, § 24, emerg. eff. June 17, 1976; Laws 1991, c. 3, § 13, eff. July 1, 1991; Laws 1992, c. 254, § 7, emerg. eff. May 22, 1992.