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SF 173

Educational bankruptcy act.

2025 Regular Session Introduced by Charles Scott

Creates Educational Bankruptcy Act to court-declare failing districts, appoint a trustee, remove leaders, limit board power, and reset management to boost student outcomes.

S:Died in Committee Returned Bill Pursuant to SR 5-4
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Bill Summary · SF 173

Summary — SF 173: Educational Bankruptcy Act

Status: Introduced Feb 3, 2025; S:Died in Committee (Returned pursuant to SR 5-4) — Sponsor: Senator Scott

Purpose / Intent

SF 173 would create a statutory “Educational Bankruptcy Act” to allow courts to place chronically low‑performing school districts into an educational bankruptcy process. The stated intent is to provide a legal mechanism for state intervention and appointment of a trustee to manage a district where student academic performance meets specified failure thresholds and other conditions are met.

Key provisions

  • Establishes a new Article (“Educational Bankruptcy”) in statute (W.S. 21-2-1001 through 21-2-1003).
  • Gives the State Superintendent of Public Instruction authority (effective May 1, 2027) to petition the district court to declare a school district “educationally bankrupt” if the district meets specified test‑score thresholds over multiple years (see thresholds below).
  • Allows parents or guardians to file a petition on behalf of a public school district if they submit signatures from at least 12.5% of the students’ parents/guardians (signatures must be collected March 1–May 1 and any petition filed no later than May 1).
  • Requires the State Superintendent to publish a list of qualifying districts and to report annually (first report due December 1, 2025) to the joint education interim committee on districts that qualify and any recommended statutory changes.
  • Directs the district court to hold a hearing and, if it finds that placing a district in educational bankruptcy is in the students’ best interest, to appoint a trustee to manage the district.
  • Specifies trustee powers and duties, including (among others): soliciting input from the State Superintendent and local board, removing the district superintendent, removing board authority over management (converting the board to an advisory body), and removing other principals or administrators.
  • Excludes students with disabilities who take alternate assessments from certain calculation denominators; allows the State Superintendent, in consultation with the court, to treat non‑participants (when participation <90%) as scoring “basic or below basic” for purposes of threshold calculations.
  • The bill also references modifications to teacher certification rules, but the text on those changes is truncated in the available copy.

Performance thresholds / timing rules

A district triggers eligibility for a petition if it meets the applicable performance thresholds in the required number of years:
- Timing: For districts with >800 students — thresholds must be met in 2 of the last 3 school years; for districts with ≤800 students — in 3 of the last 4 school years.
- Thresholds (examples as drafted):
- ≥60% of grade 3 students score “basic or below basic” on statewide English Language Arts;
- ≥50% of grade 8 students score “basic or below basic” on statewide mathematics;
- ≥25% of grade 10 students score “below basic” on ELA, mathematics and science portions of the statewide assessment.

Fiscal and administrative impact

  • Fiscal Note: The Department of Education and the judicial system impacts are indeterminable. The Department of Education could face a significant administrative impact beginning May 1, 2027, depending on how many districts are designated educationally bankrupt. The number of potential court cases is unknown.

Who would be affected

  • Public school districts that meet the academic thresholds
  • Students in those districts
  • Local school boards, superintendents, principals, and staff (trustee may remove leaders and take management control)
  • State Department of Education (administration, reporting, possible interventions)
  • District courts (hearings, potential increase in cases)
  • Parents/guardians (ability to initiate petitions)

Procedural / timeline notes

  • State Superintendent may begin filing petitions under the act starting May 1, 2027.
  • Annual reporting by the State Superintendent begins December 1, 2025.
  • Parents’ signature collection window for petitions is March 1–May 1 of the filing year.
  • The introduced bill text includes a note indicating retroactive application to January 1, 2025; the operative petitioning authority, however, is explicitly tied to May 1, 2027 in the bill text.
  • Legislative outcome: SF 173 was introduced and referred to Education but was returned/died in committee on March 3, 2025.

This summary highlights the substance and likely impacts of SF 173 as drafted. Portions of the bill text (notably teacher certification changes and some trustee dismissal/release conditions) were truncated in the available documents, and the fiscal effects are stated as indeterminable by the fiscal note.

Compiled from official sources — confirm details with the bill’s official record.

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