If the board of directors deems it not in the best interests of the district that the lands mentioned in the petition, or some portion of the lands, should be excluded from the district, the board shall order that the petition be denied. If the board deems it in the best interests of the district, the board may order that the lands mentioned in the petition, or some portion of the lands, be excluded from the district under the following conditions:

(1) Less than twenty-five percent of the electors of the district show cause in writing why the lands or some portion of the lands should not be excluded from the district or, having shown cause, withdraw their objection;

(2) There are no outstanding bonds of the district, or, if there are outstanding bonds of the district, no bondholder assent to exclusion is required as provided by § 46A-4-68 and by the resolution authorizing the issuance of the outstanding bonds; and

(3) There is no contract between the district and the United States.

Source: SDC 1939, § 61.0833; SDCL § 46-12-68; SL 1976, ch 277, § 4; SL 2011, ch 165, § 364.