You request advice as to whether tuition rate calculation for the first year of operation of a union or merged school district should be based in part upon the combined overhead cost for the combined operations of the component districts during the previous year or upon the separate overhead cost of a particular school within a component district during the previous year.
Section 2561 of the Public School Code of March 10, 1949, P. L. 30 as amended, 24 PS §25-2561, provides the method of computing the tuition rate which a receiving school district may charge for educating pupils who are residents of another school district. In brief, *212the method is to total certain enumerated operating expenditures of the receiving school district, e.g\, salaries and wages, utility costs, maintenance and ordinary repair costs, but not including such items as insurance premiums and teachers’ retirement contributions, and divide this total by the total number of pupils in average daily membership in the receiving district’s public schools. The quotient so obtained is designated “overhead cost per pupil”. Depending upon the particular schools which nonresident pupils attend, i.e., elementary or high school, “tuition charge per pupil” is determined by calculating “instruction cost per ■ pupil”, obtained by adding certain enumerated costs and dividing the sum so obtained by the total number of pupils in average daily membership in the particular level of schools involved of' the receiving school district, and adding to it the above overhead cost per pupil, and in the case of elementary pupils, a rental charge of $8, and in the case of high school pupils, a rental charge of $18.
Since it is imperative that tuition rates be available early in the school year, the expenditures and average daily membership of the preceding school year are used.
Union districts are formed under sections 251 to 254 of the Public School Code of 1949, supra, as amended, 24 PS §§2-251 to 2-254, and merged districts are formed under sections 261 to 264 thereof, 24 PS § § 2-261 to 2-264. In both cases, when two or more school districts form a union school district, or when two or more school districts or parts thereof form a merged school district, a single union or merged school district springs into existence.
In years subsequent to the first year of. operation, overhead cost per pupil will be based upon the total expeditures of the union or merged district for the *213preceding year. There is no difficulty with this method of calculation in years subsequent to the first year of operation. The problem arises with regard to the basis for calculations during the first year of operation of the union or merged district where there is no previous experience as a union or merged district. Obviously, the previous year’s expenditures of the component parts of the union or merged district will have to be employed. The question becomes whether the individual school and school district expenditures of the component parts of the union or merged district will be combined to arrive at one overhead cost per pupil figure or whether the overhead cost per pupil factor in computing the tuition cost for nonresident pupils attending a particular school will be based upon that school’s individual overhead cost for the previous year. We favor the former view which is supported by reason and logic.
Once a union or merged school district comes into being, it is a separate legal entity. The several districts or parts thereof which unite or merge lose their separate identity as individual school districts and parts thereof. All the assets, debts and liabilities of the several districts become the assets and liabilities of the new district.* From the moment the union or merger becomes effective the new district operates in all respects as a combined district. It follows that a single, combined overhead cost should be calculated for the union or merged district, arrived at by totaling the individual overhead expenditures of the component parts of the district and dividing by the total number of pupils in average daily membership in all the schools of the district. The basis for tuition rate calculation *214should be the same in the first year of operation of a union or merged district as in all subsequent years.
We are, therefore, of the opinion and you are accordingly advised that tuition rate calculation under section 2561 of the Public School Code of 1949, supra, for the first year of operation of a union or merged school district should be based in part upon the combined overhead cost for the combined operations of the component districts during the previous year.
Sections 254 and 264 of the Public School Code of 1949, supra, 24 PS §§2-254 and 2-264.