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PUBLIC LAWS
First Regular Session of the 122nd

PART D

     Sec. D-1. 5 MRSA §17154, sub-§6, ¶E, as amended by PL 2003, c. 504, Pt. B, §1, is further amended to read:

     Sec. D-2. 20-A MRSA §1, sub-§§17 and 18, as amended by PL 1999, c. 75, §1, are further amended to read:

     17. Major capital costs. "Major capital costs" is defined in section 15603, subsection 17 15672, subsection 18-A.

     18. Minor capital costs. "Minor capital costs" is defined in section 15603, subsection 18 15672, subsection 20-A.

     Sec. D-3. 20-A MRSA §1301, sub-§1, ¶A, as amended by PL 1993, c. 410, Pt. F, §3, is further amended to read:

     Sec. D-4. 20-A MRSA §1301, sub-§1, ¶B, as amended by PL 2001, c. 375, §1, is further amended to read:

     Sec. D-5. 20-A MRSA §1307, sub-§3, as amended by PL 1997, c. 68, §1, is further amended to read:

     3. Summary action. To summarize the action taken on the school budget for the purposes of determining state and local cost sharing, the articles prescribed in chapter 606 606-B must also be voted upon.

     Sec. D-6. 20-A MRSA §1307, sub-§4, as enacted by PL 1997, c. 68, §2, is amended to read:

     4. Budget explanation. The warrant may include an explanation of the relationship between warrant articles authorizing specific line item expenditures as provided in subsection 1 and the articles prescribed in chapter 606 606-B summarizing the budget proposal.

     Sec. D-7. 20-A MRSA §1308, as amended by PL 1999, c. 710, §6, is further amended to read:

§1308. Failure to pass budget

     If a budget for the operating of the district is not approved prior to July 1st, the latest budget as submitted by the board of directors is automatically considered the budget for operational expenses for the ensuing year until a final budget is approved, except that, when the school board delays the school budget meeting in accordance with section 15617 15693, subsection 2, paragraph C, the operating budget must be approved within 30 days of the date the commissioner notifies the school board of the amount allocated to the school unit under section 15613 15689-B or the latest budget submitted by the directors becomes the operating budget for the next school year.

     Sec. D-8. 20-A MRSA §1311, sub-§1, ¶C, as amended by PL 1993, c. 372, §4, is further amended to read:

     Sec. D-9. 20-A MRSA §1351, sub-§1, ¶K, as amended by PL 1999, c. 75, §2, is further amended to read:

     Sec. D-10. 20-A MRSA §1407, sub-§2, as amended by PL 1999, c. 75, §3, is further amended to read:

     2. Expense of keeping the school open. If the voters vote to keep the school open, the member municipality is liable for some additional expense for actual local operating costs and transportation operating costs as defined in section 15603 15672. The determination of costs is subject to the approval of the commissioner. The cost to be borne by the town voting to keep an elementary school open is the amount that would be saved if the school were closed. Any additional costs that must be borne by the member municipality must be part of the article presented to the voters at the meeting to determine whether the school should remain open.

     Sec. D-11. 20-A MRSA §1701, sub-§3, as amended by PL 1991, c. 429, §4, is further amended to read:

     3. Time and place. The district school committee shall call an annual budget meeting on or before June 30th at an hour and in a location within the community school district it designates, except that the school committee may delay the annual budget meeting to a date after July 1st in accordance with section 15617 15693, subsection 2, paragraph C.

     Sec. D-12. 20-A MRSA §1701, sub-§9, ¶A, as amended by PL 1999, c. 710, §8, is further amended to read:

     Sec. D-13. 20-A MRSA §1701, sub-§12, as amended by PL 1999, c. 710, §10, is further amended to read:

     12. State-local allocations. To summarize the action taken on the budget for the purposes of determining the community school district's state-local allocations, the articles prescribed in chapter 606 606-B must also be voted on.

     Sec. D-14. 20-A MRSA §1701-B, sub-§5, as enacted by PL 1999, c. 710, §11, is amended to read:

     5. Failure to approve budget. If the voters do not validate the budget approved in the district budget meeting at the budget validation referendum vote, the district school committee shall hold another district budget meeting in accordance with section 1701, subsection 8 at least 10 days after the referendum to vote on a budget approved by the committee. The budget approved at the district budget meeting must be submitted to the voters for validation at referendum in accordance with this section. The process must be repeated until a budget is approved at a district budget meeting and validated at referendum. If a budget is not approved and validated before July 1st of each year, the latest budget submitted by the committee is automatically considered the budget for operational expenses for the ensuing year until a final budget is approved, except that when the school committee delays the district budget meeting in accordance with section 15617 15693, subsection 2, paragraph C the operating budget must be approved within 30 days of the date the commissioner notifies the school committee of the amount allocated to the school unit under section 15613 15689-B or the latest budget submitted by the committee becomes the operating budget for the next school year.

     Sec. D-15. 20-A MRSA §1704, sub-§1, ¶B, as amended by PL 1993, c. 410, Pt. F, §4, is further amended to read:

     Sec. D-16. 20-A MRSA §4003-A is enacted to read:

§4003-A. Hazardous chemicals

     The commissioner shall establish rules governing the purchase and storage of hazardous chemicals in schools.

     Sec. D-17. 20-A MRSA §4254, sub-§1, as amended by PL 1997, c. 534, §3, is further amended to read:

     1. Allowable costs. Allowable costs are the cost of implementing approved plans; these costs may be added to the school unit's subsidizable costs under chapter 606 606-B.

     Sec. D-18. 20-A MRSA §5401, sub-§15, ¶C, as amended by PL 2001, c. 667, Pt. C, §11, is further amended to read:

     Sec. D-19. 20-A MRSA §6303, as enacted by PL 1995, c. 427, §1, is amended to read:

§6303. Medicaid for health and human services

     A school administrative unit may receive funds from the Medicaid program pursuant to the United States Social Security Act, 42 United States Code, for the provision of preventive health, health, habilitation, rehabilitation and social services to eligible students in accordance with section 15613, subsection 16.

     Sec. D-20. 20-A MRSA §6651, sub-§3, as amended by PL 1989, c. 414, §16, is repealed.

     Sec. D-21. 20-A MRSA §6654, as amended by PL 1991, c. 550 and PL 2003, c. 689, Pt. B, §6, is further amended to read:

§6654. School-based child care grants

     The department and the Department of Health and Human Services are authorized to provide assistance to school administrative units to assist the units in establishing school-based child care services. Any assistance provided must provide funds for 2 years and expenditure of those funds is considered expenditure of local funds in computing the unit's educational program costs in chapter 606. The department has full authority to administer any grant program that it operates under this section.

     Sec. D-22. 20-A MRSA §7734-A, first ¶, as repealed and replaced by PL 1999, c. 296, §10, is amended to read:

     In addition to the programs authorized in this chapter, school administrative units may provide services for children who are disabled in a manner consistent with sections 4251 to 4254, and the cost of such services is subsidizable as special education costs under chapter 606 606-B.

     Sec. D-23. 20-A MRSA §8301-A, sub-§§4 and 9, as enacted by PL 1991, c. 518, §2, are amended to read:

     4. Municipality. "Municipality" has the same meaning as in section 15603, subsection 19 15672, subsection 21.

     9. State subsidy. "State subsidy" has the same meaning as in section 15603, subsection 26 15672, subsection 31-A.

     Sec. D-24. 20-A MRSA §8351, as amended by PL 1991, c. 518, §9 and c. 716, §6 and PL 2003, c. 545, §5, is further amended to read:

     State aid for centers and regions must be administered in accordance with chapters 606 606-B and 609 and Title 20, section 3457.

     Sec. D-25. 20-A MRSA §8402, as corrected by RR 2003, c. 2, §55, is amended to read:

§8402. Programs

     A center shall provide programs of career and technical education. Programs of career and technical education are eligible to receive state subsidy pursuant to chapters 606 606-B and 609. All programs of career and technical education offered by a center must be approved by the commissioner pursuant to section 8306-A. The programs must offer a sequence of courses that are directly related to the preparation of individuals for employment in current or emerging occupations and may include training and education in academic and business skills preparing students to further their education at the community college or other college level or allowing students to use trade and occupational skills on other than an employee basis. Programs of career and technical education may also include alternative educational programs and training and education in music, athletics, art and other activities approved by the commissioner pursuant to section 8306-A.

     Sec. D-26. 20-A MRSA §8404, sub-§3, ¶C, as corrected by RR 2003, c. 2, §59, is amended to read:

     Sec. D-27. 20-A MRSA §8451-A, as corrected by RR 2003, c. 2, §61, is amended to read:

§8451-A. Programs

     A region shall provide programs of career and technical education. Programs of career and technical education are eligible to receive state subsidy pursuant to chapters 606 606-B and 609. All programs of career and technical education offered by a region must be approved by the commissioner pursuant to section 8306-A. The programs must offer a sequence of courses that are directly related to the preparation of individuals for employment in current or emerging occupations and may include training and education in academic and business skills preparing students to further their education at the community college or college level or allowing students to use trade and occupational skills on other than an employee basis. Programs of career and technical education may also include alternative educational programs and training and education in music, athletics, art and other activities approved by the commissioner pursuant to section 8306-A.

     Sec. D-28. 20-A MRSA §8601-A, sub-§6, as enacted by PL 1991, c. 518, §33, is amended to read:

     6. Municipality. "Municipality" has the same meaning as in section 15603, subsection 19 15672, subsection 21.

     Sec. D-29. 20-A MRSA §8605, sub-§2, ¶B, as amended by PL 1995, c. 665, Pt. J, §1, is further amended to read:

     Sec. D-30. 20-A MRSA §8606-A, sub-§2, ¶C, as amended by PL 1991, c. 518, §38, is further amended to read:

     Sec. D-31. 20-A MRSA §15622 is enacted to read:

§15622. Repeal

     This chapter is repealed July 1, 2005.

     Sec. D-32. 20-A MRSA §15671, sub-§1, as amended by PL 2003, c. 712, §9, is further amended to read:

     1. State and local partnership. The State and each local school administrative unit are jointly responsible for contributing to the cost of the components of essential programs and services described in this chapter. Except as otherwise provided in this subsection, for each fiscal year, the total cost of the components of essential programs and services may not exceed the prior fiscal year's costs multiplied by one plus the average real personal income growth rate as defined in Title 5, section 1665, subsection 1, except that in no case may that rate exceed 2.75%. For fiscal years commencing after the state tax burden ranks in the middle 1/3 of all states, as calculated and certified by the State Tax Assessor, the total cost of the components of essential programs and services may not exceed the prior fiscal year's costs multiplied by one plus the average real personal income growth rate as defined in Title 5, section 1665, subsection 1. The Legislature, by an affirmative vote of each House, may exceed the limitations on increases in the total cost of the components of essential programs and services provided in this subsection, as long as that vote is taken upon legislation stating that it is the Legislature's intent to override the limitation for that fiscal year. The state contribution to the cost of the components of essential programs and services, exclusive of federal funds that are provided and accounted for in the cost of the components of essential programs and services, must be made in accordance with this subsection:

Beginning in fiscal year 2005-06 and in each fiscal year thereafter, the commissioner shall use the funding level determined in accordance with this section as the basis for a recommended funding level for the state share of the cost of the components of essential programs and services.

     Sec. D-33. 20-A MRSA §15671, sub-§§2, 3, 4 and 6, as enacted by PL 2001, c. 660, §1, are amended to read:

     2. Per-pupil rate amounts. A per-pupil guarantee rate represents the an amount of funds that is to be made available for each subsidizable pupil. Three per-pupil guarantee amounts must be calculated, reflecting grade level cost differences: one for kindergarten to grade 5, one for grades 6 to 8 and one for grades 9 to 12. These per-pupil guarantees must be modified as appropriate for special student populations. The per-pupil guarantee represents the annual cost of staffing and material resources that are appropriately allocated on a per-pupil basis. Categories of staffing and resources are as follows: Per-pupil rates are determined pursuant to section 15676.

     3. Specialized student populations. In recognition that educational needs can be more costly for some student populations than for others, modified per-pupil guarantee amounts or weighted pupil counts must be calculated for specialized student populations special student populations are specifically addressed in sections 15675 and 15681-A, subsection 2. The specialized student populations to be addressed are:

     4. Educational cost components outside the per-pupil rate. A per-pupil guarantee rate is not a suitable method for allocation of all educational cost components. These components may include, but are not limited to, debt service, transportation, bus purchases, vocational education, small school adjustments, teacher educational attainment and longevity of service and adjustments to general purpose aid. The funding methodology of these educational cost components must be established based on available research.

     6. Targeted funds. Funds for technology, assessment and the costs of additional investments in educating children in kindergarten to grade 2 as described in section 15681 must be provided as targeted grants. School administrative units shall submit a plan for the use of these funds and shall receive funding based on approval of the plan by the commissioner.

     Sec. D-34. 20-A MRSA §15671, sub-§7, as amended by PL 2003, c. 712, §10, is further amended to read:

     7. Transition; annual targets. To achieve the system of school funding based on essential programs and services required by this section, the following annual targets are established.

     Sec. D-35. 20-A MRSA §15671-A, as enacted by PL 2003, c. 712, §11, is amended to read:

     1. Definitions. As used in this section, unless the context otherwise indicates, the following terms have the following meanings.

     2. Local cost share expectation. The local cost share expectation is established as follows. This subsection establishes full-value education mill rates that limit a municipality's required local contribution pursuant to section 15688, subsection 3-A. The full-value mill rates represent rates that, if applied to the statewide valuation, would produce the statewide total local share. Notwithstanding any other provision of law, with respect to the assessment of any property taxes for property tax years beginning on or after April 1, 2005, a municipality's required local contribution determined pursuant to section 15688, subsection 3-A establishes the local cost share expectation for that municipality.

     3. Exceeding maximum local cost share expectations; separate article. Beginning with the 2005-2006 school budget, the legislative body of a school administrative unit may adopt property tax rates an additional local appropriation that exceed exceeds the local cost share expectation established by section 15688, subsection 3 3-A, paragraph A only if that action is approved in a separate article by a vote of the school administrative unit's legislative body through the same process that the school budget is approved in that school administrative unit and in accordance with section 15690. If that additional appropriation causes the school administrative unit to exceed the maximum state and local spending target described in subsection 4, the requirements of subsection 5 apply.

     4. Maximum state and local spending target. The maximum state and local spending target for a school administrative unit is the sum of the following costs calculated by the commissioner for the unit:

The commissioner shall annually notify each school administrative unit of its maximum state and local spending target.

     5. Exceeding maximum state and local spending target. If the sum of a school administrative unit's required local contribution determined pursuant to section 15688, subsection 3-A plus the state contribution as calculated pursuant to section 15688, subsection 3-A, paragraph D plus any additional local amount proposed to be raised pursuant to section 15690, subsection 3 exceeds the school administrative unit's maximum state and local spending target established pursuant to subsection 4, the following provisions govern approval of that additional amount.

     Sec. D-36. 20-A MRSA §15672, as amended by PL 2003, c. 712, §12, is further amended to read:

§15672. Definitions

     As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings.

     1. Allocation year. "Allocation year" means the year that subsidy is distributed to school administrative units.

     1-A. Adjusted total cost of components of essential programs and services. "Adjusted total cost of the components of essential programs and services" means the total cost of the components of essential programs and services adjusted to reflect the application of the transition targets to the base total component as specified in section 15671, subsection 7, paragraph A.

     1-B. Base year. "Base year" means the 2nd year prior to the allocation year.

     1-C. Bus purchase costs. "Bus purchase costs" includes expenditures for bus purchases approved by the commissioner and made during the year prior to the allocation year.

     2. Clerical staff. "Clerical staff" means full-time equivalent public school secretaries, as documented in the department's database.

     2-A. Debt service costs. "Debt service costs," for subsidy purposes, includes:

     3. Economically disadvantaged students. "Economically disadvantaged students" means students who are included in the department's count of students who are eligible for free or reduced-price meals or free milk or both.

     4. Education technician. "Education technician" means a full-time equivalent public teacher aide or education technician I, associate teacher or education technician II or assistant teacher or education technician III but not a special education technician I, II or III, as documented in the department's database.

     5. Elementary free or reduced-price meals percentage. "Elementary free or reduced-price meals percentage" means the percentage, as determined by the commissioner, that reflects either:

     6. Elementary grades. "Elementary grades" means kindergarten to grade 8 and includes children enrolled in early kindergarten programs and 4-year-old children enrolled in a 2-year childhood education program prior to grade one.

     7. Elementary school level. "Elementary school level" means the grades from kindergarten to grade 5 and includes early kindergarten programs and 2-year childhood education programs enrolling 4-year-old children prior to grade one.

     7-A. EPS per-pupil rate. "EPS per-pupil rate" means the rate calculated under section 15676 or 15676-A, as applicable.

     8. Essential programs and services. "Essential programs and services" means those educational resources that are identified in this chapter that enable all students to meet the standards in the 8 content standard subject areas of the system of learning results established in chapter 222.

     9. Essential programs and services transition percentage. "Essential programs and services transition percentage" means the full estimated cost for all essential programs and services for that fiscal year that will be funded by a state contribution or by a required local contribution percentage of the base total calculated pursuant to section 15671, subsection 7, paragraph A.

     9-A. Gifted and talented costs. "Gifted and talented costs" means the cost of programs for gifted and talented students that have been approved by the commissioner.

     10. Grade 9 to 12 portion. "Grade 9 to 12 portion" means those pupils in the secondary grades or high school level.

     11. Guidance staff. "Guidance staff" means full-time equivalent public guidance counselors, directors of guidance or school social workers, as documented in the department's database.

     12. Health staff. "Health staff" means full-time equivalent public school nurses, as documented in the department's database.

     13. High school level. "High school level" means grade 9 to grade 12.

     13-A. Institutional resident. "Institutional resident" means a person between 5 years of age and 20 years of age who is attending a public school of the school administrative unit and who is committed or otherwise legally admitted to and residing at a state-operated institution. "Institutional resident" does not include students attending private facilities, regardless of the means of placement.

     14. Income weight. "Income weight" means a value between zero and one that is used to adjust a municipality's ratio of local median household income to the statewide median household income. The income weight plus the property weight, as defined in subsection 24, must total one.

     15. Kindergarten to grade 8 portion. "Kindergarten to grade 8 portion" means those pupils in the elementary grades or a combination of the elementary school level and middle school level.

     16. Kindergarten to grade 2 student. "Kindergarten to grade 2 student" means a student in any grade from prekindergarten to grade 2 who is at least 5 4 years old on October 15th of the school year.

     17. Librarian. "Librarian" means a full-time equivalent public librarian or media specialist, as documented in the department's database.

     18. Limited English proficiency student. "Limited English proficiency student" means a student who was not born in the United States or whose native language is a language other than English and who satisfies the definition of a limited English proficient student under the federal No Child Left Behind Act of 2001, 20 United States Code, Chapter 70.

     18-A. Major capital costs. "Major capital costs" means costs relating to school construction projects, as defined in section 15901.

     19. Media assistant. "Media assistant" means a full-time equivalent public librarian aide or library technician I, librarian assistant or library technician II or librarian associate or library technician III, as documented in the department's database.

     20. Middle school level. "Middle school level" means grade 6 to grade 8.

     20-A. Minor capital costs. "Minor capital costs" means costs relating to plant maintenance, minor remodeling, site development or the purchase of land not in conjunction with a construction project.

     21. Municipality. "Municipality" means a city, town or organized plantation.

     21-A. Other subsidizable costs. "Other subsidizable costs" means those costs identified in section 15681-A. These costs are part of the total operating allocation under section 15683.

     21-B. Portable, temporary classroom space. "Portable, temporary classroom space" means one or more mobile or modular buildings that are at least partially constructed off site and that are designed to be moved to other sites with a minimum of disassembly and reassembly.

     22. Per-pupil guarantee. "Per-pupil guarantee" means the total amount of funds that is made available for each subsidizable pupil representing the following cost components:

     22-A. Predicted per-pupil transportation costs. "Predicted per-pupil transportation costs" means the predicted transportation costs for a school administrative unit based on the number of resident pupils, the number of miles of Class 1 to Class 5 roads in the school administrative unit and approved adjustments. Approved adjustments include a per mile rate equal to the state average gross transportation operating costs per mile driven for transportation associated with out-of-district special education programs, up to 2 round trips per day for vocational education programs, and adjustments for expenditures for ferry services within a school administrative unit, transportation of homeless children in accordance with section 5205 and transportation costs of island school administrative units.

     23. Property fiscal capacity. "Property fiscal capacity" means the certified state valuation amount for the year prior to the most recently certified state valuation.

     24. Property weight. "Property weight" means a value between zero and one that is used to adjust a municipality's ratio of local per-pupil property fiscal capacity to the statewide per-pupil property fiscal capacity. The income weight, as defined in subsection 14, plus the property weight must total one.

     25. School administrative staff. "School administrative staff" means full-time equivalent public school principals and assistant principals, as documented in the department's database.

     26. School administrative unit's local contribution to EPS per-pupil rate. "School administrative unit's local contribution to the per-pupil guarantee EPS per-pupil rate" means the funds that a school administrative unit provides for each subsidizable pupil who resides in that unit.

     27. School administrative unit's state contribution to EPS per-pupil rate. "School administrative unit's state contribution to the per-pupil guarantee EPS per-pupil rate" means the funds that the State provides to a school administrative unit for each subsidizable pupil who resides in that unit.

     28. School level. "School level" means elementary level, middle school level and high school level.

     29. School level teaching staff. "School level teaching staff" means full-time equivalent public classroom teachers, itinerant classroom teachers and special teachers of reading or literacy specialists excluding special education teachers and vocational education teachers, as documented in the department's database.

     30. Secondary grades. "Secondary grades" means grade 9 to grade 12.

     30-A. Special education costs. "Special education costs" for subsidy purposes includes:

     30-B. State-operated institution. "State-operated institution" means any residential facility or institution that is operated by the Department of Health and Human Services or a school operated by the Department of Education.

     31. State share percentage. "State share percentage" means the percentage of the sum of the following amounts that is provided by a state appropriation: state contribution determined under section 15688, subsection 3, paragraph B divided by the total cost determined in section 15688, subsection 1.

     31-A. State subsidy. "State subsidy" means the total of the state contribution determined under section 15688, subsection 3-A, paragraph B and any applicable adjustment under section 15689.

     31-B. Subsidizable costs. "Subsidizable costs" includes the costs described in paragraphs A to C and used to calculate the total allocation amount:

     32. Subsidizable pupils. "Subsidizable pupils" means all school level pupils who reside in a school administrative unit and who are educated at public expense at a public school or at a private school approved for tuition purposes.

     32-A. Total allocation. "Total allocation" means the total of the operating allocation as described in section 15683 and the debt service allocation as described in section 15683-A.

Nonsubsidizable costs are not considered in the calculation of the total allocation. "Nonsubsidizable costs" includes the following:

     32-B. Total cost of components of essential programs and services. "Total cost of the components of essential programs and services" means the total of the following components:

     32-C. Transportation operating costs. "Transportation operating costs" means all costs incurred in the transportation of pupils in kindergarten to grade 12, including lease costs for bus garage and maintenance facilities and lease-purchase costs that the school administrative unit may apply to the purchase of bus garage and maintenance facilities, when the leases and lease-purchase agreements have been approved by the commissioner, but excluding the costs of bus purchases and excluding all costs not associated with transporting students from home to school and back home each day. The amount includable for determining the subsidy for a school administrative unit for lease-purchase of bus garage and maintenance facilities may not exceed the amount for the lease of a comparable facility.

     32-D. Vocational education costs. "Vocational education costs" for subsidy purposes means all costs incurred by the vocational regions, centers or satellites in providing approved secondary school vocational education programs, excluding transportation, capital costs and debt service.

     32-E. Year. "Year" means a fiscal year starting July 1st and ending June 30th of the succeeding year.

     33. Year of funding. "Year of funding" means the fiscal year during which state subsidies are disbursed to school administrative units, except as specified in section 15005, subsection 1.

     Sec. D-37. 20-A MRSA §15673, as repealed and replaced by PL 2003, c. 712, §13, is repealed.

     Sec. D-38. 20-A MRSA §15675, sub-§1, as enacted by PL 2003, c. 504, Pt. A, §6, is amended to read:

     1. Limited English proficiency students. The additional weights for school administrative units with limited English proficiency students are as follows:

Eligibility for state funds under this subsection is limited to school administrative units that are providing services to limited English proficient students through programs approved by the department.

     Sec. D-39. 20-A MRSA §15676, as enacted by PL 2003, c. 504, Pt. A, §6, is amended to read:

§15676. EPS per-pupil rate

     For each school administrative unit, the commissioner shall calculate the unit's per-pupil guarantee EPS per-pupil rate for each year as the sum of:

     1. Teaching staff costs. The salary and benefit costs for school level teaching staff that are necessary to carry out this Act, calculated in accordance with section 15678, adjusted by the regional adjustment under section 15682 and reduced by the amount of funds received by the school administrative unit during the most recent fiscal year under Title 1 of the federal Elementary and Secondary Act of 1965, 20 United States Code, Section 6301 et seq.;

     2. Other staff costs. The salary and benefit costs for school-level staff who are not teachers, but including substitute teachers, that are necessary to carry out this Act, calculated in accordance with section 15679, adjusted by the regional adjustment under section 15682 and reduced by the amount of funds received by the school administrative unit during the most recent fiscal year under Title 1 of the federal Elementary and Secondary Act of 1965, 20 United States Code, Section 6301 et seq.; and

     3. Additional costs. The per-pupil amounts not related to staffing, calculated in accordance with section 15680.

     The EPS per-pupil rate is calculated on the basis of which schools students attend. For school administrative units that do not operate their own schools, the EPS per-pupil rate is calculated under section 15676-A.

     Sec. D-40. 20-A MRSA §15676-A is enacted to read:

     1. Definitions. For purposes of this section, the following terms have the following meanings.

     2. Calculation of EPS per-pupil rate. For school administrative units that do not operate certain types of schools, the commissioner shall calculate that unit's EPS per-pupil rate for each year as follows.

     Sec. D-41. 20-A MRSA §15678, sub-§5, ¶B, as enacted by PL 2003, c. 504, Pt. A, §6, is amended to read:

     Sec. D-42. 20-A MRSA c. 606-C, headnote, as enacted by IB 2003, c. 2, §1, is repealed.

     Sec. D-43. 20-A MRSA §15681, as enacted by IB 2003, c. 2, §1, is repealed.

     Sec. D-44. 20-A MRSA §15681-A is enacted to read:

§15681-A. Other subsidizable costs

     The following are other subsidizable costs:

     1. Bus purchases. Bus purchase costs;

     2. Special education costs. Beginning in fiscal year 2005-06, a school administrative unit receives an additional weight of at least 1.20 but not greater than 1.40 for each special education student identified on the annual December 1st child count as required by the federal Individuals with Disabilities Education Act for the most recent year, up to a maximum of 15% of the school administrative unit's resident pupils as determined under section 15674, subsection 1, paragraph C, subparagraph (1). For those school administrative units in which the annual December 1st child count for the most recent year is less than 15% of the school administrative unit's resident pupils as determined under section 15674, subsection 1, paragraph C, subparagraph (1), the special education child count percentage may not increase more than 0.5% in any given year, up to a maximum of 1.0% in any given 3-year period. For each special education student above the 15% maximum, the unit receives an additional weight of .38. In addition, each school administrative unit must receive additional funds:

The commissioner shall develop an appeals procedure for calculated special education costs for school administrative units;

     3. Transportation costs. For fiscal year 2005-06, the commissioner, using information provided by a statewide education policy research institute, shall establish a per-pupil transportation cost for each school administrative unit based on an analysis of the most recent year's reported transportation expenditures and a predicted per-pupil transportation cost based on the number of resident pupils, the number of miles of Class 1 to Class 5 roads in the school administrative unit and any approved adjustments. In fiscal year 2005-06 the established per-pupil transportation cost for each school administrative unit is the most recent year's reported transportation expenditures or predicted per-pupil transportation cost, plus 10%, whichever is lower. Beginning in fiscal year 2006-07, and for each subsequent fiscal year, the per-pupil transportation costs for each school administrative unit are its established costs for the most recent year adjusted by the Consumer Price Index or other comparable index. For fiscal years 2005-06 and 2006-07, in no case may the per-pupil transportation costs for a school administrative unit be less than 75% of the established costs for the most recent fiscal year. Every 3 years, the commissioner, using information provided by a statewide education policy research institute, shall examine and may adjust reported transportation expenditures and predicted transportation costs. The commissioner shall develop an appeals procedure for established per-pupil transportation costs for school administrative units;

     4. Vocational education costs. Vocational education costs in the base year adjusted to the year prior to the allocation year; and

     5. Gifted and talented education costs. Gifted and talented education costs in the base year adjusted to the year prior to the allocation year.

     Sec. D-45. 20-A MRSA §15682, as enacted by IB 2003, c. 2, §1, is repealed.

     Sec. D-46. 20-A MRSA §15682, as enacted by PL 2003, c. 504, Pt. A, §6, is amended to read:

§15682. Regional adjustment

     The commissioner shall make a regional adjustment in the total operating allocation for each school administrative unit determined pursuant to section 15683. The regional adjustment must be based on the regional differences in teacher salary costs within labor market areas in the State, as computed by a statewide education policy research institute, and must be applied only to appropriate teacher salary and benefits costs as calculated under section 15678 and salary and benefit costs of other school-level staff who are not teachers as calculated under section 15679. Beginning in fiscal year 2006-07, and at least every 2 years thereafter, the commissioner, using information provided by a statewide education policy research institute, shall review the regional adjustment amounts under this section and shall submit any recommended changes to the state board for approval.

     Sec. D-47. 20-A MRSA §15683, as amended by PL 2003, c. 712, §14, is further amended to read:

§15683. Total operating allocation

     For each school administrative unit, that unit's total operating allocation is the base total set forth in subsection 1 as adjusted in accordance with subsection 2 and including the total amount for subsection 3 of other subsidizable costs as described in section 15681-A.

     1. Base total. The base total of a school administrative unit's total operating allocation is the sum of:

     2. Adjustments. The base total calculated pursuant to subsection 1 must be adjusted as follows by multiplying it by the appropriate transition percentage in accordance with section 15671, subsection 7, paragraph A.

     Sec. D-48. 20-A MRSA §15683, as enacted by IB 2003, c. 2, §1, is repealed.

     Sec. D-49. 20-A MRSA §15683-A is enacted to read:

§15683-A. Total debt service allocation

     For each school administrative unit, that unit's total debt service allocation is that unit's debt service costs as defined in section 15672, subsection 2-A.

     Sec. D-50. 20-A MRSA §15684, as enacted by PL 2003, c. 712, §15 and IB 2003, c. 2, §1, is repealed.

     Sec. D-51. 20-A MRSA §15685, as enacted by PL 2003, c. 504, Pt. A, §6 and IB 2003, c. 2, §1, is repealed.

     Sec. D-52. 20-A MRSA §15686, as amended by PL 2003, c. 712, §16, is further amended to read:

§15686. Transition adjustment

     For each of the fiscal years described in section 15671, subsection 7, the commissioner shall establish a transition adjustment calculated to minimize the adverse fiscal impact that may be experienced by some municipalities as a result of the phase-in of this Act. The transition adjustment for a municipality must be directly related to the phase-in of essential programs and services and the local cost share expectation method under section 15671-A of determining the local contribution to the cost of funding essential programs and services. The amount of this adjustment must decline with each successive fiscal year, and the adjustments must end no later than fiscal year 2009-10 2008-09.

     1. Adjustment in fiscal year 2005-06. A school administrative unit is eligible for a transition adjustment in fiscal year 2005-06 if the school administrative unit meets the following criteria.

A school administrative unit that meets the criteria in paragraph A is eligible to receive no less than a 5% transition adjustment in fiscal year 2005-06 if the school administrative unit operates an elementary or secondary school and also has a student count of less than 1,000.
A school administrative unit that meets the criteria in paragraph A is eligible to receive no less than a 2.5% transition adjustment in fiscal year 2005-06 if the school administrative unit operates an elementary or secondary school and also has a student count of more than 1,000.

     Sec. D-53. 20-A MRSA §15688, sub-§1, ¶¶A to C, as enacted by PL 2003, c. 712, §17, are amended to read:

     Sec. D-54. 20-A MRSA §15688, sub-§2, as enacted by PL 2003, c. 712, §17, is amended to read:

     2. Member municipalities in school administrative districts or community school districts; total costs. For each municipality that is a member of a school administrative district or community school district, the commissioner shall annually determine each municipality's total cost of education. A municipality's total cost of education is the school administrative district's or community school district's total cost of funding education multiplied by the percentage that the municipality's most recent calendar year average pupil count is to the school administrative district's or community school district's most recent calendar year average pupil count.

     Sec. D-55. 20-A MRSA §15688, sub-§3, as enacted by PL 2003, c. 712, §17, is repealed.

     Sec. D-56. 20-A MRSA §15688, sub-§3-A is enacted to read:

     3-A. School administrative unit; contribution. For each school administrative unit, the commissioner shall annually determine the school administrative unit's required contribution, the required contribution of each municipality that is a member of the unit, if the unit has more than one member, and the State's contribution to the unit's total cost of education in accordance with the following.

     Sec. D-57. 20-A MRSA §15688, sub-§4, as enacted by PL 2003, c. 712, §17, is amended to read:

     4. Method of cost sharing; exception. For the purpose of local cost sharing, the provisions of subsection 3 3-A do not apply to municipalities that are members of a school administrative district or a community school district whose cost sharing formula was established pursuant to private and special law prior to January 1, 2004. For each municipality that is a member of a school administrative district or a community school district whose cost sharing formula was established pursuant to private and special law prior to January 1, 2004, the cost sharing formula established pursuant to private and special law determines each municipality's local cost of education.

     Sec. D-58. 20-A MRSA §15689, sub-§1, as enacted by PL 2003, c. 712, §17, is repealed and the following enacted in its place:

     1. Minimum state allocation. Each school administrative unit must be guaranteed a minimum state share of its total allocation that is an amount equal to the greater of the following:

These funds must be an adjustment to the school administrative unit's state and local allocation after the state and local allocation has been adjusted for debt service pursuant to subsection 2.

     Sec. D-59. 20-A MRSA §15689, sub-§3, as enacted by PL 2003, c. 712, §17, is amended to read:

     3. Adjustment limitations. The amounts of the adjustments paid to school administrative units or municipalities in subsections 1 and 2 pursuant to this section are limited to the amounts appropriated by the Legislature for these adjustments.

     Sec. D-60. 20-A MRSA §15689, sub-§§4 to 6 are enacted to read:

     4. Audit adjustments. The following provisions apply to audit adjustments.

     5. Adjustment for cost of educating eligible students in long-term drug treatment centers. A school administrative unit that operates an educational program approved pursuant to chapter 327 to serve eligible students in licensed drug treatment centers must be reimbursed in the year in which costs are incurred as follows.

     6. Adjustment for uncertified personnel. The commissioner shall reduce the state share of the total allocation to a school administrative unit in the current year or following year by an amount that represents the state share of expenditures for salaries and benefits paid to uncertified personnel.

     Sec. D-61. 20-A MRSA §§15689-A to 15689-F are enacted to read:

     1. Payment of state agency client costs. State agency client costs are payable pursuant to this subsection. As used in this subsection, "state agency client" has the same meaning as defined in section 1, subsection 34-A.

     2. Education of institutional residents. The commissioner may pay tuition to school administrative units or private schools for institutional residents within the limits of the allocation made under this section.

     3. Essential programs and services components contract. The commissioner may contract for the updating of the essential programs and services component with a statewide education research institute.

     4. Learning results implementation, assessment and accountability. The commissioner may expend and disburse funds limited to the amount appropriated by the Legislature to carry out the purposes of Public Law 1995, chapter 649, sections 5 and 8.

     5. Regionalization, consolidation and efficiency assistance. The commissioner may expend and disburse funds limited to the amount appropriated by the Legislature to carry out the purposes of promoting regionalization, consolidation and efficiency.

     6. Education research contract. The commissioner may contract for the compilation and analysis of education data with a statewide education research institute.

     7. Disbursement limitations. The funds disbursed in accordance with this section are limited to the amounts appropriated by the Legislature for these purposes.

     1. Schedules of payment of unit allocation. The commissioner shall authorize state subsidy payments to the school administrative units to be made in accordance with time schedules set forth in sections 15005, 15689-D and 15901 to 15910.

     2. Notification of allocation; commissioner's duty; superintendent's duty. The following provisions apply to notification of allocation by the commissioner and each superintendent.

     3. Payments of state subsidy to unit's treasurer; basis. State subsidy payments must be made directly to the treasurer of each school administrative unit. The payments must be based on audited financial reports submitted by school administrative units.

     4. Appeals. A school board may appeal the computation of state subsidy for the school administrative unit to the state board in writing within 30 days of the date of notification of the computed amount. The state board shall review the appeal and make an adjustment if in its judgment an adjustment is justified. The state board's decision is final as to facts supported by the record of the appeal.

     5. School purpose expense requirement. Notwithstanding any other law, money allocated for school purposes may be expended only for school purposes.

     6. Balance of allocations. Notwithstanding any other law, general operating fund balances at the end of a school administrative unit's fiscal year must be carried forward to meet the unit's needs in the next year or over a period not to exceed 3 years. Unallocated balances in excess of 3% of the previous fiscal year's school budget must be used to reduce the state and local share of the total allocation for the purpose of computing state subsidy. School boards may carry forward unallocated balances in excess of 3% of the previous year's school budget and disburse these funds in the next year or over a period not to exceed 3 years.

     7. Required data; subsidy payments withheld. A school administrative unit shall provide the commissioner with information that the commissioner requests to carry out the purposes of this chapter, according to time schedules that the commissioner establishes. The commissioner may withhold monthly subsidy payments from a school administrative unit when information is not filed in the specified format and with specific content and within the specified time schedules.

     8. Unobligated balances. Unobligated balances from amounts appropriated for general purpose aid for local schools may not lapse but must be carried forward to the next fiscal year.

     1. Annual recommendation. Prior to December 15th of each year, the commissioner, with the approval of the state board, shall recommend to the Governor and the Department of Administrative and Financial Services, Bureau of the Budget the funding levels that the commissioner recommends for the purposes of this chapter.

     2. Funding level computations. The following are the funding level computations that support the commissioner's funding level recommendations:

     3. Guidelines for updating other subsidizable costs. The commissioner's recommendation for updating percentages to bring base year actual costs to the equivalent of one-year-old costs may not exceed the average of the 2 most recent percentages of annual increase in the Consumer Price Index.

     The Department of Administrative and Financial Services, Bureau of the Budget shall annually certify to the Legislature the funding levels that the Governor recommends under sections 15683, 15683-A, 15689 and 15689-A. The Governor's recommendations must be transmitted to the Legislature within the time schedules set forth in Title 5, section 1666.

§15689-E. Actions by Legislature

     The Legislature shall annually, prior to March 15th, enact legislation to:

     1. Appropriation for state share of adjustments, debt service and operating; single account. Appropriate the necessary funds for the State's share for general purpose aid for local schools with a separate amount for each of the following components:

     2. Local cost share expectation. Establish the local cost share expectation described in section 15671-A.

     Funds for appropriations under this section must be placed in a single account.

§15689-F. Actions by department

     Within the annual appropriations, the department shall follow the procedures described in this section.

     1. State's obligation. If the State's continued obligation for any program provided by one of the appropriated amounts under section 15689-E exceeds the appropriated amount, any unexpended balance from another of those appropriated amounts may be applied by the commissioner toward the obligation for that program.

     2. Cash flow. For the purpose of cash flow, the commissioner may pay the full state and local share of the payment amounts due on bond issues for school construction from that school administrative unit's state subsidy, excluding payments on non-state-funded projects. This subsection does not apply if a school administrative unit has less subsidy than the total principal and interest payment on bonds.

     Sec. D-62. 20-A MRSA §§15690 to 15695 are enacted to read:

§15690. Local appropriations

     Beginning with the budget for the 2005-2006 school year, the following provisions apply to local appropriations for school purposes.

     1. School administrative unit contribution to total cost of funding public education from kindergarten to grade 12. The legislative body of each school administrative unit may vote to raise and appropriate an amount up to its required contribution to the total cost of education as described in section 15688.

     2. Non-state-funded debt service. For each school administrative unit's contribution to debt service for non-state-funded major capital school construction projects or non-state-funded portions of major capital school construction projects, the legislative body of each school administrative unit may vote to raise and appropriate an amount up to the municipality's or district's annual payments for non-state-funded debt service.

     3. Additional local appropriation. A school administrative unit may raise and expend funds for educational purposes in addition to the funds under subsections 1 and 2.

     4. Total budget article. A school administrative unit must include a summary article indicating the total annual budget for funding public education from kindergarten to grade 12 in the school administrative unit. The amount recommended must be the gross budget of the school system. This article does not provide money unless the other articles are approved.

     5. Vote. Actions taken pursuant to subsections 1 to 4 must be taken by a recorded vote.

     6. Administrative costs for units with no pupils. If a school administrative unit is required to pay administrative costs and has no allocation of state or local funds, that unit may raise and expend funds for administrative costs.

§15691. Municipal assessment paid to district

     1. Presentation of assessment schedule. The assessment schedule based on the budget approved at a community school district or school administrative district budget meeting must be presented to the treasurer of each municipality that is a member of the district.

The assessment schedule must include each member municipality's share of the school administrative unit's contribution to the total cost of funding public education from kindergarten to grade 12 as described in section 15688, the school administrative unit's contribution to debt service for non-state-funded school construction projects and additional local funds for school purposes under section 15690.

     2. Municipal treasurer's payment schedule. The treasurer of the member municipality, after being presented with the assessment schedule, shall forward 1/12 of that member municipality's share to the treasurer of the district on or before the 20th day of each month of the fiscal year beginning in July.

§15692. Special school districts

     1. School administrative unit. For the purposes of section 15695 and Title 20, sections 3457 to 3460, a special school district is deemed to be a school administrative unit.

     2. Debt service. Debt service on bonds or notes issued by a special school district must be included in the school budget of the school administrative unit that operates the schools constructed by that district. The school board for the school administrative unit that operates the special district's schools shall pay to the special school district all sums necessary to meet the payments of principal and interest on bonds or notes when due and to cover maintenance or other costs for which the special school district is responsible.

§15693. School budget; budget formats

     1. Content. A school administrative unit shall include in its school budget document:

     2. Budget deadlines. The following time limitations apply to adoption of a school budget under this section.

     3. Budget format. The following provisions apply to a budget format.

     4. Budget format; town or city charter. In a municipality where the responsibility for final adoption of the school budget is vested by municipal charter in a council, the school budget format may be changed through amendment of the charter under the home rule procedures of Title 30-A, chapter 111, except that the amendment must be approved by a majority of voters in an election in which the total vote is at least 20% of the number of votes cast in the municipality in the last gubernatorial election.

     5. Budget format; town meeting. When the final budget authority is vested in a town meeting operating under the general enabling procedures of Title 30-A, the format of the school budget may be determined by the town meeting or under the procedures of Title 30-A, section 2522 or 2528.

     6. Budget format; community school district. The following provisions apply to the budget format of a community school district.

     7. Budget format; articles. The articles prescribed in this chapter must be included in the budget format and be voted on in the adoption of the budget in order to determine state and local cost sharing.

     8. Change in budget format. Any change in the budget format must be voted on at least 90 days prior to the budget year for which that change is to be effective.

§15694. Actions on budget

     The following provisions apply to approving a school budget under this chapter.

     1. Checklist required. Prior to a vote on articles dealing with school appropriations, the moderator of a regular or special school budget meeting shall require the clerk or secretary to make a checklist of the registered voters present. The number of voters listed on the checklist is conclusive evidence of the number present at the meeting.

     2. Reconsideration. Notwithstanding any law to the contrary, in school administrative units where the school budget is finally approved by the voters, a special budget meeting to reconsider action taken on the budget may be called only as follows.

     3. Invalidation of action of special budget reconsideration meeting. If a special budget meeting is called to reconsider action taken at a regular budget meeting, the actions of the meeting are invalid if the number of voters at the special budget meeting is less than the number of voters present at the regular budget meeting.

     4. Line-item transfers. Meetings requested by a school board for the purpose of transferring funds from one category or line item to another must be posted for voter or council action within 15 days of the date of the request.

§15695. Bonds; notes; other

     All bonds, notes or other evidences of indebtedness issued for school purposes by a school administrative unit for major capital expenses, bus purchases or current operating expenses, including tax or other revenue anticipation notes, are general obligations of the unit.

     1. Tax assessments. The municipal officers or school board shall require the sums that are necessary to meet in full the principal of and interest on the bonds, notes or other evidences of indebtedness issued pursuant to this section payable in each year to be assessed and collected in the manner provided by law for the assessment and collection of taxes.

     2. Reduction. The sums to be assessed and collected under subsection 1 must be reduced by the amount of an allocation of funds appropriated by the Legislature to pay the principal and interest owed by the school administrative unit in a given year as certified to the unit by the commissioner. The commissioner shall certify the amount due to the unit within 30 days of its appropriation by the Legislature.

     3. Collection. After assessment and reduction under subsection 2, the remaining sum must be paid from ad valorem taxes, which may be levied without limit as to rate or amount upon all the taxable property within the school administrative unit.

     Sec. D-63. 20-A MRSA c. 608 is enacted to read:

CHAPTER 608
SCHOOL FINANCE ACT OF 2003

§15751. Short title

     This chapter may be known and cited as "the School Finance Act of 2003."

     In accordance with the phase-in schedule provided in chapter 606-B, beginning in fiscal year 2008-09, the Legislature each year shall provide at least 55% of the cost of the total allocation for kindergarten to grade 12 education from General Fund revenue sources.

     For the purposes of this chapter, and until such time as the Legislature may implement an alternative school funding system, "total allocation" means the foundation allocation for a year, the debt service allocation for that year, the sum of all adjustments for that year and the total of the additional local appropriations for the prior year. In the event the Legislature implements an alternative school funding model that alters the meaning of the terms used in this Title or otherwise makes obsolete the system of allocations and local appropriations established by this Title, the term "total allocation" as it applies to the mandatory appropriation required by this section means the amount reasonably calculated as the equivalent of this definition.

     Except as provided in section 15689, subsection 1, but notwithstanding any other provision of chapter 606-B, the Legislature shall provide 100% of a school administrative unit's special education costs as calculated pursuant to section 15681-A, subsection 2.

     For the purposes of the mandatory appropriation required by this section, and in accordance with the essential programs and services school funding allocation system established in chapter 606-B, the commissioner shall identify and provide in the commissioner's recommendation pursuant to section 15689-C the total special education costs required to be funded pursuant to this section. In addition to any appropriations required by section 15689-E, the Legislature shall appropriate and ensure the accurate distribution of the total amount identified by the commissioner, adjusted by the federal reimbursements for the costs of special education services mandated by federal or state law, rule or regulation that will be provided to the individual school administrative units for that same school year.

     The Fund for the Efficient Delivery of Educational Services, referred to in this section as "the fund," is established as a dedicated nonlapsing account within the Department of Education. This section provides for the design, implementation, administration and use of the fund.

     1. Source of funds; purpose. Funds for appropriations under this section must be appropriated in addition to the total amount annually appropriated for general purpose aid for local schools and must be placed into a single account. Beginning in fiscal year 2005-06 and in each succeeding fiscal year until fiscal year 2008-09, an amount calculated to be not greater than 2% of the total amount annually appropriated for general purpose aid for local schools must be dedicated to the fund and distributed from the fund to those school administrative units and municipalities that are able to demonstrate significant and sustainable savings in the cost of delivering educational services and improved student achievement through changes in governance, administrative structure or adopted policy that result in the creation of consolidated school administrative units, broad-based purchasing alliances, enhanced regional delivery of educational services or collaborative school-municipal service delivery or service support systems.

Beginning in fiscal year 2005-06, the Legislature shall annually, prior to March 15th, enact legislation to allocate the following amounts calculated based on the amount appropriated for general purpose aid for local schools to the fund during each of the following fiscal years:

Any balance remaining in the fund at the end of any fiscal year does not lapse and must be carried forward for the next fiscal year.

     2. Administration; plan for implementation of the fund. The department shall administer the fund or may contract for services for administration of the fund. The commissioner, in consultation with the Executive Department, State Planning Office and the other agencies, organizations and individuals determined appropriate by the commissioner, shall establish an implementation plan for the fund that includes, but is not limited to, the following:

§15755. Entitlement

     The State's school administrative units and municipalities are entitled to the appropriations required by this chapter.

     Sec. D-64. 30-A MRSA §2181, sub-§4, ¶E, as enacted by PL 2003, c. 696, §12, is amended to read:

     Sec. D-65. 30-A MRSA §6006-F, sub-§6, as enacted by PL 1997, c. 787, §13, is amended to read:

     6. Forgiveness of principal payments. The fund must provide direct grants by forgiving the principal payments of a loan for an eligible school administrative unit. The amount of the forgiveness of principal payments must be determined by the school administrative unit's state share percentage of debt service costs as determined in Title 20-A, section 15611 15672, subsection 31, not to exceed:

     Sec. D-66. Fund for the Efficient Delivery of Educational Services; implementation plan. The Commissioner of Education shall submit a proposed plan to govern the design, implementation, management and oversight of the Fund for the Efficient Delivery of Educational Services established in the Maine Revised Statutes, Title 20-A, section 15754 to the Joint Standing Committee on Education and Cultural Affairs by March 31, 2005. As part of this review, the commissioner shall consider the efficient delivery of educational services in rural and isolated small school administrative units. The joint standing committee may report out a bill designed in accordance with the intentions of this Part to govern the design, implementation, management and oversight of the Fund for the Efficient Delivery of Educational Services.

     Sec. D-67. Fund for the Efficient Delivery of Educational Services; distribution of the fund in fiscal year 2005-06. Notwithstanding the Maine Revised Statutes, Title 20-A, section 15754, the allocations from the General Purpose Aid to Local Schools program in fiscal year 2005-06 to the Fund for the Efficient Delivery of Educational Services must be used for the transition adjustment pursuant to Title 20-A, section 15686, subsection 1. The allocation of funds from the Fund for the Efficient Delivery of Educational Services must be distributed to school administrative units that are eligible for the transition adjustment under the criteria established in Title 20-A, section 15686, subsection 1.

     Sec. D-68. Sharing of total costs in school administrative districts and community school districts; Department of Education review. Notwithstanding the Maine Revised Statutes, Title 20-A, section 15688, subsection 2 and to ensure that member municipalities of school administrative districts and community school districts whose cost-sharing formulas were established in accordance with Title 20-A, sections 1301 and 1704, respectively, do not experience significant adverse effects as a result of the cost-sharing mechanism established pursuant to Title 20-A, section 15688, subsection 2, the Department of Education shall conduct a review and analysis, for each school administrative unit, of the implications of this proposed cost-sharing mechanism on the member municipalities of these school administrative districts and community school districts. The Department of Education shall assist the member municipalities of these school districts in developing transition plans that include a phase-in to achieve the new method of determining member municipalities' local cost of education in accordance with Title 20-A, section 15688, subsection 2 no later than fiscal year 2008-09. The Department of Education shall report the findings of this review, including any recommended legislation, to the Joint Standing Committee on Education and Cultural Affairs by March 31, 2005. The Joint Standing Committee on Education and Cultural Affairs is authorized to introduce a bill related to the Department of Education report to the First Regular Session of the 122nd Legislature.

     Sec. D-69. Method of cost sharing; exception. Beginning in fiscal year 2005-06, the provisions of the Maine Revised Statutes, Title 20-A, section 15688, subsection 2 do not apply in determining the local cost of education of member municipalities in Maine School Administrative Districts No. 6 and No. 44. The cost-sharing formulas established between the member municipalities in these 2 school administrative districts prior to January 1, 2005 remain in effect until the formulas are changed pursuant to Title 20-A, section 1301, subsection 3. Pursuant to section 68, all other school administrative districts and community school districts whose cost-sharing formulas were established in accordance with Title 20-A, sections 1301 and 1704, respectively, remain subject to a phase-in approach to achieve the requirements of Title 20-A, section 15688, subsection 2 and must reach full implementation of this provision no later than fiscal year 2008-09.

     Sec. D-70. Criteria for isolated small school adjustment; rulemaking. For fiscal year 2005-06 and pursuant to the Maine Revised Statutes, Title 20-A, section 15683, subsection 1, paragraph F, the Commissioner of Education shall use the proposed model that was approved by the State Board of Education during its December 2004 meeting to determine the school administrative units that qualify for the adjustment for isolated small schools, except that the commissioner shall use the following criterion change for isolated small elementary schools: for elementary schools, the distance from the nearest school is reduced from 10 to 8 miles. The commissioner shall develop provisionally adopted rules that establish the qualifications for the adjustment for isolated small schools in accordance with Title 20-A, section 15687 no later than December 2, 2005 so that the Legislature may consider these criteria during the Second Regular Session of the 122nd Legislature.

     Sec. D-71. Transition adjustment for fiscal year 2006-07. To minimize the adverse fiscal impact that may be experienced by some school administrative units as a result of the phase-in of the Essential Programs and Services Funding Act, the Commissioner of Education shall facilitate a review and analysis of the need for a transition adjustment in fiscal year 2006-07. The Commissioner of Education, no later than January 13, 2006, shall make a recommendation to the Joint Standing Committee on Education and Cultural Affairs regarding the eligibility requirements and funding levels necessary for a transition adjustment in fiscal year 2006-07. The recommendations of the Commissioner of Education must be consistent with the provisions of the Maine Revised Statutes, Title 20-A, section 15686.

     Sec. D-72. Application. This Part applies to school budgets passed for the fiscal year beginning July 1, 2005, and thereafter.

     Sec. D-73. Retroactive application. This Part applies retroactively to July 1, 2005.

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