An Act to Implement School Funding Based on Essential Programs and Services, as the basis for determining the total cost ofK-public education. However, this bill differs from LD 1623 in that it requires the State's share to increase to 55% by fiscal year 2009-10 versus the 50% requirement in LD 1623. This bill provides for the calculation of a maximum local mill rate expectation to be used to determine the state and local share of the cost of funding K-12 education. The Department of Education estimates the maximum local mill rate to be 8.83 mills in fiscal year 2005-06. This bill also requires the Department of Education to reserve any unexpended funds in the General Purpose Aid for Local Schools program in fiscal years 2003-04 and 2004-05 and any savings from the refmancing of school construction bonds and use those funds to partially offset the cost of increasing the State's contribution of funding the cost ofK-12 public education beginning in fiscal year 2005-06. The Department of Education estimates the savings to be $6,100,000 through fiscal year 2004-05. The following table provides estimates for the total State and Local Operating cost of funding education based on the Essential Programs and Services model and compares the total State and Local cost of funding K-12 education based on the EPS model, adjusted for the transition percentage, with the total State and Local cost of funding education based on the current model. The table also provides a comparison of the General Fund appropriations that are estimated to be needed to fund the state's share of the cost of funding K-12 education based on the State's contribution reaching 55% in fiscal year 2009-10. Total State & Local Operating Cost allocation based on EPS model (100%) EPS Transition Percentage Adjusted Total Operating Allocation based on EPS model Total State & Local cost based on EPS funding model (includes program costs, debt service and adjustments) State and Local Cost to Fund K-12 Public Education Essential Programs and Services vs. Current Model Base Year 2003-04* 2004-05* Projections 2005-06 Projections 2006-07 $ 1,256,951,694 $ 1,260,260,954 $ 1,270,125,664 $ 1,285,714,652 80.82% 82.00% 84.00% 88.00% $ 1,015,868,359 $ 1,033,413,982 $ 1,066,905,558 $ 1,131,428,894 $ 1,467,457,416 $ 1,518,173,106 $ 1,537,199,970 $ 1,618,879,589 LR2165(3) - Fiscal Note - Page 2 of 3
Maine Legislature, Session 121, LD 1629
Committee Amendment CA_B_H588 (House)
Committee: State and Local Government shall review this legislation
Amends: 36 MRSA §662

COMMITTEE 
AMENDMENT 
"~,, 
to 
H.P. 
1209, 
L.D. 
1629, 
"RESOLUTION, Proposing a Competing Measure under the Constitution 
of Maine To Create Municipal Service Districts To Reduce the Cost 
of Local 
Government, 
To 
Provide Property Tax 
Relief 
and 
To 
Increase Economic Competitiveness" 
Amend 
the 
resolution 
by 
striking 
out 
the 
title 
and 
substituting the following: 
'RESOLUTION, Proposing a Competing Measure under the Constitution 
of Maine To Create Regional Service Districts To Reduce the Cost 
of Local 
Government, 
To 
Provide Property Tax Relief and To 
Increase Economic Competitiveness' 
Further amend the resolution by striking out Part A and Part 
B and inserting in their place the following: 
'PART A 
Sec. A-I. 30-A MRSA c. 112 is enacted to read: 
CIIAPTER 112 
REGImE SERVICE DISTRICTS 
§2111. 
Purpose 
The purpose of this chapter is to enhance the ability of 
municipalities to cooperate and consolidate on a basis of mutual 
advantage in the efficient and effective exercise of municipal 
obligations and home-rule authority pursuant to this Part through 
voluntary 
creation 
of 
and 
delegation 
to 
regional 
service 
districts or through other cooperative agreements that achieve 
COMMITTEE AMENDMENT 
".t'S. 
COMMITTEE AMENDMENT pot to H.P. 1209, L.D. 1629 
similar cost savings, including, but not limited to, cooperative 
agreements with county governments. 
The goal and results of 
cooperation and consolidation are to achieve significant property 
tax relief and to increase municipalities' ability to fund public 
education. 
Sec. A-2. Legislation and review. 
By January 2, 
2004, 
the 
Executive Department shall present legislation to 
the Joint 
Standing Committee on State and Local Government to carry out the 
purpose of the Maine Revised Statutes, Title 30-A, chapter 112. 
The Joint Standing Committee on State and Local Government shall 
review this legislation. 
PARTB 
Sec. B-1. 36 MRSA c.l0S, sub-c. I-A is enacted to read: 
SUBCHAPTER I-A 
PROPERTY TAX CORTRIBOTIOJI TO PUBLIC EDQCATIOJI 
§S2l. 
Definitions 
As used in this subchapter, unless the context otherwise 
indicates, the following terms have the following meanings. 
1. 
Full value mill rate emectation. 
"Full value mill rate 
expectation" means the maximum property tax rate that may be 
applied to the value of property for the purpose of funding 
public education from kindergarten to grade 12. 
2. 
Funding public education from kindergarten to grade 12. 
"Funding public education from kindergarten to grade 12" means 
the cost of funding essential programs and services as described 
in Title 20-A, chapter 606-B. 
§S22. Maximum mill rates established 
1. 
Maximum 
full 
value 
mill 
rate 
e:qmctation. 
Notwithstanding Title 20-A, chapter 606-B, with respect to the 
assessment of any property taxes' for property tax years beginning 
on or after April L 
2005, this section establishes the full 
value mill rate expectations that may be applied to the value of 
property 
for 
the 
purpose 
of 
funding 
public 
education 
from 
kindergarten to grade 12. 
For 
a 
municipality that assesses 
property at a percentage other than 100% of just value, the 
maximum mill rate calculated under subsection 2 must be adjusted, 
in the process of assessment and prior to commitment, to the mill 
rate 
that 
generates 
the 
eguivalent 
revenue 
that 
would 
be 
COMMITTEE AMENDMENT 
adS. 
COMMITTEE AMENDMENT :} .. to H.P. 1209, L.D. 1629 
collected if the municipality were assessing property at 100% of 
just value. 
2. 
Calculation of full value mill rate expectation. 
For 
property tax years beginning on or after April I, 2005, 
the 
Commissioner of Education shall calculate the full value mill 
rate expectation that is required to fund the local share of 
funding public education from kindergarten to grade 12 according 
to the following schedule. 
A. 
For the 2005 property tax year, the full value mill rate 
expectation is the amount necessary to result in a 51% local 
share in fiscal year 2005-06. 
B. 
For the 2006 property tax year, the full value mill rate 
expectation is the amount necessary to result in a 49. 5CJ-o 
local share in fiscal year 2006-07. 
C. 
For the 2007 property tax year, the full value mill rate 
expectation is the amount necessary to result in a 48% local 
share in fiscal year 2007-08. 
D. 
For the 2008 property tax year, the full value mill rate 
expectation is the amount necessary to result in a 
46.5°-& 
local share in fiscal year 2008-09. 
E. 
For the 2009 property tax year and subsequent years, the 
full value mill rate expectation is the amount necessary to 
result in a 45% local share in fiscal year 2009-10. 
§523. Exceeding mill rate expectations; referendum process 
The legislative body of a school administrative unit, as 
defined in Title 20-A, 
section 1, 
subsection 26, 
may 
adopt 
property tax rates that exceed the adjusted full value mill rate 
expectation established by section 522. 
Sec. B-2. Basis for funding costs of education from kindergarten to 
grade 12. 
Notwithstanding any other provision of law, beginning 
in 
fiscal 
year 
2005-06, 
funding 
public 
education 
from 
kindergarten to grade 
12, 
as 
defined in the 
Maine 
Revised 
Statutes, Title 36, section 521, must be based on the cost of 
providing essential programs and services as described in the 
Maine Revised Statutes, Title 20-A, chapter 606-B. 
Sec. B-3. Savings from school construction bond refinancing and 
unexpended balance. 
Notwithstanding any other provision of law, 
at the close of fiscal year 2003-04 and fiscal year 2004-05 the 
Commissioner of Education shall allocate any unexpended funds 
from 
General 
Purpose 
Aid 
for 
Local 
Schools, 
COMMITTEE AMENDMENT 
lo!SD 
COMMITTEE AMENDMENT ,fi" to H.P. 1209, L.D. 1629 
including those funds resulting from the refinancing of school 
construction bonds, to the General Purpose Aid for Local Schools 
in subsequent years. 
These funds may not be expended in fiscal 
year 2003-04 or fiscal year 2004-05 but must be carried forward. 
These funds may be allotted in fiscal year 2005-06 by financial 
order upon the recommendation of the State Budget Officer and 
approval of the Governor.' 
Further amend the resolution in Part C by striking out all 
of sections I to 14 and inserting in their place the following: 
'Sec. C-l. 36 MRSA §662 is enacted to read: 
§662. 
Business egp!ement 
1. 
Eligible busines;us"---"'eqw.......,'=!· ... 
pm@~"-'!n~tS-...!ie<!!:z:~emp~;!..ltlo.;."----=E~l'-"i~g,..i""b....,l...,e"'--...... 
b.uu~s .... i""n""'e"'"'s2.s ... 
equipment is exempt from all taxation under this Part, except 
chapters 111 and 112. 
• 
Definitions. 
As 
used in this 
section, 
unless 
the 
context 
otherwise 
indicates, 
the 
following 
terms 
have 
the 
following meanings. 
A. 
"BETR-expired property" means property that was eligible 
for property tax reimbursement under chapter 915, but is no 
longer eligible for such reimbursement due to the fact that 
reimbursements have been made for the entire length of time 
for which reimbursements were allowed under section 6652, 
subsection 1. 
B. 
"Eligible business equipment" means qualified business 
property that. in the absence of this section, would first 
be subject to taxation under this Part after April 1. 2003 
and BETR-expired property. 
"Eligible business equipment" 
includes, 
without 
limitation, 
repair 
parts, 
replacement 
parts, 
additions, 
accessions 
and 
accessories 
to 
other 
gualified business property that first became taxable under 
this Part on or before April 1, 2003 if the part. addition, 
accession or 
accessory 
would, 
in 
the 
absence 
of 
this 
section, first be subject to taxation under this Part after 
April L 
2003. 
"Eligible business equipment" also includes 
inventory parts for qualified business property that, in the 
absence of this section, would first be subject to taxation 
under this Part after April 1, 2003. 
"Eligible business eguipment" does not include: 
(1) 
Office furniture, including, without limitation, 
tables, chairs, desks, bookcases, filing cabinets and 
modular office partitions; 
COMM/77EE AMENDMENT 
COMMITTEE AMENDMENT -:pIt to H.P. 1209, L.D. 1629 
(2) 
Lamps and lighting fixtures; and 
(3) 
Property owned or used by an excluded person. 
C. 
"Excluded person" means: 
(1) 
A public utility as defined in Title 35-A, section 
102, subsection 13; 
(2) 
A person that provides radio paging services as 
defined in Title 35-A, section 102, subsection 15; 
(3) 
A person that provides mobile telecommunications 
services 
as 
defined 
in Title 
35-A, 
section 
102, 
subsection 9-A; 
(4) 
A cable television company as defined in Title 
30-A, section 2001, subsection 2; 
(5) 
A person that provides 
satellite-based direct 
television broadcast services; or 
(6) 
A person that provides multichanneL multipoint 
television distribution services. 
D. 
"Inventory parts" includes repair parts, 
replacement 
parts, 
replacement 
equipment, 
additions, 
accessions 
and 
accessories 
on 
hand but not in service 
and 
stocks 
or 
inventories of repair parts, replacement parts, replacement 
equipment, additions, accessions and accessories on hand but 
not in service and other machinery and equipment on hand for 
future use but not in service if acquired after April L 
2003, regardless of when placed in service. 
E. 
"Oualified business property" means tangible personal 
property that: 
(1) 
Is used or held for use exclusively for a business 
purpose by the person in possession of it or, in the 
case of construction in progress or inventory parts, is 
intended to be used exclusively for a business purpose 
by the person who will possess that property; and 
(2) 
Either: 
(a) 
Was subject to an allowance for depreciation 
under the Code on April 1st of the property tax 
year 
for 
which 
a 
claim 
for 
exemption 
under 
subsection 4 is filed, or would have been subject 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT .':p" to H.P. 1209, L.D. 1629 
to an allowance for depreciation under the Code as 
of that date but for the fact that the property 
has been fully depreciated; or 
(b) 
In the case of construction in progress or 
inventory parts. would be Subject under the Code 
to an allowance for depreciation when placed in 
service or would have been subject to an allowance 
for depreciation under the Code as of that date 
but for the fact that the property has been fully 
depreciated. 
"Qualified business property" also includes all property 
that is affixed or attached to a building or other real 
estate if it is used primarily to further a particular trade 
or business activity taking place in that building or on 
that real estate. 
"Oualified business property" does not 
include components or attachments to a 
building if used 
primarily to serve the building as a building. regardless of 
the particular trade or activity taking place in or on the 
building. 
"Qualified business 
property" 
also 
does 
not 
include land improvements if used primarily to further the 
use of the land as land. regardless of the particular trade 
or business activities taking place in or on the land. 
In 
the case of construction in progress or inventory parts. the 
term "used" means intended to be used. 
"Qualified business 
property" also does not include any vehicle registered for 
on-road use on which a tax assessed pursuant to chapter III 
has been paid or any watercraft registered for use on state 
waters on which a tax assessed pursuant to chapter 112 has 
been paid. 
3. 
Additional 
limitations. 
The 
exemptions 
provided 
pursuant to this section are limited as follows. 
A. 
Exemption 
for 
certain energy facilities 
under 
this 
section is limited as follows. 
(1) 
The exemption provided by this section does not 
apply to a natural gas pipeline. including pumping or 
compression stations. 
storage depots 
and appurtenant 
facilities used in the transportation. delivery or sale 
of natural gas but not including a pipeline that is 
less than a mile in length and is owned by a consumer 
of natural gas delivered through the pipeline. 
(2) 
The exemption provided in this section does not 
apply to property used to produce or transmit energy 
primarily for sale. 
Energy is primarily for sale if 
during the immediately preceding property tax year 213 
COMMITTEE AMENDMENT 
-
~~.\ '::, 
. \:". 
COMMITTEE AMENDMENT ,:P" to H.P. 1209, L.D. 1629 
or more of the useful energy is directly or indirectly 
sold 
and 
transmitted 
through 
the 
facilities 
of 
a 
transmission and distribution utility. 
(3) 
For purposes of this paragraph, unless the context 
otherwise 
indicates, 
the 
following 
terms 
have 
the 
following meanings. 
(a) 
"Transmission and distribution utility" has 
the same meaning as defined in Title 35-A, section 
102, subsection 20-B. 
(b) 
"Useful energy" is energy in any form that 
does not include waste heat. efficiency losses, 
line losses or other energy dissipation. 
B. 
Pollution 
control 
facilities 
that 
are 
entitled 
to 
exemption pursuant to section 656, subsection 1, paragraph E 
are not entitled to an exemption under this section, except 
that such property is entitled to exemption under this 
section if: 
(1) 
The property is entitled to an exemption under 
section 656, subsection 1, paragraph E but has not yet 
been certified for exemption under that paragraph: 
(2) 
The property has been placed in service after the 
December 1st immediately preceding April 1st of the tax 
year for which the exemption is sought but prior to 
April 1st of the property tax year for which the 
exemption is sought; and 
(3) 
The 
taxpayer 
has 
submitted 
the 
required 
application for certification to the Commissioner of 
Environmental Protection prior to April 1st. 
The exemption under this section continues for property that 
meets the requirements of subparagraphs (1), 
(2) and (3) 
only until the certification for exemption under section 
656, subsection 1. paragraph E has been granted. 
If the 
assessor denies an exemption on the ground that the property 
in question is entitled to exemption under section 656, 
subsection 1, 
paragraph E and the taxpayer appeals 
the 
denial, the assessor shall, at the taxpayer's request, allow 
the taxpayer up to one year to obtain a statement from the 
Commissioner of Environmental Protection that the property 
at issue is not exempt under section 656, 
subsection 1. 
paragraph 
E. 
If 
the 
taxpayer 
timely 
produces 
such 
a 
statement or otherwise demonstrates that the property is not 
exempt under section 656, subsection 1, paragraph E, 
the 
assessor shall allow the exemption under this section. 
COMMITTEE AMENDMENT 
~. o\s. 
COMMITTEE AMENDMENT pIt to H.P. 1209, L.D. 1629 
4. 
Reporting. 
On 
or before June 1st of each year, 
a 
taxpayer claiming an exemption under this section shall file a 
report with the assessor of the taxing jurisdiction in which the 
property would otherwise be subject to taxation. 
The report must 
identify the property for which exemption is claimed and must be 
made on a form prescribed by the State Tax Assessor or substitute 
form approved by the State Tax Assessor. 
The State Tax Assessor 
shall furnish copies of the form to each municipality in the 
State and the form must be made available to taxpayers prior to 
April 1st. 
The assessor may require the taxpayer to sign the 
form and make oath to its truth. 
The assessor may request in writing that taxpayers answer in 
writing all reasonable inquiries as to the nature, situation and 
value of the property for which exemption is requested. 
A 
taxpayer has 60 days from receipt of such inquiries to respond. 
The assessor may at MY time grant an extension of the time 
periods for action provided for in this subsection. 
Upon written 
request, a taxpayer is entitled to a 30-day extension of time as 
a matter of right and additional extensions for good cause, it 
being the intent that extensions be granted liberally to avoid 
forfeiture of the exemption. 
Failure to comply with the provisions of this subsection on a 
timely basis, including any extensions of time, results in a 
penalty equal to the lesser of $5.000 or 10'%. of the taxes that 
would be imposed on the exempt property in the absence of the 
exemption as long as the taxpayer complies with the provisions of 
this subsection before October 
1st following 
the April 1st 
exemption date. 
The penalty amount is treated as property taxes 
and must be paid to the municipality as such. 
The penalty may be 
waived by the assessor for good cause. 
A failure to comply with 
the provisions of this subsection by October 1st following the 
April 1st exemption date disqualifies the property involved from 
exemption for that tax year. 
All notices and requests provided 
pursuant 
to 
this 
subsection 
must 
conspicuously 
state 
the 
consequences of the taxpayer's failure to respond to the notice 
or request in a timely manner. 
If an exemption has already been granted and the State Tax 
Assessor then determines that the property is not entitled to 
exemption. a supplemental assessment must be made within 3 years 
of the original assessment date with respect to the property in 
compliance with section 713. without regard to the limitations 
contained in that section regarding the justification necessary 
for a supplemental assessment. 
COMMITTEE AMENDMENT 
~,~'e 
COMMITTEE AMENDMENT .$ .. to H.P. 1209, L.D. 1629 
5. 
Local 
review. 
Reports 
properly 
filed pursuant 
to 
subsection 4 must be reviewed by the assessor with whom they are 
filed. 
A 
taxing 
jurisdiction 
is 
not 
entitled 
to 
state 
reimbursement pursuant to section 661 with respect to property 
entitled to exemption under this section unless the assessor 
certifies to the State Tax Assessor that the property qualifies 
for such exemption. 
The local taxing jurisdiction shall file an 
annual 
certification 
for 
business 
equipment 
exemptions 
by 
November 1st following the April 1st exemption date or 30 days 
after commitment of taxes, whichever is later, but in no event 
later than 120 days following November 1st following the April 
1st exemption date. 
All exemptions certified by the local 
taxing jurisdiction must be applied in calculating the taxable 
valuation 
of 
property 
in 
that 
jurisdiction. 
unless 
the 
jurisdiction determines that the property is not entitled to 
exemption and provides a corrected certification to the State Tax 
Assessor. 
6. 
State valuation. 
The State Tax Assessor shall annually 
determine the value of property that is exempt pursuant to this 
section 
based 
upon 
the 
business 
equipment 
exemption 
certifications 
filed 
by 
local 
taxing 
jurisdictions 
under 
subsection 5. 
The State Tax Assessor shall use the valuation of 
exempt 
property 
so 
determined 
to 
compute 
the 
reimbursement 
required by section 661 arising from property tax exemptions. 
The State Tax Assessor shall establish a uniform methodology to 
be 
used in determining the 
just value 
of certified exempt 
property. 
The 
valuations 
of 
certified 
exempt 
property 
as 
determined by the State Tax Assessor must be reported to local 
taxing jurisdictions no later than July 1st following receipt of 
the certified reports. 
The valuations determined may be appealed 
in 
the 
Same 
fashion 
as 
provided 
for 
the 
state 
valuation 
determined in accordance with section 305, subsection I. with the 
exception that the State Board of Property 
Tax 
Review. 
as 
established by Title 5, 
section 12004-B. 
subsection 6, 
must 
render its decision no later than November 15th following the 
date on which the appeal is taken. 
The board must certify its 
decisions on these exemption appeals to the State Tax Assessor by 
December 
1st of the year 
following 
the application of 
the 
exemption. 
The valuations of exempt property must be filed with 
the Secretary of State by December 10th following the year of 
exemption. 
7. 
State 
review. 
The 
State 
Tax 
Assessor 
may 
review 
exemption claims made under this section and may disqualify any 
exemption certified under subsection 5 within a 2-year period 
from the date of the local tax jurisdiction certification. 
In a 
case in which a local taxing jurisdiction has already received 
reimbursement, the excess reimbursement may be offset against the 
next 
reimbursement 
payment. 
A 
local 
taxing 
jurisdiction 
COMMITTEE AMENDMENT 
~ f:\S, 
~ .. 
COMMITTEE AMENDMENT ,~" to H.P. 1209, L.D. 1629 
aggrieved by a decision of the State Tax Assessor to disgualify a 
certified exemption after the exemption amount has been filed 
with the Secretary of State may 
seek review as provided by 
section 151. 
The assessor shall send notice to the taxpayer, in 
the manner and of the type provided for in section 151 in the 
case of a reconsideration decision, of any decision to disgualify 
an exemption. 
The taxpayer may seek reconsideration pursuant to 
section 151 of the State Tax Assessor's decision to disgualify 
any exemption claimed by the taxpayer. 
8. 
Legis1ative 
findings. 
The 
Legislature 
finds 
that 
encouragement of the growth of capital investment in this State 
is in the public interest and promotes the general welfare of the 
people of the State. 
The Legislature further finds that the high 
cost of owning gualified business property in this State is a 
disincentive to the growth of capital investment in this State. 
The Legislature further finds that the tax exemption set forth in 
this 
section 
is 
a 
reasonable 
means 
of 
overcoming 
this 
disincentive and will encourage capital investment in this State.' 
Further amend the resolution in Part C by striking out all 
of section 17. 
Further amend the resolution by striking out all of Part D. 
Further amend the resolution in Part E in section 2 by 
striking out all of the question (page 50, lines 21 to 23 in 
L.D.) and inserting in its place the following: 
, "Do you want the State to pay 55'%. of the costs of public 
education without raising taxes?" , 
Further amend the resolution in Part E by inserting after 
section 2 the following: 
'Sec. E-3. 
Transfer of funds. 
Notwithstanding 
any 
other 
provision of law, the State Controller shall transfer $254,286 
from the General Purpose Aid for Local Schools account in the 
Department 
of 
Education 
to 
the 
General 
Fund 
unappropriated 
surplus no later than June 30, 2005. 
Sec. 
E-4. 
Appropriations 
and 
allocations. 
appropriations and allocations are made. 
The 
ADMINISTRATIVE AND FIBARCIAL SERVICES, DEPARTMENT OF 
Revenue Services - Bureau of 0002 
following 
Initiative: 
Provides funds for 3 Claims Administration positions 
and related costs associated with property valuation and property 
tax exemption reimbursement. 
COMMITTEE AMENDMENT 
R ;~ 
~.~ u· 
COMMITTEE AMENDMENT P" to H.P. 1209, L.D. 1629 
General Fund 
positions - Legislative Count 
Personal Services 
All Other 
General Fund Total 
2003-04 
(0.000) 
$0 
o 
$0 
2004-05 
(3.000) 
$165,786 
88,500 
$254,286' 
Further amend the resolution by relettering or renumbering 
any 
nonconsecutive 
Part 
letter 
or 
section 
number 
to 
read 
consecutively. 
SUMMARY 
This amendment strikes Part A and Part B of the resolution, 
which provided the details of 
a 
municipal 
service district 
concept, and in their place expresses the legislative purpose for 
the 
adoption of 
regional 
service districts 
and directs 
the 
Executive Department to submit legislation by January 2, 2004 to 
carry out this purpose. 
The legislation will be reviewed by the 
Joint Standing Committee on State and Local Government. 
This 
amendment 
provides 
new 
language 
establishing 
the 
essential programs and services model for funding education as 
the 
basis 
for 
the 
calculation of 
a 
full 
value 
mill 
rate 
expectation identifying the state and local share of the cost of 
providing essential programs and services beginning in fiscal 
year 2005-06. 
The state share increases from 49~ in fiscal year 
2005-06 to 
55~ in fiscal year 2009-10. 
Funds to assist in 
increasing the state share of education funding would be obtained 
from 
refinancing 
school 
construction 
debt 
and 
from 
General 
Purpose Aid to Local Schools carry-over. 
The 
amendment also 
makes minor miscellaneous changes to the provisions establishing 
a property tax exemption for certain business property. 
The 
amendment 
also 
changes 
the question that would 
be 
presented to the voters for the competing measure. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 06112/03 ~ae 
Office of Fiscal and Program Review 
LD 1629 
RESOLUTION, Proposing a Competing Measure under the Constitution of Maine 
to Create Municipal Service Districts to Reduce the Cost of Local Government, to 
Provide Property Tax Relief and to Increase Economic Competitiveness 
LR 2165(03) 
Fiscal Note for Bill as Amended by Committee Amendment" " 
Committee: Taxation 
Fiscal Note Required: Yes 
Minority Report 
Fiscal Note 
Projections 
Projections 
2003-04 
2004-05 
2005-06 
2006-07 
Net Cost (Savings) 
General Fund 
$0 
$0 
($20,651,208) 
$14,716,289 
Appropriations/Allocations 
General Fund 
$0 
$254,286 
($20,651,208) 
$14,716,289 
Transfers 
General Fund 
$0 
$254,286 
$0 
$0 
Referendum Costs 
MonthNear 
Election Type 
Question 
Length 
Nov-03 
General 
Referendum 
Lengthy 
The Secretary of State's budget includes sufficient funds to accommodate one ballot of average length for the general election in 
November 2003. If the number or size of the referendum questions increases the ballot length, an additional appropriation of 
$8,000 or more may be required. 
Fiscal Detail and Notes 
The implementation of this bill is contingent upon approval by the voters. 
impact. 
If approved by the voters, this bill has the following 
General Fund Summary 
Business Equipment Tax Reimbursement 
Municipal Property Tax Exemption Reimb. 
Maine Revenue Services Administrative Costs 
Net Approp\Deapprop to fund EPS 
Transfer from Dept. of Educ. to General Fund 
Net General Fund Cost (Savings) 
2003-04 
$0 
$0 
$0 
$0 
$0 
$0 
2004-05 
$0 
$0 
$284,286 
$0 
($284,286) 
$0 
LR2165(3) - Fiscal Note - Page I on 
Projections 
Projections 
2005-06 
2006-07 
($8,763,692) 
($21,064,966) 
$5,842,000 
$12,095,000 
($712,189) 
($747,798) 
($17,017,327) 
$24,434,053 
$0 
$0 
($20,651,208) 
$14,716,289 
Limiting Business Equipment Tax Reimbursement (BETR) to property placed in service on or before April 1, 2003 will result in 
General Fund savings beginning in fiscal year 2005-06. Establishing a property tax exemption for certain property placed in 
service after April 1, 2003 will result in General Fund costs beginning in fiscal year 2005-06 due to the 50% reimbursement 
requirement. 
This bill also includes General Fund appropriations of$254,286 in fiscal year 2004-05 for Maine Revenue Services for the 
additional costs associated with administering these provisions and a transfer from the Department of Education to offset these 
costs in fiscal year 2004-05. 
This bill provides for a new method of determining the state and local share of funding the cost ofK-12 public education 
beginning in fiscal year 2005-06. This bill includes the Essential and Programs and Services model, as proposed in LD 1623, 
An Act to Implement School Funding Based on Essential Programs and Services, as the basis for determining the total cost ofK-
public education. However, this bill differs from LD 1623 in that it requires the State's share to increase to 55% by fiscal 
year 2009-10 versus the 50% requirement in LD 1623. This bill provides for the calculation of a maximum local mill rate 
expectation to be used to determine the state and local share of the cost of funding K-12 education. The Department of 
Education estimates the maximum local mill rate to be 8.83 mills in fiscal year 2005-06. 
This bill also requires the Department of Education to reserve any unexpended funds in the General Purpose Aid for Local 
Schools program in fiscal years 2003-04 and 2004-05 and any savings from the refmancing of school construction bonds and 
use those funds to partially offset the cost of increasing the State's contribution of funding the cost ofK-12 public education 
beginning in fiscal year 2005-06. The Department of Education estimates the savings to be $6,100,000 through fiscal year 2004-
05. 
The following table provides estimates for the total State and Local Operating cost of funding education based on the Essential 
Programs and Services model and compares the total State and Local cost of funding K-12 education based on the EPS model, 
adjusted for the transition percentage, with the total State and Local cost of funding education based on the current model. The 
table also provides a comparison of the General Fund appropriations that are estimated to be needed to fund the state's share of 
the cost of funding K-12 education based on the State's contribution reaching 55% in fiscal year 2009-10. 
Total State & Local Operating 
Cost allocation based on EPS 
model (100%) 
EPS Transition Percentage 
Adjusted Total Operating 
Allocation based on EPS model 
Total State & Local cost based 
on EPS funding model (includes 
program costs, debt service and 
adjustments) 
State and Local Cost to Fund K-12 Public Education 
Essential Programs and Services vs. Current Model 
Base Year 
2003-04* 
2004-05* 
Projections 
2005-06 
Projections 
2006-07 
$ 1,256,951,694 
$ 1,260,260,954 
$ 1,270,125,664 
$ 1,285,714,652 
80.82% 
82.00% 
84.00% 
88.00% 
$ 1,015,868,359 
$ 1,033,413,982 
$ 1,066,905,558 
$ 1,131,428,894 
$ 1,467,457,416 
$ 1,518,173,106 
$ 1,537,199,970 
$ 1,618,879,589 
LR2165(3) - Fiscal Note - Page 2 of 3 
Total State & Local cost based 
on current funding formula 
(includes program costs, debt 
service and adjustments) 
Net Increase (Decrease) in 
Allocation 
State Share Targets to fund K -12 
education based on EPS model 
Estimated General Fund 
appropriation needed to fund K-
education based on EPS 
model 
Estimated General Fund 
appropriation needed to fund K-
education based on current 
funding model (assumes 6% 
growth per year) 
Net General Fund Appropriation 
(Deappropriation) required to 
fund EPS model vs. current 
funding formula 
$ 1,467,408,432 
$ 1,503,862,194 
$ 1,543,887,175 
$ 1,589,697,612' 
$ 
48,984 
$ 
14,310,912 
$ 
(6,687,205) $ 
29,181,977 
49.89% 
47.81% 
49.00% 
50.50% 
$ 
753,227,985 
$ 
817,534,192 
$ 
770,245,312 
$ 
793,100,139 
$ 
(17,017,327) $ 
24,434,053 
* No adjustment in fiscal year 2003-04 and fiscal year 2004-05 
LR2165(3) - Fiscal Note - Page 3 of3