An Act To Implement the School Finance and Tax Reform Act of
Maine Legislature, Session 122, LD 0012
Committee: Taxation
Sponsors: NUTTING, FLETCHER, BARTLETT, DAVIS, MARTIN, MITCHELL, TURNER, MAZUREK, PARADIS, SCHATZ
Amends: 5 MRSA §1677, 20-A MRSA §15671, 20-A MRSA §15671-A, 20-A MRSA §15672, 20-A MRSA §15680, 20-A MRSA §15683

Legislative Document 
No. 12 
S.P.11 
In Senate, January 6,2005 
An Act To Implement the School Finance and Tax Reform Act of 
2003 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Senator NUTTING of Androscoggin. 
Cosponsored by Representative FLETCHER of Winslow and 
JOY J. O'BRIEN 
Secretary of the Senate 
Senators: BARTLETT of Cumberland, DAVIS of Piscataquis, MARTIN of Aroostook, 
MITCHELL of Kennebec, TURNER of Cumberland, Representatives: MAZUREK of 
Rockland, PARADIS of Frenchville, SCHATZ of Blue Hill. 
Printed on recycled papcr 
Be it enacted by the PeopJe of the State of Maine as follows: 
Sec. 1. 5 MRSA §1677, sub-§2, as enacted by PL 2003, c. 712, 
§1, is amended to read: 
2. 
Determination 
of 
effectiveness 
of 
increased 
state 
support for public education in reducing property tax. 
Beginning 
in fiscal year 2006-07 and ending in fiscal year 2009-10, the 
committee shall meet annually on or about June 15th and, 
in 
coordination with the development of budget estimates pursuant to 
section 1665, determine whether the state share percentage of the 
total costs of essential programs and services described in Title 
20-A, section 
15671T-~-i-o.n--1 was met in the prior fiscal 
year 
and 
to 
determine 
whether 
this 
level 
of 
state 
funding 
resulted in 
a 
reduction 
of 
the 
related 
local 
property tax 
commitment required to fund the costs of essential programs and 
services described in Title 20-A, 
section 15671 in the prior 
fiscal year. 
The committee's determination must be based on 
consideration of 
the 
following 
information 
developed 
by 
the 
Department 
of 
Education 
regarding 
each municipality and 
the 
statewide aggregate for the prior fiscal year: 
A. 
The 
total state 
and 
municipal 
spending 
for 
public 
education services for kindergarten to grade 12; 
B. 
The total costs of the essential programs and services 
described in Title 20-A, section 15671; 
c. 
The 
total state appropriation 
for 
public 
education 
services for kindergarten to grade 12; and 
D. 
The total local property tax commitment to support the 
provision of public education services for kindergarten to 
grade 12, municipal services and the local share of the 
county budget apportioned pursuant to Title 30-A, section 
706. 
Sec. 2. 20-A MRSA §15671, sub-§I, 1rA. as enacted by PL 2001, 
c. 660, §1, is repealed. 
Sec. 3. 20-A MRSA §15671, sub-§I. 1rB. as amended by PL 2003, 
c. 712, §9, is further amended to read: 
B. 
By fiscal year 6999-19 2005-06 the state share of the 
total cost of funding public education from kindergarten to 
grade 12, as described by essential programs and services, 
must be 55%. 
Be~iBBiB~-~~~-~~-y&aF-~QQ~-Q~-~-i&-eaeR 
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esseB6ial--~~~--aBQ--~~~--QeSeFigeQ--~~--mQS6 
iBeFease--6eWaFQ--6Re--§§%--level--Fe~QiFea--iB--Eiseal--yeaF 
6999-19T 
Sec. 4. 20-A MRS A §15671. sub-§l-A is enacted to read: 
A. 
Essential Programs 
and Services Review Panel. 
To 
ensure the sustained integrity of the essential programs 
and 
services school funding model, 
the Governor shall appoint the 
following members to serve as the Essential Programs and Services 
Review Panel, which is charged with evaluating on an annual basis 
the degree to which the model accurately identifies the true and 
reasonable costs of providing educational services: 
A. 
The commissioner or the commissioner's designee; 
B. 
One representative of the state board; 
C. 
Two 
active school teachers 
recommended by the Maine 
Education Association; 
D. 
Two 
active 
school 
superintendents 
recommended 
by 
a 
statewide school superintendents' association; 
E. 
Two active school board members recommended by the Maine 
School Boards Association; 
F. 
Two 
municipal 
officials 
recommended 
by 
the 
Maine 
Municipal Association; and 
G. 
One active school principal recommended by a statewide 
school principals' association. 
The 
Governor's 
appointments 
must 
be 
characterized 
by 
broad 
representation 
both 
geographically 
and 
with 
respect 
to 
the 
variously configured and sized school administrative units. 
No 
later than December 
1, 
2005 
and by 
December 1st every year 
thereafter, the review panel must prepare a formal evaluation of 
the essential programs and services school funding model, along 
with any recommendations to change the model in order to approve 
its accuracy and integrity, and provide that evaluation to the 
state board, the Governor and the Legislature. 
Sec. 5. 20-A MRS A §15671, sub-§7. as amended by PL 2003, c. 
712, §10, is repealed. 
Sec. 6. 20-A MRSA §15671-A, sub-§2, ,B. as enacted by PL 2003, 
c. 712, §ll, is amended to read: 
B. 
For property tax years beginning on or after April 1, 
2005, 
the 
commissioner 
shall 
calculate 
the 
full-value 
education mill rate that is required to raise the total of 
the local cost share expectation. 
The full-value education 
mill rate is calculated by dividing the applicable tax year 
percentage of the projected cost of funding public education 
from kindergarten to grade 12 by the certified total state 
valuation for the year prior to the most recently certified 
total 
state 
valuation 
for 
all 
municipalities. 
The 
full-value education mill rate ffiHS~-~€£~~~€-~--~-~eriea 
~reffi-~4££a~-~-~~-~-~iseal-y€a~-~~~~~a~-Ae~ 
eHeeea-.g .. .Q--fA-j,..1-l-s--i-a-~~£€a.J.-~--6-00~-aAa may not exceed 
gTG 
8.5 mills in fiscal year 
6GG9-1G 
2005-06 
and every 
fiscal year thereafter. 
The full-value education mill rate 
must be applied according to section 15688, subsection 3, 
paragraph A to determine a municipality's local cost share 
expectation. 
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aeriyea-aee9raiA~-~e-~Ae-~9119wiA~-seAeaH1eT 
f1}--~~-~£€--6gg~-~~~~-~aH--~a~r-~~-~H11-ya1He 
eaHea~ieA-~~~--~a~-4£-~~-affieaa&-~€£€££a~y-~~-resHl~ 
iA-a-41T4%-±gea1-sAar e-iB-Eisea±-year -6GG§-GeT 
f6}--~~-~£€--6gg&-~~~~-~aH--~a~r-~~-EH11-ya1He 
eaHea~ieA-~~~--~~-46-~~-affieaA&-~€£€~~a~y-~~-resH1t 
iA-a-41T4%-leeal-saar e-iA-Eiseal-year-6GGe-G1T 
f~}--~~-~£€--6991-~~~~-~aH--~a~r-~~-EH±1-ya±He 
eaHea~i9A-~~~--~~-46-~~-ameaa&-~€£€~£a~y-~~-resH±t 
iA-a-47TG%-leeal-saar e-iA-Eisea±-year -6GG1-GgT 
f4}--~~-~£€--6ggS-~~~~-~aH--~a~r-~~-EH1±-ya±He 
eaHea~ieA-~~~--~~-46-~~-ameaa&-~€£€~~a~y-~~-resH±~ 
iA-a-4eTG%-leea1-saare-iA-~isea±-year-6GGg-G9T 
f9}--~~-~£€--6999-~~~~-~aK--yea~r-~~-~H1l-ya±He 
eaHea~ieA-~~~--~~-i6-~~-ameaa&-~€£€~£a~y-~~-resH±~ 
iB-a-4§TG%-±gea±-saa~e-iB-~isea±-year-6g99-1GT 
Sec. 7. 20-A MRSA §15672. sub-§9. as enacted by PL 2003, c. 
504, Pt. A, §6, is repealed. 
Sec. 8. 20-A MRSA §15680. sub-§4. as enacted by PL 2003, c. 
504, Pt. A, §6, is amended to read: 
4. Review; approval. 
Beginning in fiscal year 2006-07, and 
at least 
every 
years 
thereafter, 
the 
commissioner, 
using 
information provided by a 
statewide education policy research 
institute, 
shall 
review 
the essential 
programs 
and 
services 
components under this Act and shall submit, in consultation with 
the 
review 
panel 
established 
pursuant 
to 
section 
15671, 
subsection I-A, any recommended changes to the state board for 
approval. 
Sec. 9. 20·A MRSA §15681. sub·§5. as enacted by PL 2003, c. 
504, Pt. A, §6, is amended to read: 
5. 
Review; approval. 
Beginning in fiscal year 2006-07, and 
at least every 
years 
thereafter, 
the 
commissioner, 
using 
information provided by 
a 
statewide education policy research 
insti tute, shall review the targeted amounts under this section 
and 
shall 
submit, 
in 
consultation 
with 
the 
review 
panel 
established pursuant 
to 
section 
15671, 
subsection 
1-A, 
any 
recommended Changes to the state board for approval. 
Sec. 10. 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. 
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, in consultation with the 
review panel established pursuant to section 15671, subsection 
I-A, any recommended changes to the state board for approval. 
Sec. 11. 20-A MRSA §15683. last,. as enacted by IB 2003, c. 2, 
§1, is amended to read: 
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 this 
chapter, 
the 
commissioner shall identify and provide in the 
commissioner's recommendation pursuant to section 15605 the total 
costs to the individual school administrative units associated 
with providing all special education services mandated under 
federal or state law, 
rule or regulation for the school year 
eeRe±~e~R~--ea--~~-~r~~-~~~--~g~H associated 
with 
the 
commissioner's recommendation. 
In addition to any appropriations 
required by section 15607, the Legislature shall appropriate and 
ensure the accurate distribution of the total amount identified 
by the commissioner, adjusted by the 
aet;~a±-~-at.-&--aREl federal 
reimbursements 
for 
the 
costs 
of 
special 
education 
services 
mandated 
by 
federal 
or 
state 
law, 
rule 
or 
regulation 
aRe 
~Fev~e~s±y that will 
be 
provided 
to 
the 
individual 
school 
administrative units for that'same school year. 
Sec. 12. 20-A MRSA §IS686, as amended by PL 2003, c. 712, 
§16, is repealed. 
Sec. 13. 20-A MRSA §IS688, sub-§I, ,A. as enacted by PL 2003, 
c. 712, §17, is amended to read: 
A. 
The school administrative uni t . s total cost of funding 
essential programs and services 
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peFee.Rt;a~es--~~~~--~--seet.ieH--~~~~--~~--+T 
paFa~Faph-A; 
Sec. 14. 20-A MRSA §IS689. as enacted by PL 2003, c. 712 
§17, is repealed. 
Sec. IS. 20-A MRSA c. 608 is enacted to read: 
CHAPTER 608 
FUND FOR THE EFFICIENT DELIVERY 
OF EDUCATIQHAL SERVICES 
§15801. 
Fund for Efficient Delivery of Educational Services 
1. 
Establisbment. 
The Fund for the Efficient Delivery of 
Educational Services, referred to in this chapter as "the fund, " 
is established as a dedicated, special revenue account to provide 
a 
financial incentive for vOluntary collaboration among school 
administrative units or among one or more municipalities and one 
or 
more 
school 
administrative units 
to 
reduce 
the 
costs 
of 
delivering educational services. 
2. 
Fund source: nonlapsing. 
The fund consists of revenues 
provided pursuant to section 15684 and any funds 
received as 
contributions 
from 
private 
and 
public 
sources. 
Eligible 
investment earnings credited to the assets of the fund become 
part of the assets of the fund. 
Any balance remaining in the 
fund at the end of any fiscal year must be carried forward to the 
next fiscal year, except that the maximum fund balance, less any 
encumbrances, at the end of any fiscal year must not exceed 150
0b 
of the revenue accrued to the fund during that fiscal year. 
Revenue in the fund in excess of the maximum fund balance, less 
any encumbrances, must be used to supplement, and not supplant, 
the distribution of general school subsidy during the subsequent 
fiscal year. 
3. 
Administration. 
The fund, 
to be accounted within the 
department, must be held separate and apart from all other money, 
funds 
and accounts. 
The department shall administer the fund 
according to the grant application review and decision process 
established in subsection 5. 
4. 
Fund eligibility. 
The fund is available solely to fund 
proposed efficiency projects jointly presented in a collaborative 
application pursuant to subsections 6 to 10 by one or more school 
administrative units. 
School administrative units may contract 
with 
nongovernmental 
organizations 
and 
individuals 
for 
the 
purpose of carrying out projects supported by the fund. 
5. Establishment of review panel: review and decision on 
grant applications. 
The Governor shall appoint the following 
members to serve as the review paneL which, in accordance with 
rules developed by the department pursuant to subsection 11, 
shall 
review, 
prioritize 
among 
and 
award 
applications 
for 
competitive grants made pursuant to subsections 6 to 9: 
A. 
One representative of the department; 
B. 
One representative of the state board; 
c. 
One representative of a private financial institution 
with expertise in the areas of business finance, commercial 
loans and return on investment; 
D. 
One representative recommended by the Maine Education 
Association who formerly served as a public school teacher 
in Maine; and 
E. 
Two 
representatives 
recommended 
by the 
Maine 
School 
Management Association, 
one of whom 
formerly served as 
a 
school superintendent in Maine 
and one of whom 
formerly 
served as an elected school board member or school district 
representative in Maine. 
The 
Governor's 
appointments 
must 
be 
characterized 
by 
broad 
geographic representation. 
6. Competitive grants; standard of qualification. In seeking 
competitive awards from the fund, each application for a grant to 
fund 
or 
partially 
fund 
an 
efficiency 
project 
must 
contain 
sufficient information so that the review panel established in 
subsection 5 can identify: 
A. 
The nature, scope and timing of the entire efficiency 
project, including all proposed programmatic and governance 
changes, 
school 
administrative 
unit 
or 
school 
district 
reconfigurations, 
system 
restructurings, 
employment 
reconfigurations and capital or infrastructure investments; 
B. 
The total cost of the efficiency project, including the 
dollar value of the grant request and all other funds and 
in-kind services contributed by the applicants and other 
sources; 
C .. The 
annual 
cost 
of 
providing 
educational 
services 
throughout the jurisdiction represented by the applicant or 
applicants 
for 
each 
of 
the 
years 
before 
the 
implementation of the efficiency project; 
D. 
The projected costs of providing educational services 
throughout the jurisdiction represented by the applicant or 
applicants for each of the 10 years after the implementation 
of the efficiency project; 
E. 
The type of commitments, contracts or agreements made, 
entered into or executed by the applicant or applicants that 
serve to substantiate, verify or support the projections 
required by this subsection; and 
f. 
The annual return 
total cost of projects 
grants from the fund. 
on investment with 
supported in whole 
respect to the 
or in part with 
1. 
Competitive 
grants; 
qualifying 
actions. 
Except 
as 
otherwise 
provided 
in 
subsection 
10, 
applicants 
for 
grant 
assistance must demonstrate significant and sustainable savings 
in the cost of delivering educational services through proposals 
involving one or more of the following qualifying actions: 
A. Consolidation of school administrative units; 
B. 
Enhancement 
of 
the 
regional 
delivery 
of 
educational 
services; 
C. 
Consolidation of administrative services or functions 
directly related to delivery of educational services; 
D. 
Creation of broad-based alliances for the purchase of 
goods 
and 
services 
directly 
related 
to 
delivery 
of 
educational services; 
E. 
Creation 
of 
collaborative 
school-municipal 
or 
schOOl-county service delivery or service support systems; 
F. 
Changes in the schooladministrati ve unit' s governance 
system, 
administrative structure or adopted policies that 
provide for one or more qualifying actions provided for in 
paragraphs A to E. 
The qualifying actions in this subsection are not listed in order 
of priority. 
Except as otherwise provided in subsection 10, 
applicants 
for 
a 
grant 
under this 
chapter 
must 
specify the 
pertinent qualifying actions for which assistance is sought, how 
implementation of those actions will result in cost savings and a 
projection 
of 
the 
cost 
savings 
reasonably 
attributable 
to 
implementation of its proposal, in addition to and in the manner 
provided 
in 
rules 
adopted 
by 
the 
department 
pursuant 
to 
subsection 11. 
8. 
Competitive 
grants; 
additional 
review 
criteria. 
In 
addition to the standard of qualification information identified 
in 
subsection 
and 
the 
qualifying 
actions 
identified 
in 
subsection 7, the review panel shall also consider the following 
review criteria: 
A. 
Chance of success, including the extent and guality of 
historical cooperation among the various school or munici~al 
applicants; 
B. 
Estimate 
and 
likelihood 
of 
property 
tax 
savings, 
including the strength and enforceability of all agreements, 
contracts 
and 
commitments 
supporting 
the 
estimated 
investment returns; 
c. 
Abilit:l' to replicate the efficiency project in other 
areas of the State; and 
D. 
Innovation, 
creativity and likelihood of stimulating 
similarly structured projects. 
9. Relationship to school f;mding distribution. 
Except as 
provided in this subsection, grants that are authorized pursuant 
to this chapter must be provided to the successful applicants 
separately and distinctly from the distribution of school subsidy 
as targeted grants provided for the purposes of establishing more 
efficient educational 
service 
delivery 
systems 
and 
achieving 
defined cost reductions. 
A. 
School administrative units experiencing or projected to 
experience significant and sustained reductions in total 
allocation primarily attributable to low student populations 
or sustained declining school enrollments may be 
awarded 
grants under this chapter that are effectively distributed 
in whole or in part as supplements to the school subsidy 
that would otherwise 
be distributed pursuant to 
chapter 
606-B, if all of the following requirements are met: 
(1) 
Supplemental school subsidy distribution may not 
be provided for more than a 5-year period; 
( 2) 
The 
successful applicant must 
submit 
a 
school 
system 
reconfiguration 
plan, 
approved 
by 
the 
appropriate legislative body or bodies, that when fully 
implemented 
would 
result 
in 
a 
total 
allocation 
according 
to 
the 
essential 
programs 
and 
services 
funding model that is reasonably sufficient to operate 
the reconfigured school system on 
a 
sustained basis 
without the need for local spending beyond the local 
share of the total allocation; 
(3) 
The 
reconfiguration plan 
must 
be 
designed 
to 
provide for its full implementation within a 
5-year 
period; and 
(4) 
No 
annual 
distribution 
of 
supplemental 
school 
subsidy provided on 
a 
transitional basis under this 
section may 
be authorized unless the reconfiguration 
plan 
is 
being 
implemented 
on 
schedule 
and 
the 
appropriate legislative body or bodies have annually 
validated their original endorsement of the plan. 
10. Planning grants. 
The review panel established pursuant 
to subsection 5 may award eligible applicants a planning grant '-
in 
an 
amount 
not 
to 
exceed 
$10,000, 
to 
support 
technical 
assistance and facilitation needed for development of a proposal 
for 
one 
or 
more qualifying actions potentially eligible for 
funding under subsections 6 to 9. 
The review panel may award a 
planning grant under this subsection prior to adoption of rules 
required under SUbsection 11. 
11. 
Ru1emating. 
No 
later 
than 
January 
1, 
2006, 
the 
department 
shall 
adopt 
rules 
governing 
the 
schedule 
for 
submission and action on competitive grant proposals submitted 
pursuant 
to 
subsections 
and 
7, 
related 
submission 
and 
information 
requirements 
including, 
but 
not 
limited 
to, 
information 
that 
an 
applicant 
must 
provide 
to 
demonstrate 
significant cost savings, the methodology for determining such 
significant 
cost 
savings, 
the 
methodology 
for 
estimating 
anticipated 
return 
on 
investment 
of 
fund 
proceeds 
through 
issuance of grants 
and criteria for scoring and prioritizing 
among 
grant proposals. 
The 
department 
may 
adopt 
any 
rules 
necessary for 
the administration of the fund. 
Rules 
adopted 
pursuant 
to 
this 
subsection 
are 
routine 
technical 
rules 
as 
defined in Title 5, chapter 375, subchapter 2-A. 
Sec. 16. 30·A MRSA c. 230 is enacted to read: 
CHAPTER 230 
FUND FOR THE EFFICIENT DELIVERY 
OF LOCAL AND REGIONAL SERVICES 
§620l. 
Fund for Efficient Delivery of Local and Regional 
Services 
1. 
Establishment. 
The Fund for the Efficient Delivery of 
Local and Regional Services, referred to in this chapter as "the 
fund," is established as a dedicated, special revenue account to 
provide a financial incentive for voluntary collaboration among 
municipalities or among one or more municipalities and one or 
more 
counties 
to 
reduce 
the 
costs 
of 
delivering 
local 
and 
regional governmental services. 
2. 
Fund source: nonlapsing. 
The fund consists of revenues 
transferred from the Local Government Fund pursuant to section 
5681, subsection 5-B and Public Law 2003, chapter 20, Part W, 
section 2 and any funds received as contributions from private 
and public sources. 
Eligible investment earnings credited to the 
assets of the fund become part of the assets of the fund. 
Any 
balance remaining in the fund at the end of any fiscal year must 
be carried forward to the next fiscal year, 
except that the 
maximum fund balance, less any encumbrances, at the end of any 
fiscal year must not exceed 150 Qb of the revenue accrued to the 
fund during that fiscal year. 
Revenue in the fund in excess of 
the maximum fund balance, less any encumbrances, must be returned 
to the Local Government Fund and distributed in addition to all 
other revenue otherwise accruing to the Local Government Fund the 
subseguent fiscal year. 
3. 
Administration. 
The fund, to be accounted within the 
Department of Administrative an? Financial Services, must be held 
separate and apart from all other money, funds and accounts. 
The 
State Planning Office shall administer the fund according to the 
grant application 
review 
and decision process established in 
subsection 5. 
4. 
Fund eligibility. 
The fund is available solely to fund 
proposed efficiency projects jointly presented in a collaborative 
application 
pursuant 
to 
subsections 
to 
by 
or 
more 
municipalities or one or more municipalities and one or more 
regional service providers, including counties, regional planning 
commissions or councils of government established pursuant to 
chapter 119, 
or development districts established pursuant to 
chapter 206. 
Municipalities and regional service providers may 
contract with nongovernmental organizations and individuals for 
the purpose of carrying out projects supported by the fund. 
5. Establishment of review panel; review and decision on 
grant applications. 
The 
Governor shall appoint the following 
members to serve as the review paneL which, in accordance with 
rules 
developed 
by 
the 
State 
Planning 
Office 
pursuant 
to 
subsection 
10, 
will 
review, 
prioritize 
among 
and 
award 
applications for competitive grants made pursuant to subsections 
to 9: 
A. 
One representative of the State Planning Office; 
B. 
One representative of the Department of Economic and 
Community Development; 
C. 
One representative of the Maine Municipal Bond Bank or a 
private financial institution with expertise in the areas of 
business finance, commercial loans and return on investment; 
D. 
One 
representative 
representing 
providers 
of 
governmental services on a regional basis; and 
E. 
Three 
representatives 
of 
municipal 
government 
recommended by the Maine Municipal Association who formerly 
served as a municipal officer or the chief administrative 
official of a municipality, with one representing a rural 
community with a population of less than 4,000 inhabitants, 
one representing a suburban community with a population of 
4,000 to 15,000 inhabitants and one representing a service 
center 
community 
with 
a 
population greater 
than 
15,000 
inhabitants. 
The 
Governor's 
appointments 
must 
be 
characterized 
by 
broad 
geographic representation. 
6. Competitive grants; standard of qualification. In making 
competitive 
awards 
from 
the 
fund, 
and 
with 
respect 
to 
the 
jurisdictions 
throughout 
the 
several 
local 
or 
regional 
governments that are submitting each application for a grant to 
fund or partially fund an efficiency project, the review panel 
established in subsection 5 must identify: 
A. 
The nature, scope and timing of the entire efficiency 
project, including all proposed programmatic and governance 
changes, system restructur ings, employment reconfigurations 
and capital or infrastructure investments; 
B. 
The total cost of the efficiency project, including the 
dollar value of the grant request and all other funds and 
in-kind services contributed by the applicants and other 
sources; 
C. 
The 
annual 
cost of providing the 
targeted services 
throughout 
the 
jurisdictions 
represented by 
the 
several 
applicants 
for 
each 
of 
the 
years 
before 
the 
implementation of the efficiency project; 
Page ll-LR0831(1) 
D. 
The projected costs of providing the targeted services 
throughout 
the 
jurisdictions 
represented 
by 
the 
several 
applicants for each of the 10 years after the implementation 
of the efficiency project; 
E. 
The type of commitments, contracts or agreements made, 
entered into or executed by the several applicants that 
serve to substantiate, verify or support the projections 
required by this subsection; and 
f. 
The annual return on investment with respect to the 
total cost of projects supported in whole or in part wi th 
grants from the fund. 
7. 
Competitive 
grants; 
qualifying 
actions. 
Except 
as 
otherwise 
provided 
in 
subsection 
8, 
applicants 
for 
grant 
assistance must demonstrate significant and sustainable savings 
in 
the 
cost 
of 
delivering 
local 
and 
regional 
governmental 
services through proposals involving one or more of the following 
qualifying actions: 
A. 
Collaborative delivery of governmental services; 
B. 
Enhancement 
of 
an existing 
or 
development 
of 
a 
new 
regionalized system for delivery of governmental services; 
C. 
Consolidation of administrative services or functions 
directly related to delive1Y of governmental services: 
D. 
Creation of broad-based alliances for purchase of goods 
and services directly related to delivery of governmental 
services; or 
E. 
Execution and implementation of an interlocal agreement 
pursuant 
to 
chapter 
that provides 
for 
one 
or 
more 
qualifying actions provided for in paragraphs A to D. 
The qualifying actions in this subsection are not listed in order 
of priority. 
Except 
as 
otherwise 
provided 
in subsection 
9, 
applicants 
for 
a 
grant 
under 
this 
chapter must 
specify the 
pertinent qualifying actions for which assistance is sought, how 
implementation of those actions will result in cost savings and a 
projection 
of 
the 
cost 
savings 
reasonably 
attributable 
to 
implementation of its proposal, in addition to and in the manner 
provided in rules adopted by the State Planning Office pursuant 
to subsection 10. 
8. 
Competitive 
grants; 
additional 
review 
criteria. 
In 
addition to the standard of qualification information identified 
in 
subsection 
and 
the 
qualifying 
actions 
identified 
in 
subsection 7, the review panel established in subsection 5 must 
also consider the following review criteria: 
A. 
Chance of success, including the extent and quality of 
historical cooperation among local and regional governments 
and nongovernment organizations; 
B. 
Estimate 
and 
likelihood 
of 
property 
tax 
savings, 
including the strength and enforceability of all agreements, 
contracts 
and 
commitments 
supporting 
the 
estimated 
investment returns; 
C. 
Ability to replicate the efficiency project in other 
areas of the State; and 
D. 
Innovation, 
creativity and likelihood of 
stimulating 
similarly structured projects. 
9. Planning grants. 
The review panel established pursuant 
to subsection 5 may award eligible applicants a planning grant, 
ln 
an 
amount 
not 
to 
exceed 
$10,000, 
to 
support 
technical 
assistance and facilitation needed for development of a proposal 
for 
one 
or 
more qualifying actions potentially eligible for 
funding under subsections 6 to 8. 
The review panel may award a 
planning grant under this . subsection prior to adoption of rules 
required under subsection 10. 
10. 
Rulemaking. 
No later than January 1, 2006, the State 
Planning Office shall adopt rules governing the schedule for 
submission and action on competitive grant proposals submitted 
pursuant 
to 
subsections 
and 
7, 
related 
submission 
and 
information 
requirements 
including, 
but 
not 
limited 
to, 
information 
that 
an 
applicant 
must 
provide 
to 
demonstrate 
significant cost savings, the methodology for determining such 
significant 
cost 
savings, 
the 
methodology 
for 
estimating 
anticipated 
return 
on 
investment 
of 
fund 
proceeds 
through 
issuance of grants and criteria for 
scoring and prioritizing 
among 
grant proposals. 
The 
Department 
of 
Administrative 
and 
Financial 
Services 
may 
adopt 
any 
rules 
necessary 
for 
the 
administration of 
the 
fund. 
Rules 
adopted pursuant 
to this 
subsection are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
SUMMARY 
The School Finance and Tax Reform Act of 2003, as adopted by 
the voters on June 8, 2004, requires the State to provide 
55~ of 
"the total allocation," a term that describes the total state and 
local financial contribution to the operation of the State's 
Page l3-LR0831(1) 
kindergarten to grade 12 public school system. 
The current law 
delays until 2010 the State's obligation to meet the 55 90 school 
fundinq level. 
This bill removes all transitional language in 
that law that would delay the full implementation of the State's 
55% 
school 
funding 
requirement. 
This bill also 
creates 
an 
essential programs and services review panel, made up largely of 
educational 
practitioners, 
that 
is 
charged 
with 
annually 
evaluating the school funding allocation system with respect to 
the 
model's 
accuracy 
and 
integrity. 
In 
addition, 
the bill 
redesigns 
the 
100°'0 
special 
education 
funding 
requirement, 
established as a year-to-year reimbursement system according to 
the School Finance and Tax Reform Act of 2003, as a current-year 
state funding requirement that operates through the essential 
programs and services allocation system as it pertains to special 
education. 
This bill also establishes the system of managing 
both the Fund for the Efficient Delivery of Educational Services 
and the Fund for the Efficient Delivery of Local and Regional 
Services, both of which were created by the School Finance and 
Tax Reform Act of 2003. 
By the management systems created in the 
bill, grants 
from 
both funds 
would 
be distributed to 
school 
administrative units and local or regional governmental units 
that compete for project financing. 
The bill establishes thp. 
review panels charged with reviewing and awarding the efficiency 
grants, as well as the funding qualifications and review criteria. 
Page l4-LR0831(1)