An Act To Increase the State Share of Education Costs, Reduce Property Taxes and Reduce Government Spending at All Levels
Maine Legislature, Session 122, LD 0001
Committee: Property Tax Reform
Sponsors: RICHARDSON, EDMONDS
Amends: 5 MRSA §15, 5 MRSA §1664, 5 MRSA §1665, 5 MRSA §1710-F, 30-A MRSA §2181, 5 MRSA §17154, 20-A MRSA §1, 20-A MRSA §1307, 20-A MRSA §1701-B, 20-A MRSA §1704, 20-A MRSA §4254, 20-A MRSA §6651, 20-A MRSA §6654, 20-A MRSA §7734, 20-A MRSA §8301-A, 20-A MRSA §8402, 20-A MRSA §8404, 20-A MRSA §8451-A, 20-A MRSA §8601-A, 20-A MRSA §8605, 20-A MRSA §8606-A, 20-A MRSA §15622, 20-A MRSA §15658, 20-A MRSA §15671, 20-A MRSA §15672, 20-A MRSA §15673, 20-A MRSA §15675, 20-A MRSA §15682, 20-A MRSA §15683, 20-A MRSA §15683-A, 20-A MRSA §15685, 20-A MRSA §15688, 20-A MRSA §15689, 30-A MRSA §6006-F, 36 MRSA §685-A, 36 MRSA §6203-A, 36 MRSA §6207, 36 MRSA §6209, 36 MRSA §6656, 30-A MRSA §7102

Legislative Document 
No.1 
H.P.6 
House of Representatives, December 1,2004 
An Act To Increase the State Share of Education Costs, Reduce 
Property Taxes and Reduce Government Spending at All Levels 
(EMERGENCY) 
Reference to the Joint Select Committee on Property Tax Reform suggested and ordered 
printed. 
!r/~/J7.~ 
MilLICENT M. MacFARLAND 
Clerk 
Presented by Representative RICHARDSON of Brunswick. (GOVERNOR'S BILL) 
Cosponsored by Senator EDMONDS of Cumberland. 
Primed on recycled paper 
Emergency preamble. Whereas, acts of the Legislature do not 
become effective until 90 days after adjournment unless enacted 
as emergencies; and 
Whereas, this Act provides a variety of tools to reduce the 
property tax 
burden of 
Maine 
residents, 
including of 
those 
residents most in need of such reductions, and the overall state 
and local tax burden; and 
Whereas, the tools to reduce property taxes provided in 
this Act include an increase in the state share of education 
funding and measures to control government spending at the state, 
county, municipal and school district levels in a manner that 
respects the role of local decision making and thus provide means 
to control the demand for property tax revenues; and 
Whereas, property tax reduction is a major concern of the 
people of Maine as evidenced by the Legislature's consideration 
and debate of a variety of proposals on this topic in recent 
years, including citizen-initiated legislation; 
Whereas, 
property 
tax 
reduction to 
Maine 
residents 
and 
businesses will provide an important improvement to the State' s 
business climate and a potential stimulus of the state economy as 
a result; and 
Whereas, in the judgment of the Legislature, these facts 
create an emergency within the meaning of the Constitution of 
Maine 
and 
require 'the 
following 
legislation 
as 
immediately 
necessary for the preservation of the public peace, health and 
safety; now, therefore, 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 5 MRSA §15II, as amended by PL 2003, c. 451, Pt. X, 
§1, is repealed. 
Sec. A-2. 5 MRS A §15I3, as amended by PL 2003, c. 451, Pt. X, 
§§2 to 4, is repealed. 
Sec.A-3. 5MRSA§lSI7, as amended by PL 2003, c. 451, Pt. X, 
§6, is repealed. 
Sec. A-4. 5 MRSA c.142 is enacted to read: 
CBAPTEI 142 
MAIRE BUDGET S"lABILlZATIc:J.I FtJBD 
§1531. 
Definitions 
As 
used in this 
chapter. 
unless 
the 
context otherwise 
indicates. the following terms have the following meanings. 
1. Adjusted General f'gpd ApRrRPriatiQA. 
"Adjusted General 
Fund a,ppropriation" mea,ns the General Fund appropriation for a 
given fiscal year plus any non-General Fund allocation for that 
fisca,l year that will require a General Fund appropria,tion in 
upcoming fisca,l years. 
2. 
Baseline General fund revenue. 
"Baseline General Fund 
reyenue" 
means 
the 
recommended Genera,l 
Fund 
revenue 
foreca,st 
reported by the Revenue Forecasting Committee in its December 1st 
report. increased by the estima,ted amount of net tax reductions 
ena,cted in either the previous or current Legislature. 
The 
estima,ted amount of net tax reductions is based on the estima,tes 
of the Office of Fiscal and Program Review. 
3. 
eo.issioner. 
"Conunissioner" means the Commissioner of 
Adrninistra,tiye and Fina,ncial Services. 
4. General Fund revenue shortfall. 
"General Fund revenue 
shortfall" 
means 
the 
amount 
by 
which 
the 
Genera,l 
Fund 
appropriation limitation established by 
section 
1534 
exceeds 
baseline Genera,l Fund revenues and other available resources in 
each sta,te fiscal yea,r of the current fiscal biennium and the 
next 
fisca,l 
biennium. 
a,s 
reconunended 
a,nd 
authorized 
by 
the 
Reyenue Foreca,sting CQmmittee in its December 1st repQrt. 
5. 
Stabilization fund. 
"Sta,hilization 
fund" 
means 
the 
Maine Budget Sta,biliza,tion Fund established in this chapter. 
§1532. 
Maine Budget Stabilisation Fund 
1. 
Generally: Stabilisation F!Ind established. 
The Maine 
Budget Stabilization Fund is hereby established. 
Amounts in the 
stabiliza,tion fund may not exceed 12'\ Qf total General 
Fund 
revenues in the immediately preceding state fiscal year 
a,nd. 
except a,s provided by section 1533. may not be reduced below 1% 
of the tota,l General Fund revenues in the immediately preceding 
state fiscal yea,r. 
2. Expepditures fro. fUDd. 
Amounts in the stabilization 
fund ma,y 
be expended only to offset a 
General 
Fund 
revenue 
shortfall. 
3. Fund to be nonl.sing. 
The balance of the stabilization 
fund may not lalJse but must be carried forward to carry out the 
purposeS of this chapter. 
4. Inyestment of funds. The money in the stabilization fund 
may be invested as provided by law with the earnings credited to 
the stabilization fund. 
5. Investment proceeds; ezception. At the close of every 
month 
during 
which 
the 
stabilization 
fund 
is 
at 
the 
12% 
limitation described in subsection I. the State Controller shall 
transfer from the General Fund to the Retirement Allowance Fund 
established 
in 
section 
17251 
an 
amount 
equivalent 
to 
the 
investment earnings that otherwise would have been credited to 
the stabilization fund. 
6. Death benefits. The Governor shall allocate funds from 
the stabilization fund as needed to pay benefits due pursuant to 
Title 25. chapter 195-A. Allocations may be made upon written 
request of the Chief of the State Police. State Fire Marshal or 
Director 
of 
Maine 
Emergency 
Medical 
Seryices. 
and 
after 
consultation with the State Budget Officer. 
S1533. 
Declaration of budget emergency 
If the Legislature has adjourned sine die prior to the close 
of a fiscal year and the commissioner determines that available 
General Fund resources will not be sufficient to meet General 
Fund 
appropriations, 
the 
commissioner 
may 
declare 
a 
budget 
emergency, 
and the Governor may reduce the stabilization fund 
below the 1'\, minimum threshold established by section 1532. but 
only 
to 
a 
level 
sufficient to bring the 
budget 
back 
into 
balance. 
The 
Governor 
shall 
inform 
the Legislative 
Council 
immediately "pon such transfers from the stabilization fund. 
S1534. 
General Fund agprQpriation limitation 
The General Fund appropriation for each fiscal year of the 
c"rrent fiscal biennium and the next fiscal biennium may not 
exceed the adjusted General Fund appropriation of the previous 
fiscal year. multiplied by one pl"s the long-term growth rate 
limitation as 
defined 
in section 1710-F, 
subsection 4. 
The 
limitation may be exceeded only by the amount of the additional 
costs or the lost federal revenue from the following exceptional 
circumstances: 
unfunded or under-funded 
new federal mandates. 
losses in federal revenues or other reven"e sources, citizen's 
initiatives or referenda that require increased state spending. 
court orders or decrees that require additional state resources 
to comply with the orders or decrees and sudden or significant 
increases in demand for existing state services that are not the 
result of 
legislative 
changes 
that increased eligibility or 
increased benefits. 
The Legislature may designate exceptional 
circumstances that are not explicitly defined in this section but 
meet the intent of this section. 
for purposes of this section. 
"exceptional circumstances" 
means 
an 
unforeseen condition or 
conditions over which the 
Governor 
and the Legislature have 
little or no control. 
Exceptional circumstances do not apply to 
new 
programs 
or 
program 
expansions 
that go 
beyond existing 
program criteria and operation. 
§1535. 
General Fund trapsfers to stabilization fppd 
Baseline 
General 
fund 
revenues 
and 
other 
available 
resources. as recommended by the Revenue forecasting Committee 
and authorized in accordance with chapter lSI-B. that exceed the 
General fund appropriation limitation established by section 1534 
must 
be 
transferred 
to 
the 
stabilization 
fund. 
The 
State 
Controller. at the close of each fiscal year. shall transfer the 
available 
balance 
rema~n~ng 
in 
the 
General 
fund 
to 
the 
stabilization 
fund 
after 
all 
required 
deductions 
of 
appropriations. 
budgeted 
financial 
cOmmitments 
and 
other 
adjustments considered necessary by the State Controller. 
§153fi. 
Excess General Fund revenues 
1. 
First priority reserve. 
The State Controller shall. as 
the first priority at the close of each fiscal year. reserve from 
the unappropriated surplus of the General fund an amount equal to 
the excess of total baseline General fund revenues received over 
accepted estimates in that fiscal year and transfer that amount 
at the beginning of the next fiscal year as follows: 
A. 
Thirty-two percent to the stabilization fund; 
B. 
Thirty-two percent to the Retirement Allowance fund 
established in section 17251; and 
C. 
Sixteen 
percent 
to 
the 
Reserye 
for 
General 
fund 
Operating Capital. 
2. 
TrimEfer. 
At the close of each fiscal year, the State 
Controller shall transfer from the unappropriated surplus of the 
General Fund to the stabilization fund: 
A. 
An amount equal to the balance remaining of the excess 
of 
total 
General 
fund 
revenues 
received 
over 
accepted 
estimates 
in 
that 
fiscal 
year 
that 
would 
have 
been 
transferred 
to 
the 
Reserve 
for 
General 
Fund 
Qperating 
Capital had the Reserve for General Fund Operating Capital 
not been at its statutor~ limit of $50,000.000. 
Sec. A-5. 5 MRSA §1664, last" as enacted by PL 2003, c. 451, 
Pt. X, §s, is repealed. 
Sec. A-6. 5 MRSA §1665, sub-§l, as amended by PL 2003, c. 451, 
Pt. X, §9, is further amended to read: 
1. 
Expenditure 
and 
appropriation 
requirements. 
On 
or 
before September 1st of the even-numbered years, all departments 
and other agencies of the State Government and corporations and 
associations receiving or desiring to receive state funds under 
the provisions of law shall prepare, in the manner prescribed by 
and on blanks furnished them by the State Budget Officer, and 
submit 
to 
the 
officer 
estimates 
of 
their 
expenditure 
and 
appropriat".ion requirements for each fiscal year of the ensuing 
biennium contrasted with the corresponding figures of the last 
completed fiscal year and the estimated figures for the current 
IS 
fiscal 
year. 
The 
total 
General 
Fund 
appropriation 
requests 
submitted by each department and agency for each fiscal year may 
not exceed the General Fund appropriation of the previous fiscal 
year multiplied by one plus the average real personal income 
growth rate. 
For purposes of this subsection, 
"average real 
personal income growth rate" means the average for the prior 10 
calendar years, ending with the most recent calendar year for 
which data is available, of the percent change in personal income 
in this State for a calendar year, as estimated by the United 
States Department of Commerce, Bureau of Economic Analysis, less 
the percent change in the Consumer Price Index for that calendar 
year. 
For purposes of this subsection, 
"Consumer Price Index" 
has the same meaning as in Title 36, section 5402, subsection 1. 
The expenditure estimates sasJ:J: must be classified to set forth 
the data by funds, organization units, character and objects of 
expenditure. 
The 
organization units 
may 
be 
subclassified 
by 
functions 
and 
activities, 
or 
in 
any 
other 
manner, 
at 
the 
discretion of the State Budget Officer. 
All departments 
and other 
agencies receiving 
Qr 
desiring to 
receive state funds from the Highway Fund shall submit to the 
officer 
estimates 
of 
their 
expenditure 
and 
appropriation 
requirements for each fiscal year of the ensuing biennium that do 
not exceed the Highway Fund appropriation of the previous fiscal 
year multiplied by one plus the average real personal income 
growth rate. 
The Highway Fund highway and bridge improvement 
accounts are exempt from this spending limitation. 
Sec. A-7. 5 MRSA §1710-F, sub-§4 is enacted to read: 
4. COMi,ttee to calculate long-teI1ll growth rate limitation. 
The committee shall calculate a percentage rate to be known as 
the "long-term growth rate limitation" and shall include it in 
.t.be report required by subsection 2. 
The long-term growth rate 
limitation is a percentage rate equal to the measure of real 
economic growth plus the average forecasted inflation rate. 
For 
purposes of this subsection. "measure of real economic growth" 
means the average real personal income growth rate as defined in 
section 
1665. 
For 
purposes· of 
this 
subsection. 
"average 
forecasted inflation rate" means the average forecasted change in 
the 
Consumer 
Price 
Index 
underlying the 
revenue 
projections 
developed by the committee pursuant to subsection 1 for the 5 
future calendar years in the economic forecast. 
"Consumer Price 
Index" 
has 
the 
same 
meaning 
as 
in Title 
36« 
section 5402. 
subsection 1. 
Sec. A-S. S MRSA §13063-C, sub-§4, 4(8, as amended by PL 2003, 
c. 451, Pt. X, §10, is further amended to read: 
B. 
Notwithstanding section 1585, any balance 
rema~n~ng in 
the program after July 31, 2007 must be transferred to the 
Maine Budget Stabilization Fund as established in section 
lni llll. 
Sec. A-9. S MRSA §172S3, sub-§3, as enacted by PL 1995, c. 
464, §15, is amended to read: 
3. 
Components 
o~ unfunded liability contribution. 
The 
annual valuation report prepared by the actuary in accordance 
with section 17107 must include identification of the impact on 
the 
employer 
contribution 
rate 
of 
any 
excess 
General 
Fund 
revenues transferred to the Retirement Allowance Fund pursuant to 
section 1917 l51Z. 
Sec. A-IO. 5 MRS A §22001, sub-§13, as enacted by PL 2001, c. 
439, Pt. T, §5, is amended to read: 
13. 
Trust fund. 
"Trust fund" means the Baxter Compensation 
Authority Other Special Revenue Fund account authorized pursuant 
to former section 1513, subsection 1-T7-e~-i's-6Qeeesse~. 
Sec. A·II. 2S MRSA §1612, sub·§7~ as amended by PL 2003, c. 
451, Pt. X, §13, is further amended to read: 
7. 
Payment 
from 
the 
Maine 
Budqet 
Stabilization Fund. 
Benefits are payable from the Maine Budget Stabilization Fund as 
provided in Title 5, section 1§16 1532. subsection 6. 
Sec. A·12. Transition; stabilization fund. 
Any money in the Maine 
Budget Stabilization Fund on the effective date of this Act is 
deemed 
to 
be 
in 
the 
Maine 
Budget 
Stabilization 
Fund 
as 
reconstituted by this Act. 
PARTB 
Sec. B-1. 30-A MRSA §2181, sub-§4, 1fE, as enacted by PL 2003, 
c. 696, §12, is amended to read: 
E. 
Identify 
best 
management 
practices 
and 
make 
this 
information available to the public. 
including. 
but not 
limited 
to. 
best 
management 
practices 
that 
facilitate 
property tax rate reduction pursuant to the increasing state 
share of the total cost of essential programs and services 
under Title 20-A. chapter 606-B; 
PARTC 
Sec. C-I. 30-A MRS A §S721-A is enacted to read: 
§S721-A. 
Ljmjtation on munjcipal appropriations 
1. 
ApprO,priation limit established. 
Notwithstanding any 
~her provision of law. a municipality may not in any fiscal year 
make 
an 
appropriation. 
including 
amounts 
appropriated 
or 
allocated to 
reserves. 
except as 
otherwise provided in this 
section. 
where such appropriation utilizes 
revenues collected 
through property taxes levied by such municipality. and where 
such appropriation would cause the municipality to exceed its 
property tax levy limit for the fiscal year. 
A municipality's 
property tax levY limit for any fiscal year must be set at its 
property tax levy limit for the prior fiscal year, multiplied by 
the sum of the following: one; plus the income growth factor set 
forth in subsection 4; plus the municipality's annual property 
growth 
factor. 
The 
annual 
property 
growth 
factor 
for 
a 
municipality is a fraction established by the municipality whose 
denominator is the total valuation of the municipality. and whose 
numerator is the amount of increase in the assessed valuation of 
any real or personal property in the municipality during the 
prior fiscal year that may become subject to taxation for the 
first time. or taxed as a separate parcel for the first time 
during such fiscal year. or that. has had an increase in its 
assessed valuation over the prior year's valuation as a result of 
improvements to or expansion of the property. 
2. 
Scope. 
Appropriation 
and 
property tax 
levy limits 
established 
in 
subsection 
apply 
to 
any 
general 
fund 
appropriation of a municipality, other than appropriations and 
revenues related to tax increment financing districts or other 
similar special tax districts pursuant to state law, but do not 
apply 
to 
expenditures 
related 
to 
assessments 
or 
tuition 
expenditures properly issued by a school administrative unit or 
county of which the municipality is a member. 
3. 
trnD§itioD. 
The 
appropriation 
limit established in 
subsection 1 becomes effective for a municipality for its first 
full fiscal year following the effective date of this section. 
A. 
For purposes of determining the property tax levy limit 
for 
the 
first 
fiscal 
year 
for 
which 
this 
section is 
effective. 
the 
limit must 
be set at the property tax 
c011UDitment of the municipality for the fiscal year during 
which this section becomes effective. multiplied by the Sum 
of the following: 
one; plus the income growth factor set 
forth 
in 
subsection 
4: 
plus 
the 
municipality's 
annual 
property growth factor set forth in subsection 1. 
B. 
In the event the prior year's tax commitment reflects 
the 
effect 
of 
extraordinary. 
nonrecurring 
events. 
the 
municipality may submit a written notice to the State Tax 
Assessor requesting an adjustment in the levy calculation. 
The adjustment must be determined in a reasonable amount of 
~ 
4. 
Income 
growth 
factor. 
The 
income 
growth 
factor 
applicable to fiscal years following the effective date of this 
section is the base growth factor. defined as the average real 
personal income growth rate. defined in Title 5. section 1665. 
subsection 1, which rate may not exceed 2.75~. 
For fiscal yeats 
commencing after such time as the state tax burden ranks in the 
middle 
1/3 
of all states. 
as 
determined 
by the State 
Tax 
Assessor. 
the growth factor must become 
the personal 
income 
growth factor. 
The personal income growth factor is one plus the 
average percent change in personal income in this State for the 
prior 10 calendar years. ending with the most recent calendar 
year for which data are available, as estimated by the United 
States Department of COmmerce, Bureau of Economic Analysis. 
For 
purposes of this section. "state tax burden" means the total 
amount of state and local taxes paid by Maine residents, per 
$1 < 000 of income, as determined by the State Tax Assessor based 
on data from the United States Department of Comnerce. Bureau of 
Census and Bureau of Economic Analysis. 
The State Tax Assessor 
shall undertake this calculation no less than once per year. 
For 
any fiscal 
year 
thereafter, 
if the State 
Tax 
Assessor 
has 
determined that the state tax burden has increased to the highest 
1/3 of states, the growth factor for the following fiscal year 
must be the base growth factor. 
In all other fiscal years when 
the state tax burden ranks in the middle 
of states < 
as 
determined by the State Tax Assessor, the growth factor must be 
the personal income growth factor. 
5. 
AcljUStmeDt for ney state funding. 
In the event the 
State provides net new funding to a municipality for existing 
services funded in whole or in part by property taxes, other than 
required state mandate fund§, pursuant to section 5685 that do not 
displace current property 
tax expenditures, 
the municipality 
shall lower its property tax levy limit in that year in an amount 
equal to the net new funds. 
For purposes of this subsection, 
"net new 
funds" 
means 
the 
amount of 
funds 
received by 
the 
municipality from the State in that fiscal year, with respect to 
services funded in whole or in part by property taxes, less the 
following product: 
the amount of such funds received in the 
prior fiscal 
year multiplied by 
an 
adjustment 
factor. 
The 
adjustment factor equals; one; plus the income growth factor set 
forth in subsection 4: plus the municipality's annual property 
growth factor 
as defined in subsection 1. 
In the event 
a 
municipality receives net new funds in any fiscal year for which 
its levy limit has 
not been 
adjusted 
as 
provided in this 
subsection, the municipality shall adjust its levy limit in the 
following year in an amount equal to the net new funds. 
6. 
Hill rate. 
Notwithstanding Title 36. chapter 103, 
a 
municipality may, without the need for voter approval, establish 
a property tax mill rate at any level it considers appropriate 
and 
may 
establish 
any 
method 
of 
computing 
property 
taxes, 
provided that, 
in establishing such mill rate or method of 
computation, the tax rate and computation method do not cause the 
total property tax 
levy of 
the municipality to 
exceed its 
property tax levy limit. 
1. 
Certain taxes. 
Nothing in Title 36, chapter 103 may be 
interpreted to prohibit the imposition of special district taxes, 
user fees or county taxes on any real or personal property, 
provided such taxes or fees are otherwise permitted by law. 
8. 
btraordinaq events. 
Upon the affirmative vote of a 
majority of its legislative body, a municipality may exceed its 
property tax levy limit in such an amount as necessary to comply 
with a court order or decree or to respond to an extraordinary 
event. 
An "extraordinary event" includes any catastrophic event 
outside the control of the legislative body such as a natural 
disaster. severe weather event, act of God. act of terrorism. 
fire, war and riot. but in no event may "extraordinary event" 
include a 
change in economic conditions. 
revenue shortfall or 
increase in salaries or benefits. 
An appropriation made under 
this subsection mAY not cause the municipality's property tax 
levy limit to be adjusted for any future fiscal years nor may 
such an appropriation continue for longer than required to comply 
with the court order or decree or to address the extraordinary 
event. 
9. 
Election. 
A municipality 
may 
elect 
to 
raise its 
property tax levy limit upon the affirmative yote of the yoters 
by municipal election held at any regular or special election. 
Notwithstanding allY law to .. the contrary. such election may be 
called only upon the affirmatiye yote of a majority of the 
municipality's legislatiye body and must be goyerned according to 
state law and any applicable municipal charter. 
The warrant for 
the election must set forth the question to be determined. which 
must be in the following form: 
"Do you fayor raising the leyy 
limit of the [name of municipality] for the purpose of [insert 
purpose]?" 
10. 
'treatment of surplus: 
reserves. 
Any 
property tax 
revenues collected by a municipality in any fiscal year in excess 
of its property tax levy limit. as determined by a final audited 
accounting. must be transferred to a property tax relief fund. 
which 
each municipality must establish. 
and 
used 
to 
reduce 
property tax 1eyies in subsequent fiscal years. 
Nothing in this 
subsection is intended to limit the ability of a municipality to 
maintain adequate reseryes pursuant to section 5801. proyided 
that annual allocations or appropriations of funds to reseryes 
are treated as appropriations subject to the appropriation limits 
set forth in subsection 1. 
11. 
FractioDal divisions. 
A municipality may. consistent 
with Title 36, section 710. exceed its property tax levy limit in 
such reasonable amount as necessary to avoid fractional divisions. 
12. 
Enforcement. 
In 
the 
event 
a 
municipality 
makes 
appropriations in violation of this section. 
the State 
Tax 
Assessor may require the municipality to adjust its ~propriation 
limit downward in an amount equal to the illegal appropriation 
and impose such other penalties as the Legislature may provide. 
PART D 
Sec. D-I. 5 MRSA §17154, sub-§6, fE, as amended by PL 2003, c. 
504, Pt. B, Sl, is further amended to read: 
E. 
Notwithstanding this section, the employer retirement 
costs related to the retirement system applicable to those 
teachers 
whose 
funding is 
provided directly or 
through 
reimbursement from private or public grants must be paid by 
local school systems from those funds. 
"Public grants" does 
not 
include 
state 
or 
local 
funds 
provided 
to 
school 
administrative units under Title 20-A, chapters 315 r -iQi and 
606-B. 
Sec. D-2. 20-A MRSA §1, sub-§§17 and 18, as 
amended by PL 
1999, c. 75, §l, are further amended to read: 
17. 
llajor capital costs. 
"Major capital costs" is defined 
in section *eiQ6T-saBseetieB-17 15672, subsection l8-A. 
18. 
Minor capital costs. 
"Minor capital costs" is defined 
in section 1§iQ6T-sQ9seet~eB-lg 15672, subsection 20-A. 
Sec. D-3. 20·A MRSA §1301, sub.§l, ,A, as amended by PL 1993, 
c. 410, Pt. F, §3, is further amended to read: 
A. 
Under a property valuation method, municipalities in a 
district shall share costs in the same proportion as each 
municipality's fiscal capacity as defined in section l§iQ~T 
sY9seg.t;.~-.l-A 15672, subsection 23 is to the district's 
fiscal capacity. 
Sec. D·4. 20·A MRSA §1301, sub.§I,~, as amended by PL 2001, 
c. 375, Sl, is further amended to read: 
B. 
Under an alternate plan approved by the state board and 
by 
a 
vote 
of 
the 
legislative 
bodies 
of 
the 
school 
administrative units forming the district and based on: 
(1) 
The number of resident pupils in each town; 
(2) 
The fiscal capacity of each member municipality as 
defined 
in 
section 
l§iQ~T---&ub&&o-t...,i.on.--ll-A 
15672. 
subsection 23; 
(3) 
Any combination of subparagraphs (1) and (2); or 
(4) 
Any other factor or combination of factors that 
may, but need not, include subparagraphs (1) and (2). 
Sec. D·5. 20-A MRSA §1307, sub-§3, as amended by PL 1997, c. 
68, §l, is further amended to read: 
3. 
SUllmlary 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 eQi 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 
explanation 
of 
the 
relationship 
between 
authorizing 
specific 
line 
item 
expenditures 
Page ll-LR0328(1) 
may 
include 
an 
warrant 
articles 
as 
provided 
in 
subsection 1 and the articles prescribed in chapter {i09 606-8 
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 *9&*+ 15693, subsection 
2, paragraph C, the operating budget must be approved wi thin 30 
days of the date the commissioner notifies the school board of 
the 
amount allocated to the school unit under section 
*991~ 
15689-8 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·§l, ,C, as amended by PL 1993, 
c. 372, §4, is further amended to read: 
c. 
Minor 
capital 
costs 
as 
defined 
in 
section 
19{i0~7 
s~9see~ieB-18 15672, subsection ZQ-A. 
Sec. D·9. 20·A MRSA §1351, sub·§l,'K, as amended by PL 1999, 
c. 75, §2, is further amended to read: 
K. 
To borrow funds for minor capital costs as defined in 
section l§906T-s~see~ieR-18 15672, subsection 20-A. 
Sec. D·IO. 20·A MRSA §1407, sub·§2, as amended by PL 1999, c. 
75, §3, is further amended to read: 
2. 
Expense of keepiDq 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 
li&O~ 
15612. 
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·ll. 20·A MRSA §1701, sub·§3, as amended by PL 1991, c. 
429, §4, is further amended to read: 
3. 
Tille aud place. 
The dist.r i ct s-choo:l, ctIJI1mit t.e'e"-
sha'Il 
call an annual budget meeting on: or' before June- 30th at au· 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 lii11 ~, subsection.2, paragraph C. 
Sec. D·12. 20·A MRSA §1701. sub·§9. ,A, as amended by PL 1999, 
c. 710, Sa, is further amended to read: 
by the voters of a 
of an appropriate 
election held in 
in section 1§i11 
A. 
The budget format may be determined 
community school district by adoption 
warrant article at 
a 
properly called 
accordance with the procedure set forth 
. 15693, subsection 6. 
Sec. D·13. 20·A MRSA §1701, sub·§12. as amended by PL 1999, c. 
710, S10, 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 ege 606-B must also be voted on. 
Sec. D·14. 20-A MRSA §1701-B, sub-§S, as enacted by PL 1999, 
c. 710, §1l, 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 cOlMlittee. 
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 1ge11 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 19&1~ l5689-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-§I, 1'8, as amended by PL 1993, 
c. 410, Pt. F, §4, is further amended to read: 
B. 
The fiscal capacity of each member 
municipality as 
defined in section lieQ~7-~~-~~-A 15672. subsection 
23; 
Sec. D-16. 20·A MRSA §4003.A is enacted to read: 
S4003-A. 
Hazardous chel8ica1s 
The 
commissioner 
shall 
establish 
rules 
governing 
the 
purchase and storage of hazardous chemicals in schools. 
Sec. D·17. 20-A MRSA §4254, sub·§I, 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 iQi 606-B. 
Sec. D-18. 20·A MRSA §5401, sub·§15, ,e, as amended by PL 
2001, c. 667, Pt. C, §11, is further amended to read: 
C. 
A school board may obtain a short-term loan or enter 
into a lease-purchase agreement to acquire school buses if 
the loan is approved by the unit's legislative body or if 
funds 
that 
can 
be 
used 
for 
the initial 
lease-purchase 
payment have been appropriated by the unit's legislative 
body. 
The term of a loan or a lease-purchase agreement may 
not exceed 5 years. 
The commissioner shall establish a 
maximum amount for annual-term purchases in excess of the 
amount established in paragraph A. 
Beginning in fiscal year 
6996-Q4 2005-06, these expenditures must be subsidized in 
accordance with see~i9B-lii96T-SQ9Sge~i9B-6i-A chapter 606-B. 
Sec. D·19. 20·A MRSA §6303. as enacted by PL 1995, c. 427, 
§l, is amended to read: 
S6303. Medicaid for health aDd bu.m services 
A school administrative unit may 
receive funds 
from the 
Medicaid program pursuant to the United States Social Security 
Act, 
United States Code, 
for the provision of preventive 
health, health, habilitation, rehabilitation and social services 
to eligible students iB-aee&£Qa.ee-~~~~~-~~~~r-&Q9&ee~i9a 
U. 
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-
assi.stance 
to 
schaol 
administrative 
units 
to 
assist 
the 
units 
in 
estabJ.ishing 
school-based child care services. 
As}' 
assi&t~~ide4-IR\lSE 
pEeY~Qe--~-~~--4--:rea~&-~-eKpeBe4~v~~-&~-~~-~~-is 
eeS&~QeEeQ-~~~-~--k&ea~-~~-*B-~~-~~-\lRiE~S 
eQ\leae~eRa*-~-~&6~~--~a-~~--eQeT---~-~~~~-aas 
'\l •• -~~~~~-aQmiai&Ee~-~-qFaaE-p~e~Eam-~~--~-epe~aEes 
\lRQeE-ta~6-6eeE~eRT 
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 999 6Q6-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. 
Ilu:a.i.cipa1ity. 
"Municipality" has the same meaning as in 
section .e99~7-S\l8&eeEieR-*9 15672, subsection 21. 
9. 
State subsidy. 
"State subsidy" has the same meaning as 
in section .e89~7-6\lB6eeEieR-~9 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: 
S8351. State aid for career and technical education centers 
and career and tec.bnica1 education reqions 
State aid for centers and regions must be administered in 
accordance with chapters iQi 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. Proe,rr-
Page l5-LR0328(1) 
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 eOe ~ 
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, §S9, is amended to read: 
C. 
Shall, in the event that the school boards of School 
Administrative 
District 
No. 
27, 
School 
Administrative 
District No. 33 and Madawaska School Department enter into a 
cooperative agreement pursuant to section 8401 and a 
new 
career 
and 
technical 
education 
center 
in 
Maine 
School 
Administrative District No. 33 becomes operational, devise a 
cost sharing formula for the center established thereby 
pertaining to the cost of career and technical education 
programs that exceed expenditures made for those programs in 
the base year as adjusted pursuant to section lieO~ IS681-A, 
subsection S and to the local share of debt service costs 
attributable 
to 
construction 
of 
the 
center 
in 
School 
Administrative District No. 33; 
Sec. D-27. 20-A MRSA §8451-A, as corrected by RR 2003, c. 2, 
§61, is amended to read: 
§8451-A. Prograas 
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 egg ~ 
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 conununity college or 
college level or allowing stu,dents to use trade and occupational 
skills on other than an employee basis:. 
Programs of career and 
technical 
education 
may 
also 
illC"lude-
alternative educational 
programs and training and education in mQaic:, athletics, art and 
other activities approved by the comm:is:sioner pursuant to sa-etion 
8306-A. 
Sec. D-28. 20-A MRSA §8601-A, s~6.,. as enacted by PL 1991, 
c. 518, §33, is amended to read: 
6. 
Municipality. 
"Municipality" has the same meaning as in 
section liiQiT-saBsee~i9B-19 15672. subsection 21. 
Sec. D-29. 20-A MRSA §8605, sub-§2,,-u, as amended by PL 1995, 
c. 665, Pt. J, §l, is further amended to read: 
B. 
The 
unit 
in which 
such 
a 
person resides 
must 
be 
reimbursed in accordance with ehap~e~s-iOi-aBe-iOe-A chapter 
606-B. 
Sec. D-30. 20-A MRSA §8606-A, sub-§2, ,C, as amended by PL 
1991, c. 518, §38, is further amended to read: 
C. 
The recommendation in the commissioner's funding level 
certification must include local program cost adjustment to 
the equivalent of the year prior to the year of allocation. 
This 
adjustment 
is 
calculated 
according 
to 
the 
same 
guidelines established, for purposes of chapter §O§ 606-B, 
by section l§eO§ l5689-C, subsection 3. 
Sec. D-31. 20-A MRSA §15622 is enacted to read: 
515622. 
Repeal 
This chapter is repealed July I. 2005. 
Sec. D-32. 20-A MRSA §15658, as enacted by PL 1995, c. 368, 
Pt. Z, §1 and affected by §Z. is amended to read: 
515658. 
Relationship to the School Finance Act of 1985 
The 
provisions 
of 
chapter 
aga 
606-B 
apply 
except 
as 
described in this section. 
1. 
Operating costs .ill rate. 
The operating costs mill 
rate, as described in chapter eOe 606-B, is in effect for the 
limited purposes of determining the state and local shares of 
each school administrative unit' s 
program costs allocation and 
its debt service allocation, 
and 
for 
determining the 
amount 
required to provide the statewide state share of the allocation 
for 
the 
per 
pupil 
guarantee. 
For 
each 
individual 
school 
Page l7-LR0328(1) 
administrative unit, 
the amounts described in section 15655, 
subsection 1 are used rather than the amounts in section 15608, 
subsection 1; section 15609, 
subsection 1, paragraph A; 
and 
section 15610, subsection 1, paragraph A. 
Sec. D-33. 20-A MRSA §lS6S9, sub-§l, ,A, as enacted by PL 
1995, c. 368, Pt. Z, §1 and affected by §2, is amended to read: 
A. 
The State's share for fiscal year 
1996-97 
for 
the 
allocation of the per pupil guarantee as determined in this 
chapter, plus the State's share for program costs and the 
m1n1mum 
subsidy allocation as determined in chapter 
&0& 
606-B, less subsidies provided for bus purchases, divided by 
the subsidizable pupils, as defined in this chapter; and 
Sec. D-34. 20-A MRSA §lS671, sub-§l, as amended by PL 2003, c. 
712, §9, is 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: 
A. 
The level of the state share of funding attributable to 
the 
cost 
of 
the 
components 
of 
essential 
programs 
and 
services must be at least 50'\, of eligible state and local 
General Fund education costs statewide, no later than fiscal 
year ~OO+-Og 2006-07; and 
B. 
By fiscal year aQQ9-*Q ZOQ'8-09- the state- share of the 
total cost of funding public education from' kindergarten to 
grade 12, as described by essen.ti.al programs and services, 
must be 55'\. 
Beginning in fiscal. year 2005-06 and in each 
fiscal year until fiscal year 6009-*9-
2008-09, the state 
share of essential programs 
and' services-
described cos-ts 
must increase toward the 55'\ level requi..red in fiscal year 
6QQ9-lQ 2008-09. 
Beginning 
in fiscal 
year 
2005-06 
and 
in 
each 
fiscal 
year 
thereafter, 
the 
commissioner 
shall 
use 
the 
funding 
leve.l 
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 servic·es. 
Sec. D-35. 20-A MRSA §15671, sub-§7, as amended by PL 2003, c. 
712, §10, is further amended to read: 
7. 
Transition; aunual targets. 
To achieve the system of 
sChool funding based on essential programs and services required 
by this section, the following annual targets are established. 
A. 
The 
annual 
targets 
for 
the essential programs 
and 
services 
transition 
percentage, 
excluding 
program 
cost 
allocation, debt service allocation and adjustments, are as 
follows. 
(1) 
For fiscal year 2005-06, the target is 84"0. 
(2) 
For fiscal year 2006-07, the target is 88% 90"0. 
(3) 
For fiscal year 2007-08, the target is 9a% 95"0. 
(4) 
For fiscal year 2008-09 and 12yccgeging 
~e~rs, the 
target is 98' 100'\. 
t§+--~~-~~~-yea~-6QQ9-lQ-~~-y&a~r-~ae 
~alF4Je~-i8-*QQ90T 
B. 
The annual targets for the state share percentage are as 
follows. 
(1) 
For fiscal year 2005-06, the target is 52.6"0. 
(2) 
For fiscal 
year 2006-07, 
the target is 
§6TS% 
53.86'\. 
(3) 
For fiscal year 2007-08, the target is §~% 54.44"0. 
(4) 
For fiscal year 2008-09 and succeeding years, the 
target is i4% 55~. 
~i}--~e£-~~~-~~-agg9-1g-~~-Y&&~r-~Ae 
~al'4Je~-is-i9%T 
Sec. D-36. 20-A MRSA §lS671-A, as enacted by PL 2003, c. 
712, §11, is amended to read: 
§15671-A. Property tax contribution to pub1ic education 
1-
context 
Definitions. 
As 
used in 
otherwise 
indicates, 
the 
this section, 
unless 
following 
terms 
have 
the 
the 
following meanings. 
A. 
"Funding public education from kindergarten to grade 12" 
means providing the cost of funding the essential programs 
and 
services described in this chapter plus the total 
allocations 
for 
program 
cost, 
debt 
service 
costs 
and 
adjustments. 
B. 
"Local cost share expectation" means the maximum amount 
of money for funding public education from kindergarten to 
grade 12 that may be derived from property tax for the 
required local contribution established in section 15688, 
subsection 3. 
2. 
Loca1 cost share expectation. 
expectation is established as follows. 
The local cost share 
A. 
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, this subsection 
establishes the local cost share expectation that may be 
assessed on the value of property for the purpose of funding 
public 
education 
from 
kindergarten 
to 
grade 
12. 
The 
commissioner shall annually by February 1st notify each 
school 
administrative 
unit 
of 
its 
local 
cost 
share 
expectation. 
Each 
superintendent 
shall 
report 
to 
the 
municipal officers whenever a school administrative unit is 
notified of the local cost share expectation or a change 
made in the local cost share expectation resulting from an 
adjustment. 
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 projec~ed 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 must decline over the period 
from fiscal year 2005-06 to fiscal year aQQ9-1Q 2008-09 and 
may not exceed 9.0 mills in fiscal ye'ar 2005-06 and may not 
exceed 
8~0 mills 
in fiscal 
year 
aQQ9-1Q 
2008-09. 
The 
full-value education mill rate must be applied according to 
section 15688, 
subsection 3, 
paragraph A to determine 
a 
municipality I s 
local 
cost 
share 
expe"ctation. 
Full-value 
education mill 
rates 
must 
be 
derived 
according to 
the 
following schedule. 
(1) 
For the 2005 property tax year, the full-value 
education mill rate is the amount necessary to result 
in a 
47.4~ local share in fiscal year 2005-06. 
(2) 
For the 2006 property tax year, the full-value 
education mill rate is the amount necessary to result 
in a 
4+?4~ 46.14~ local share in fiscal year 2006-07. 
(3) 
For the 2007 property tax year, the full-value 
education mill rate is the amount necessary to result 
in a 
4+?Q~ 45.56~ local share in fiscal year 2007-08. 
(4) 
For the 2008 property tax year, the full-value 
education mill rate is the amount necessary to result 
in a 
4ijTQ~ 45.0~ local share in fiscal year 2008-09. 
~§~--~-~~-~gg9-~~~1r-~aH-~~r-~~-fy~~-va~ye 
eQyeaei9R-~~~--~~-46-~~-am&QR&-~e5~~Y-~~-FeSY*E 
iR-a-4§?Q~-1gea~-shaFe-iR-fisea~-yeaF-aQQ9-1QT 
3. 
Exceeding 
.azimua 
local 
cost 
share 
expectations; 
separate article. 
Beginning with the 2005-2006 school budget, 
the legislative body of a school administrative unit may adopt 
P~9p&F~y-eaH-~a~9s an additional local appropriation that eReeee 
exceeds the local cost share expectation established by section 
15688, subsection 3, paragraph A if that action is approved in a 
separate article by a vote of the, school administrative unit I s 
legislative body through the same process that the school budget 
is 
approved 
in 
that 
school 
administrative 
unit. 
If 
that 
additional appropriation causes the school administrative unit to 
exceed the maximum state and local spending target described 
~n 
subsection 4. the voting requirements of subsection 4 apply. 
4. Exceeding the JlaZiJawa state and local spending target. 
The sum of a school administrative unit I s local contribution to 
the total cost of funding public education determined pursuant to 
section 
15688. 
subsection 
3, 
paragraph 
A 
plus 
the 
state 
contribution 
as 
calculated 
in 
section 
15688, 
subsection 
3. 
paragraph 
B 
plus 
the 
additional 
local 
contribution 
raised 
pursuant to section 15690, 
subsection 
may not exceed the 
targeted state and local spending for fiscal year 2005-06 and 
succeeding fiscal years. The targeted state and local spending 
for fiscal years 2005-06, 
2006-07. 
2007-08 and 2008-09 is as 
follows; 
A. 
The targeted state and local spendinq for fiscal year 
2005-06 is equal to the state and local spending. excluding 
local only debt. from fiscal year 2004-05 increased by the 
3-year average percent of increase in the Consumer Price 
Index plus 25,) of the difference between that result and 
100' of the essential programs and services costs for fiscal 
year 2005-06 or 100' of the essential programs and services 
costs, whichever is less; 
B. 
The targeted state and local spending for fiscal year 
2006-07 is equal to the state and local spending. excluding 
local only debt. from fiscal year 2005-06 increased by the 
3-year average percent of inCrease in the Consumer Price 
Index plus 25' of the difference between that result and 
100' of the essential programs and services costs for fiscal 
year 2006-07 or 100' of the essential programs and services 
costs, whichever is less; 
C. 
The targeted state and local spending for fiscal year 
2007-08 is equal to the state and local spending, excluding 
local only debt. from fiscal year 2006-07 increased by the 
3-year average percent of increase in the Consumer Price 
Index plus 2S,} of the difference between that result and 
100' of the essential programs and services costs for fiscal 
year 2007-08 or 100' of the essential programs and services 
costs. whichever is less; and 
D. 
The targeted state and local spending for fiscal year 
2008-09 
and 
succeeding years 
is 
equal 
to 
100' of 
the 
essential programs and services costs. 
If 
a 
school administrative unit elects to exceed the limit 
established in paragraph A. 
B. C or Dc the legislative body of 
that school administrative unit must approve or otherwise ratify 
that action, which may be done only by referendum in a separate 
article. The referendum procedures governing the school budget 
adoption 
or 
ratification 
voting 
must 
be 
accomplished 
in 
accordance with sections 1305. subsection 1. 1305-B and 17Q1-B 
or, for municipal school systems opting to use a secret ballot. 
Title 30-A. section 2528. and the article must conform to section 
15690. subsection 3. paragraph B. 
Sec. D-37. 20-A MRSA §15672. as amended by PL 2003, c. 712, 
§12, is further amended to read: 
§1567Z. Definitions 
As 
used in this 
chapter, 
unles's 
th~ cont-ext 
othe-rwi.s:e 
indicates, the following terms have the follo-winq mea-nings:. 
1. 
Allocation year. 
"Allocation year." means the- yeat: that 
subsidy is distributed to school administrat-ive: uni.ts. 
1-6. 
Base "are 
"Base year" means- the-
2nd- ye-ar prior to 
the allocation year. 
I-B. 
Bus purrni!se costs. 
"Bus purchase costs" includes 
expenditures for bus purchases aRproved by the commissioner and 
made during the year prior to the allocation year. 
2. 
Clerical 
staff. 
equivalent 
public 
school 
department's database. 
"Clerical 
secretaries, 
staff" 
means 
as 
documented 
full-time 
in 
the 
2-6. 
Debt service costs. 
"Debt service costs," for subsidy 
purposes. includes: 
A. 
Principal and interest costs for approved major capital 
projects in the allocation year, including the initial local 
share of school construction projects that received voter 
approval for all or part of their funding in referendum in 
fiscal year 1984-85: 
B. 
Lease 
costs 
for 
school buildings 
when 
the 
leases. 
including leases under which the school administrative unit 
may apply the lease payments to the purchase of portable, 
temporary classroom space beginning January 1. 1988. have 
been approved by the COmmissioner for the year prior to the 
allocation year. 
Beginning July I. 1998 lease costs include 
costs for leasing: 
(1) 
Administratiye 
space. 
A 
school 
administrative 
unit may lease administrative space with state support 
until 
July I. 
2003. 
A 
school 
administrative 
unit 
engaged 
in 
a 
lease-purchase 
agreement 
for 
administrative 
space is eligible 
for 
state 
support 
until July 1, 2008: 
(2) 
Temporary interim nonadministrative space. 
(a) 
A 
school 
administrative 
unit 
with 
state-approved need 
for 
nonadministrative 
space 
may 
lease 
tempQrary 
interim space. 
with state 
suppQrt, 
fQr 
a 
maximum 
Qf 
years. 
A schQQl 
administrative unit may appeal tQ the state bQard 
if this limitatiQnpresents an undue burden. 
When 
making a determinatiQn Qn a school administrative 
unit's reguest fQr relief based on undue burden, 
the state board may consider. but are not limited 
to cQnsidering. the fQllQwing; 
eil 
Fiscal capacity; 
(ii) 
Enrollment demQgraphics; and 
(iii) 
UnfQreseen 
circumstances 
nQt within 
the 
cQntrQI 
of 
the 
appealing 
schQQl 
administrative unit. 
Ibe state bQard's decisiQn is final. 
(bl 
A schQol administrative unit engaged in a 
lease-purchase 
agreement 
for 
temporary 
interim 
nQnadministrative 
space 
is eligible 
fQr 
state 
support for a maximum of 10 years; and 
( 3 ) 
Permanent 
small 
nQnadministrative 
space 
that 
replaces Qr is cQnverted frQm existing apprQved leased 
PQrtable space. 
The existing approved leased portable 
space will be eligible for state support until July 1, 
2003. Once an existing leased portable space has been 
cQnyerted 
intQ 
a 
permanent 
nonadministrative 
space 
through 
an 
approved 
lease-purchase 
agreement. 
that 
space is eligible for state support fQr a maximum of 10 
years. 
The department shall adopt rules necessary tQ implement this 
paragraph. 
Rules adopted by the department to implement 
this paragraph are major substantive rules pursuant to Title 
5. chapter 375. subchapter 2-A; 
c. 
Ihe PQrtion Qf the tuition costs applicable to the 
insured value 
factor 
for 
the base year 
computed 
under 
section 5806; 
D. 
Ibe 
CQst 
of construction Qr 
purchase 
Qf 
PQrtable. 
temporary classroom space as approved by the commissioner 
beginning 
January 
1, 
1988. 
FQr 
the 
purposes 
of 
this 
section, 
"portable. 
temporary 
classrQom 
space" 
means 
a 
prQject 
consisting 
Qf 
one 
Qr 
mQre 
mobile 
or 
modular 
buildings that are at least partially constructed off site 
and are designed to be n:'oved to other sites with a minimum 
of 
disassembly 
and 
reassembly. 
"POrtable., 
temporary 
classroom space" includes. but is' not- limited- to. SPiWe: for 
regular 
classrooms. 
small 
g r.o up 
inst;ruction. 
libra'fias. 
clinics 
and 
guidance 
and 
adnti;,nis-trative-
office 
space, 
including 
principal 
and 
superintendent 
offices. 
The 
department shall adopt rules for approving the purchase. 
construction 
or 
lease-purchase 
of 
portable. 
temporary 
classroom space and for determining the amount includable 
for 
subsidy purposes. 
Lease-purchase 
agreements 
may 
not-
exceed a term of 10 years. 
Approyed costs are those for 
the year prior to the allocation year. 
The department shall 
adopt rules necessary to implement this paragraph. 
Rules 
adopted b,y the department to implement this paragraph are 
major substantive rules pursuant to Title 5, chapter 375. 
subchapter 2-A; and 
E. 
Beginning in school year 2002-2003. 1/5 of the aggregate 
amount of the approved leases defined in paragraph B and an 
additional 115 for each year thereafter may not be used to 
determine the debt service millage limit calculated under 
section 15611. subsection 1. paragraph A. 
The local share 
for the 115 of the aggregate amount of the approved leases 
defined in paragraph B and an additional 1/5 for each year 
thereafter 
must 
be 
calculated 
as 
the 
same 
percentage 
determined under section 15609. subsection 1. paragraph A. 
The department shall adopt rules necessary to implement this 
paragraph. 
Rules adopted by the department to implement 
this paragraph are major substantive rules pursuant to Title 
5. chapter 375. subchapter 2-A. 
3. 
Econoaically 
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 eguivalent 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, lIar III, 
as 
documented in the department' s 
database. 
S. 
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: 
A. 
The actual percentage of element~ry students in a school 
administrative unit who are eligible to receive free or 
reduced-price meals or free milk or both; or 
B. 
The commissioner's estimated percentage of elementary 
students in a school administrative unit who are eligible to 
receive free or reduced~price meals or free milk or both. 
6. 
Blementary 
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. 
Blementary 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. 
A. 
BPS per pgpil rate. 
"EPS per-pupil rate" means the 
total 
amount 
of 
funds 
that 
is 
made 
available 
for 
each 
subsidizable pupil representing the following cost components: 
A. 
Salary and benefit costs for school level teaching staff; 
B. 
Salary and benefit costs for other identified school 
level staff; 
c. 
Designated costs for substitute teachers: and 
D. 
Identified nonstaffing costs. 
8. 
Bssential 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 progrmas 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. 
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. 
equivalent 
public 
school 
department's database. 
"Health 
nurses, 
staff" 
means 
as 
documented 
full-time 
in 
the 
13. 
High school level. "High school level" means grade 9 to 
grade 12. 
ll-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. 
14y--~-wei~~y-~q~-we~~R~~-~-a-~-geeweeR 
BeFe-~-eRe-~~--~&-~-~-~Q~~~~-~-~~R4E4pa~4~y~6-~~-~-9f 
1geal-~~~~-*REeme-~~-~&&-~~~~~~~-R9~seRele 
~ReemeT--~-~-wei~Re-~~~-pEepeEey-~~~-~-ee'~Ree 
iR-s~Bseee~eR-64T-~~se-eeeal-9ReT 
15. 
Iinderqarten to qrade 
portion" means those pupils 
combination of the elementary 
level. 
portion. "Kindergarten to grade 
in the elementary grades or a 
school level and middle school 
16. 
Iinderqarten to qrade 
student. 
"Kindergarten to 
grade 
student" 
means 
a 
student 
in 
any 
grade 
from 
prekindergarten to grade 2 who is at least -~-
.i years old on 
October 15th of the school year. 
17. 
Librarian. 
public librarian or 
department's database. 
"Librarian" means 
media specialist, 
a 
full-time equivalent 
as 
documented in the 
18. 
Limited Enq1isb 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. 
l8-A. 
Major capital costs. 
"Major ca.pital costs" means 
costs relating to school construction projects r 
as defined in 
section 15901. 
19. 
equivalent 
librarian 
Media assistant. 
"Media assistant" means a full-time 
public 
librarian 
aide 
or 
library 
technician 
I. 
assistant 
or 
library 
technician 
II 
or 
librarian 
associate 
or 
library 
technician III, 
as 
documented 
in 
the 
department's database. 
20. 
Middle school. l.eve;L. 
"Middle school level" means grade 
to grade 8. 
20-A.. 
Hinor capital costs. 
"Minor 
c~ital costs" means 
costs relating to plant maintenance, 
minor 
remodeling. 
site 
development or the purchase of land not in conjunction with a 
construction project. 
A. 
"Minor capital costs" does not include construction of 
new buildings or the purchase of land in conjunction with a 
school construction project. 
B. 
Expenditures to repay funds borrowed for minor capital 
expenditures must be considered minor capital costs in the 
year in which these funds are repaid. 
C. 
Purchase of land made in accordance with this subsection 
must be approved: 
(1) 
By 
the 
legislative 
body 
of 
the 
school 
administrative unit: and 
(2) 
By the commissioner, under rules adopted for this 
purpose. 
21. 
Municipal.ity. 
"Municipality" means 
a 
city, 
town or 
organized plantation. 
2l-A.. 
Portabl.e. 
te"RQrar.y 
cl.assrooa 
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. 
~~ .. --~-~aat.ee 
.. --"Pe~~j,.l---9U'M'-ant.-ee!!....-fn&afl.6--t;Be 
t;9~al--~--&~--~~--&&a&--4~-~--a¥a4~~e--~~---eaeB 
SQ9&~Q~.a919-~Q~il-~ep~eseat;~a~-t;B9-i9119w~a~-e9st;-e9M~9a9at;s+ 
8T--~~-~-ge&9~j,.t;-~~-~9~-~~~-~~~~~~-seA991 
level-st;aii. 
ZZ-A. 
Predicted per-pypil trap§20rtatioD. costs. 
"Predicted 
per-pqpil 
transportation 
costs" 
means 
the 
predicted 
transportation costs for a school administrative unit based on 
the number of resident pupi~s« 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 fisca1 capacity. 
"Property fiscal capacity" 
means the eeF~ifiee state valuation aMeliRe amounts for the year 
prior to the most ~eeeR~.y-eeF~i'iee-sea~e-yallla~ieR recent year. 
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seeweeB-~-afiQ-~B&-~~--is-~-~e--aGt~&&-~-mliRieipaliey~s 
Faeie--~--~-~~~~--pFepeFey--~~~£~--~it~--~--eRe 
sea~ewiee-~~~-~~~1r-~i&ea~-eapaeieYT-~~-~-wei~RET 
as-Qe.fi.eQ--i-n-~-.ion--],4.,,-p.lls-~he--pc~~~-we-i-qht:--m~&1::--teeal 
eReY" 
25. 
School administrative staff. 
"School administrative 
staff" means full-time equivalent public school principals and 
assistant principals, as documented in the department's database. 
Z6. 
School administrative unit' s loca1 contribution to EPS 
per-pupil rate. "School administrative unit's local contribution 
to the 
pe~-p~pi~-~iia~aB~ee 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 
pe!'-plipj,.~-4Jiia~aBeee 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 teachinq 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. 
A. 
Special education costs. 
"Special education costs" 
for subsidy purposes includes: 
A. 
The salary and benefit costs of certified professionals. 
assistants and aides or persons contracted to perform a 
special education service; 
B. 
The costs of tuition and board to other schools for 
programs that have been approved by the commissioner and not 
paid directly by the State. 
Medical costs are not allowable 
as part of a tuition charge: 
c. 
The following preschool handicapped services: 
(1) 
The 
salary 
and 
benefit 
costs 
of 
certified 
professionals. 
assistants 
and 
aides 
or 
persons 
contracted to perform preschool handicapped services 
that have been approved by the commissioner; and 
(2) 
The cost of tuition to other schools for programs 
that have been approved by the commissioner; and 
D. 
Special 
education 
costs 
that 
are 
the 
costs 
of 
educational 
services 
provided 
to 
students 
who 
are 
temporarily 
unable 
to 
participate 
in 
regular 
school 
programs. 
Students 
who 
may 
be 
included 
are 
pregnant 
students, hospitalized students or those confined to their 
homes for illness or injury, students involved in substance 
abuse programs within hospital settings or in residential 
rehabilitation facilities 
licensed 
by 
the 
Department of 
Health and Human Services. Office of Alcoholism and Drug 
Abuse Prevention for less than 6 weeks duration or students 
suffering 
from 
other 
temporary 
conditions 
that prohibit 
their attendance at school. 
Students served under this 
paragraph may not be counted as exceptional students for 
federal reporting purposes. 
30-B. 
State=Qperated 
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 
E""IJII--&~--t.-be--..f"~-~~--tfla-t--i-s 
p~9viees-&y-~-&&a~-app~ep~ia~ieB. state contribution determined 
under section 15688 c 
subsection 3, paragraph B divided by the 
total cost determined in section 15688, subsection 1. 
A~---Qpe~a~i~~--~~~--~~~--~~~-~r-~--Se&e~19eQ--iR 
seetieB-1568~t 
i~--P~e~~am-~~~~-~4~4~-~~~-~&-&ee~1eB-l§9g8T 
s1iB&ee~ieB-6f-
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&ee~iQB-l§ig~T-61iB&ee~ieB-8t-aBe 
P~--~~~~~~~~--a~~-ae~1i6~~eB~s-~~~~~-ees~s 
a1itaeFiBeS-p1i~s1iaB~-te-6ee~iQBs-l§e16-aBe-l§&16T 
31-A. 
State subsi4y. "State subsidy" means the total of the 
state contribution determined under section 15688, subsection 3, 
paragraph B and any applicable adjustment under section 15689. 
31-B. 
SUbsidizabl.e costs. 
"Subsidizable costs" includes 
the costs described in paragraphs A to C and used to calculate 
the total allocation amount: 
A. 
The total operating allocation under section 15683; 
B. 
Debt service cost, including the following: 
(1) 
Principal 
and 
interest 
on 
approved 
school 
construction costs 
as 
described in subsection 
2-A, 
paraqraph A: excluding payments made with funds 
from 
state and local government accounts established under 
the federal Internal Revenue Code and regulations for 
disposition 
of 
excess, 
unneeded 
proceeds 
of 
bonds 
issued for a school project: 
(2) 
Approved 
lease 
and 
lease 
purchase 
costs 
as 
described in subsection 2-A, paragraphs Band D: and 
(3) 
Insured value factor' costs as described in section 
5806, subsection 2; and 
C. 
Adjustments and miscellaneous costs under sections 15689 
and 15689-A including special education tuition and board, 
excluding medical costs. 
For purposes of this paragraph, 
"special education tuition and board" means: 
(1) 
Tuition and board for pupils placed directly by 
the State in accordance with rules adopted or amended 
by the commissioner; and 
( 2) 
Special education tuition and other tuition for 
institutional residents of state-operated institutions 
attending programs in school administrative units or 
private schools in accordance with rules adopted or 
amended by the commissioner. 
32. 
Subsidizable pupils. 
"Subsidizable pupils" means all 
school level pupils who reside in a school administrative unit 
and who are educated at public expense. 
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 lS683-A. 
Nonsubsidizable costs are not considered in the calculation of 
the 
total 
allocation. 
"Nonsubsidizable 
costs" 
includes 
the 
following; 
A. 
Community service costs; 
s. 
Major capital costs; 
c. 
Expenditures from all federal revenue sources, except 
for amounts received under United States Public Law 81-874; 
0. 
Transportation costs not associated with transporting 
students from home to school and back home each day; and 
E. 
Costs payable to the Maine State Retirement System under 
Title S. section 17154. subsections 10 and II. 
32-B. 
TrftD&pg..t'tation 
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-C. 
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-D. 
Year. "Year" means a fiscal year starting July 1st 
and ending June 30th of the succeeding year. 
33. 
Year of fundinq. 
"Year of funding" means the 
year 
during 
which 
state 
subsidies 
are 
disbursed 
to 
administrative units, 
except 
as 
specified in section 
subsection 1. 
fiscal 
school 
15005, 
Sec. D-38. 20-A MRSA §15673, as repealed and replaced by PL 
2003, c. 712, §13, is repealed. 
Sec. D-39. 20-A MRSA §15675, sub-§l, as enacted by PL 2003, c. 
504, Pt. A, §6, is amended to read: 
1. 
LiJaited ElUJlish proficiency students. 
The additional 
weights for 
school administrative units with limited English 
proficiency students are as follows: 
A. 
For 
a 
school administrative unit with 
or 
fewer 
limited English proficiency students, the unit receives an 
additional weight of .50 per student; 
B. 
For a school administrative unit with more than 15 and 
fewer than 251 limited English proficiency students, 
the 
unit receives an additional weight of .30 per student; and 
C. For a school administrative unit with 251 or more limited 
English 
proficiency 
students, 
the 
unit 
receives 
an 
additional weight of .60 per student. 
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-40. 20-A MRSA §lS676, as enacted by PL 2003, c. 504, 
Pt. A, §6, is amended to read: 
§15676. 
BPS per-pupil rate 
For each school administrative unit, the commissioner shall 
calculate the unit' s 
peF-plipi-l--'JyaFall~ee EPS per-pY]?il rate for 
each year as the sum of: 
1. TeachiJ1C} 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 and adjusted by 
the regional adjustment under section 15682; 
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 and adjusted by the regional 
adjustment under section 15682: and 
3. Additional costs. 
The per-pupil amounts not related to 
staffing, calculated in accordance with section 15680. 
The EPS per-pu,pil rate is calcu,lated on the basis of which 
schools students attend. 
For school administrative units that do 
not 
operate 
their 
own 
schools, 
the 
EPS 
per-pu,pil 
rate 
is 
calcu,lated under section 15676-A. 
Sec. D·41. 20·A MRSA §15676.A is enacted to read: 
§15676-A. 
IPS per-py,pil rate for units that do not operate 
schools 
1. 
Definitions. 
For 
purposes 
of 
this 
section. 
the 
following terms have the following meanings. 
A. 
"Receiving unit" means the school administrative u,nit to 
which students are sent by the sending unit. 
B. 
"Receiving unit cost" means the amount arrived at by 
multiplying the receiving unit's EPS rate by the number of 
students sent to that u,nit by the sending u,nit. 
C. 
"Sending unit" 
means 
the school administrative unit 
sending students to other school administrative units. 
2. 
Calculation 
of 
IPS 
per p1q)il 
rate. 
For 
school 
administrative 
units 
that 
do 
not 
operate 
certain 
types 
of 
schools, 
the 
commissioner 
shall 
calcu,late 
that 
unit's 
EPS 
per-pupil rate for each year as follows. 
A. 
For units that do not operate elementary grade schools. 
the EPS per-pu,pil rate for elementary grades is calcu,lated 
by mu,ltiplying the number of stu,dents sent by the sending 
unit to an elementary grade receiving unit mu,ltiplied by the 
receiving unit's EPS per-pu,pil rate for elementary grades 
and the resu,lt divided by the number of students sent by the 
sending unit to that elementary grade receiving unit. 
If 
the sending unit sends students to more than one elementary 
grade receiving unit. then the elementary grade receiving 
unit cost for each stude~t sent by the sending unit is added 
and the result divided by the total number of students sent 
to elementary grade receiving units by the sending unit. 
The result is the average elementary grade EPS per-pupil 
rate for the sending unit. 
The EPS 
per-pupil rate for private schools approved for 
tuition purposes under chapter 117 is the statewide average 
EPS per-pupil rate for elementary grades. 
The elementary 
attending student count is the most recent October 1st count 
prior to the allocation year. 
B. 
For units that do not operate secondary grade schools, 
the EPS per-pupil rate for secondary grades is calculated by 
multiplying the number of students sent by the sending unit 
t2--a secondary grade 
rece1v1ng 
unit multiplied by 
the 
receiving unit's EPS per-pupil rate for secondary grades and 
the result divided by the number of students sent by the 
sending unit to that secondary grade receiving unit. 
If the 
sending unit sends students to more than one secondary grade 
receiving unit. then the secondary grade receiving unit cost 
for each student sent by the sending unit is added and the 
result divided by the total number of students sent to 
secondary grade receiving units by the sending unit. 
The 
result is the average secondary grade EPS per-pupil rate for 
the sending unit. 
The EPS per-pupil rate for private schools approved for 
tuition purposes under chapter 117 is the statewide average 
EPS 
per-pupil 
rate for 
secondary grades. 
The 
secondary 
attending student count is the most recent October 1st count 
prior to the allocation year. 
Sec. D-42. 20·A MRSA §15681, as enacted by IB 2003, c. 2, 
§1. is repealed. 
Sec. D·43. 20·A MRSA §lS681-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 resident's 
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 I. 
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. O~ in any given 3-year period. 
For each 
special 
education 
student 
above 
the 
l5~ maximum. 
the 
unit 
receives an additional weight of .38. In addition, each school 
administrative unit must receive additional funds: 
A. 
For 
lower staff-student ratios and expenditures for 
related services for school administrative units with fewer 
than 20 special education students identified on the annual 
December 
1st 
child 
count 
as 
reguired 
by 
the 
federal 
Individuals with Disabilities Education Act for the most 
recent year: 
B. 
For high-cost in-district special education placements. 
Additional 
funds 
must 
be 
allocated 
for 
each 
student 
estimated to cost 3 times the statewide special education 
EPS per-pupil rate: 
C. 
For 
high-cost 
out-of-district 
special 
education 
placements. 
Additional funds must be allocated for each 
student estimated to cost 4 times the statewide special 
education EPS per-pupil rate: and 
D. 
To 
ensure the school administrative unit meets 
the 
federal 
maintenance 
of effort reguirement 
for 
receiving 
federal Individuals with Disabilities Education Act funds. 
The 
commissioner 
shall 
develop 
an 
appeals 
procedure 
for 
calculated special 
education costs 
for 
school 
administrative 
units. 
3. 
Tran&portatioD 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 
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 subseguent 
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-pypil transportation costs for a school administrative unit 
be less than 75' of the established costs for the most recent 
fiscal year. 
Eyery 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. 
VocatiMal education costs. 
Vocational education costs 
in the base year adjusted to the year prior to the allocation 
~ 
5. 
Gifted 
and 
talented education 
costs. 
Gifted 
and 
talented costs in the base year adjusted to the year prior to the 
allocation year. 
Sec. D-44. 20-A MRSA §15682, as enacted by IB 2003, c. 2, 
§l, is repealed. 
Sec. D-45. 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 
feF--&Ub&e<!-t.-:i-o-n--~ 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: 
A. 
The 
product 
of 
the 
school 
administrative 
unit's 
kindergarten to grade 8 
per-pl:lp.,i~-~l:l-aFaBEee EPS per-pupil 
~ 
multiplied by the total of the kindergarten to grade 8 
portions of the following pupil counts: 
(1) 
The 
pupil 
count 
set 
forth 
in 
section 
15674, 
subsection 1, paragraph C; 
(2) 
The 
additional 
weight 
for 
limited 
proficiency students 
calculated pursuant 
to 
15675, subsection 1; and 
English 
section 
(3 ) 
The 
additional 
weight 
for 
economically 
disadvantaged students 
15675, subsection 2; 
calculated pursuant to section 
B. The product of the school administrative unit' s grade 9 
to 12 peE-pllpi,l.-'J\iaEaat.ee EPS per-pupil rate multiplied by 
the total of the grade 9 to 12 portion of the following 
pupil counts: 
(1) 
The 
pupil 
count 
set 
forth 
in 
section 
15674, 
subsection 1, paragraphs A, Band C; 
(2) 
The 
additional 
weight 
for 
limited 
proficiency students calculated pursuant to 
15675, subsection 1; and 
English 
section 
(3) 
The 
additional 
weight 
for 
economically 
disadvantaged students calculated pursuant to section 
15675, subsection 2; 
C. 
If 
the 
school 
administrative 
unit 
is eligible 
for 
targeted student assessment funds pursuant to section 15681, 
subsection 1, the sum of: 
(1) 
The product of the elementary school level and 
middle 
school 
level 
per-pupil 
amount 
for 
targeted 
student assessment funds calculated pursuant to section 
15681, subsection 2 multiplied by the kindergarten to 
grade 8 portion of the pupil count calculated pursuant 
to 
section 
15674, 
subsection 
1, 
paragraph 
C, 
subparagraph (1); and 
(2) 
The product of the high school 
amount for targeted student assessment 
pursuant to section 15681, subsection 
the grade 9 to 12 portion of the pupil 
pursuant to section 15674, subsection 
subparagraph (I): 
level per-pupil 
funds calculated 
multiplied by 
count calculated 
1, paragraph C, 
D. 
If the 
school 
administrative unit is eligible 
for 
targeted 
technology 
resource 
funds 
pursuant 
to 
section 
15681, subsection 1, the sum of: 
(1) 
The product of the elementary school level and 
middle 
school 
level 
per-pupil 
amount 
for 
targeted 
technology 
resource 
funds 
calculated 
pursuant 
to 
section 
15681, 
subsection 
multiplied 
by 
the 
kindergarten to grade 8 portion of the pupil count 
calculated pursuant to section 15674, 
subsection 1, 
paragraph C, subparagraph (1); aRe 
(2) 
The product of the high school level per-pupil 
amount 
for 
targeted 
technology 
resource 
funds 
calculated pursuant 
of 
section 
15681, 
subsection 
multiplied by the grade 9 to 12 portion of the pupil 
count calculated pursuant to section 15674, subsection 
1, paragraph C, subparagraph (1); aBa 
E. 
If the 
school 
administrative 
unit is 
eligible 
for 
targeted kindergarten to grade 2 funds pursuant to section 
15681, subsection 1, the product of the pe~-PQP~~-~QaEaB~ee 
EPS per-pupil rate multiplied by the additional weight for 
kindergarten to 
grade 
calculated pursuant 
to 
section 
15675, subsection 3T : and 
F. 
A 
necessary 
small 
unit 
adjustment. 
A 
school 
administrative unit is eligible for a necessary small school 
adjustment 
when 
the 
unit 
meets 
the 
size 
and 
distance 
criteria as established by the commissioner and approved by 
the state board. 
The amount of the adjustment is the result 
of 
adjusting 
the 
necessary 
student-to-staff 
ratios 
determined in section 15679, 
subsection 2, 
the per-pupil 
amount for operation and maintenance of plant in section 
15680, subsection I. paragraph B or other essential programs 
and services components in chapter 606-8, as recommended by 
the commissioner. 
2. 
Adjustments. 
The 
base 
total 
calculated pursuant 
to 
subsection 1 must be adjusted as follows. 
A. The base total calculated pursuant to subsection 1 must 
be reduced by the amount of all funds received by the school 
administrative unit under Title I of the federal Elementary 
and Secondary Education Act of 1965, 20 United States Code, 
Section 6301 et seq. during the most recent fiscal year. 
R~--~~-aM&~B~-~~~~~~-?~r&~&~-~~~~~-A-~--ge 
aa~Q6~ea--&y--~-~~~~-~Yu&t~--PQ~~~aR~--~9--see~iaB 
lfifi86T 
C. 
The 
amount 
calculated pursuant 
to 
paFa~EapR--R this 
subsection must be multiplied by the essential programs and 
services transition percentage for the appropriate year in 
accordance with section 15671, subsection 7, paragraph A. 
Sec. D-46. 20-A MRSA §15683, as enacted by IB 2003, c. 2. 
§l, is repealed. 
Sec. D-47. 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 the base total defined in section 15683, 
subsection 1. 
Sec.D-48. 20-AMRSA§15684, as enacted by PL 2003, c. 712, 
§15 and IS 2003, c. 2, §I, is repealed. 
Sec. D-49. 20-A MRSA §15685, as enacted by PL 2003, c. 504, 
Pt. A, §6 and IS 2003, c. 2, §I, is repealed. 
Sec. V-50. 20-A MRS A §l5688, sub-§I, ,,8 and C, as enacted by 
PL 2003, c. 712, §17, are amended to read: 
B. 
The program cost allocation as used in chapter 
~Q~ 
606-B; and 
C. 
The debt service allocation as used in chapter ~Q9 606-B. 
Sec. D-51. 20-A MRSA §15688, sub-§l, ,tB and C, as enacted by 
PL 2003, c. 712, §17, are amended to read: 
B. 
The pl'eEJl'aJR-€e6~-.a-l.,l-&€*-i~-as-~-.Hi--g.aapl;&F--&Q& ~ 
subsidizable costs described in section 15681-A; and 
C. 
The ~ 
debt service allocation as-~sea-iR-€hap~eF-9Q9 
described in section 15683-A. 
Sec. D-52. 20-A MRSA §15689. sub-§§l and 3, as enacted by PL 
2003, c. 712, §17, are amended to read: 
1. 
MinimUJII state allocation. 
Each school administrative 
unit must be guaranteed a 
minimum state share of its total 
allocation that is determined by the sum of the following: 
A. 
Multiplying 
5% 
of each school administrative unit's 
essential programs and services per-pupil elementary rate by 
the average 
number 
of resident kindergarten to grade 
pupils as determined under section 15674, 
subsection 1, 
paragraph C, subparagraph (1); and 
B. 
Multiplying 
5% 
of each 
school administrative unit's 
essential programs and services per-pupil secondary rate by 
the average number of resident grade 9 to grade 12 pupils as 
determined under section 15674, subsection 1, paragraph C, 
subparagraph (1). 
These funds must be 
i:ae*~aea--a&--p&f"-t--9' an adjustment to the 
school administrative unit' s 
~e~a* state and local allocation as 
e9MPQeea-~-~~~-ekap~e~-~aG-~--a6--aB-~~~-~~-eRe 
sek99.-aQm~Ri&eFaei¥e-QRie~&-~9~al-a~~gea~i9R after the state and 
local allocation has been adjusted for debt service pursuant to 
subsection 2. 
3. 
Adjust.ent liadtatioDs. 
The amounts of the adjustments 
paid 
to 
school 
administrative 
units 
or 
municipalities 
i:a 
sQs6ee~i9R6--l--a.nd--;J pursuant to this section are limited to the 
amounts appropriated by the Legislature for these adjustments. 
Sec. D-53. 20-A MRSA §15689, sub-§§4 to 6 are enacted to read: 
4. 
Audit adjUSt:llleDtS. 
The following provisions apply to 
audit adjustments. 
A. 
If errors are revealed by audit and by the commissioner, 
the 
school 
administrative unit's state subsidy must 
be 
adjusted to include corrections. 
B. 
If audit adjustments are discovered after the funding 
level is certified by the commissioner and the state board 
on December 15th pursuant to section 15689-C. the department 
may request the necessary additional funds, if any. to pay 
for 
these 
adjustments. 
These 
amounts, 
if 
any, 
are 
in 
addition to the audit adjustment amount certified by the 
commissioner and state board on the prior December 15th. 
5. 
Adjustment for cost of educating eligible students in 
long-tena drug treatJReR centers. 
A school administrative unit 
that operates an educational program approved pursuant to chapter 
to serve eligible students in licensed drug treatment centers 
must be reimbursed in the year in which costs are incurred as 
follows. 
A. 
Reimbursements must be limited to a maximum of 12 state 
average tuition rates a year for each approved plan. 
B. 
The rate of reimbursement per student may not exceed the 
state average tuition rates in effect during the year of 
placement as computed under sections 5804 and 5805. 
The 
tuition rates must be computed based on the state average 
secondary tuition rate and may be adjusted if the program is 
approved to operate beyond the l80-day school year. 
6. 
AdjusteR 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·54. 20·A MRSA §§15689.A to 15689·F are enacted to read: 
§15689 A. 
Authorization of puaent of .iscellapenus costs 
1. 
PilJIIlent of state agene!, client costs. 
State agenc:;{ 
client costs are pa:;{able pursuant to this subsection. 
As used in 
this subsection. "state agency client" has the same meaning as 
defined in section I. subsection 34-A. 
A. 
The commissioner shall approve special education costs 
and supportive services, including transportation. for all 
state agency clients placed in residential placements b:;{ an 
authorized agent of a state agency. 
B. 
Special education costs authorized by this subsection 
for state agenc:;{ clients must be paid by the department in 
the allocation year at lQQ~ of actual costs. 
C. 
The 
commissioner 
shall 
pay 
only 
approved 
special 
education 
costs 
and 
supportive 
services. 
including 
transportation. 
authorized 
by 
this 
subsection for 
state 
agency 
clients 
and 
may 
not allocate for 
those 
special 
education 
costs 
and 
supportive 
services. 
including 
transportation. incurred by the school administrative unit 
for state agency clients in the base years starting July I. 
1985. and every base year thereafter. 
D. 
Transportation costs 
for state agency clients. 
when 
provided 
in 
accordance 
with 
rules 
established 
b:;{ 
the 
commissioner 
under 
section 
7204. 
must 
be 
paid 
by 
the 
department in the allocation :;{ear at 10Q~ of actual costs. 
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 cOJDROnents 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 
accoUDtabiliU' 
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 
h 
S. 
Kegiona)iSB~~pn. 
copsolidation 
and 
e~ficien~ 
assistapce. 
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. 
5. 
Iducation 
research contract. 
The 
commissioner 
may 
contract for the compilation and analysis of education data with 
a statewide education research institute. 
7. 
Disburseaent li .. jtations. 
The 
funds 
disbursed 
in 
accordance 
with 
this 
section 
are 
limited 
to 
the 
amounts 
appropriated by the Legislature for these purposes. 
§lS589-B. 
Authorisatiop aDd schedules of payment of state 
subsi4J': apgeals 
1. 
Schedules 
of 
PB}!IIlent 
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. 
BotificatiQJl 
of 
al.location: 
cQdddssioper's 
duty: 
sYJi"trinteAcJent • s 
dUU. 
The 
following 
provisions 
apply 
to 
notification 
of 
allocation 
by 
the 
commissioner 
and 
each 
syperintendent. 
A. 
The commissioner shall annually, prior to February 1st. 
notify each school board of the estimated amount to be 
allocated to the school administrative unit. 
B. 
Each 
superintendent 
shall 
report 
to 
the 
municipal 
officers whenever the school administrative unit is notified 
of the allocation or a change is made in the allocation 
resulting from an adjustment. 
3. 
pa,ywepts of state subsid,y 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 
submitte.d by 
school 
administrative 
units. 
4. 
A2lH!al.s. 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. 
s. 
School purJ.JOse egeuse requirfflll!eJlt. Notwithstanding any 
other law« money allocated for school purposes may be expended 
only for school purposes. 
6. 
Balance of allocatiOl1&. 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 
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 
subsiqy. 
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: subsidr pa:pents 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 a,mounts 
appropr iated for general purpose aid for local schools may not 
lapse but must be carried forward to the next fiscal y~ 
§15689-C. 
C....,issioner's rec2II!II!eudation for funding levels; 
cQllpUtations 
1. 
Annual recQ8Denciation. 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. 
• 
Funding 
level 
computations. 
The 
following 
are 
the 
funding 
level 
computations 
that 
sypport 
the 
commissioner'S 
funding level recommendations: 
A. 
The 
reqyested 
funding 
levels 
for 
the 
operating 
allocation under section 15683; 
B. 
The requested funding levels for debt service under 
section 15683-11., which are as follows: 
(1) 
The known obligations and estimates of anticipated 
principal and interest costs for the allocation year; 
(2) 
The expenditures for the insured value factor for 
the base year; 
(3) 
The level of lease payments and lease-purchase 
payments pursuant to section 15672, subsection 2-A for 
the year prior to the allocation year: and 
(4) 
Funds allocated by the state board for new school 
construction projects funded in the current fiscal year; 
C. 
The 
requested funding 
levels 
for 
adjustments 
under 
section 15689« which must be computed by estimating costs 
for the allocation year; and 
D. 
The requested funding levels for miscellaneous costs 
under section l5689-A. 
3. 
Guidelines for updating other subsidizable costs. 
The 
commissioner I 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. 
515689-D. 
Governor' s reCOPBeDdatioD for funding leye1s 
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, 
l5683-A, 
15689 
and 
l5689-A. 
The 
Governor's 
reCOmmendations must be transmitted to the Legislature within the 
time schedules set forth in Title 5, section 1666. 
515689-1. 
Actions b7 Legislature 
The Legislature shall annually, prior to March 15th, enact 
legislation to: 
1. 
APprcmriatiQD for state share of adjust:DleDts, 
debt 
service and qperating: single accoupt. 
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; 
A. 
Adjustments 
and 
miscellaneous 
costs 
described 
in 
sections 15689 and 15689-A, including an appropriation for 
~pecial education pupils placed directly by the State, for: 
el) Tuition and board for pupils placed directly by the 
State in accordance with rules adopted or amended by 
the commissioner: and 
(2) 
Special education tuition and other tuition for 
residents 
of 
state-operated 
institutions 
attendivg 
programs 
in 
school 
administrative units 
or private 
schools in accordance with rules adopted or amended by 
the commissioner: and 
B. 
The state share of the total operating allocation and 
the total debt service allocation described in sections 
15683 and 15683-A; and 
2. 
Local cost share e~ctation. Establish the local cost 
share expectation described in section 15671-A. 
Funds for appropriations under this section must be placed 
in a single account. 
§156S9-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 l5689-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 
subsigy. 
excluging 
payments on non-state-funded projects. 
This subsection goes not 
apply if a school administrative unit has less subsigy than the 
total principal and interest payment on bonds. 
Sec. D·55. 20·A MRSA §§15690 to 15695 are enacted to read: 
515690. Local apprgpriations 
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 frOJl!J 
kindergarten to grade 12. 
The 
legislative bogy of each school administrative unit may vote to 
raise and appropriate an amount up to the local share of the 
school administrative unit's contribution to the total cost of 
funding 
public 
education 
from 
kindergarten 
to 
grade 
as 
described in section 15688. 
A. 
For a municipal school unit. an article in substantially 
the following form must be used when a 
single municipal 
school administrative unit is considering the appropriation 
of the local 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. 
(1) 
"Article 
: 
To see what sum the municipality 
will apprQpriate for the school administrative unit's 
contribution 
to 
the 
total 
cost 
of 
funding 
public 
education from kindergarten to grade 12 as described in 
the 
Essential 
Programs 
and 
Services 
Funding 
Act 
(Recommend 
$ 
) 
and 
to 
see 
what 
sum 
the 
municipality 
will 
raise 
as 
the 
municipality's 
contribution 
to 
the 
total 
cost 
of 
funding 
public 
education from kindergarten to grade 12 as described in 
the Essential Programs 
and Services Funding Act in 
accordance with the Maine Revised Statutes. Title 20 A. 
section 15688. (Recommend $ 
• ) " 
(2) 
The following statement must accompany the article 
in 
subparagraph 
(1) • 
"Explanation: 
The 
school 
administrative unit's contribution to the total cost of 
funding public education from kindergarten to grade 12 
as described in the Essential Programs and Services 
Funding Act is the amount of money determined by state 
law to be the minimum amount that a municipality must 
raise in order to receive the full amount of state 
dollars," 
B. 
For 
a 
school administrative district or 
a 
community 
school district, an article in substantially the following 
form must be used when the school administrative district or 
community school district is considering the appropriation 
of 
the local 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. 
(1) 
"Article 
: To see what Sum each municipality 
will appropriate for the school administrative unit's 
contribution 
to 
the 
total 
cost 
of 
funding 
public 
education from kindergarten to grade 12 as described in 
the Essential Programs and Services Funding Act and to 
see what Sum 
each municipality will raise as 
each 
municipality's 
contribution 
to 
the 
total 
cost 
of 
funding public education from kindergarten to grade 12 
as described in the Essential Programs and Services 
Funding 
Act 
in 
accordance 
with 
the 
Maine 
Revised 
Statutes. Title lO-A. section 15688 (Recommends); 
Total cost by 
municipality 
Town A ($amount) 
Town B ($amount) 
Town C ($amount) 
School District 
Total ($sum of above) 
Municipal local 
contribution 
Town A ($amount) 
Town B ($amount) 
Town C ($amount) 
School District 
Total 
($sum 
of 
above) 
(2) 
The following statement must accompau:y the article 
in 
subparagraph 
( 1) • 
"Explanation; 
The 
school 
administrative unit's contribution to the total cost of 
funding public education from kindergarten to grade 12 
as described in the Essential Programs and Services 
Funding Act is the amount of money determined by state 
law to be the minimum amount that each municipalit,Y 
must raise in order to receive the full amount of state 
dollars ... 
C. 
The state share of the total cost of funding public 
education from kindergarten to grade 12 
as described in 
section 15688. excluding state-funded debt service for each 
school 
administrative 
unit. 
is 
limited 
to 
the 
same 
proportion as the local school administrative unit raises of 
its 
local 
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. 
excluding state-funded debt service. 
2. 
Ron-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. 
A. 
An article in substantially the following form must be 
used when a school administrative unit is considering the 
appropriation 
for 
debt 
service 
allocation 
for 
non-state-funded 
school 
construction 
projects 
or 
non-state-funded portions of school construction projects. 
(1) 
"Article 
To see what sum the (municipality 
or district) will raise for the annual debt service 
payments 
on 
a 
non-state-funded 
school 
construction 
project 
or 
non-state-funded 
portion 
of 
a 
school 
construction 
project 
in 
addition 
to 
the 
funds 
appropriated 
as 
the 
local 
share 
of 
the 
school 
administrative unit's contribution to the total cost of 
funding public education from 
kindergarten to grade 
• 
(Recommend $ 
• ) " 
(2) 
The following statement must accompany the article 
in subparagraph 
(1), 
"Explanation: 
Non-state-funded 
debt service is the amount of money needed for the 
annual payments on the (municipality's or district's) 
long-term debt for major capital school construction 
that is not approved for state subsidy. The bonding of 
this long-term debt was approved by the voters on (date 
of original referendum)," 
3. 
Additinnal local APPropriation. 
A school administrative 
unit may raise and expend funds 
for educational purposes in 
addition to the funds under subsections 1 and 2. 
A. 
An article in substantially the following form must be 
used when a school administrative unit is considering the 
appropriation of additional local funds: 
(1) 
"Article 
; To see what sum the (municipality 
or district) will raise and to appropriate the sum of 
(ReCOmmend 3) 
} in additional local funds for schoQl 
purposes under the Maine Revised Statutes« Title 20-A, 
section 15690. (Recommend 3) 
.)" 
(2) 
The following statement must accompany the artic~ 
in 
subparagraph 
(1). 
"Explanation: 
The 
additional 
local funds are those locally raised funds over and 
above 
the 
school 
administrative 
unit' s 
local 
contribution 
to 
the 
total 
cost 
of 
funding 
public 
education from kindergarten to grade 12 as described in 
the Essential Programs and Services Funding Act and 
local 
amounts 
raised 
for 
the 
annual 
debt 
service 
payment 
on 
non-stAte-funded 
school 
construction 
projects or the non-state-funded portion of a 
school 
construction 
project 
that 
will 
help 
achieve 
the 
(municipality's or district' s) budget for educational 
programs," 
B. 
An article in substantially the following form must also 
be used when a school administrative unit is considering an 
appropr iation of additional local funds that exceeds the 
maximum state and local spending target defined in section 
1567l-A. subsection 4. 
(1) 
"Article 
Do you favor adopting a budget 
that 
exceeds 
those 
costs 
considered 
reasonably 
necessary 
according 
to 
the 
essential 
programs 
and 
services funding model by (Recommend $ 
.) for the 
purpose of (insert purpose)?" 
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. 
A. 
"Article 
To see what sum the (municipality or 
district) will authorize the school committee to expend for 
the fiscal year beginning (July 1. 
) and ending (June 
30. 
) from the school administrative unit's contribution 
to 
the 
total 
cost 
of 
funding 
public 
education 
from 
kindergarten to grade 
as 
described in the Essential 
Programs and Services Funding Act. non-state-funded school 
construction projects, additional local funds 
for 
school 
purposes 
under 
the 
Maine 
Revised Statutes, Title 
A, 
section 15690, unexpended balances, tuition receipts, state 
subsidy and other receipts for 
the support of 
schools. 
(Recommend $ 
.)U 
5. 
Vote. 
Actions taken pursuant to subsections 1 to 4 must 
be taken by a recorded vote. 
6. 
Administrative costs for up j ts with DO py,pils. 
I f 
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. Mupicipal 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 
tQtal cost Qf funding public educatiQn from kindergarten to grade 
as described in section 15688, 
the 
schQQl 
administrative 
unit • s contributiQn tQ debt service fQr nQn-state-funded schQol 
cQnstruction projects 
and additional 
local 
funds 
for 
schoQl 
purposes under section 15690. 
2. -pjciRa} treasurer's p~t schedule. The treasurer of 
the 
member 
municipality. 
after 
being 
presented 
with 
the 
assessment 
schedule. 
shall 
forward 
1/12 
of 
that 
member 
municipality's share tQ the treasurer of the district on or 
before the 20th day of each mQnth of the fiscal year beginning in 
~ 
--. 
§15692. Special school districts 
1. 
School ethejn.istrative "pjt. For the purposes Qf section 
15695 and Title 20. 
sections 
3457 to 3460, 
a 
special schOQl 
district is deemed tQ be a schQQl administrative unit. 
2. 
Debt service. Debt service on bQnds Qr notes issued by a 
special schoQl district must be included in the school budget Qf 
the 
schQol 
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 schQol district all sums necessary to 
meet the payments of principal and interest on bonds or nQtes 
when due and to CQyer maintenance or other costs for which the 
special schQQl district is resPQnsible. 
§15693. School budget: budget formats 
1. 
Content. A school administrative unit shall include in 
its schOQl budget document; 
A. The schQol administrative unit's total cost of funding 
ptililic 
education 
from 
kindergarten 
to 
grade 
12. 
its 
non-state-funded debt service. if any. 
and any additional 
expenditures authorized by law; 
B. 
A summary of anticipated revenues and estimated school 
expenditures for the fiscal year; and 
c. The following statement. including the estimated dollar 
amQunt Qf state retirement payments; "This budget does not 
include the estimated amount of $ 
in employer share 
of teacher retirement costs that is paid directly by the 
State," 
2. 
Budget deadlines. The following time limitations apply 
to adoption of a schoQl budget under this section. 
A. 
At 
least 7 
days 
before the initial meeting of 
the 
legislative body responsible for adopting 
a 
budget. 
the 
school~ administrative unit shall provide a detailed budget 
document to that legislative body and to any person who 
requests one and resides within the geographic area served 
by the school administrative unit. 
B. 
Notwithstanding a provision of law or charter to the 
contrary. school administrative units may adopt an annual 
budget prior to June 30th. 
The school budgets for career 
and technical education regions must be adopted on or before 
August 1st. 
C. 
Notwithstanding 
any 
municipal 
charter 
provision. 
ordinance or other law to the contrary. if the level of 
state subsidy for the next school year is not finalized in 
accordance with this chapter before June 1st. the school 
board may delay a school budget meeting otherwise required 
to be held before July 1st to a date after July 1st. If a 
school board elects to delay a school budget meeting under 
this paragraph, 
the meeting must be held and the budget 
~proved within 
days 
of 
the 
date 
the 
commissioner 
notifies the school board of the amount allocated to the 
school administrative unit under section 15689-B. 
When 
a 
school budget meeting is delayed under this paragraph, the 
school administrative unit may continue operation of the 
unit at the same budget levels as were approved for the 
previous year. Continued operation under the budget for the 
previous year is limited to the time between July 1st and 
the date the new budget goes into effect. 
3. 
Budget format. 
The 
following provisions 
apply 
to 
a 
budget format. 
A. Except as provided in subsection 4, the budget format is 
that prescribed by a majority of the school board until an 
article prescribing the school budget format is 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, or 200, 
whichever is less. 
B. 
The format of the school budget may be determined in 
accordance with section 1306. 
C. It is the intent of the Legislature that a school board 
shall 
attempt 
to 
obtain 
public 
participation 
in 
the 
development of the school budget format. 
4. 
Budget fOraat; town or city chnrter. 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 3D-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; 
tOYD aaeeting. 
When the 
final budget 
authority is vested in a town meeting operating under the general 
enabling procedures of Title 3D-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 fOraat; cqeeynity school district. The following 
provisions apply to the budget format of a 
community school 
district. 
A. 
An article containing the district's proposed budget 
format must be placed on the next warrant issued or ballot 
printed if: 
(1) A majority of the district school committee votes 
to place it on the warrant or ballot: or 
(2) A written petition signed by at least 10% of the 
number 
of voters 
voting in the last gubernatorial 
election in each municipality within 
the 
community 
school district reguests it to be on the warrant or 
ballot. 
B. The article containing the budget format may be voted on 
by secret ballot at an election conducted in accordance with 
Title 3D-A, sections 2528 to 2532. 
C. The district school committee shall: 
(1) 
Issue 
a 
warrant 
specifying that the municipal 
officers of the municipalities within the 
community 
school district shall place the budget format article 
on the secret ballot: and 
(2) Prepare and furnish the required number of ballots 
for 
carrying 
out 
the 
election. 
including 
absentee 
ballots. 
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 provi.sions apply to approving a school budget 
under this chapter. 
1. 
Checklist regpired. Prior to a vote on articles dealing 
with school appropriations. the moderator of a regular or special 
school budget meeting shall 
re~uire 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. 
Z. 
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. 
A. The meeting must be held within 30 days of the regular 
budget meeting at which the budget was finally approved. 
·50 
B. In a school administrative district or community school 
district. the meeting must be called by the school board or 
as follows. 
( 1) A petition containing a 
nwnber of signatures of 
legal voters in the member municipalities of the school 
administrati ve 
unit 
e~ualling at least 
10°0 
of 
the 
number of voters who voted in the last gubernatorial 
election 
in 
member 
municipalities 
of 
the 
school 
administrative unit. or 100 voters. whichever is less, 
and 
specifying 
the 
article 
or 
articles 
to 
be 
reconsidered must be presented to the school board 
within 15 days of the regular budget meeting at which 
the budget was finally approved. 
(2) On receiving the petition, the school board shall 
call the special budget reconsideration meeting, which 
must be held within 15 days of the date the petition 
was received. 
C. 
In a municipality, the meeting must be called by the 
municipal officers: 
(1) Within 15 days after receipt of a request from the 
school board, if the request is received within 15 days 
of the budget meeting at which the budget was finally 
approved and it specifies the article or articles to be 
reconsidered; or 
(2) 
Within 
days 
after 
receipt 
of 
a 
written 
aRplication presented in accordance with Title 3Q-A, 
section 2532, if the application is received within 15 
days of the budget meeting at which the budget was 
finally 
approved 
and it specifies 
the 
article 
or 
articles to be reconsidered. 
3. 
Invalidation of action of special budget reconsideration 
Meting. 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-it.. trapsfers. 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. 
Taz 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 hl' 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 t 
the remaining sum must be paid from ad valorem 
taxes t 
which may be levied without limit as to rate or amount 
upon all the taxable property within the school administrative 
unit. 
Sec. D-56. 20-A MRSA c. 608 is enacted to read: 
CHAPTER 608 
SCRQQL FIBABCI ACT OF 2003 
§1575l. 
Short title 
This chapter may be known and cited as "the School Finance 
Act of 2003." 
§15752. 
Mandated legislative AePrgpriations for kindergarten 
to grade 12 education 
The Legislature each year shall provide at least SS~ of the 
cost of 
the total allocation for 
kindergarten to grade 
education from General Fund revenue sources as established in 
chapter 606-B. 
For the purposes of this chapter, and until such time as the 
Legislature may implement an alternative school funding system, 
"total allQcation" 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. 
§15753. 
MAPdated legislative A22fQpriatiops for special education 
The Legislature shall provide 
100~ of the state and local 
cost of providing all special education services mandated under 
federal 
or state law. 
rule or 
regulation as established in 
chapter 606-B. 
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 ch~ter 
606-B, 
the 
commissioner 
shall 
identify 
and 
provide 
in 
the 
commissioner's 
recommendation pursuant to section 
15689 C 
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 
associated with 
the 
commissioner's 
recommendation. 
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. 
§15754. 
Fund for the Efficient Deliye~ of Educational Services 
The Fund for the Efficient Delivery of Educational Services, 
referred to in this section as "the fund," is established. 
Two percent of the funds annually appropriated pursuant to 
this chapter must be dedicated to the fund Md distributed from 
the fund to those school administrative units and municipalities 
that can demonstrate significant and sustainable sayings in the 
cost of 
delivering 
educational 
services 
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, 
515755. 
Egtitleeent 
The State's school administrative units and municipalities 
are entitled to the appropriations required by this chapter. 
Sec. D-57. 30-A MRSA §6006-F, sub-§6, as enacted by PL 1997, 
c. 787, S13, 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 
e~--eeBE 
6el''Yi-e&-ee6~6 as determined in Title 20-A, section le&ll 15672 « 
subsection 31, not to exceed: 
A. 
Seventy percent and no less than 30~ for health, safety 
and compliance; 
B. 
Seventy percent and no less than 30'\ for repairs and 
improvements; and 
c. 
i=i:it:y Seventy percent and no less than 
::lQ'lt. ~ for 
learning space upgrades. 
Sec. D-SS. Application. 
This Part applies to school budgets 
passed for the fiscal year beginning July 1, 2005, and thereafter. 
Sec. D-S9. Effective date. This Part takes effect July 1, 2005. 
PARTE 
Sec. E·l. 30·A MRSA §706·A is enacted to read: 
§706-A. 
Limitation on APPropriations 
1. 
Appropriation liaait established. 
Notwithstanding any 
other provision of law, a county may not in any fiscal year make 
an appropriation, including an appropriation to reserves, except 
as otherwise provided in this section, where such appropriation 
is funded by an assessment on its member municipalities and where 
such 
appropriation 
would 
cause 
the 
county 
to 
exceed 
its 
assessment limit for the fiscal year. 
A county's assessment 
limit for any fiscal year must be set at its assessment limit for 
the prior fiscal year, multiplied by the sum of the following: 
one; plus the income growth factor set forth in subsection 3; 
plus 
the 
annual 
property 
growth 
factor 
for 
its 
member 
municipalities. 
The annual property growth factor for member 
municipalities is a 
fraction whose denominator is the total 
combined 
valuation 
of 
each 
member 
municipality 
and 
whose 
numerator 
is 
the 
total 
combined 
increase 
in 
the 
assessed 
valuation of 
any real or 
personal property in each 
member 
municipality during the prior fiscal year that may become subject 
to taxation for the first time, or taxed as a separate parcel for 
the first time during such fiscal year, or that has had an 
increase 
in its 
assessed 
valuation 
over 
the 
prior 
year's 
valuation as a result of improvements to or expansion of the 
property. In estaD_lishing the property growth factor under this 
section, 
the 
county 
must 
rely 
on 
the 
total valuation 
and 
increased valuation calculations 
of 
each 
member 
municipality 
under 
section 
572l-A. 
subsection 
for 
its 
most 
recently 
concluded fiscal year. 
Z. 
Transition. 
The 
appropriation limit established in 
subsection 1 becomes effective for a county for its first full 
fiscal year following the effective date of this section. 
A. 
For purposes of determining the assessment limit for the 
first fiscal year for which this section is effective. the 
limit must be set at the amount assessed by the county on 
its member municipalities during the prior fiscal year. 
multiplied by the Sum of the following: one: plus the income 
growth factor set forth in subsection 3; plus the annual 
property growth factor for its member municipalities set 
forth in subsection 1. 
B. 
In the event the prior year's assessment reflects the 
effect of extraordinary, nonrecurring events, the county may 
submit a written notice to the State Tax Assessor requesting 
an adjustment in the assessment calculation. 
The adjustment 
must be determined in a reasonable amount of time. 
3. 
IncOlle 
growth 
factor. 
The 
income 
growth 
factor 
applicable to fiscal years following the effective date of this 
section is the base growth factor, defined as the average real 
personal income growth rate, defined in Title 5, section 1665. 
subsection 1. which rate may not exceed 2.75'. 
For fiscal years 
commencing after such time as the state tax burden ranks in the 
middle 
1/3 
of all states. 
as 
determined 
by 
the 
State Tax 
Assessor, 
the growth factor must 
become 
the personal 
income 
growth factor. 
The personal income growth factor is one plus the 
average percent change in personal income in this State for the 
prior 10 calendar years, ending with the most recent calendar 
year for which data are available. as estimated by the United 
States Department of Commerce. Bureau of Economic Analysis. 
For 
purposes of this section, "state tax burden" means 
the total 
amount of state and local taxes paid by Maine residents, per 
$1,000 of income, as determined by the State Tax Assessor based 
on data from the United States Department of COmmerce, Bureau of 
Census and Bureau of Economic Analysis. 
The State Tax Assessor 
shall undertake this calculation no less than once per year. 
For 
any 
fiscal 
year thereafter, 
if the State Tax 
Assessor 
has 
determined that the state tax burden has increased to the highest 
1/3 of states, the growth factor for the following fiscal year 
must be the base growth factor. 
In all other fiscal years when 
the state tax burden ranks in the middle 1/3 of states, as 
determined by the State Tax Assessor« the growth factor must be 
the personal income growth factor. 
4. 
Adjus"",nt for 
new state funding. 
In addition 
to 
subsection 3, in the event the State provides net new funding to 
a county for existing services "funded in whole or in part by 
assessments, other than required state mandate funds pursuant to 
section 
5685 
that 
do 
not 
displace 
current 
assessment-based 
expenditures, the county must lower its assessment limit in that 
year in an amount equal to the net new funds. 
For purposes of 
this subsection, 
"net 
new 
funds" 
means 
the 
amount 
of 
funds 
received by the county from the State in that fiscal year. with 
respect to services funded in whole or in part by assessments. 
less the following product: 
the amount of such funds received in 
the prior fiscal year multiplied by an adjustment factor. 
The 
adjustment factor equals: 
one; plus the income growth factor 
described in subsection 3; plus the annual property growth factor 
for member municipalities as defined in subsection 1. 
In the 
event a 
county receives net new funds in any fiscal year for 
which its assessment limit has not been adjusted as provided in 
this subsection. the county must adjust its assessment limit in 
the following year in an amount equal to the net new funds. 
5. 
EztraQrdimny events. 
Upon the affirmative vote of a 
majority 
of 
its 
governing 
body, 
a 
county 
may 
exceed 
its 
assessment limit in such an amount as necessary to comply with a 
court order or decree or to respond to an extraordinary event. 
An "extraordinary event" includes any catastrophic event outside 
the 
control 
of 
the 
county 
commissioners 
such 
as 
a 
natural 
disaster, severe weather event, act of God. act of terrorism, 
fire, war and riot, but in no event mayan "extraordinary event" 
include a 
change in economic conditions. 
revenue shortfall or 
increase in salaries or benefits. 
An appropriation made under 
this subsection may not cause the county's assessment limit to be 
adjusted 
for 
any 
future 
fiscal 
years 
nor 
may 
such 
an 
appropriation continue for longer than required to comply with 
the court order or decree or to address the extraordinary event. 
6. 
Referendum. 
A county may elect to raise its assessment 
limit u,pon the affirmative vote of the voterS of the county by 
written referendu,m vote held at any regular or special election. 
Notwithstanding any law to the contrary. such referendum may be 
called only u,pon the affirmative vote of a majority of the county 
commissioners and must be governed according to state law and any 
applicable charter. 
The warrant for the referendum must set 
forth 
the question to 
be 
determined, 
which must 
be in the 
following form: 
"Do you favor raising the levy limit of [name of 
county) for the purpose of [insert purpose]?" 
7. 
Treatment of sur.p1us. 
Any assessments collected by a 
county in any fiscal year in excess of its assessment limit. as 
determined by a final au,dited accounting. must be transferred to 
a property tax relief fund, which each county must establish, and 
used to reduce assessments in subsequent fiscal years. 
Nothing 
in this subsection is intended to limit the ability of a cou,nty 
to maintain adequate reserves as permitted by law. provided that 
annual allocations or appropriations of funds to reserves are 
treated as appropriations subject to the appropriation limits set 
forth in subsection 1. 
8. 
Epforcement. 
In the event a county makes appropriations 
in violation of this section, the State Tax Assessor may reguire 
the county to adjust its appropriation limit downward in an 
amount egual to the illegal appropriation and impose such other 
penalties as the Legislature may provide. 
PARTF 
Sec. F-l. 36 MRSA §685-A is enacted to read: 
S08S-A. 
Prograa funding 
During the period in which the State is increasing funding 
to at least 55'\ of the cost of essential programs and services, 
as described in Title 20-A. section 15671. the appropriation for 
the homestead property tax exemption must be at least $36.000.QQO. 
Notwithstanding any other provision of law. beginning with 
20" 
fiscal year 2005-06 and ending with the fiscal year for which the 
State first enacts a budget that funds at least 55'\ of the cost 
of essential programs and services as described in Title 20-A, 
section 15671. the State Controller shall transfer at the close 
of the fiscal year the balance of the funds appropriated for the 
homestead property tax exemption under this chapter after all 
reguired 
deductions 
of 
appropriation. 
budgeted 
financial 
commitments and other adjustments considered necessary by the 
State Controller have been made to the so-called circuit breaker 
reserve for the following fiscal year. 
3.0 
Sec. F-2. 36 MRSA §6203-A, as enacted by PL 2003, c. 673, Pt. 
BB, §2, is amended to read: 
§6Z03-A. Procedure for reimbursement 
A~-~ea6~-~eft~k~y-~~-~~~~~-ba&t-~~~-~&&-~eR~ar-~Be 
~ State Tax Assessor shall determine the benefit for each 
claimant under this chapter and certify the amount to the State 
Controller to be transferred to the so-called circuit breaker 
reserve established, maintained and administered by the State 
Controller 
from 
General 
Fund 
undedicated 
revenue 
within the 
individual 
income 
tax 
category. 
A~--*eas~--~9R~alYT--~ae The 
assessor 
shall 
pay 
the 
certified 
amounts 
to 
each 
approved 
applicant 
qualifying 
for 
the 
benefit 
under 
this 
chapter. 
Interest may not be allo}fed on any payment made to a claimant 
pursuant to this chapter. 
In addition to the transfer reguired 
by section 68S-A. by the end of fiscal years 2006-07. 2007-08 and 
2008-09. 
the State Controller shall 
ensure that 
the 
amount 
transferred 
to 
the 
so-called 
circuit 
breaker 
reserve 
from 
undedicated revenue within the individual income tax category is 
equal to the amount ne~ to meet the requirements of this 
chapter for that year as estimated by the Revenue Forecasting 
Committee established in Title 5. section 1710-E in its report 
dated December L 
2004. as adjusted by the assessor to reflect 
any statutory changes to this chapter enacted after the date of 
that report. The assessor must report any required adjustment to 
the State Controller no later than 15 days prior to the end of 
the fiscal year. 
Beginning with fiscal year 
2009-10 
and ending with the 
fiscal year subsequent to the fiscal year for which the State 
first increases funding to at least 55~ of the cost of essential 
programs and services as described in Title 20-A. section 15671, 
-14 
the State Controller shall ensure that. 
in addition to the 
transfer required by section 685-A, the amount transferred to the 
so-called circuit breaker reserve from undedicated revenue within 
the individual income tax category is equal to the estimated 
amount needed to meet the requirements of this chapter for that 
year 
as 
determined 
by 
the 
Revenue 
Forecasting 
Committee 
established in Title 5, section 1710-E and reported to the State 
Controller no later than June 15th of the respective fiscal 
year. 
For purposes of this estimate, the Revenue Forecasting 
Committee shall assume that funding for the essential programs 
and services as described in Title 2Q-A, section 15671 was never 
enacted. 
The estimate must 
take into account any statutory 
changes to this chapter enacted after the Revenue Forecasting 
Committee's December 1. 2004 report. 
Any 
amounts 
remaining 
in 
the 
so-called circuit breaker 
reserve account at the end of the fiscal year must be carried 
forward to the next fiscal year. 
Sec. F-3. 36 MRSA §6207. sub-§§l and 2, as amended by PL 1997, 
c. 557, Pt. A, §3 and affected by Pt. G, §l, are further amended 
to read: 
1. 
Benefit 
calculation. 
For 
claimants 
representing 
a 
nonelderly household, the benefit is calculated as follows: 
A-I. 
Fifty percent of that portion of the benefit base that 
exceeds 4% but does not exceed 8% of income plus 100°" of 
that portion of the benefit base that exceeds 8% of income 
to a maximum payment of $1,000. 
The State Tax Assessor shall increase the maximum payment amount 
provided in paragraph A-I no later than August 15, 2007. 
and 
Annually thereafter ( by an amount determined by the sum of any 
funds 
in the 
so-~alled circuit breaker reserve under section 
6203-A as of July 1st of the fiscal year. 
In no fiscal year may 
the maximum payment amount arising from the adjustment made by 
the State Tax Assessor be less than in the prior fiscal year. The 
maximum payment amount must be rounded down to the nearest $50. 
z. 
Income 
eligibility. 
household incomes in excess of 
Single-member 
households 
with 
$69r+GG S50,000 and households 
with 2 or more members with a 
household income in excess of 
$4Gr QQQ $75,000 are not eligible for a benefit. 
Sec. F·4. 36 MRSA §6209, sub-§l, as amended by PL 1989, c. 
508, §25, is further amended to read: 
1. 
Housebold limitation adjustment. 
Re~i-aa4IUj--Mal'eR--*r 
1989r --afl&--annua-.1:-l?--&Qe.!'eai-&&l'-r-sRe The State Tax Assessor shall 
determine annually the household income eligibility adjustment 
factor. That factor saa.! must be multiplied by the applicable 
income 
limitations 
in 
seesi-ea 
sections 
6206 
and 
6207, 
as 
previously adjusted according to this subsection, app!i:easle for 
the year prior to that for which relief is requested. The result 
Baall ~ 
be rounded to the nearest $100 and Beall-apply applies 
to the year for which relief is requested corresponding to the 
year on which the annualized cost of living adjustments were 
based. 
Re!iaaia~-~~-~~--*~~*r-~~-6ame-~~~-~~--Be 
eMpleyea--~e--~~~--~~-~--],...~~~~--~&--&~~&~eft--96G1T 
sQBseeSiea-6T 
Sec. F·5. 36 MRSA §6656, as amended by PL 2001, c. 714, Pt. 
BB, §2 and affected by §4, is further amended to read: 
§6656. Payment of claims; procedure for reimbursement 
Except 
as provided in section 6652, 
subsection 3, 
upon 
receipt 
of 
a 
timely 
and 
properly 
completed 
claim 
for 
reimbursement, 
the State Tax Assessor shall certify that the 
claimant is eligible for reimbursement and shall pay the amount 
claimed 
~l'eRl-~-~-aJ--i!l:lJU~. as provided by this section by 
November 1st or within 
days after receipt of 
the claim. 
whichever is later. 
For those claims for which payments are 
withheld pursuant to section 6652, subsection 3, 
reimbursement 
must 
be 
paid 
within 
days 
after 
the 
assessor 
receives 
notification under that subsection that the report has 
been 
received. 
Notwithstanding any other provision of law, the State Tax 
Assessor shall determine the benefit for each claimant under this 
chapter and certify the amount to the State Controller to be 
transferred to the so-called Business Eguipment Tax Reimbursement 
Reserve account established, maintained and administered by the 
State ContrQller from General Fund undedicated revenue within the 
individual 
income 
tax category. 
The 
assessor shall pay the 
certified amounts to each approved applicant gualifying for the 
benefit under this chapter. 
Interest may not be allowed on any 
payment made to a claimant pursuant to this chapter. 
Sec. 
F -6. 
Appropriations 
and 
allocations. 
appropriations and allocations are made. 
The 
following 
ADMIIUsnATlVE A1ID FIHABCIAL SERVICES, DEPAll'DIEII"l' OF 
Busine&& Equipment Taz Reimbur&ement Program 0806 
Initiative: 
Deappropriates funds in the Business 
Reimbursement 
program 
in 
order 
to 
establish 
Equipment Tax Reimbursement Reserve account from 
undedicated revenue within the individual income tax 
GEREHAL FOBD 
2005-06 
All Other 
($78,132,345) 
GENERAL FUND TOTAL 
($78,132,345) 
REVENUES 
2005-06 
Individual incoae taz 
General Fund 
($74,069,463) 
Local Government Fund 
($4,062,882) 
REVENUES TOTAL 
($78,132,345) 
Equipment Tax 
the 
Business 
General Fund 
category. 
2006-07 
($82,896,495) 
($82,896,495) 
2006-07 
($78,585,877) 
($4,310,618) 
($82,896,495) 
Sec. F·7. Maine Residents Property Tax Program. 
The State Tax 
Assessor shall undertake a study of the Maine Residents Property 
Tax Program and shall specifically examine how the program can be 
amended so that the maximum benefit provided by the program may 
be increased over time. 
The 
study shall examine alternative 
means 
by which the maximum benefit under the program may be 
increased to $2,000 in time for the 2009 program year and to 
$3,000 in time for the 2011 program year. 
The State Tax Assessor 
shall also study the potential benefits of making the Maine 
Residents Property Tax Program a part of the Maine income tax 
program. 
The State Tax 
Assessor shall report to the joint 
standing conunittee of the Legislature having jurisdiction over 
taxation matters by January 2, 2006. 
Sec. F-8. Maine State Housing Authority property tax deferral 
program. 
The 
Maine State Housing Authority, 
in consultation 
with Maine Revenue Services, shall develop a plan to issue bonds, 
the proceeds from which must be used to establish a property tax 
deferral program. 
The program will allow any Maine resident with 
a property tax bill on that resident' s principal residence that 
exceeds 
6'" 
of 
that 
resident' s 
income 
to 
elect 
to 
defer property tax payments that otherwise exceed 6'\, of income. 
The program must require repayment, with interest, of deferred 
property tax amounts upon transfer of the property. 
The program 
must provide for securing the property tax payments deferred, 
consider equity in the property and provide for low transaction 
costs and for ease of application for program participants. 
The 
Maine State Housing Authority shall examine the 
impact 
upon 
program participants if market value in the property has declined 
from the time of property tax payment deferral to the time of 
property transfer. 
The Maine State Housing Authority shall, in 
consul tation with Maine Revenue Services, develop and implement 
administrative policies and practices, including but not limited 
to 
a 
common application form, 
to ensure coordination of the 
property tax deferral program established by this section and the 
Maine Residents Property Tax Program established in the Maine 
Revised Statutes, Title 36, chapter 907. 
The Maine State Housing 
Authority shall report to the joint standing committee of the 
Legislature having jurisdiction over taxation matters by March 1, 
2005 any legislation necessary to carry out the purpose of this 
section. 
The committee may subsequently report to the First 
Regular 
Session 
of 
the 
122nd 
Legislature 
any 
implementing 
legislation to carry out the purposes of this section. 
Sec. F-9. Household income eligibility adjustment factor. 
The 
household 
income eligibility adjustment 
factor 
in 
Revised Statutes, Title 36, section 6209, subsection 1 
applied 
to Title 
36, 
section 
6207 
for 
the 
Maine 
Property Tax Program that begins on August 1, 2005. 
the 
Maine 
may not be 
Residents 
Sec. F-IO. Application. 
That section of this Part that amends 
the Maine Revised Statutes, Title 36, section 6207, subsection 2 
applies to applications filed for any Maine Residents Property 
Tax Program beginning on or after August 1, 2005. 
That section 
of this Part that amends Title 36, section 6209 applies to any 
Maine Residents Property Tax Program beginning on or after August 
1, 2005, except that the household income eligibility adjustment 
factor in Title 36, section 6209 does not apply to Title 36, 
section 6207 for the Maine Residents Property Tax Program that 
begins on August 1, 2005. 
Sec. F-ll. Effective date. 
That section 
amends the Maine Revised Statutes, Title 36, 
effect July 1, 2005. 
PARTG 
of this Part that 
section 6656 takes 
Sec. G-l. 30-A MRSA §7102~ as enacted by PL 1987, 
Pt. A, §2 and Pt. C, §106 and amended by PL 1989, c. 6, 
c. 737, 
c. 9, §2 
and c. 104, Pt. C, §§8 and 10, is further amended by adding at 
the end a new paragraph to read: 
The appropriation limitations set forth in section 5721-A 
are applicable to the appropriations and revenues of plantations. 
PARTH 
Sec. H-l. 36 MRSA Pt. 11 is enacted to read: 
PART 11 
STAn TAX POLICY GOALS 
CBAP"rER 931 
TAX BtlKDEIf RJm!TCTIc.Jf GOAL 
§7301. 
Taz reduction goal 
It is the goal and policy of the State that by 2015 the 
total state and local tax burden be reduced to the national 
average total state and local tax burden. as determined by the 
United States Census Bureau's most recent tax burden analysis, 
adjusted 
by 
the 
assessor 
to 
reflect 
the 
State' 5 
unique 
expenditure tax relief programs. 
§7302. 
Progress reporting 
1. 
Independent 
commission: 
membership. 
In consultation 
with the Legislative Council. 
the Governor shall establish an 
independent commission to separately assess and report on the 
progress made by the State, municipalities. counties and school 
administrative units, respectively, in achieving the tax burden 
reduction goal established in section 7301. 
The Governor shall 
appoint 
as 
members 
to 
serve 
on the 
commission persons with 
pertinent 
knowledge 
and 
expertise 
in 
economic 
development. 
government 
finance. 
tax 
policy 
and 
business 
matters. 
The 
Governor shall designate 
a 
member 
to serve as chair of the 
commission. 
The commission may seek and receive outside funds to 
fund the costs of the commission. 
2. 
Indicators: annual re,port. 
With reference to Title 5, 
chapter 142; Title 20-A. section 15671. subsection 1; and Title 
30-A, sections 706-A and 5721-A, the commission shall develop and 
apply specific, quantifiable performance indicators against which 
the 
progress 
in 
achieving 
the 
tax 
burden 
reduction 
goal 
established in section 7301 can be measured. 
On January 15, 2006 
and annually thereafter, 
the 
COmmission shall report to the 
Goyernor and to the joint standing committee of the Legislature 
having jurisdiction over taxation matters on the progress made by 
the State, 
counties, 
municipalities and school administrative 
units, respectively, in achieving the tax burden reduction goal 
established 
in section 
7301. 
The 
report 
reguired 
by 
this 
subsection must be comprised of 4 distinct parts reporting on the 
progress made by the State, municipalities, counties and school 
administrative units, 
respectively. 
The 
commission 
may 
also 
include in its report recommendations on alternative strategies 
to achieve the tax burden reduction goal established in section 
7301 that reflect the best practices in this State, other states 
and other countries. 
Sec. H-2. Fund for the Efficient Delivery of Educational Services. 
In accordance with Initiated Bill 2003, chapter 2, section 4, 
subsection 
2, 
this 
section 
provides 
for 
the 
design, 
implementation, 
management and oversight of the Fund for the 
Efficient Delivery of Educational Services established by the 
Maine Revised Statutes, Title 20-A, section 15684, referred to in 
this section as "the fund." 
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. 
The Department of Education shall administer the fund or may 
contract for services for administration of the fund. 
Notwithstanding Title 20-A, section 15684, the Treasurer of 
State shall transfer from the amount appropriated for general 
purpose aid for local schools to the fund the following amounts 
on the first day of each of the following fiscal years: 
1. 
Fiscal year 2005-06. 
In fiscal year 2005-06, an amount 
equi valent to 0.5% of the total amount appropriated for general 
purpose aid for local schools; 
2. 
Fiscal year 2006-07. 
In fiscal year 2006-07, an amount 
equivalent to 1% of the total amount appropriated for general 
purpose aid for local schools; 
3. 
Fiscal year 2007-08. 
In fiscal year 2007-08, an amount 
equivalent to 1. 5% of the total amount appropriated for general 
purpose aid for local schools; and 
4. 
FiscaI year 2008-09. 
In fiscal year 2008-09, an amount 
equivalent to 2% of the total amount appropriated for general 
purpose aid for local schools. 
The 
Department 
of 
Education, 
in 
consultation 
with 
the 
Executive 
Department, 
State 
Planning 
Office 
and 
the 
other 
agencies, organizations and individuals determined appropriate by 
the Commissioner of Education, shall establish criteria through 
which 
school 
administrative 
units 
and 
municipalities 
may 
demonstrate significant and sustainable savings in the cost of 
delivering educational services and improved 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. 
Prior 
to 
the 
end 
of 
fiscal 
year 
2008-09, 
a 
school 
administrative unit or municipality may apply to the Commissioner 
of Education for 
a distribution from the fund. 
Pursuant to 
criteria established in 
this 
section, 
the 
commissioner 
may 
authorize distributions from the fund in the form of competitive 
and planning grants. 
Sec. 8-3. Fund for the Efficient Delivery of Local and Regional 
Services; distribution. 
In accordance with Initiated Bill 2003, 
chapter 2, section 4, subsection 3, this section provides for the 
design, implementation, management and oversight of the Fund for 
the Efficient Delivery of Local and Regional Services established 
in 
the 
Maine 
Revised 
Statutes, 
Title 
3D-A, 
section 
5681, 
subsection 3, referred to in this section as "the fund." 
The 
Department 
of 
Administrative 
and 
Financial 
Services 
shall 
distribute the 
fund, 
in the 
form of competitive grants 
and 
planning grants, to municipalities that demonstrate significant 
and sustainable savings in the cost of delivering local and 
regional governmental services, 
or, 
in the case of planning 
grants, 
the potential for such savings, 
through collaborative 
approaches 
to 
service 
delivery, 
enhanced 
regional 
delivery 
2 
systems, the consolidation of regional services and the creation 
of 
broad-based purchasing 
alliances 
in 
accordance 
with 
the 
criteria and application process developed by the department 
pursuant to Public Law 2003, chapter 20, Part W, section 2. 
The 
Department of Administrative and Financial Services may contract 
for services for administration of the fund. 
Emergency clause. 
preamble, 
this 
Act 
otherwise indicated. 
In view of 
takes 
effect 
the emergency cited in 
when 
approved, 
except 
the 
as 
SUMMARY 
This bill increases the state share of education costs, 
provides property tax reduction for Maine residents and reduces 
government 
spending at all 
levels. 
Specifically, 
the bill 
accomplishes the fOllowing. 
Part A reconstitutes and changes the current State Budget 
Stabilization Fund to further control state spending and taxes. 
Part 
B 
supports 
additional 
property 
tax 
reduction 
by 
promoting government efficiencies, 
including efficiencies that 
might assist implementing property tax reductions from additional 
state 
education 
funding, 
by 
the 
Intergovernmental 
Advisory 
Group. 
Parts C and E establish caps on the growth of municipal and 
county spending, respectively. 
These caps may not be exceeded 
except in defined extraordinary circumstances or as overridden by 
a majority vote of the voters of the municipality or county. 
Part D establishes a cap on total education costs. 
It also 
requires the State to increase its share of school funding by 
paying 50\. of the total cost of essential programs and services 
in fiscal year 2006-07 and 55\. in fiscal year 2008-09. 
As 
a 
result of this increased state aid to education, 
cents of 
every dollar of the additional state aid are 
available 
for 
property tax reduction. 
The funds made available for property 
tax reduction, as a result of the State's increasing its share of 
education funding, must reduce property taxes. 
This property tax 
reduction may be overridden only by a majority vote of affected 
voters. 
Part D also corrects a numbering problem created when Public 
Law 2003, chapter 504, Part A, section 6 and Initiated Bill 2003, 
chapter 2 both enacted substantively different provisions with 
the same section numbers. 
Part F provides funding for increasing property tax relief 
over the period of time during which the State is increasing 
funding of education spending up to at least 55%. The specific 
relief provided is in an increase in the 
income 
limits and 
maximum payment amount to claimants under the Maine Residents 
Property Tax Program. 
Part F expands the nonelderly portion of the Maine Residents 
Property Tax Program by increasing household income limitations 
to 
$50,000 
for 
single-member 
households 
and 
$75, 000 
for 
mul timember households. 
The expansion applies to program years 
beginning on or after August 1, 2005. 
Part F directs the State Tax Assessor to undertake a study 
of the Maine Residents Property Tax Program in order to examine 
how the maximum benefits under the program may be increased over 
time. 
The State Tax Assessor is to report to the joint standing 
committee of the Legislature having jurisdiction over taxation 
matters by January 2, 2006. 
Part F directs the Maine State Housing Authority to create a 
tax deferral program. 
The tax relief option in this section 
would permit any Maine resident to defer property tax payments on 
a principal residence, so that no Maine resident will have to pay 
more than 
6"& of income in property taxes. 
The program must 
require 
repayment, 
with 
interest, 
of 
deferred 
property 
tax 
amounts upon transfer of the property. 
The program must provide 
for securing the property tax payments deferred, consider equity 
in the property and provJde for low transaction costs and provide 
for ease of application for program participants. 
The Maine 
State Housing Authority and Maine Revenue Services must examine 
combining administration of the tax deferral program and Maine 
Residents Property Tax Program. 
Part 
F 
eliminates 
the 
appropriation 
for 
the 
Business 
Equipment Tax Reimbursement, 
"BETR," program and in its place 
creates the Business Equipment Tax Reimbursement Reserve account, 
to which transfers are made from General Fund undedicated revenue 
within 
the 
individual 
income 
tax category in order 
to 
pay 
benefits under the BETR program. 
Part 
G provides that the 
appropriation limitations 
for 
municipalities under Part C are applicable to plantations. 
Part H establishes the goal of reducing the total state and 
local tax burden to the national average in 10 years. 
It also 
requires 
the 
Governor, 
1n 
consultation with the 
Legislative 
Council, 
to establish 
an 
independent 
commission 
to 
annually 
assess and report to the Governor and Legislature on progress 
toward the tax burden reduction goal. 
Part H supports addi tional property tax 
grants 
to 
municipalities 
and 
schools 
to 
service delivery. 
reduction through 
create 
cost-saving