An Act To Reform Maine's School Funding
Maine Legislature, Session 123, LD 1506
Committee: Education and Cultural Affairs
Sponsors: NUTIING
Amends: 20-A MRSA §15752, 20-A MRSA §15753, 5 MRSA §1534, 5 MRSA §1535, 5 MRSA §1677, 5 MRSA §1753, 5 MRSA §17154, 20-A MRSA §1, 20-A MRSA §1301, 20-A MRSA §130, 20-A MRSA §1307, 20-A MRSA §1308, 20-A MRSA §1311, 20-A MRSA §13, 20-A MRSA §1403, 20-A MRSA §1407, 20-A MRSA §1701, 20-A MRSA §1701-A, 20-A MRSA §1701-B, 20-A MRSA §1704, 20-A MRSA §3252, 20-A MRSA §3253-A, 20-A MRSA §4254, 20-A MRSA §6051, 20-A MRSA §6651, 20-A MRSA §8301-A, 20-A MRSA §8351, 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 §9703, 20-A MRSA §13506, 20-A MRSA §15901, 20-A MRSA §15904, 20-A MRSA §15905, 30-A MRSA §2181, 30-A MRSA §5703, 30-A MRSA §5721-A, 30-A MRSA §6006-F, 36 MRSA §1603, 36 MRSA §7302

Legislative Document 
No. 1506 
S.P.529 
March 19, 2007 
An Act To Reform Maine's School Funding 
Reference to the Committee on Education and Cultural Affairs suggested and ordered 
printed. 
Presented by Senator NUTIING of Androscoggin. 
JOY 1. O'BRIEN 
Secretary of the Senate 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 20-A MRSA c. 606-B, as amended, is repealed. 
Sec. A-2. 20-A MRSA c. 606-D is enacted to read: 
CHAPTER 606-D 
SCHOOL FINANCE ACT OF 2007 
§15696. Local funding effort required 
Each school administrative unit in this State shall fund its budget from local property 
tax revenue in an amount equal to .008 times the total valuation of the taxable property 
within the school administrative unit. Any school administrative unit that fails to meet 
this requirement is ineligible for any state funding under section 15697. 
§15697. State funding effort required 
The Legislature shall provide to each school administrative unit funds necessary to 
meet the school administrative unit's expenses that exceed the amount required to be 
funded from local property tax revenue under section 15696. The amount of funding 
must be based on audits conducted pursuant to section 15698. 
§15698.State audits required 
The department shall audit each school administrative unit's budget. By December 
st of each even-numbered year, the department shall present to the Legislature the 
results of its audits along with a comparison of education spending among schools of the 
same or closely similar size. The department shall identify the amount of expenses of 
each school administrative unit that exceeds the amount required to be funded from 
property tax revenues under section 15696. 
Sec. A-3. 20-A MRSA §15752, as enacted by PL 2005, c. 2, Pt. D, §63 and 
affected by §§72 and 74 and c. 12, Pt. WW, § 18, is repealed. 
Sec. A-4. 20-A MRSA §15753, as enacted by PL 2005, c. 2, Pt. D, §63 and 
affected by §§72 and 74 and c. 12, Pt. WW, §18, is repealed. 
PART B 
Sec. B-1. 5 MRSA §1534, sub-§l, as amended by PL 2005, c. 683, Pt. M, § I, is 
further amended to read: 
1. Establishment of General Fund appropriation limitation. As of December 1 st 
of each even-numbered year, there must be established a General Fund appropriation 
limitation for the ensuing biennium. The General Fund appropriation limitation applies 
Page I - 123LR0003(OI)-1 
to all General Fund appropriations, except that the additioHal cost for esseHtial programs 
and services for kindergarten to grade 12 education under Title 20 A, chapter 606 B o't'er 
the fiscal year 2004 05 appropriation for general purpose aid for local schools is e](c\uded 
from the General Fund appropriation limitatioH until the state share of that cost reaches 
55% of the total state and local cost. 
A. 
For the first fiscal year of the biennium, the General Fund approprIatIOn 
limitation is equal to the biennial base year appropriation multiplied by one plus the 
growth limitation factor in subsection 2. 
B. 
For the 2nd year of the biennium, the General Fund appropriation limitation is 
the General Fund appropriation limitation of the first year of the biennium biennial 
base year appropriation multiplied by one plus the growth limitation factor in 
subsection 2. 
Sec. B-2. 5 MRSA §1535, as amended by PL 2005, c. 621, §4, is further amended 
to read: 
§1535. General Fund transfers to stabilization fund 
Baseline General Fund revenue, as recommended by the Revenue Forecasting 
Committee and authorized in accordance with chapter 151-B, and other available 
budgeted General Fund resources that exceed the General Fund appropriation limitation 
established by section 1534 plus the additioHal cost for esseHtial programs aHd ser",ices 
for kindergarten to grade 12 education under Title 20 A, chapter 606 B o>.'er the fiscal 
year 2004 05 appropriatioH for general purpose aid for local schools uHtil the state share 
of that cost reaches 55% of the total state and local cost must be transferred to the 
stabilization fund. 
Sec. B-3. 5 MRSA §1677, as enacted by PL 2003, c. 712, §1, is repealed. 
Sec. B-4. 5 MRSA §1753, sub-§4, as amended by PL 2005, c. 683, Pt. B, §1, is 
repealed. 
Sec. B-5. 5 MRSA §17154, sub-§6, ~, as amended by PL 2005, c. 2, Pt. 0, § 1 
and affected by §§72 and 74 and c. 12, Pt. WW, § 18, 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 and 6()6-B 
606-0. 
Sec. B-6. 20-A MRSA §1, sub-§12-A is enacted to read: 
12-A. Fiscal capacity. "Fiscal capacity" means the certified state valuation for the 
year prior to the most recently certified state valuation. 
Sec. B-7. 20-A MRSA §1, sub-§17, as amended by PL 2005, c. 2, Pt. D, §2 and 
affected by §§72 and 74 and c. 12, Pt. WW, § 18, is further amended to read: 
17. 
Major capital costs. 
"Major capital costs" is defined in section 15672, 
sHBsection 18 A means costs relating to school construction projects, as defined in 
section 15901. 
Sec. B-8. 20-A MRSA §1, sub-§18, as amended by PL 2005, c. 2, Pt. D, §2 and 
affected by §§72 and 74 and c. 12, Pt. WW, § 18, is further amended to read: 
18. 
Minor capital costs. 
"Minor capital costs" is defined in section 15672, 
sHbsection 20 A 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 ofland 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. 
Sec. B-9. 20-A MRSA §1, sub-§20-A is enacted to read: 
20-A. 
Portable, temporary classroom space. 
"Portable, temporary classroom 
space" means one or more mobile or modular buildings that are at least partially 
constructed off site and that are designed to be moved to other sites with a minimum of 
disassembly and reassembly. 
Sec. B-I0. 20-A MRSA §1301, sub-§I, ~A, as amended by PL 2005, c. 2, Pt. D, 
§3 and affected by §§72 and 74 and c. 12, Pt. WW, § 18, 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 
15672, sHbsection 23 is to the district's fiscal capacity. 
Sec. B-11. 20-A MRSA §1301, sub-§I,~, as amended by PL 2005, c. 2, Pt. D, 
§4 and affected by § § 72 and 74 and c. 12, Pt. WW, § 18, 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 15672, 
sHBsection 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. B-12. 20-A MRSA §130S-A, first~, as amended by PL 2005, c. 683, Pt. A, 
§21, is further amended to read: 
Notwithstanding section 1302, 1305, 1306, or 1307 or 15693, after January 31,2001, 
the format of the annual budget of a school administrative district may be changed only in 
accordance with this section and section 1305-8. 
Sec. B-13. 20-A MRS A §130S-A, sub-§l, ~, as amended by PL 2005, c. 12, 
Pt. WW, § 1, is further amended to read: 
B. 
Revenue sources: 
(1) Total education costs appropriated pursuant to section 15690, sl:IbseetioA 1 
15696; 
(2) NOA state fOAded debt serviee eosts approved pl:lrSl:laAt to seetioA 15690, 
sl:lbseetioA 2, if aAY; aAd 
(3) 
AdditioAal loeal fOAds, if aAY, approved pl:lrSl:laAt to seetioA 15690, 
subseetioA 3, paragraph A or B; 
Sec. B-14. 20-A MRSA §130S-B, first~, as amended by PL 2005, c. 683, Pt. A, 
§22, is further amended to read: 
Notwithstanding sections 1302, 1305, 1306, and 1307 aAd 15693, after January 31, 
2001, the procedure for approval of the annual budget of a school administrative district 
provided under sections 1304 and 1305 may be changed only in accordance with this 
section and section 1305-A. The budget validation referendum process provided in this 
section may not be adopted for use in a school administrative district unless the cost 
center summary budget format provided in section 1305-A is also adopted. A school 
administrative district using the alternative voting procedures established in section 1305 
may reconsider that use only if as part of that reconsideration the voters adopt use of the 
cost center summary budget format provided in section 1305-A or the cost center 
summary budget format and the budget validation referendum process provided in this 
section. 
Sec. B-lS. 20-A MRSA §1307, sub-§3, as amended by PL 2005, c. 2, Pt. D, §5 
1 
and affected by § § 72 and 74 and c. 12, Pt. WW, § 18, is repealed. 
Sec. B-16. 20-A MRSA §1307, sub-§4, as amended by PL 2005, c. 2, Pt. D, §6 
and affected by §§72 and 74 and c. 12, Pt. WW, §18, is repealed. 
Sec. B-17. 20-A MRSA §1308, as amended by PL 2005, c. 2, Pt. D, §7 and 
affected by §§72 and 74 and c. 12, Pt. WW, § 18, is further amended to read: 
§130S. Failure to pass budget 
If a budget for the operating of the district is not approved prior to July 1 st, 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, 
';."hen the school board delays the school budget meeting in accordance 'Nith section 
15693, subsection 2, paragraph C, the operating budget must be approved within 30 days 
of the date the commissioner notifies the school board of the amount allocated to the 
school unit under section 15689 B or the latest budget submitted by the directors 
becomes the operating budget for the ne"t school year. 
Sec. B-18. 20-A MRSA §1311, sub-§l, ~C, as amended by PL 2005, c. 2, Pt. 0, 
§8 and affected by §§72 and 74 and c. 12, Pt. WW, § 18, is further amended to read: 
C. 
Minor capital costs as defined in section ~ 
1, subsection W-A 11. 
Sec. B-19. 20-A MRSA §13S1, sub-§l,~, as amended by PL 2005, c. 2, Pt. 0, 
§9 and affected by §§72 and 74 and c. 12, Pt. WW, § 18, is further amended to read: 
K. 
To borrow funds for minor capital costs as defined in section ~ 
1, 
subsection W-A 11. 
Sec. B-20. 20-A MRSA §1403, sub-§16, as amended by PL 2005, c. 683, Pt. A, 
§23, is further amended to read: 
16. General purpose aid. 
When a school administrative district dissolves, the 
general purpose aid for the individual municipalities must be computed in accordance 
with chapter 6G6-B 606-0. 
Sec. B-21. 20-A MRSA §1407, sub-§2, as amended by PL 2005, c. 2, Pt. 0, § I 0 
and affected by §§72 and 74 and c. 12, Pt. WW, § 18, is further amended to read: 
2. Expense of keeping the school open. If the voters vote to keep the school open, 
the member municipality is liable for some additional expense for actual local operating 
costs and transportation operating costs as defined in section 15672. The determination 
of costs is subject to the approval of the commissioner. The cost to be borne by the town 
voting to keep an elementary school open is the amount that would be saved if the school 
were closed. Any additional costs that must be borne by the member municipality must 
be part of the article presented to the voters at the meeting to determine whether the 
school should remain open. 
Sec. B-22. 20-A MRSA §1701, sub-§3, as amended by PL 2005, c. 2, Pt. 0, § 11 
and affected by §§72 and 74 and c. 12, Pt. WW, § 18, is further amended to read: 
3. Time and place. The district school committee shall call an annual budget 
meeting on or before June 30th at an hour and in a location within the community school 
district it designates, except that the school committee may delay the annual budget 
meeting to a date after July 1 st in accordance with section 15693, subsection 2, paragraph 
C. 
I 
Sec. B-23. 20-A MRSA §1701, sub-§9, ~A, as amended by PL 2005, c. 2, Pt. 0, 
§ 12 and affected by § § 72 and 74 and c. 12, Pt. WW, § 18, is further amended to read: 
A. 
The budget format may be determined by the voters of a community school 
district by adoption of an appropriate warrant article at a properly called election ~ 
in accordance with the procedure set forth in section 15693, subsection 6. 
Sec. B-24. 20-A MRSA §1701, sub-§12, as amended by PL 2005, c. 2, Pt. 0, 
§13 and affected by §§72 and 74 and c. 12, Pt. WW, §18, is repealed. 
Sec. B-25. 20-A MRSA §1701-A, sub-§l, ~, as amended by PL 2005, c. 12, 
Pt. WW, §2, is further amended to read: 
lOB. Revenue sources: 
II 
(I) Total education costs appropriated pursuant to section 15690, subsection 1 
15696; 
(2) Non state funded debt service costs approved pursuant to section 15690, 
subsection 2, if any; and 
(3) 
Additional local funds, if any, approved pursuant to section 15690, 
subsection 3, paragraph A or B; 
Sec. B-26. 20-A MRSA §1701-B, sub-§5, as amended by PL 2005, c. 2, Pt. 0, 
§ 14 and affected by § § 72 and 74 and c. 12, Pt. WW, § 18, is further amended to read: 
5. Failure to approve budget. If the voters do not validate the budget approved in 
the district budget meeting at the budget validation referendum vote, the district school 
committee shall hold another district budget meeting in accordance with section 1701, 
subsection 8 at least 10 days after the referendum to vote on a budget approved by the 
committee. The budget approved at the district budget meeting must be submitted to the 
voters for validation at referendum in accordance with this section. The process must be 
repeated until a budget is approved at a district budget meeting and validated at 
referendum. If a budget is not approved and validated before July 1 st 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 
'""hen the school committee delays the district budget meeting in accordance with section 
15693, subsection 2, paragraph C the operating bHdget must be approved within 30 days 
of the date the commissioner notifies the school committee of the amount allocated to the 
school Hnit Hnder section 15689 B or the latest bHdget sHbmitted by the committee 
becomes the operating budget for the next school year. 
Sec. B-27. 20-A MRSA §1704, sub-§l, ~, as amended by PL 2005, c. 2, Pt. 0, 
§ 15 and affected by §§72 and 74 and c. 12, Pt. WW, § 18, is further amended to read: 
B. 
The fiscal capacity of each member municipality as defined in section 15672, 
subsection 23; 
Sec. B-28. 20-A MRSA §3252, sub-§4-A, as amended by PL 2005, c. 635, §l, is 
further amended to read: 
4-A. Targeted funds. In addition to tuition rates calculated pursuant to chapter 219, 
targeted funds for each student in the unorganized territory must be paid to the school 
administrative unit or private school approved for tuition purposes that a student attends. 
for ptlFposes of tHis stlbsectioR, "targeted ftJRds" meaRS tHose fl:mds ideRtified uRder 
esseRtial programs aRd services for tecHRology, implemeRtatioR of a staRdards based 
s)'stem aRd kiRdergarteR to grade 2 ptlrSuaRt to sectioR 15671, subsectioR 6 aRd sectioR 
~ 
Sec. B-29. 20-A MRSA §3253-A, sub-§3-A, as amended by PL 2005, c. 635, 
§2, is further amended to read: 
3-A. Targeted funds. In addition to tuition rates calculated pursuant to chapter 219, 
targeted funds for each student in the unorganized territory must be paid to the school 
administrative unit or private school approved for tuition purposes that a student attends. 
for ptlFposes of tHis subsectioR, "targeted fUAds" meaRS tHose fURds ideRtified tlRder 
esseRtial programs aRd services for tecHRology, implemeRtatioR of a staRdards based 
system aRd kiRdergarteR to grade 2 pursuaRt to seetioR 15671, subseetioR 6 aRd seetioR 
15681. 
Sec. B-30. 20-A MRSA §4254, sub-§l, as amended by PL 2005, c. 2, Pt. D, § 17 
and affected by §§72, and74 and c. 12, Pt. WW, §18, is further amended to read: 
1. Allowable costs. Allowable costs are the cost of implementing approved plans~ 
tHese costs may be added to tHe seHooll:mit's stlbsidizable costs uRder eHapter 606 B. 
Sec. B-31. 20-A MRS A §5401, sub-§15, ~C, as amended by PL 2005, c. 2, Pt. 
D, § 18 and affected by §§72 and 74 and c. 12, Pt. WW, § 18, 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. 
BegiRning in fiscal year 2005 06, tHese expenditures must be subsidized in 
aceordaRce witH CHapter 606 B. 
Sec. B-32. 20-A MRSA §6051, sub-§l, ~, as enacted by PL 1985, c. 797, §36, 
is amended to read: 
D. 
An audit of all federal programs in accordance with applicable federal law; and 
Sec. B-33. 20-A MRSA §6051, sub-§l, ~, as amended by PL 2005, c. 683, Pt. 
A, §24, is repealed. 
Sec. B-34. 20-A MRSA §6051, sub-§4, as amended by PL 2005, c. 683, Pt. A, 
§25, is further amended to read: 
4. Initial report to commissioner. On or before December 1st, the school board 
shall provide the commissioner with: 
C. 
Written determination of whether or not proper budgetary controls are in place; 
and 
II 
D. 
A written determination of whether or not the annual financial report submitted 
to the department is correct, including submission of an audited recondliation of the 
;~ 
annual financial report prepared and certified by the auditor;--aOO~ 
Eo 
A written determination as to whether the school administrati .. 'e unit has 
complied with applicable provisions of the EsseRtial Programs aRd Services Funding 
Aet 
Sec. 8-35. 20-A MRSA §6651, sub-§6, as amended by PL 2005, c. 683, Pt. A, 
§26, is further amended to read: 
6. Subsidizable cost of operating programs in private secondary schools. The 
cost of salaries and educational materials attributable to the child care services must be 
calculated on a per-child basis. One hundred percent of the cost per child times the 
number of children 'Nhose parents attend school in the private school must be 
subsidiz:able as program costs under the Essential Programs and Services Funding Act if 
these costs are paid for by the school administrative unit responsible for educating the 
student parents. 
Sec. 8-36. 20-A MRSA §8301-A, sub-§4, as amended by PL 2005, c. 2, Pt. 0, 
§23 and affected by §§72 and 74 and c. 12, Pt. WW, § 18, is further amended to read: 
4. 
Municipality. 
"Municipality" has the same meaning as in section 15672, 
subsection 21 means a city, town or organized plantation. 
Sec. 8-37. 20-A MRSA §8301-A, sub-§9, as amended by PL 2005, c. 2, Pt. 0, 
§23 and affected by §§72 and 74 and c. 12, Pt. WW, § 18, is further amended to read: 
9. 
State subsidy. 
"State subsidy" has the same meaning as in section 15672, 
subsection 31 A means the amount of funds provided to a school administrative unit 
under chapter 606-0. 
Sec. 8-38. 20-A MRSA §8351, as amended by PL 2005, c. 2, Pt. 0, §24 and 
affected by §§72 and 74 and c. 12, Pt. WW, § 18, is further amended to read: 
§8351. State aid for career and technical education centers and career and technical 
education regions 
State aid for centers and regions must be administered in accordance with chapters 
B and chapter 609 and Title 20, section 3457. 
Sec. 8-39. 20-A MRS A §8402, as amended by PL 2005, c. 2, Pt. 0, §25 and 
§§72 and 74 and c. 12, Pt. WW, § 18, is further amended to read: 
§8402. Programs 
A center shall provide programs of career and technical education. Programs of 
career and technical education are eligible to receive state subsidy pursuant to chapters 
I 
B and chapter 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. 
II 
Sec. B-40. 20-A MRSA §8404, sub-§3, ~C, as amended by PL 2005, c. 2, Pt. D, 
§26 and affected by §§72 and 74 and c. 12, Pt. WW, § 18, is further 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 techn ical 
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 caFeer and technical edHcation programs that exceed 
expenditHFes made for those programs in the base year as adjHsted pHrsHant to section 
15681 A, sHbsection 4 and to the local share of debt service costs attribHtable to 
constFHction ofthe center in School Administrative District l'Jo. 33; 
Sec. B-41. 20-A MRSA §8451-A, as amended by PL 2005, c. 2, Pt. D, §27 and 
affected by §§72 and 74 and c. 12, Pt. WW, § 18, is further amended to read: 
§8451-A. Programs 
A region shall provide programs of career and technical education. Programs of 
career and technical education are eligible to receive state subsidy pursuant to chapters 
B and chapter 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 
I 
education in academic and business skills preparing students to further their education at 
the community college or college level or allowing students to use trade and occupational 
skills on other than an employee basis. Programs of career and technical education may 
also include alternative educational programs and training and education in music, 
athletics, art and other activities approved by the commissioner pursuant to section 8306-
A. 
Sec. B-42. 20-A MRSA §8601-A, sub-§6, as amended by PL 2005, c. 2, Pt. D, 
§28 and affected by §§72 and 74 and c. 12, Pt. WW, §18, is further amended to read: 
6. Municipality. "Municipality" has the same meaning as in section ~ 
8301-A, 
subsection U 1. 
Sec. B-43. 20-A MRSA §8605, sub-§2, ,n, as amended by PL 2005, c. 2, Pt. 0, 
§29 and affected by §§72 and 74 and c. 12, Pt. WW, §18, is repealed. 
Sec. B-44. 20-A MRSA §8606-A, sub-§2, ~C, as amended by PL 2005, c. 12, 
Pt. D, § 1 and affected by Pt. WW, § 12, is further amended to read: 
C. 
The recommendation in the commissioner's funding level certification must 
include local adult education 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 606 B, by section 15689 C, subsection 
~ 
Sec. B-45. 20-A MRSA §9703, sub-§5, as amended by PL 2005, c. 683, Pt. A, 
§27, is further amended to read: 
5. Line-item budget. A line-item budget submitted no later than 90 days prior to the 
fiscal year in which the program will operate. The proposed budget request may not 
exceed, on a per student basis, the state average tuition rate for a total of 12 students as 
provided in sections 5804, and 5805 and 15689. 
Sec. B-46. 20-A MRS A §9706, as amended by PL 2005, c. 683, Pt. A, §28, is 
further amended to read: 
§9706. Rule-making authority 
The commissioner shall adopt rules to implement this chapter and the funding 
scheme under the Bssential Programs and Services Funding }\ct. 
Sec. B-47. 20-A MRSA §13506, sub-§3-A, ,n, as amended by PL 2005, c. 683, 
Pt. A, §30, is further amended to read: 
B. 
The impact on local communities of the Bssential Programs and Services 
Funding Act and of implementing increased curriculum and graduation requirements, 
including recommended ways to meet increased local needs. The commissioner shall 
estimate projected local costs, including catastrophic costs, and propose alternative 
methods for meeting those costs, including recommendations for additional state 
funding of education costs; and 
Sec. B-48. 20-A MRSA §15753, as enacted by PL 2005, c. 2, Pt. D, §63 and 
affected by §§72 and 74 and c. 12, Pt. WW, §18, is repealed. 
Sec. B-49. 20-A MRSA §15901, sub-§4, as amended by PL 2005, c. 683, Pt. B, 
§ 12, is further amended to read: 
4. School construction project. "School construction project" means: 
A. 
On-site additions to existing schools; 
B. 
New schools; 
I 
C. 
The cost of land acquired in conjunction with projects otherwise defined by this 
subsection; 
D. 
The building of or acquisition of other facilities related to the operation of 
school administrative units; 
E. 
The complete restoration of existing school buildings in lieu of replacement 
when in the judgment of the commissioner the action is in the best interest of the 
State and local unit; and 
F. 
Off-site construction only if, in the judgment of the commissioner, it is 
economically in the best interests of the State or there is no other practical way to 
complete a project. 
II 
"School construction project" does not mean the purchase, lease-purchase or construction 
of portable temporary classroom space, as defined in section 15672, subsection 21 B, the 
lease-purchase of bus garage and maintenance facilities or a permanent space lease-
purchase project as defined in section 15901, subsection 4-B. 
Sec. B-50. 20-A MRSA §15901, sub-§4-A, as amended by PL 2005, c. 683, Pt. 
B, § 13, is further amended to read: 
4-A. Small scale school construction project. "Small scale school construction 
project" means a project that will not be eligible for state subsidy and is limited to: 
A. 
New buildings not exceeding 600 square feet in gross area to be utilized solely 
for storage or custodial work, or both; or 
B. 
On-site additions to existing school buildings not exceeding 600 square feet in 
gross area. 
"Small scale school construction project" does not mean the purchase, lease-purchase or 
construction of portable temporary classroom space, as defined in section 15672, 
subsection 21 B, or the lease-purchase of bus garage and maintenance facilities. 
Sec. B-51. 20-A MRSA §15901, sub-§4-B, as amended by PL 2005, c. 683, Pt. 
B, § 14, is further amended to read: 
4-B. Permanent space lease-purchase project. "Permanent space lease-purchase 
project" means the lease-purchase of permanent administrative space or permanent small 
nonadministrative or instructional space '",hose costs are ·,..,holly or partially eligible as 
debt service costs for subsidy purposes under section 15672, subsection 2 A, paragraph 
B, subparagraph (1) or subparagraph (3). "Permanent space lease-purchase project" does 
not mean the purchase, lease-purchase or construction of portable temporary classroom 
space, as defined in section 15672, subsection 21 B, or the lease-purchase of bus garage 
and maintenance facilities. 
Sec. B-52. 20-A MRSA §15904, sub-§4,~, as amended by PL 2005, c. 12, Pt. 
WW, §9, is further amended to read: 
E. 
The school administrative unit is responsible for the local share of annual 
principal and interest payments for this school construction project included in the 
total cost of education appropriated pursuant to section 15690, subsection 1 15696, if 
Page II - 123LR0003(OI)-1 
t 
.. 
( 
.. 
any, and for the annual principal and interest payments for the non-state-funded 
portion of this school construction project. 
Sec. 8-53. 20-A MRSA §15904, sub-§6, as amended by PL 2005, c. 683, Pt. B, 
§ 15, is further amended to read: 
6. Permanent space lease-purchase projects. A permanent space lease-purchase 
project, as defined in section 15901, subsection 4-B, whose costs are wholly eligible as 
debt service costs for sl:lbsid)' pl:lrposes I:IRder sectioR 15672, sl:lbsectioR 2 A, paragraph B 
must receive a favorable vote of the legislative body of the school administrative unit. A 
permaReRt space lease pl:lrchase project '",hose lease pl:lrchase costs are Rot eligible as 
debt service costs for sl:lbsid)' pl:lrposes I:IRder sectioR 15672, sl:lbsectioR 2 A, paragraph B 
1 
ml:lst receive a fayorable vote of the legislatiye body cORdl:lcted iR accordaRce '",ith this 
sectioR, except that sl:lbsectioR 4 does Rot apply. The vote may authorize the school 
board or school committee to enter into a mortgage, security interest or other 
encumbrance on the permanent space lease-purchase project determined to be necessary 
for the permanent space lease-purchase project. 
Sec. 8-54. 20-A MRSA §15905, sub-§l, ~A, as amended by PL 2005, c. 519, 
Pt. J, §3, is further amended to read: 
A. 
The state board may approve projects as long as no project approval will cause 
debt service costs, as defiRed iR sectioR 15672, sl:lbsectioR 2 A, paragraph A 
determined by the state board, to exceed the maximum limits specified in Table 1 in 
subsequent fiscal years. 
Fiscal year 
1990 
1991 
1992 
1993 
1994 
1995 
1996 
1997 
1998 
1999 
2000 
2001 
2002 
2003 
2004 
2005 
2006 
2007 
Table 1 
Maximum Debt Service Limit 
$ 48,000,000 
$ 57,000,000 
$ 65,000,000 
$ 67,000,000 
$ 67,000,000 
$ 67,000,000 
$ 67,000,000 
$ 67,000,000 
$ 67,000,000 
$ 69,000,000 
$ 72,000,000 
$ 74,000,000 
$ 74,000,000 
$ 80,000,000 
$ 80,000,000 
$ 84,000,000 
$ 90,000,000 
$ 96,000,000 
2008 
2009 
2010 
2011 
$100,000,000 
$104,000,000 
$108,000,000 
$126,000,000 
Sec. B-55. 20-A MRSA §15905, sub-§7, as amended by PL 2005, c. 683, Pt. B, 
§ 16, is further amended to read: 
7. Interest-only interim local financing. Notwithstanding any provision of law or 
rule to the contrary, the state board may accelerate the dates on which it grants concept 
approval and funding approval for a school construction project that has been placed on 
the special priority list of the state board on the condition that the school administrative 
II 
unit provide interest-only interim local financing for the project in accordance with this 
subsection. The period of interest-only interim local financing must be determined by the 
state board at the time concept approval is granted for a project and must be based on the 
time difference between the date that final funding approval is expected to be granted on 
an accelerated basis and the date that final funding approval would have been expected to 
be granted in the normal course. The period of interim local financing for a project may 
7 
not exceed 5 years. 
Notwithstanding any provision of law or rule to the contrary, a school administrative unit, 
including a school administrative unit established by private and special law, authorized 
to issue securities for school construction purposes may issue its securities for school 
construction purposes on an interest-only basis during a period of interest-only interim 
local financing approved by the state board in accordance with this subsection. 
The 
period of interest-only interim local financing must precede, and be in addition to, the 
periods for interest payments and principal payments otherwise established pursuant to 
the school construction rules of the state board. The length of the period of interest-only 
interim local financing and the length of the debt service schedule otherwise established 
must be clearly stated on the face of the securities. 
The iAterest oAly pa)'meAts made by a school admiAistrative uAit duriAg the period of 
iAterim fiAaAciAg must be paid from local fUAds without state participatioA aAd may AOt 
be iAcluded iA the uAit's debt seryiee costs for state subsidy purposes uAder section 15672, 
subsectioA 2 A. Such iAterest oAly paymeAts duriAg the period of iAterim local fiAaAciAg 
rna)' AOt be cOAsidered debt seryiee costs as defiAed iA seetioA 15672, subsectioA 2 A for 
purposes of calculatiAg amouAts subject to the debt service limit established by this 
sectioA. 
The referendum question that is submitted to the voters for a project subject to interest-
only interim local financing under this subsection must include, in addition to the 
information required by section 15904, an informational statement that sets forth the 
length of the period of interest-only interim financing established by the state board, an 
estimate of the annual interest cost during the period of interest-only interim local 
financing and a statement that the interest-only payments during the period of interim 
local financing is not eligible for inclusion in the debt service allocation of the school 
administrative unit for purposes of calculating state school construction subsidy to the 
unit. 
I 
The maximum period that securities for a school construction project may be outstanding 
under any applicable statute or rule must be extended by the length of the period of 
interest-only interim local financing approved by the state board under this subsection. 
If the voters of a school administrative unit do not vote to approve a school construction 
project subject to interest-only interim local financing under this subsection, the unit's 
school construction project remains eligible for concept and funding approval from the 
state board at the time that the project would be eligible for such approval without 
interest-only interim location funding. 
Sec. 8-56. 30-A MRSA §2181, sub-§4, ~, as amended by PL 2005, c. 2, Pt. 0, 
§64 and affected by §§72 and 74 and c. 12, Pt. WW, § 18, is further amended to read: 
I I 
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; 
IS 
Sec. 8-57. 30-A MRSA §5703, sub-§2, ~, as amended by PL 2005, c. 683, Pt. 
B, §24, is further amended to read: 
B. 
For school construction projects approved by the State Board of Education after 
July 1, 1985, by multiplying the outstanding amount of each issue of debt incurred 
for school purposes by the municipality in connection with a project that qualifies for 
state school construction subsidy under Title 20-A and the state share percentage 
subsidy of operating costs for that municipality as defined in under Title 20-A, 
section 15672, subsection 31, for the year in which the project received concept 
approval from the State Board of Education. 
(I) The certificate of the Commissioner of Education that a project qualifies for 
state school construction aid and as to the state share percentage subsidy of 
operating costs for that municipality as defined in under Title 20-A, section 
15672, subsection 31, for the year in which the project received concept approval 
is conclusive evidence of the facts stated therein. 
Sec. 8-58. 30-A MRSA §5721-A, sub-§l, ~, as affected by PL 2005, c. 2, Pt. 
C, §5 and amended by c. 12, Pt. WW, § II and affected by §§ IS and 16, is further 
I 
amended to read: 
0. 
"Property tax levy" means the total annual municipal appropriations, excluding 
assessments properly issued by a county of which the municipality is a member and 
amounts governed by and appropriated in accordance with Title 20-A, chapter 6{)6-B 
606-0, and amounts appropriated to pay assessments properly issued by a school 
administrative unit or tuition for students or amounts attributable to a tax increment 
financing district agreement or similar special tax district, reduced by all resources 
available to fund those appropriations other than the property tax. 
Sec. 8-59. 30-A MRSA §6006-F, sub-§6, as amended by PL 2005, c. 2, Pt. 0, 
§65 and affected by §§72 and 74 and c. 12, Pt. WW, § 18, is further 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 subsidy as determined tn under Title 20-A, 
section 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. 
Seventy percent and no less than 30% for learning space upgrades. 
Sec. B-60. 36 MRSA §1603, sub-§l, ~A, as amended by PL 2005, c. 686, Pt. A, 
§65, is further amended to read: 
II 
A. 
The cost of education, as would be determined by the Essential Programs and 
Services funding Act if the unorganized territory were a municipality; 
Sec. B-61. 36 MRSA §7302, suh-§2, as enacted by PL 2005, c. 2, Pt. H, §2, is 
amended to read: 
2. Indicators; annual report. With reference to Title 5, chapter 142; Title 20-A, 
section 15671, sl:lbsection 1; and Title 30-A, sections 706-A and 572I-A, the State 
Planning Office shall develop and apply specific, quantifiable performance indicators 
against which the progress in achieving the tax burden reduction goals established in 
section 7301 can be measured. On January 15, 2006 and annually thereafter, the State 
Planning Office shall report to the Governor 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 goals. The report required 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 State Planning Office may also include in 
its report recommendations on alternative strategies to achieve the tax burden reduction 
goals established in section 7301 that reflect the best practices in this State, other states 
and other countries. 
SUMMARY 
This bill repeals the Essential Programs and Services Funding Act and related 
prOVISIOns. 
It establishes a new school funding formula that requires school 
administrative units to make a local education funding effort equal to .008 times the total 
valuation of taxable property within the unit. The State is required to fund education 
expenses that exceed this baseline. A local unit that does not meet this baseline funding 
requirement is not eligible for any state subsidy. The bill requires the Department of 
Education to audit school administrative units' budgets and to compare the expenses of 
schools of closely similar size.