Sec A-1. 20-A MRSA, Part 2, Chapter 103-A is enacted to read:

CHAPTER 103-A

Reorganization of Maine’s School Administrative Units

§1451.  Organization of regional school units

	This chapter governs the reorganization of the state’s school administrative units.  It is declared the policy of the State to provide sufficient resources to support the reorganization of school administrative units into school systems of the size and structure identified in this chapter in order to provide:

	1.  Opportunity.  Equitable educational opportunity for all students to demonstrate achievement of the content standards of the State’s system of learning results established in section 6209;

	2.  Programs.  Rigorous academic programs that meet the requirements of the system of learning results established in section 6209 and that prepare Maine students for college, careers and citizenship;

	3.  Delivery.  The delivery of the academic programs that meet the requirements of the system of learning results established in section 6209;

	4.  Tax rates.  A general uniformity of school tax rates; 

	5.  Sustainability.  The efficient use of limited resources in order to achieve long-term sustainability and predictability in the support of public schools;

	6.  Public funds.  A more effective use of the public funds expended for the support of public schools by means of the creation of more cost efficient organizational structures; and

	7.  School choice.  The preservation of existing opportunities for choice of schools.

§1452.  State and local cost reduction goals.  

A.  By February 1, 2008 each school administrative unit including those school administrative units and school unions with more than 2,500 students in York and Cumberland counties, and more than 1,200 students in other counties, shall develop a plan to reduce costs by reorganizing administrative and non-instructional functions through collaboration, shared service arrangements, administrative reorganizations and other cost containment measures in order to achieve the legislative goal of reducing projected State and local expenditures in fiscal year 2008-09 for transportation, facilities and maintenance and other non-instructional functions by 5% from projected expenditures for those purposes in fiscal year 2007-08 as adjusted for inflation.

B.  The commissioner shall adjust the total cost of the components of Essential Programs and Services for transportation, facilities and maintenance, and other non-instructional functions in fiscal year 2008-09 to achieve a 5% reduction from the Essential Programs and Services allocations for those purposes in fiscal year 2007-08 as adjusted for inflation.  

C.  The commissioner shall adjust the cost components of Essential Programs and Services for system administration for fiscal year 2008-09 to the legislatively approved Essential Programs and Services system administration rate established for fiscal year 2008-09.

§1453.  Reorganization of school administrative units

Beginning July 1, 2009, school administrative units shall be reorganized to create regional state-approved units of school administration that in York and Cumberland counties serve no fewer than 2,500 resident students and in all other counties serve no fewer than 1,200 students, with approved exceptions.

The school administrative units of the state shall develop and implement policies that address efficiencies in administration, educational programming and the sharing of community resources for the continuous improvement of student achievement and the preparation of students for college, careers and citizenship.

§1454.  Reorganization Planning Committees

1.	To accomplish the purposes of this chapter, the Commissioner of Education shall assist in the establishment of Reorganization Planning Committees comprising all of the school administrative units in the State.

2.	The boundaries of the Reorganization Planning Committees shall be established as follows:

a.	Provisional Boundaries.  On the effective date of this chapter the provisional boundaries of the Reorganization Planning Committees shall be established on the basis of the boundaries of the state’s career and technical education regions and centers.

b.	By  August 15, 2007, any existing educational service or joint planning collaborative or similar group of school administrative units may apply to the commissioner for designation as a Reorganization Planning Committee.  The commissioner shall approve such applications upon a finding that the composition of the Reorganization Planning Committee will be consistent with the goals and purposes of this Act and that the school administrative units seeking such designation have a history of working together on a cooperative basis toward achievement of educational goals, providing educational services, or seeking greater efficiencies in the delivery of educational services.

c.	If approval of an application for designation as a Reorganization Planning Committee under paragraph b reduces the geographic area and the number of school administrative units within a Reorganization Planning Committee’s jurisdiction as provisionally established so that the commissioner finds that it is no longer consistent with the goals and purposes of this chapter, the commissioner, in consultation with affected school boards and superintendents, may reassign affected school administrative units to other Reorganization Planning Committees.

d.	No later than September 15, 2007, any existing school administrative unit or school union may apply to the commissioner for reassignment from the Reorganization Planning Committee to which it is provisionally assigned to another Reorganization Planning Committee.  After consulting with affected school boards and superintendents, the commissioner shall approve such application upon a finding that the reassignment will be consistent with the purposes of this chapter.  If the commissioner finds that the reassignment will not be consistent with the goals and purposes of this chapter, the commissioner, in consultation with affected school boards and superintendents, may either reassign the remaining school administrative units and school unions to another Reorganization Planning Committee or deny the application.

e.	No later than September 30, 2007, the commissioner shall determine the final boundaries of the Reorganization Planning Committees.

f.	In carrying out the duties required by this chapter, Reorganization Planning Committees and their participating school administrative units and school unions shall engage in joint planning to develop school reorganization plans.  At any time during the planning process, a school administrative unit or school union which proposes to participate in a school reorganization plan with one or more school units or school unions in another Reorganization Planning Committee, may petition the commissioner for permission to transfer from its designated Reorganization Planning Committee to another Reorganization Planning Committee.  The commissioner may approve such a transfer after consulting with affected Reorganization Planning Committees upon a finding that the proposed transfer will further the purposes and goals of this chapter.  If such approval is granted, the education, municipal and public representatives of the school units or school unions petitioning for the transfer shall become members of the Reorganization Planning Committee to which the school units or school unions have been transferred.

3.	Each Reorganization Planning Committee shall be comprised of the following members:

a.	There shall be one education representative from each school union and each school administrative unit that is not a member of a school union in the Reorganization Planning Committee.  Each education representative shall be selected by their respective school board or school union board.

b.	There shall be one municipal representative from the municipalities within each school union and one municipal representative from each school administrative unit that is not a member of a school union in the Reorganization Planning Committee.  Each municipal representative shall be selected by a caucus of the municipal officers of the municipalities within each respective school administrative unit or school union.

c.	For each Reorganization Planning Committee, 6 members of the general public shall be appointed by a vote of the municipal and school officials serving as members of the Regional Planning Committee, except that the number of public members shall not exceed the number of school or municipal members.

d.	The composition of the governing body of an existing educational planning group approved as a Reorganization Planning Committee by the commissioner under subsection 2 shall remain unchanged.

e.	The appointing authority under this sub-section shall fill any vacancy that occurs.

4.	Upon the determination of the members of a Reorganization Planning Committee, the commissioner shall call the initial meeting of the Reorganization Planning Committee representatives by notifying each representative of the date, time and place of that meeting.  

5.	At the initial meeting of the Reorganization Planning Committee representatives, one-half of the eligible representatives shall constitute a quorum.  If a quorum is not present, the eligible representatives present shall continue the meeting to a later date.  Once a quorum is present the representatives may adopt rules of procedure, elect officers and conduct other lawful business as they deem appropriate.

§1455.  Initial school reorganization plans.  Plans for reorganization of school administrative units shall be developed by the Reorganization Planning Committees according to the standards established by this section. .  

	1.  Parameters of reorganization plans.  In developing a reorganization plan for school administrative units in existence during the 2007-08 school year, the Reorganization Planning Committees shall work within the following parameters:

A.	Each reorganized school administrative unit or school union located in York or Cumberland counties must serve no fewer than 2,500 students, with approved exceptions. 

B.	Each reorganized school administrative unit or school union in all counties of the state except York and Cumberland counties must serve no fewer than 1,200 students, with approved exceptions.

C.	Exceptions shall be provided for geographically isolated school administrative units, including coastal islands not connected by road or bridge to the mainland, and geographic regions of the state where the population density is less than 30 inhabitants per square mile according to U.S. Census. 

D.	The plan may not displace teachers or students or close any schools existing and operating during the 2008-2009 school year except as school closings are permitted under section 4102.

§1456.  Department of Education responsibilities.  The department shall have the following responsibilities in the implementation of this chapter:

A.	Preparing at the request of any Reorganization Planning Committee one or more models for the reorganization of school administrative units consistent with the provisions of section 1455.

B.	Assisting all of the Reorganization Planning Committees in the collection and presentation of data pertinent to the charge established by this chapter;

C.	Assisting in the organization of the meetings and caucuses required by this chapter to establish Reorganization Planning Committees and to prepare reorganization plans as provided in section 1457.

D.	Providing or contracting for facilitation services to be provided to the Reorganization Planning Committees to ensure their ability to fulfill the charges by required by this chapter.

E.	Adjusting, with legislative approval, the essential programs and services rates for transportation, facilities and maintenance, other non-instructional services, and system administration to reflect the cost reduction requirements of § 1455, subsection 2;

F.	Facilitating meetings among existing bargaining units to assist in the merging of bargaining units into new bargaining units, as applicable, and

G.	Submitting reports to the Legislature no later than January 1, 2008 and January 1, 2009 that describe the progress of the Reorganization Planning Committees and participating school administrative units with the requirements of this chapter.

§1457.  Reorganization Planning Committee responsibilities.

	The Reorganization Planning Committees are responsible for developing plans for the reorganization of Maine school administrative units and school unions in accordance with this chapter.

1.	Initial Plans for Consolidation.
 
A.	Plan Submission. On or before March 1, 2008, each Reorganization Planning Committee shall submit to the commissioner a reorganization plan that meets the parameters for reorganization of Section 1455, subsection 1.  The plan shall serve as an initial notification of intention to reorganize those affected school administrative units and school unions. 

B.	Department review and approval.  The preliminary plans for school reorganization shall be reviewed by the commissioner and approved by March 30, 2008 upon a finding that the plan is consistent with the purposes and goals of this chapter.  Alternatively, if the commissioner determines that the preliminary plan is not consistent with the goals and purposes of this chapter, the commissioner shall return the preliminary plan to the Reorganization Planning Committee with specific suggestions for modification.  In that event, the Reorganization Planning Committee shall revise the preliminary plan to address the commissioner’s concerns and shall submit a revised plan to the commissioner no later than May 1, 2008.  The commissioner shall approve or disapprove the revised plan by May 30, 2008. 

2.	Plans for School Unit and School Union Reorganization.  On or before June 30, 2008, each Reorganization Planning Committee shall submit to the commissioner a final plan for the reorganization of school administrative units and school unions within the region with a goal of ensuring that each school union and each school administrative unit not a member of a school union serves at least 2,500 resident pupils if located within York or Cumberland counties and at least 1,200 students if located within any other county in the state.  Exceptions shall be provided for geographically isolated school administrative units, including coastal islands not connected by road or bridge to the mainland and geographic regions of the state where the population density is less than  30 inhabitants per square mile according to U.S. Census. The plans for reorganization shall address at a minimum the following matters consistent with the requirements established in §1455.

A.	The school administrative units to be included in the proposed reorganized school administrative unit or school union; 

B.	The size, composition and apportionment of the governing body; 

C.	The method of voting of the governing body;

D.	The inclusion of at least one publicly supported secondary school; 

E.	The disposition of real and personal school property in accordance with section 1460; 

F.	The disposition of existing school indebtedness and lease purchase obligations in accordance with section 1461;

G.	The assignment of school personnel contracts, school collective bargaining agreements, and other school contractual obligations in accordance with section 1462;

H.	The disposition of existing school funds, including undesignated fund balances, trust funds, reserve funds, and other funds appropriated for school purposes;

I.	A plan that ensures the timely development of a budget for the 2009-2010 school year and interim personnel policies; and

J.	Such other matters as the governing bodies of the existing school administrative units and school unions may determine to be necessary.

Elements of the plans for multi-municipal school administrative units related to the size, composition, apportionment and method of voting of the governing body shall conform to the requirements of chapter 103, subchapter 3, and chapter 105, subchapter 2, as applicable.  

§1458.  Action on school reorganization plans.

1.  Review and Approval of Reorganization Plans by Commissioner.  Proposed reorganization plans shall be reviewed by the commissioner and approved or disapproved by July 15, 2008.  A reorganization plan shall be approved upon finding that the plan is consistent with the goals and purposes of this chapter and that the plan has adequately addressed the matters described in section 1457, subsection 2.  If the commissioner determines that a plan for reorganization is not consistent with the purposes and goals of this chapter, or that it has not adequately addressed the matters set forth in section 1457, the commissioner shall return the plan to the Reorganization Planning Committee with specific suggestions for modification of the plan.  In that event, the Reorganization Planning Committee shall revise the proposed reorganization plan to address the commissioner’s concerns and submit a revised reorganization plan not later than August 15, 2008.  The commissioner shall approve or disapprove the revised reorganization plan by August 31, 2008.

2.  Approval of Reorganization Plan by the Voters.  If a plan or revised reorganization plan has been approved by the commissioner by August 31, 2008, the municipal officers of each municipality in a proposed reorganized school administrative unit or school union shall place a warrant article substantially as follows on the ballot of a municipal referendum conducted in conjunction with the general election in November 2008. 

Article __:    Shall the school reorganization plan prepared by the (insert name) Reorganization Planning Committee and approved by the Commissioner of Education to reorganize (insert names of affected school administrative units and school unions) with an effective date of July 1, 2009 be approved?

	If a reorganization plan is approved by all of the affected municipalities, the commissioner shall issue a certificate of organization to the reorganized school administrative unit or school union.  If the reorganization plan is approved by less than all of the affected municipalities, the commissioner may issue a certificate of organization for a reorganized school administrative unit or school union comprised of those municipalities which voted in favor of the plan, upon a finding by the commissioner that the approval of that smaller reorganized school administrative unit or school union is consistent with the purposes and goals of this chapter. 

3.  Consequences of failure to submit or gain approval of reorganization plans. The legislatively approved Essential Programs and Services rate for system administration shall be reduced by 50% for any school administrative unit with a system administration that serves less than the minimum number of students established by this chapter as of July 1, 2009 until such a time as the school administrative unit is compliant with that standard, provided that this penalty shall not apply to any school administrative unit or school union that has been designated as an approved exception to the minimum resident pupil requirement under Section 1456, subsection 1 nor to a school administrative unit or school union that has been issued a certificate of organization by the commissioner pursuant to subsection 2, nor to any municipal school administrative unit whose voters have approved a reorganization plan under subsection 2 but which has not been issued a certificate of organization because one or more other municipalities have failed to approve the reorganization plan.   If a Reorganization Planning Committee fails to submit proposed reorganization plans as required by this section, or if reorganization plans are disapproved by the commissioner, or if one or more of the municipalities fail to approve a reorganization plan approved by the commissioner, the commissioner shall submit a report to the committee of the Legislature having jurisdiction over education matters that the Reorganization Planning Committee or the non-approving municipalities have not met the school reorganization goals of this chapter. 

4.  Additional planning authority. The Reorganization Planning Committees are authorized and encouraged to engage in additional planning activities to redesign the provision of educational administrative and non-instructional services within the Reorganization Planning Committee region in a manner appropriate to the needs of the region and designed to help meet the expenditure reduction and containment requirements of section 1455, subsection 2. The plan should:

i.	Recommend the number of educational administrative and non-instructional full-time equivalent positions required within the Reorganization Planning Committee’s region for the following positions:  principal, special education director, transportation director, technology officer, business agent or financial officer, human resources director and all reasonably equivalent positions;

ii.	Recommend adjustments to the region’s current profile of administrative and non-instructional personnel; 

iii.	Recommend the organization or reorganization of any joint purchasing arrangements between and among school administrative units within the reorganization planning committee area and between and among school administrative units and municipalities within the reorganization planning committee area;

iv.	Recommend the coordination of schedules, including without limitation, school calendars, school board meetings, and school budget development and budget adoption meetings; 

v.	Recommend the development of coordinated school transportation systems; and

vi.	Recommend the administrative and non-instructional services that should be made available through an educational services collaborative for the benefit of school administrative units and municipal units of government in the region.

§1459.  Contracts for secondary school programs.  A reorganized school unit may contract with a nearby school administrative unit or with a private school approved for tuition purposes for all or part of its secondary school pupils.  The contract may run from a period of 2 to 10 years.  The contract must also comply with section 2703 and may provide for the formation of a joint committee in accordance with section 2704.  A school administrative unit or school union created pursuant to this chapter that includes within it a school administrative unit in existence prior to June 30, 2008 which has contracted for secondary school programs is bound by the terms of that contract, unless otherwise negotiated by the parties.

§1460:  Transfer of property and assets.

1.	School property.  The governing body of each reorganized school administrative unit and school union established pursuant to this chapter shall determine what school property of the municipalities and of the school administrative units in existence prior to July 1, 2008 within their jurisdiction is necessary to carry out the functions of the new school administrative unit or school union and shall request in writing that the governing body of each pre-existing school administrative unit or the municipal officers transfer title of their school property and buildings to the new school administrative unit or school union.

2.	Transfer.  The municipal officers and boards contacted pursuant to subsection 1 shall make the transfer of property and assets notwithstanding any other provision in the charter of the school administrative unit or municipality.

§1461.  Debt liability.  This section governs the debt obligations existing at the time of reorganization accomplished pursuant to this chapter unless a different arrangement is made pursuant to a plan approved by the commissioner under this chapter.  Any such plan shall be consistent with subsection 2.

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

A.	“Existing debt” means any bond, note, loan arrangement, lease purchase agreement or other debt instrument issued prior to July 1, 2009 for the purposes of funding public schools, or for refinancing such debt, that remains outstanding at the time of a reorganization pursuant to this chapter.  “Existing debt: does not include routine payables or commercial contract obligations;

B.	“Original education unit” means:

i.	A school administrative unit or school union that has existing debt; or

ii.	A municipality that has existing debt incurred on behalf of a school administrative unit or school union; and

C.	“New unit” means a school administrative unit or school union created or established pursuant to this chapter.

2.	Liability remains with original unit.  Existing debt held by an original education unit remains the obligation of that original education unit after reorganization pursuant to this chapter.  No original education unit may be finally dissolved while any existing debt held by the original education unit remains outstanding.  All aspects of an original education unit’s administrative or political organization may be merged into a new unit or otherwise modified to accomplish the purposes of this chapter but its existing debt and its right to secure payment of such debt from income streams that existed at the time of the issuance of such debt may not be affected or altered except as authorized by this section.

A.	A new unit must agree to pay the existing debt of an original education unit that is included within the new unit with respect to any real and personal property transferred to the new unit pursuant to section 1459.   In the event that the new unit fails to pay any amount of the existing debt, the original education unit remains responsible for the deficiency.  An original education unit may contract with a new unit for the administration of the payment of existing debt of the original education unit. An original education unit may transfer or delegate to a new unit all those powers and duties reasonable and necessary for the payment of existing debt of the original education unit. A new unit may accept and exercise on behalf of the original education unit for the remaining term of any existing debt all those powers and duties reasonable and necessary for the payment of existing debt of the original education unit.

B.	Notwithstanding any other provision of law or any provision of any trust agreement, a new unit may use any sinking fund or other money set aside by the original education unit to pay an existing debt to pay that debt.

C.	A new unit may issue bonds or other debt instruments for the purpose of refinancing or retiring the existing debt of an original education unit.  The issuance of such bonds or other debt must be in accordance with applicable procedural requirements.

3.	No impact on state debt subsidies.  No change in any administrative or political organization resulting from the creation of a new unit may affect any state subsidy with respect to existing debt or the relative portion of any such debt paid or reimbursed by the state except as provided in this subsection.

A.	The original education unit may continue to pay its existing debt obligations in due course as though no new unit had been created and its choice to do so may not reduce or otherwise affect the level of state assistance or subsidy with respect to that existing debt.

B.	If the original education unit and the new unit choose to refinance the existing debt, the state subsidy or assistance with respect to the debt must be determined as of the date of the new issuance and must be based on that refinancing and not on any previous subsidy or assistance calculation related to the existing debt.

4. Debt of Existing School Units. After June 30, 2009, for each original education unit with existing debt that has reorganized into a new unit, if the new unit has not agreed to assume liability to pay that existing debt, the governing body of the new unit shall serve as agent for purposes of that existing debt and shall have full authority to:

A. Sue and be sued in the name of the original education unit in respect to the existing debt;

B. Determine the debt service due each fiscal year on any existing debt;

C. As applicable, allocate to each member of the original education unit the member’s share of the annual debt service for the existing debt of the original education unit in addition to each member’s share of costs of the new unit;

D. Collect the allocation for debt service on the existing debt from the original education unit or, as applicable, from each member of the original education unit in addition to each member’s share of costs of the new unit;

E. Pay the debt service on the existing debt of the original education unit when due; and

F. Take all other actions necessary and proper in respect of the existing debt.

Allocations between members of the original education unit to pay the debt service for the existing debt shall be made on the basis of the cost sharing formula of the original education unit in effect on July 1, 2008, as applied to the year of allocation. In the case of state subsidized debt service, the provisions of subparagraph 3 apply. Amounts to pay the debt service on the existing debt of the original education units shall be included in the budget that the governing body of a new unit submits for approval. If the original education unit is divided between different new units that have not agreed to assume liability to pay the existing debt, the commissioner shall require that the reorganization plan of one of those new units provide for that new unit to serve as agent for purposes of the existing debt of the original education unit. That new unit, as agent, shall have the authority provided by this subsection, except that it shall notify the other new units containing members of the original education unit of the amounts they must assess and collect from their members of the original education unit, and those other new units shall perform the functions in subparagraph 4 (C) and 4 (D) of this subsection with respect to their members, and shall pay the appropriate amounts over to the new unit serving as agent.

§1462. Operational date and transfer authority. The following provisions apply to any reorganized school administrative unit and school union and its governing body created pursuant to this chapter. 

1.	Operational date.  The school administrative unit or school union becomes operational on the date established in the certificate of organization as approved by the commissioner pursuant to section 1458, subsection C.
 
2.	Transfer of governing authority.  On July 1, 2009, the governing body of the new school administrative district or school union shall assume the responsibilities of the governing bodies of the school administrative units or school unions in existence prior to July 1, 2009 within the new school administrative unit or school union’s jurisdiction, as applicable. 
 
3.	Transfer of school accounts.  Not withstanding Title 20-A, section 15004 or any charter of a municipal school unit, school administrative district, or community school district, the balance remaining in the school accounts of the former municipal school unit, school administrative district, community school district or school union within the new school administrative unit or school union must be paid to the treasurer of the new school administrative unit or school union, as applicable, and verified through the annual audit process pursuant to chapter 221, subchapter 2.  The balance from each former municipal unit, school administrative district, or community school district and school union, as applicable, must be used to reduce the local contribution to the new school administrative unit of the municipalities in the original units.  Payment may be made in equal monthly installments during the implementation year.

4.	Employee Contracts and Collective Bargaining.  All teachers and employees who were employed by a school administrative unit that has been reorganized into a new school administrative unit, with the exception of probationary teachers and other employees whose employment contracts are terminated prior to July 1, 2009, shall be transferred to and employed by the new school administrative unit as of that date.  Such transferred teachers and employees shall maintain their salaries or wages, insurance and retirement benefits, accumulated leave and accrual rights thereto, seniority, contract and employment status and other working conditions.  Such rights and benefits shall not be diminished by their transfer to a new school administrative unit.  The new school administrative unit shall also maintain and honor any agreements, contracts or policies regarding the rights and benefits of retirees and former employees created by a school administrative unit that is dissolved as a result of its inclusion within a new school administrative unit.

5.	Collective Bargaining Governed by Existing State Labor Law.  For collective bargaining governed by existing state labor law, the following provisions apply:

A.	The new school administrative unit governing body shall be deemed the successor to the original school administrative unit school boards for all purposes under the Maine Municipal Employee Labor Relations Law, Title 26, Chapter 9-A;

B.	Bargaining units that existed in the original school administrative units may merge in accordance with Title 26, §966, sub-§4 except that:

1.	Merging bargaining units need not have the same bargaining agents.  When bargaining units with different bargaining agents merge, the bargaining agent of the merged bargaining unit shall be selected in accordance with Title 26, §967.

2.	The Maine Labor Relations Board shall expedite to the extent practicable all petitions for merger filed by employers or bargaining agents in new school administrative units.

6.	Superintendent and administrative contracts.  The contracts between the superintendents and other administrative employees and school administrative units and school unions within the new school administrative unit or school union are transferred to the new school administrative unit or school union’s governing body.  The new school administrative unit or school union’s governing body shall determine their duties within the new school administrative unit or school union.

Sec. A-2. 20-A MRSA, Part 2, Chapter 114-A is enacted to read:

Chapter 114-A

EDUCATION SERVICE COLLABORATIVES

§2651. Purpose and goals. It is the policy of the State to encourage school boards of school administrative units and school unions to form educational service collaboratives to provide joint or shared school administrative and non-instructional services, and where appropriate, to encourage municipalities, counties and other quasi-municipal corporations to participate in educational service collaboratives. The purpose of educational service collaboratives is to achieve efficiencies in school administrative, non-instructional and specialized services, including purchasing, finance and payroll, facilities, human resources and technology, transportation, food service, safety and security, and health services, and special education. Where non-school units of local government and quasi-municipal corporations are participants in an educational service collaborative, the educational service collaborative may provide corresponding services for such non-school participants in order to achieve efficiencies for all the participants. 

§2652. Educational service collaboratives authorized.  The governing bodies of school administrative units, school unions, municipalities, counties and other quasi-municipal corporations may form and participate in educational service collaboratives in accordance with the procedures of section 2653.  

§2653. Formation of educational service collaboratives.  

1.	Submission of plan.  A plan for an educational service collaborative may be developed and approved by the governing bodies of school administrative units, school unions, municipalities, counties and other quasi-municipal corporations.  These participants shall submit the plan to the commissioner.

2.	  Plan contents. The plan for an educational service collaborative may include:

a.	The school administrative units and school unions to be included;  

b.	The composition of the governing body;

c.	The method of voting;  

d.	The proposed method of sharing costs;

e.	The designation of a member school administrative unit or school union as fiscal agent;

f	The type of services that the educational service collaborative intends to 
provide;

h.	Provisions for the addition and withdrawal of participants and for dissolution; and

i.	Provisions for amendment of the plan.

3.	Action by commissioner.  Within 30 days of submittal, the commissioner shall approve the plan upon a finding that the plan is consistent with the purposes and goals of this chapter, and, in cases where there is a non-school participant, that the plan is consistent with the education and education funding laws of this state.  Alternatively, if the commissioner determines that a plan is not consistent with the goals and purposes of this chapter, or that the plan is not consistent with the education and education funding laws of this state, the commissioner shall return the plan to the governing bodies of the participants with specific suggestions for modification.  If the commissioner does not approve a plan or return the plan with specific suggestions for modification within 30 days, the commissioner is deemed to have approved the plan.  

4. 	Certificate of organization.  If the commissioner approves or is deemed to have approved the plan, the commissioner shall issue a certificate of organization for the educational service collaborative. The certificate of organization for an educational service collaborative shall bear the official name of the educational service collaborative, the date of organization, and the names of the participants.  The commissioner shall file an attested copy of the certificate of organization with the Office of the Secretary of State.  The issuance of a certificate of organization shall be conclusive evidence of the lawful organization of the educational service collaborative.

§2654 Representatives.  

1.	Appointment.  The governing body of each school administrative unit, school union and non-school participant of an educational service collaborative shall appoint one representative to the governing body of the educational service collaborative.  The representative of each participant, shall be a member of its governing body, or its superintendent or designee.  Each representative shall serve at the will of the appointing governing body.  

2.	Vacancies. The appointing governing body shall fill any vacancy which occurs.  

§2656.  Legal Status. An educational service collaborative is a quasi municipal corporation within the meaning of 30-A M.R.S.A. §2604(3) and a political subdivision within the meaning of 30-A M.R.S.A. § 2252. 

§2657 Authority and Powers.  

	The governing body of an educational service collaborative shall have the following powers and authority:

1.	Contracts.	To enter into contracts and accept assignment of contracts by its participants subject to the requirements of Title 30-A, section 2605.

	2.	Services. To hire staff or enter into agreements with its members for staff services  

3.	Real Estate.	To acquire and to convey real estate and interests in real estate, including leases.  

	4.  	Budget and Cost Sharing.  To adopt an annual budget, to expend funds and to share costs among its participants

5.	Investment.  To invest funds through its treasurer in accordance with 30-A MRSA sections 5706 through 5719.

6.	Gifts and Grants.  To accept conditional and unconditional gifts and grants, outright or in trust.  Conditional gifts requiring ongoing commitment of funds must be authorized by the participants in accordance with applicable law.

7.	Lease Purchase Financing.  
To issue municipal lease purchase agreements to vendors or third party lease finance companies to finance equipment, facilities, furnishings, instructional materials, software and related professional services and costs of issuance for school purposes, and when the educational service collaborative includes non-school participants, for corresponding governmental purposes of such non-school participants.  The term of a lease purchase agreement shall not exceed the anticipated useful life of the property and in any case shall not exceed ten years.   For purposes of and to the extent permitted by federal tax law, an educational service collaborative shall be considered a subordinate entity controlled by the school administrative units, the members of the school unions, and the non-school participants who belong to the educational service collaborative.  The participants shall not delegate their taxing, eminent domain and police powers to the educational service collaborative.

8.	Organizational powers.  
To organize any corporate or other legally recognized entity, including 501(c)(3) corporations and educational foundations, and to enter into any other legally recognized arrangement for shared or joint provision of services for the purpose of promoting the objectives of this chapter. This chapter shall not limit the authority of public agencies, including school administrative units, to enter into agreements under Title 30-A sections 2201 through 2207 to exercise powers jointly, or the authority of school administrative units or school unions to enter into any other agreements pursuant to applicable law.

§2570 Prohibited Employment. A member of the governing body of an educational service collaborative or spouse of a member may not be an employee of the educational service collaborative.  

Sec. A-3. 20-A MRSA §1001, sub-§§3 is amended to read as follows:

3.  Selection of Superintendent.  They shall select a superintendent or contract for administrative services in accordance with section 1051 to carry out the duties specified in section 1055.

Sec. A-4. 20-A MRSA §1051 is amended by adding a new sub-§7 to read as follows:

7.  Notwithstanding the other provisions of this section, a school administrative unit with fewer than 200 resident pupils is not required to employ a superintendent of schools and may contract for those administrative services with another school administrative unit, an educational advisory organization reorganized under section 5724, or the department.  A school administrative unit, educational advisory organization or the department in providing administrative services under this paragraph shall have the rights and duties of a superintendent under this subchapter.

Sec. A-5. 20-A MRSA §4102, sub-§3, is amended by adding at the end a new paragraph to read as follows:

The affirmative vote of at least two-thirds of the elected membership or voting power of the board of directors of a school administrative district or the district school committee of a community school district shall be required in order to close a school building in a member municipality.

Sec. A-6.  20-A MRSA §5724, sub-§§9 is amended by adding at the end a new paragraph to read as follows:

A recognized educational advisory organization may contract with a school administrative unit with fewer than 200 resident pupils for administrative services as permitted by section 1051(7).

Sec. A-7. 20-A MRSA, Chapter 112 is enacted to read:

CHAPTER 112

School Budget Transparency

§2401. Cost center summary budget format.  After January 31, 2008, the format of the annual budget of a school administrative unit must consist of the following cost centers and supporting data:

A.  Expenditures:

1.	Pre-kindergarten to grade 12 instruction (excluding special education);
2.	Instructional support (excluding special education);
3.	Special education;
4.	Leadership;
5.	Facilities maintenance;
6.	Transportation and buses; 
7.	Debt service; and
8.	Other commitments.

B.  Revenue sources:

(1)	Total education costs appropriated pursuant to section 15690-A, subsection 1;
(2)	Non-state-funded debt service costs approved pursuant to section 15690-A, subsection 2, if any; and
(3)	Additional local funds, if any, approved pursuant to section 15690-A, subsection 3, paragraph A;

C.  A summary of total school administrative unit expenditures;

D.  Other optional local data showing the amount and percentage of changes proposed in the state allocation, the local share and the total school administrative unit budget and related information determined appropriate by the governing body of the school administrative unit; and

E.  The warrant articles presented to the legislative body of the school administrative unit for approval of the school administrative unit budget must correspond to the categories of the cost center summary budget described in subsection 1.  In addition to expenditure and revenue cost center summary totals, the governing body shall provide to voters a reasonably detailed breakdown for each major subcategory within each budget category.  The department shall adopt routine technical rules pursuant to Title 5, chapter 375, subchapter 2-A defining and establishing the content of those informational subcategories.

F.  During the year for which the budget is approved using the cost center summary budget format, the governing body may transfer an amount not exceeding 5% of the total appropriation for any cost center to another cost center or among other cost centers without voter approval.

§2402.  Budget adoption procedures.  Except as otherwise provided in section 15671-A with respect to proposed school budgets that exceed the maximum state and local spending targets, school budget adoption procedures shall be controlled by municipal charter, municipal ordinance and municipal election laws for municipal school units, by sections 1304-1309 for school administrative districts, by sections 1701-1701-B  for community school districts, and the system administration budgets for school unions shall be adopted pursuant to section 1903.

Sec. A-7.   Department to conduct review.  The Department of Education shall conduct a review of unfunded state mandates pertaining to school systems.  In conducting its review, the Department shall:

1.	Prepare a comprehensive listing of the state mandates placed on school administrative units;

2.	Identify for each listed mandate the precise legal origin of the mandate, whether state law or rule or a combination of both, or any originating authority.  The Department shall also provide notice and analysis of federal mandates that contribute to or conflict with specific state mandates on school administrative units;

3.	Identify the statewide local government costs of each listed mandate within the limits of practicability; and

4.	Identify the characteristics of each listed mandate.  Identified characteristics may include, but are not limited to, the following:

a.	Archaic or unnecessary features or features lacking significant public purpose; 

b.	Inadequate funding; 

c.	Disproportionate efforts for the public policy benefit;

d.	Coordination between federal law and regulation and State law and rule;

e.	Subjection to excessive administrative oversight; and

f.	An insufficient structure to predict, measure or control local costs.

5.	No later than December 15, 2008, the Department shall submit a report that includes its findings and recommendations, including suggested legislation, for presentation to the Joint Standing Committee on Education and Cultural Affairs.  In its proposed implementing language, the Department may include proposals to repeal, modify, redesign, effectively coordinate or delay the implementation of any of the listed mandates, as may be appropriate.  Following receipt and review of the report, the Joint Standing Committee on Education and Cultural Affairs may report out a bill to the First Regular Session of the 124th Legislature.

Sec. A-8. Report; additional necessary implementing legislation.  No later than January 31, 2008, the Commissioner of Education shall submit to the Joint Standing Committee on Education a report that contains recommendations and any proposed legislation necessary to fully implement this Part.  Following receipt and review of the report, the Joint Standing Committee on Education may submit legislation to the Second Regular Session of the 123rd Legislature.