SENATE, No. 348

SECTION 1. Section 12 of chapter 70 of the general laws, as appearing in the 2004 Official Edition, is hereby amended by striking out said section 12, and inserting in place thereof, a new section 12.

    Section 12 Determination of amounts appropriated

  Section 12. (a) Subject to appropriation, beginning in fiscal year two thousand and seven and for all subsequent fiscal years, the amounts appropriated for state school aid in any given year shall be equal to the sum of the adjusted prior year amount and the education improvement amount.

  (b) The adjusted prior year amount for state school aid shall be the amount of state aid appropriated in the previous fiscal year, multiplied by an annual adjustment factor equal to the ratio of (i) the implicit price deflator for state government services as published by the United States department of commerce for the first quarter of the prior fiscal year to (ii) the same deflator one year earlier; provided, however, that the annual adjustment factor utilized in fiscal year two thousand and seven shall be equal to one. In no case shall the annual adjustment factor exceed one hundred and four percent.

  (c) The education improvement amount shall be an amount of additional state school aid as hereinafter described for the fiscal years two thousand and seven to two thousand and two thousand and fifteen, inclusive: in fiscal year two thousand and seven, an additional three hundred million dollars; in fiscal year two thousand and eight, an additional one hundred and fifty million dollars; in fiscal year two thousand and nine, an additional one hundred and fifty million dollars; in fiscal year two thousand and ten, an additional one hundred and fifty million dollars; in fiscal year two thousand and eleven, an additional one hundred and fifty million dollars; in fiscal year two thousand and twelve, an additional one hundred and fifty million dollars; in fiscal year two thousand and thirteen, an additional one hundred and fifty million dollars; in fiscal year two thousand and fourteen, an additional one hundred and fifty million dollars; and in fiscal year two thousand and fifteen, an additional one hundred and fifty million dollars.  The dollar amounts in this subsection shall be adjusted for inflation by multiplying the amounts for fiscal year two thousand and eight and subsequent years by the ratio of the implicit price deflator for state and local government purchases for the first quarter of the prior fiscal year to the value of the same deflator in the first quarter of fiscal year two thousand and six. In no case shall this adjustment factor be greater than what would be derived by a four percent annual adjustment compounded on a yearly basis.

   (d) For any fiscal year for which the comptroller determines on or before October 31 of the succeeding fiscal year that there is a negative balance in the funds created pursuant to section 49 of chapter 29 of the general laws as reported in his annual financial report, the comptroller shall transfer funds up to 20 per cent of the amount remaining of the consolidated net surplus after amounts made available in clauses (a), (b) and (c) of section 5C of said chapter 29, to an account established pursuant to the comptroller's authority under sections 8 and 9 of chapter 7A for the purposes of funding the increase in school aid required by this section prorated, if necessary, by the amount of funds available in such transfer.

SECTION 2.  Section 2 of Chapter 70 of the General Laws is hereby amended by striking out the definition of "Base Aid" and inserting in place thereof the following new definition: "Base aid" shall be, in any fiscal year, the amount of aid distributed to a municipality under the provisions of this chapter for fiscal 2006.

SECTION 3.  Section 2 of Chapter 70 of the General Laws is hereby amended by striking out the definition of "Foundation aid" and inserting in place thereof the following new definition:-

"Foundation aid" shall be the state share of the foundation budget, as defined  herein, times the foundation budget.

SECTION 4.  Section 2 of Chapter 70 of the General Laws is hereby amended by striking out the definition of  "Minimum required local contribution" and inserting in place thereof the following new definition:-

"Minimum required local contribution" shall be the amount of the foundation budget minus the greater of either foundation aid or base aid, assuming full funding of foundation aid; provided however that the commissioner may authorize a reduction in said minimum required local contribution, on terms and conditions prescribed by the commissioner, to obviate undue financial hardship on a municipality applying for such relief in accordance with procedures relating thereto established by the commissioner.

SECTION 5.  Section 2 of Chapter 70 of the General Laws is hereby amended by striking out the definition of "Standard of Effort" and inserting in place thereof the following new definition:-

 "Standard of effort" shall be the local share of the foundation budget, as defined herein, times the foundation budget.

SECTION 6.  Section 2 of Chapter 70 of the General Laws is hereby amended by inserting the following new definition: "Local share of the foundation budget," expressed as a percentage, shall be seventy percent for a municipality exactly at the state-wide average equalized property valuation per pupil.  For municipalities at less than the state-wide average equalized property valuation per pupil, the local share of the foundation budget shall be the product of seventy percent and the relativity factor.  For municipalities at greater than the state-wide average equalized property valuation per pupil, the local share of the foundation budget shall be one-hundred percent minus the quantity (thirty percent divided by the relativity factor).

SECTION 7. Section 2 of Chapter 70 of the General Laws is hereby amended by inserting the following new definition:-

 "Relativity factor" for each municipality shall be the local equalized valuations per pupil divided by the state-wide average equalized valuation per pupil.

SECTION 8.  Section 2 of Chapter 70 of the General Laws is hereby amended by inserting the following new definition:-

 "State share of the foundation budget," expressed as a percentage, shall be thirty percent for a municipality exactly at the state-wide average equalized property valuation per pupil.  For municipalities at less than the state-wide average equalized property valuation per pupil, the state share of the foundation budget shall be one-hundred percent minus the quantity (seventy percent times the relativity factor).  For municipalities at greater than the state-wide average equalized property valuation per pupil, the state share of the foundation budget shall be thirty percent divided by the relativity factor.

SECTION 9. Section 2 of Chapter 70 of the General laws is hereby amended by inserting the following new definition:-

 "Stabilization aid" in any fiscal year shall be the positive difference between base aid and the amount of foundation aid distributed to a municipality under the provisions of this chapter.

SECTION 10. Section 2 of Chapter 70 is hereby further amended by striking

Therefrom, the following definitions:

         (1)   Adjusted property valuation

         (2)   Equity aid

         (3)   Equity gap

         (4)   Excess debt service

         (5)   Foundation gap

         (6)   Foundation aid percent

         (7)   General revenue sharing aid

         (8)   Gross overburden amounts

         (9)   Gross standard of effort

         (10) Local contribution

         (11) Minimum aid

         (12) Municipal revenue growth factor

         (13) Overburden aid

         (14) Preliminary local contribution

         (15) Standard of effort gap

         (16) State overburden obligation

SECTION 11.  Section 5 of Chapter 70 is hereby repealed.

SECTION 12.  Section 6 of Chapter 70 is hereby amended by striking out the following phrase:-

 "but not including equity aid”.

SECTION 13.  Chapter 70 is hereby amended by striking out section 10 and inserting in its place the following new section:

SECTION 14.  Amount of State Aid to be paid to Each Municipality Subject to appropriation, the amount of state aid paid to each municipality shall be the sum of foundation aid and stabilization aid, as defined in Section 9 hereunder and as modified by the provisions of section 11.

SECTION 15.  Chapter 70 is hereby amended by striking out section 13 and inserting in its place the following new section:-

Section 13. Allocation of Funds Appropriated for State School Aid.

(a) The funds appropriated for state school aid under this chapter shall be allocated among municipalities as provided in section 10 hereunder.

(b) If upon any date of distribution the amount available for distribution under this section is insufficient to make the full distributions of state school aid required by this section, the distributions of foundation aid there-under shall be the amount otherwise due each city or town under this section multiplied by a fraction such that the sum of foundation aid and stabilization aid for all the cities and towns shall be the amount available for distribution under this section.  If upon any date of distribution the amount available for distribution under this section exceeds the amount necessary to make the full distributions required by this section, the distributions of foundation aid there-under shall be the amount otherwise due each city or town under this section increased by a fraction such that the sum of foundation aid and stabilization aid for all the cities and towns shall be the amount available for distribution under this section.

SECTION 16.  Section 5C of chapter 29 of the general laws, as appearing in the 2004 Official Edition is hereby amended by inserting after clause (c), the following new clause:

     (d) For any fiscal year for which the comptroller determines on or before October 31 of the succeeding fiscal year that there is a negative balance in the funds created pursuant to section 49 as reported in his annual financial report, the comptroller shall transfer funds up to 20 per cent of the amount remaining of the consolidated net surplus after amounts made available in clauses (a), (b) and (c), to an account established pursuant to the comptroller's authority under sections 8 and 9 of chapter 7A for the purposes of funding the increase in school aid required by subsection (c) section 12 of chapter 70 of the general laws prorated, if necessary, by the amount of funds available in such transfer.

SECTION 17.  This act shall take effect on July 1, 2008 and shall be applicable to fiscal years 2009 and thereafter.