Sec. 1. 20-A MRSA §15603, sub-§26-A, ¶F, as amended by PL 1999, c. 401, Pt. GG, §2, is further amended to read:

F. If for any fiscal year the total amount appropriated for the State's share of the total allocation is less than the amount specified in the certified funding level for that year, then all subsidizable costs except as noted in subparagraphs (1) and, (2) and (3) are reduced by a percentage of the original cost amounts. The reduction percentage is the smallest percentage that results in a state share of the total allocation that does not exceed the amount appropriated for this purpose, except that the reduction percentage that would ordinarily be used for operating and program costs must be reduced for the purpose of computing state subsidy for transportation operating costs as defined in subsection 29. Until fiscal year 2000-01, the reduction percentage ordinarily used for transportation operating costs must be reduced by the amount necessary to provide additional state subsidy equal to $4,500,000 for this category of costs. The statewide adjustment factor under section 15654, subsection 1, paragraph B must be adjusted by an amount sufficient to provide this additional funding for program costs. Beginning in fiscal year 1999-00, the reduction percentage must be phased out over 4 years. In fiscal year 1999-00, the reduction percentage for program costs other than transportation operating costs must be 15.88%. It is the intent of the Legislature that the reduction percentage for all program costs and the insured value factor be lowered to 9.97% in fiscal year 2000-01, to 4.98% in fiscal year 2001-02 and to 0% in fiscal year 2002-03. Beginning in fiscal year 2000-01, if the appropriation and any increase in the mill rate determined by the Legislature to be needed under section 15653 are not sufficient to achieve both the targeted reduction percentage and the targeted per pupil guarantee, as defined in section 15653, then the per pupil guarantee must advance toward the targeted per pupil guarantee in the same proportion as the reduction percentage, as defined in this section, is lowered toward the targeted reduction percentage. The following subsidizable costs may not be reduced:

(1) Principal and interest on approved school construction costs; and

(2) Approved lease costs.; and

(3)__Special education costs as defined in subsection 22.