Sec. J-2. Priority of transfers. Transfers made in accordance with section 1 must be expended for the purposes listed in this section in the following amounts and priority order.

1. Baxter Compensation Authority. As the first priority, the Baxter Compensation Authority must receive up to $8,122,000 less the transfer amount received from unappropriated surplus at the close of fiscal year 2004-05 for use in fiscal year 2005-06. Transfers made to the Baxter Compensation Authority must be expended for claims of former students of the Governor Baxter School for the Deaf and the Maine School for the Deaf.

2. Higher education. As the 2nd priority, transfers to the University of Maine System must be made in the following amounts and priority order:

A. As the first priority, $2,000,000 to the Maine Economic Improvement Fund in the University of Maine System to provide funds for applied research and development at the University of Maine System; and

B. As the 2nd priority, $1,500,000 to be dedicated to facility renovation or renewal needs in order to reduce deferred maintenance at all institutions in the University of Maine System resulting in improved safety, code compliance and efficiencies at its facilities.

Sec. J-3. Transferred amounts. Notwithstanding the Maine Revised Statutes, Title 5, section 1585, the amounts transferred by the State Controller for the purposes listed in section 2 are considered adjustments to appropriations in fiscal year 2006-07. These funds may be allotted by financial order upon recommendation of the State Budget Officer and approval of the Governor. The State Budget Officer shall provide the joint standing committee of the Legislature having jurisdiction over appropriations and financial affairs with a report of the transferred amounts no later than January 15, 2007.

PART K

Sec. K-1. Review of statewide administrative hearing functions to improve efficiency and cost-effectiveness. The Commissioner of Administrative and