The House, Wednesday, May 7, 2008

Rep. David Hess (R - Merr 24)Thank you very much, Madam Speaker. This bill has been improved upon in part but greatly and disturbingly made far worse than it was when you and I voted on it on the floor several weeks ago. It has been improved upon in two particulars. Number one, the Finance committee majority deemed it appropriate to allow these twelve school districts, who are having kindergarten imposed upon them, to contract with private entities to provide that kindergarten education for the four years of transition. Good idea, cost effective, avoids the need to build capital improvements during that transition period. Takes advantage of resources, training, and experience that already exists in these communities, good idea. The second improvement that the Finance committee made to this bill was to extend the transition period to four years, not long enough in the opinion of this member, but longer than three years, giving the school districts a little bit more time to implement this situation. But this bill was made far worse by the amendment that House Finance made to the provision repealing the "no means no" statutes contained in the municipal budget act. It was bad enough to repeal those statutes with respect to the transition period and temporary classrooms contained in the bill. Senate Finance went beyond that and in funding kindergarten mandated assistance the Finance committee repealed those two statutes, RSA 32:8 and RSA 32:11 with respect to every expenditure on creating and establishing and implementing kindergarten. I hope you all have had a chance to see a document out on the table in the anteroom. It simply repeats in total the language of RSA 32:8 and 32:11. RSA 32: 11 deals with emergency expenditures and over-expenditures and creates a mechanism for allowing that to occur outside a regular town meeting. Let me read to you what this bill will repeal with regard to kindergarten. Limitations on expenditures: no school board shall pay any money for any purpose in excess of the amount appropriated by the legislative body or for any purpose for which no appropriation has been made. RSA 32:8 says school board members, school administrators cannot spend any more money on any subject that was not approved by the voters of the school district, by the taxpayers of the school district, by the citizens of the school district. With this bill, we are repealing that statutory language as to kindergarten. That means that the twelve school boards affected by this bill, are not only empowered to spend money that was not approved by their taxpayers, but are indeed required to spend money that has not been voted on by their taxpayers, not approved by their taxpayers, not agreed to by their citizens. I can think of no more horrible, big brother approach to government than that. If you take away the local vote, you take away the local control and that is exactly what this bill does. It also in my opinion violates the provisions of both 28:a of the constitution and the requirements that the supreme court has imposed on the Claremont Decisions which says that anything the state mandates, the state has to pay for or anything that constitutes an adequate education, the state has to pay for. One of the other things the bill as passed by the Finance committee doesn't do is it specifically excludes site acquisition and core facility costs from the amount of funds that the state will be contributing towards these new kindergarten facilities. If you have a situation where you will have a school with plenty of adjacent space and a functioning septic system on city water, that's not a problem, but there are a number of these school districts, Litchfield jumps out at me and I think Pelham has the same situation, in which the school districts will basically have to build an entirely new structure on an entirely separate parcel of land because their schools already overcrowd the lots in which they are located or their septic systems or other systems are near failure or at failure. The bill before you does not cover those costs. The amendment that I am suggesting to you does expressly cover those costs. Let me tell you why I think the bill without this amendment violates 28:a. I will read the appropriate provisions of 28:a. I am fairly familiar with it having been one of the original cosponsors in the 1984 constitutional convention and frankly having written the language that is in the constitution. "The state shall not mandate or assign any new expanded or modified programs to any political subdivision in such a way as to necessitate additional local expenditures unless such programs or responsibilities are fully funded by the state or unless such programs or responsibilities are approved for funding by a vote of the local legislative body...." This amendment restores both of those factors. It provides full funding for the expanded program or the new program of kindergarten and it removes the restriction that would allow the imposition of these costs on our local communities without a local vote. I urge you to adopt this amendment. It doesn't do anything else to the kindergarten bill, it doesn't change the terms of the transition period, and it doesn't do anything else to any of the language. It addressed these two critical horrible shortcomings of the bill. I thank you for your attention. Speaker: The question before the House is on the adoption of floor amendment (1697h) on SB 530. The Chair recognizes the member from Durham, Representative Rous.

Rep. Emma Rous (D - Straf 7)Thank you, Madam Speaker. Colleagues, I am going to speak specifically to the elements of the amendment and I think that subsequent speakers will address some of the issues in the bill as a whole. SB 530 is consistent with existing statute on kindergarten construction, that's RSA 198:15-r. The 75% construction grant has always excluded site acquisition and core facilities, but funding for that portion of construction projects is available through the regular building aid funding requests as provided in RSA 198:15b and these provisions are consistent with the shared state and local responsibility for providing education. Construction is not mandated by this bill and many districts will meet their space needs with existing space or through construction projects already under consideration. I would add that Litchfield needs a total new school. It has for quite a while and site acquisition would be for the entire school not simply for kindergarten. I don't think we should be looking to kindergarten aid to solve needs that have been in existence for a long period of time. In regards to the 28:a issue, the policy committees and the Finance committee have repeatedly responded to the 28:a assertion. The constitutional basis for an adequate education and the local rule in providing education predates the adoption of 28:a by a long time so 28:a arguably has no application in this case, but in addition this bill eliminates any 28:a concern by providing options to the districts for 100% funding of construction and furnishing and for operation through adequacy grants. I would ask you to support the policy committee, to support the Finance committee which has thoroughly vetted these questions already and to vote no on this amendment. Speaker: The question before the House is on the adoption of floor amendment (1697h) on SB 530. A division has been requested. Will members please take their seats? The House will be attentive to the state of the vote. 139 members having voted in the affirmative and 191 in the negative, floor amendment (1697h) fails. The question before the House is on the adoption of the majority committee report of Ought to Pass with Amendment on SB 530. The Chair recognizes the member from Amherst, Representative Stepanek.

Rep. Stephen Stepanek (R - Hills 22)Thank you, Madam Speaker. Ladies and Gentlemen of the General Court, what we have before us today is an unconstitutional bill which is setting a horrible precedent for the future. We have in our state constitution a requirement under 28:a which states and I quote, "The state shall not mandate or assign any new, expanded or modified programs or responsibilities to any political subdivision in such a way as to necessitate additional local expenditures by the political subdivision unless such programs or responsibilities are fully funded by the state or unless such programs or responsibilities are approved for funding by a vote of the local legislative body of the political subdivision." Now, it has been said today that this 28:a does not apply because we have been doing school long before 28:a was passed back in 1984, I believe. However, kindergarten was never part of that. Kindergarten was mandated and it was mandated last year. Therefore, under 28:a it is a new program. As a new program, it is required to be fully funded by the state. This is not being fully funded. We have two plans in this bill. Plan one funds 75% of the actual construction costs, not 100%. It has been said that this law is the same and is consistent with what we have been doing in the past and that is true. What we have been doing in the past and the past law was an enticement for the communities to voluntarily add kindergarten. That is not on the table. They have been mandated to have kindergarten. This law does not cover the 28:a issue. The second plan funds 100% of the actual costs of a basic co-compliant facility. We affectionately call this in Finance the Quonset hut facility. It does not however cover the cost of the land, site prep, any improvements to the septic system, the electrical system, the plumbing system and so on. Therefore, neither plan is fully funded by the state. Therefore, this plan and this bill violates 28:a of the New Hampshire Constitution. This bill also, as you have heard, repeals "no means no" statute protection currently provided to the taxpayers of this state. This in effect says that the state can say to the local school boards, you will build and staff these kindergarten facilities and the town will be required to pay the unfunded costs with no warrant articles, no votes by the town citizens, just pay the bill. Since the state is not fully funding this expense and since by repealing "no means no", the local subdivisions are being prevented from voting and approving or not approving this program. This again, violates 28:a of the New Hampshire Constitution. Repealing "no means no" takes us down a very dangerous and very slippery slope. Whenever the state has a program they want to force onto the local communities for their own good, they will cite this bill again and again to repeal "no means no." If the state was, in fact, fully funding this program as the constitution requires it to do, why is it necessary to repeal "no means no?" Whether you agree or not, with kindergarten mandates you should oppose this bill as it is written. Please support our New Hampshire Constitution as you pledged that you would when you took your oath of office. Please support your constituents' rights. Please vote no on this bill. Speaker: The question before the House is on the adoption of the majority committee report of Ought to Pass with Amendment. The Chair recognizes the member from Milford,

Rep. Peter Leishman (D - Hills 6)Thank you, Madam Speaker. Good afternoon, members of the House. As one of the original sponsors of the kindergarten bill, I want to compliment the members of Finance who worked through a compromise that works, I believe, for everyone, especially as a Rep that is coming from a community that I hate to admit does not have public kindergarten. I want to thank the Representative from Hooksett who pointed out all of those good things that I think Finance did with the compromise. In my community, which I'll stick specifically to, we have had several, I think, over the last decades votes to support or not to support public kindergarten. Yes, it's always failed, but the community has always been in favor of public kindergarten. What this amendment does and quite specifically, as the Representative from Hooksett said, it gives flexibility to those communities that don't have public kindergarten, but on top of that it allows those communities to send these kids out to private kindergartens that pass state standards for private kindergarten. Its not a voucher system as some people have mentioned to me in the halls, this money would be directly funneled from the school district to, again, those private kindergartens that do support state standards and those standards that the local school districts have adopted. Now, in my community of Milford, the superintendent and I spoke this morning and they feel that this extension would give them adequate time to bring kindergarten online by 2010. All of us, I think, in this room support kindergarten. I think it's about time the five year old kids of this state get public kindergarten that is supported by this body and supported by the Senate and again I want to thank my friend from Hooksett that outlined out all those good things that this amendment does. Thank you. Speaker: The question before the House is the adoption of the majority committee report of Ought to Pass as Amended on SB 530. The Chair recognizes the member from Durham,

Rep. Emma Rous (D - Straf 7)Madam Speaker and colleagues, I would simply add that the education committee has reviewed the changes made in Finance, particularly this change that would allow an interim use of private kindergarten as one option among several for local districts to use as they make the transition to full free public kindergarten for all five year olds in New Hampshire. Knowing that these private programs will be subject to the alternate kindergarten program statutes that are already on the books that they will require certified teachers, curriculum and support services that are coordinated with the district elementary grades, provision of transportation, that all of that will have to be approved by the local school board and reviewed by the department of education. The education committee felt that this was sound policy to use as an interim step and we support this change. Thank you. Speaker: The question before the House is the adoption of the majority committee report of Ought to Pass as Amended on SB 530. A division has been requested. Will members please take their seats? Representative Daniel Eaton has requested a roll call. Is that sufficiently seconded? It is sufficiently seconded; this will be a roll call vote. The House will be attentive to the state of the vote. 200 having voted in the affirmative and 137 in the negative, the majority committee report is adopted. REGULAR CALENDAR (CONT'D) SB 539-FN-L, relative to the cost of an adequate education and provision of fiscal capacity disparity aid. MAJORITY: OUGHT TO PASS WITH AMENDMENT. MINORITY: INEXPEDIENT TO LEGISLATE. Rep. Daniel A. Eaton for the Majority of Finance: In fulfillment of the state's constitutional obligation to cost an adequate education, SB 539 applies the recommendations of the Joint Legislative Committee on Costing an Adequate Education's final report to arrive at a costing methodology. Using the school approval standards referenced in HB 927 (RSA 193-E:2, Chapter 270, 2007) to define an adequate education, the bill establishes a per pupil cost for adequacy that includes both a universal amount and differential aid for special education students, English language learners, at risk students, and for schools with higher concentrations of low income students. All of the factors noted above were determined by the Education committee to be part of education adequacy. The Finance committee honored the work of the policy committee, and working with the language proposed by the House Education committee and adopted by the General Court on April 16, 2008, it also provides fiscal disparity aid in addition to adequacy aid. The Finance committee made technical corrections to clarify how the Department of Education should apply the provisions of the bill and how adequacy funds would flow between school districts of residence and attendance when the two differ. In recognition of the impact the new funding formulas will have on school districts, and in an effort to avoid financial dislocations that will affect school districts' budgeting, the committee included a two year transition limiting the reduction of aid to any towns or cities resulting from adoption of the costing formula - including for towns known as donor towns. A transition period will allow school districts whose funding will be altered by this formula time to adjust their budgets and their allocation and use of resources. This allows all school districts to attain adequate funding while protecting districts during the transition period against disruptive reductions in education funding in those instances where the legislation's adequacy computations may ultimately reduce the amount of state education funds allocated to a district. In order to allow school districts that receive large increases in aid the opportunity to plan for and integrate programs to be supported by those substantial increases into their educational systems, a 15% cap or "collar" on annual increases for two years was included for cities and towns that will receive more aid than their 2009 statewide aid as a result of the formula. While some individuals have raised questions about the constitutionality of this transition plan, the Attorney General believes it is defensible. In addition, nothing in this bill changes tax proportionality. Just as the legislature in the past depended upon commissions to assist in defining adequacy and determining costing, SB 539 creates two committees to assist the legislature in the continuing process of reviewing and amending as necessary the policies around adequacy and educational funding. A Joint Legislative Oversight Committee on Accountability for an Adequate Education will review the assessment and assistance methods, reporting requirements, and other methods of accountability presently being used by the Department of Education and local school districts to determine whether such methods, programs, and standards will ensure the delivery of an adequate education. A Joint Legislative Committee on Fiscal Capacity, Transition Aid, and Diseconomies of Scale will study the need for providing fiscal capacity and transition aid to municipalities, as well as additional aid to address the lack of economies of scale in small school districts. These committees will report back to the legislature by December 01, 2008 so that the next legislature may make appropriate adjustments in these important areas. The new costing based on this bill does not go into effect until the 2009 school year. Using current data, the estimated cost of the bill is expected to be $940 million per year for the 2010-2011 biennium, and about $975 million per year (prior to adding in the inflation adjustment factor as required in the bill) for the 2010-2013 biennium. However, it is important to note that the exact figures will likely differ as more current figures are inserted into the formula and the next legislature determines what other adjustments should be made based on the reports of the two commissions noted above. Vote 13-9. Rep. Neal M. Kurk for the Minority of Finance: This bill is the majority's effort to meet the Supreme Court's mandate that the legislature determine the cost of a constitutionally adequate education. The cost of the bill is $939 million for each year of the next biennium. There is no provision for paying for the additional $128 million burden that the bill imposes on state taxpayers. Rather, the majority chose to put off that hard work until the next budget -that is, until after the fall elections. The majority thus significantly increases the fiscal problems facing the state in the next biennium. The majority's adequacy formula relies to an excessive degree - about $180 million or almost 20% of the total $939 million cost - on one factor: students who are eligible for free and reduced-price lunch (FRL). Here's why: for those schools in which FRL-eligible students are 12% or more of the total school population, every student in the school - not just the FRL eligible students - is counted in calculating the amount of state funding given to the school. The effect is to incorporate in the basic cost of an adequate education a factor that, when used to such a great extent, becomes a method of targeting state aid. The Finance committee was given no evidence to justify either this approach or the amount of the per pupil stipend. The majority thus inappropriately inflates the basic cost of an adequate education. Rather than deal in the bill with this issue and the issue of accountability for the effective use of these funds, the majority establishes two commissions to study these and other issues. The best that can be said of the bill is that is holds school districts harmless - but only for two years. Those districts that would receive less state aid in FY 2010 and FY 2011 under the majority formula would be guaranteed the amount they received in FY 2009. Donor towns purportedly have their excess statewide education property tax rebated. But after two years, the taxpayers in all these communities would be hit hard. The worst is that two of the bill's provisions are clearly unconstitutional. The donor town tax rebates have previously been ruled unconstitutional because they violate the requirement of our constitution that all taxes be proportional. The 15% cap on the increase in state aid in FY 2010 and FY 2011 is also unconstitutional. Transitioning to full adequacy aid is not the same as full adequacy aid, and our Supreme Court has ruled more than once that the state must pay, from day one, the full cost of a constitutionally adequate education. For these reasons the minority is unable to support this bill as amended.  Majority Amendment (1574h) Amend the bill by replacing all after the enacting clause with the following: 1 Statement of Purpose. I. The general court finds that the cost of the opportunity for an adequate education for public school students, as established in this act, is based upon the definition of the opportunity for an adequate education enacted in the 2007 Laws of New Hampshire, chapter 270. The methodologies for costing, determination of resources, and elements of cost included in this act are intended to and do fulfill the state's duty under the Encouragement of Literature clause of the New Hampshire constitution to deliver the opportunity for an adequate education. II. The individual components of the cost were selected on the basis of their effectiveness in delivering educational opportunity and after extensive review, debate and discussion by the joint legislative oversight committee on costing an adequate education and the general court. The legislative process consisted of obtaining information from professional educators, government officials, education policy and finance experts, and the public on the establishment of the cost of an adequate education. III. The joint legislative oversight committee on costing issued detailed findings and recommendations on the composition of the cost of an adequate education and how the funds for an adequate education should be allocated and accounted for in order to ensure that the educational needs of all public school students are met. These findings and recommendations were submitted to the general court and are an integral basis of the costing determinations reflected in this act. IV. The cost of the opportunity for an adequate education consists of several elements. All such elements must be provided in order to ensure the delivery of the state's constitutional duty. The universal cost represents the per pupil resources necessary to provide an adequate education where no additional aid is necessary to cover the increased costs of providing that opportunity to students who have special education needs, who have limited English language proficiency or are in schools with significant concentrations of economically disadvantaged students. The universal cost represents the costs attributable only to the subset of education that is included in the definition in RSA 193-E:2-a. V. The general court further finds that additional aid, referred to as differentiated aid, is also required to fulfill the state's constitutional duty to provide the opportunity for an adequate education for certain students. This act allocates such differentiated aid to special education students, English language learners, and students in schools with significant concentrations of economically disadvantaged students, the latter category based upon eligibility for federally-provided free and reduced-price lunch programs and the concentration of such eligible students in a school. VI. In determining the need for differentiated aid in addition to providing the universal cost for an adequate education, the general court recognizes that the resources needed to provide the opportunity for an adequate education are not the same for all students or at all schools. VII. The general court recognizes that special education students face unique challenges that require educational support and instructional resources in addition to those provided by the universal cost. After reviewing the findings of the joint legislative oversight committee and conducting its own inquiry into forms of special education funding and the laws relevant to such funding mechanisms, the general court finds that each special education student should receive additional funding above the universal cost. This per pupil amount is not dependent upon a student's level of disability or learning environment because the general court wishes to encourage the placement of special education students in the least restrictive learning environment possible. VIII. After reviewing the findings of the legislative oversight committee, including its survey of services provided to English language learners throughout the country and in New Hampshire, the general court finds that additional funding is required to provide English language learners with the opportunity for an adequate education. Accordingly, the general court finds that an amount should be distributed to each pupil receiving English language instruction in a district. This supplemental amount is based upon providing one teacher per 70 students receiving English language instruction and is in-line with funding provided throughout the United States to English language learners. IX. The joint legislative oversight committee report recognized that economically disadvantaged students require supplemental funding in addition to the universal cost amount. During its deliberations, the committee heard testimony and thoroughly reviewed studies, research, and data about the challenges that school districts face when educating economically disadvantaged students and all pupils in schools with significant concentrations of economically disadvantaged pupils, as well as the costs and considerations involved in implementing programs designed to overcome those obstacles. As encouraged by the committee report, the general court reviewed the committee's conclusions and used the legislative process to craft a funding mechanism that would provide the opportunity for an adequate education to all pupils in schools with significant concentrations of economically disadvantaged pupils. The general court further finds it necessary to provide additional aid to economically disadvantaged pupils in schools without significant concentrations of economically disadvantaged pupils to provide them with the opportunity for an adequate education. X. The general court recognizes that the adequacy and need-based formula implemented by this legislation will significantly alter the manner in which funds for public education are distributed to school districts. In recognition of the impact and scope of these changes, and in an effort to avoid financial dislocations, the general court finds that the formula should be phased into operation over the course of 2 years. In consultation with school funding experts, the general court determines that a transition period will allow school districts whose funding will be altered by this formula time to adjust their budgets and their allocation and use of resources. Accordingly, for the fiscal years 2010 and 2011, the general court determines that the new funding system enacted as part of this legislation should be phased in a manner that allows all school districts to attain adequate funding while protecting districts during the transition period against disruptive reductions in funding in those instances where the legislation's adequacy computations may ultimately reduce the amount of state education funds allocated to a district. XI. The general court recognizes that certain communities lack the relative wealth and fiscal capacity to fund local education to the extent desired by those communities. For this reason, the general court finds it appropriate to provide money above the cost of the opportunity for an adequate education based upon the fiscal capacity and relative need of certain communities. XII. This act is not intended to stand in isolation from the other statutes and rules relating to educating New Hampshire students as required by state and federal law. 2 Commissioner's Warrant. RSA 76:8, II is repealed and reenacted to read as follows: II. The commissioner shall issue a warrant under the commissioner's hand and official seal for the amount computed in paragraph I to the selectmen or assessors of each municipality by December 15 directing them to assess such sum and pay it to the municipality for the use of the school district or districts and, if there is an excess education tax payment due pursuant to RSA 198:46, directing them to assess the amount of the excess payment and pay it to the department of revenue administration for deposit in the education trust fund. Such sums shall be assessed at such times as may be prescribed for other taxes assessed by such selectmen or assessors of the municipality. 3 Adequate Education. Amend the subdivision heading preceding RSA 198:38 to read as follows: [State Aid for Educational Equality] Adequate Education; Education Trust Fund  4 Adequate Education; Definitions. RSA 198:38 is repealed and reenacted to read as follows: 198:38 Definitions. I. "Average daily membership in attendance" or "ADMA" means the aggregate halfday membership of pupils in kindergarten through grade 12 attending schools operated by a school district divided by the number of half-days of instruction offered. The average daily membership in attendance shall include any pupil who is a resident of New Hampshire educated at public expense, including any pupil whose school district provides his or her education through a private or out-of-district placement. II. "Commissioner" means the commissioner of the department of education. III. "Department" means the department of education. IV. "Determination year" means the fiscal year that was 3 years prior to the fiscal year for which aid is to be determined. Unless otherwise indicated, determination year data shall be used to calculate aid. V. "Educationally disabled child" or "educationally disabled pupil" shall mean "educationally disabled child" as defined in RSA 186-C:2, I. VI. "English language learner" means a child who has a predominant language other than English or who is educationally disadvantaged by a limited English proficiency, and who is receiving regularly scheduled English language instruction. For the purposes of RSA 198:40-a, the department shall calculate the number of English language learners using ADMA data. The department shall use the ADMA of all pupils receiving English language learner services as of October 2006 in calculating 2006-2007 ADMA data. VII. "Pupils eligible for a free or reduced-price meal" means pupils in grade 1 through grade 12 who are eligible for the federal free or reduced-price meal program. For the purposes of RSA 198:40-a, the department shall calculate the concentration of pupils eligible for free or reduced-price meals using ADMA data. The department shall use the ADMA of pupils eligible for a free or reduced-price meal as of October 2006 in calculating ADMA concentrations for 2006-2007 ADMA data. VIII. "School district" means school district as defined in RSA 194:1 and shall include cooperative school districts as defined in RSA 195:1, I. 5 Cost of an Opportunity for an Adequate Education. RSA 198:40-a is repealed and reenacted to read as follows: 198:40-a Cost of an Opportunity for an Adequate Education. I. Beginning July 1, 2009, and for every biennium thereafter, the annual cost of providing the opportunity for an adequate education as defined in RSA 193-E:2-a shall be $3,450 per pupil attending a public school, plus any applicable differentiated aid for which a pupil is eligible. Differentiated aid shall be calculated as follows: (a) An additional $431 per pupil in kindergarten through grade 12 eligible for the federal free and reduced-price meal program who attends a public school in which less than 12 percent of the pupils reported in the school's ADMA in the determination year are eligible for the federal free and reduced-price meal program. (b) An additional $863 per pupil in a public school in which at least 12 percent but less than 24 percent of pupils reported in the school's ADMA in the determination year, are eligible for the federal free or reduced-price meal program. (c) An additional $1,725 per pupil in a public school in which at least 24 percent but less than 36 percent of pupils reported in the school's ADMA in the determination year, are eligible for the federal free or reduced-price meal program. (d) An additional $2,588 per pupil in a public school in which at least 36 percent but less than 48 percent of the pupils reported in the school's ADMA in the determination year, are eligible for the federal free or reduced-price meal program. (e) An additional $3,450 per pupil in a public school in which 48 percent or more of the pupils reported in the school's ADMA in the determination year, are eligible for the federal free or reduced-price meal program.  II. In addition to the amount in paragraph I, an additional $675 for each pupil reported in the public school's ADMA in the determination year who is an English language learner and who is receiving English language instruction. III. In addition to the amounts in paragraphs I and II, an additional $1,856 for each pupil reported in the public school's ADMA in the determination year who is receiving special education. IV. (a) The sum total calculated under paragraphs I-III of this section shall be used to determine the cost of an adequate education which shall be used in each year of the biennium. (b) The department shall allocate the cost of an adequate education for each municipality by totaling the cost of an adequate education as determined in RSA 198:40-a, I- III for all children who reside in that municipality. (c) Prior to or coinciding with the first disbursement of each fiscal year under RSA 198:42, the department shall notify a school district of the cost of an adequate education for the pupils in each school within its jurisdiction sorted by the pupil's municipality of residence. In addition, the department shall furnish to each school district a report showing the cost of an adequate education for pupils who are residents of that school district sorted by a pupil's school of attendance. V. The department shall notify school districts of the estimated amounts of grants by the November 15 preceding the fiscal year for which aid is determined. The commissioner shall provide to the general court all data or reports requested by the general court in a form which the general court determines will facilitate the calculations required in this section. 6 Use of Differentiated Aid. RSA 198:40-b is repealed and reenacted to read as follows: 198:40-b Use of Differentiated Aid. I. A school district which receives differentiated aid under RSA 198:40-a, I(b)-(e) for schools within its jurisdiction, shall separately account for such aid as part of its financial accounting procedures. Differentiated aid shall only be used to provide enhanced programs in schools within its jurisdiction for which such aid has been allocated that are known to improve pupil achievement, including but not limited to: pre-kindergarten programs, full-day kindergarten programs, extended learning time, professional development opportunities for teachers, hiring of additional instructional and non-instructional personnel, programs designed to reduce class size, parental involvement programs, additional technology resources, drop out prevention programs, principal incentive programs, and curriculum enrichment programs. The school district shall determine which programs are most needed and most appropriate for their pupils. The department shall annually review and update the list of approved programs from which a school district may choose. II. A school district which receives differentiated aid under RSA 198:40-a, I(b)-(e) for use in schools within its jurisdiction shall annually submit a report to the commissioner documenting for each school within its jurisdiction for which such aid has been allocated, the enhanced programs selected for implementation, an explanation of the specific educational needs which the program is intended to address, an explanation of how the program will be implemented in the school, and an estimate of the cost of implementing the program. The commissioner shall review these reports to ensure that differentiated aid will be used to provide programs approved under paragraph I. III. A school district which receives differentiated aid for schools within its jurisdiction pursuant to RSA 198:40-a, I-III shall direct such aid to the schools for which such aid was calculated. A school district which receives differentiated aid for pupils that attend schools in another school district, shall direct such aid to the school district where its pupils are being educated. Any differentiated aid directed from one school district to another pursuant to this paragraph shall be a credit against any existing financial liability between the school districts. 7 School Money; Fiscal Capacity Disparity Aid. RSA 198:40-c is repealed and reenacted to read as follows:  198:40-c Fiscal Capacity Disparity Aid. I. In addition to aid for the cost of the opportunity for an adequate education provided under RSA 198:40-b, each biennium the department shall calculate fiscal capacity disparity aid and provide that amount of aid in each year of the biennium to a municipality's school districts and to charter schools approved under RSA 194-B:3-a as follows: (a) The department shall calculate the equalized valuation per pupil for each municipality in the state and shall sort the results into quartiles based on equalized valuation per pupil and shall divide all quartiles in half. If there are an uneven number of municipalities in a quartile or half quartile, the department shall make the lower quartile or half quartile the one with fewer municipalities. (b) A municipality with an equalized valuation per pupil in the lower half of the lowest quartile and which has a median family income which is less than the state average median family income shall receive fiscal capacity disparity aid in the amount of $2,000 multiplied by the municipality's average daily membership in residence. (c) A municipality with an equalized valuation per pupil in the upper half of the lowest quartile which has a median family income which is less than the state average median family income shall receive fiscal capacity disparity aid in the amount of $1,250 multiplied by the municipality's average daily membership in residence shall be distributed pursuant to RSA 198:42. (d) A charter school approved under RSA 194-B:3-a shall receive $2,000 per pupil multiplied by the number of pupils enrolled. The calculation of charter school enrollment and aid distribution shall be pursuant to RSA 194-B:11, I(c). II. Except as otherwise provided in this section, aid shall be distributed pursuant to RSA 198:42. III. In this section: (a) "Equalized valuation per pupil" means a municipality's equalized valuation, including properties subject to taxation under RSA 82 and RSA 83-F, as determined by the department of revenue administration, that was the basis for the local tax assessment in the determination year, divided by the school district's kindergarten through grade 12 average daily membership in residence, as defined in RSA 189:1-d for the determination year, provided that no kindergarten pupil shall count as more than 1/2 day attendance per calendar day. (b) "Median family income" means the most recent census data published for New Hampshire counties and municipalities by the United States Census Bureau, United States Department of Commerce, as of October 1 preceding the beginning of the biennium for which aid is to be determined. 8 New Section; Consumer Price Index Adjustment. Amend RSA 198 by inserting after section 40-c the following new section: 198:40-d Consumer Price Index Adjustment. Beginning July 1, 2011 and every biennium thereafter, the department of education shall adjust the sum of the amounts determined under RSA 198:40-a based on the average change in the Consumer Price Index for All Urban Consumers, Northeast Region, using the "services less medical care services" special aggregate index, as published by the Bureau of Labor Statistics, United States Department of Labor. The average change shall be calculated using the 3 calendar years ending 18 months before the beginning of the biennium for which the calculation is to be performed. 9 School Money; Determination of Grants and Excess Tax. RSA 198:41 is repealed and reenacted to read as follows: 198:41 Determination of Grants and Excess Tax. I. Except for municipalities where all school districts therein provide education to all of their pupils by paying tuition to other institutions, the department of education shall determine the amount of the education grant for the municipality as follows:  (a) Add the per pupil cost of providing the opportunity for an adequate education for which each pupil is eligible pursuant to RSA 198:40-a, I-III, and from such amount; (b) Subtract the amount of the education property tax warrant to be issued by the commissioner of revenue administration for such municipality reported pursuant to RSA 76:9 for the next tax year, and from such amount; and (c) Add the fiscal capacity disparity aid pursuant to RSA 198:40-c. II. For municipalities where all school districts therein provide education to all of their pupils by paying tuition to other institutions, the department of education shall determine the amount of the adequate education grant for each municipality as the lesser of the 2 following calculations: (a) The amount calculated in accordance with paragraph I of this section; or (b) The total amount paid for items of current education expense as determined by the department of education minus the amount of the education property tax warrant to be issued by the commissioner of revenue administration for such municipality reported pursuant to RSA 76:9 for the next tax year. III. For the fiscal years beginning July 1, 2009 and July 1, 2010, the department of education shall not: (a) Distribute a total education grant on behalf of all pupils who reside in a municipality that exceeds that municipality's total education grant for the 2009 fiscal year by more than 15 percent; or (b) Reduce the total state aid for an adequate education provided on behalf of all pupils who reside in a municipality to an amount less than that municipality's total state aid for an adequate education received in the 2009 fiscal year. 10 Excess Education Property Tax Payment. RSA 198:46, I is repealed and reenacted to read as follows: I. A municipality in which education property tax revenue collected exceeds the amount necessary to fund the cost of an adequate education in a fiscal year as determined in RSA 198:40-a, shall collect and remit such excess to the department of revenue administration on or before March 15 of the tax year in which the excess occurs. 11 School Attendance; Duty of Parent; Version Effective July 1, 2009. Amend RSA 193:1, I(c) to read as follows: (c) The relevant school district superintendent has excused a child from attendance because the child is physically or mentally unable to attend school, or has been temporarily excused upon the request of the parent for purposes agreed upon by the school authorities and the parent. Such excused absences shall not be permitted if they cause a serious adverse effect upon the student's educational progress. Students excused for such temporary absences may be claimed as full-time pupils for purposes of calculating state aid under RSA 186-C:18 and [equitable] adequate education grants under RSA 198:41; 12 Charter and Open Enrollment Schools; Funding. Amend RSA 194-B:11, I to read as follows: I.(a) There shall be no tuition charge for any pupil attending an open enrollment or charter conversion school located in that pupil's resident district. Funding limitations in this chapter shall not be applicable to charter conversion or open enrollment schools located in a pupil's resident district. For [any other] a charter or open enrollment school authorized by the school district, the pupil's resident district shall pay to such school an amount equal to not less than 80 percent of that district's average cost per pupil as determined by the department of education using the most recent available data as reported by the district to the department. (b) For any charter school authorized by the state board of education pursuant to RSA 194-B:3-a, the state shall pay tuition pursuant to RSA 198:40-a and RSA 198:40-c directly to the charter school for each pupil who is a resident of this state in attendance at such charter school [as follows: (a) For the fiscal year beginning July 1, 2006, $3,598 annual tuition.  (b) For every fiscal year thereafter, the department of education shall determine the tuition rate by adjusting for the average annual percentage rate of inflation based on the northeast region consumer price index for all urban consumers as published by the Bureau of Labor Statistics, United States Department of Labor. The average shall be based on the 4 calendar years ending 18 months before the beginning of the fiscal year for which the tuition rate is to be determined]. (c) Notwithstanding RSA 198:42, the commissioner of the department of education shall calculate and distribute charter school tuition payments as set forth herein. The first payment shall be 30 percent of the per pupil amount multiplied by the number of eligible pupils present on the first day of the current school year. Such payment shall be made no later than 15 days after the department of education receives the attendance report. The December 1 payment shall be 30 percent of the per pupil amount multiplied by the membership on November 1, and the March 1 payment shall be 30 percent of the per pupil amount multiplied by the membership on February 1. To calculate the final payment, the commissioner of the department of education shall multiply the per pupil amount by the average daily membership in attendance for the full school year, and subtract the total amount of the first 3 payments made. The remaining balance shall be the final payment. Eligible charter schools shall report membership in accordance with RSA 189:1-d. In this subparagraph, "membership" shall be as defined in RSA 189:1-d, II. Tuition amounts shall be prorated on a per diem basis for pupils attending a school for less than a full school year. (d) The source of funds for payments under this section shall be moneys from the education trust fund established in RSA 198:39. 13 Joint Legislative Oversight Committee on Accountability for An Adequate Education. I. There is hereby established the joint legislative oversight committee on accountability for an adequate education. The members of the committee shall be as follows: (a) Three members of the house of representatives, which shall include 2 members of the house education committee and one member of the house finance committee, appointed by the speaker of the house of representatives. (b) Three members of the senate, which shall include 2 members of the senate education committee and one member of the senate finance committee, appointed by the president of the senate. II. The committee shall review and study the assessment and assistance methods, reporting requirements, and other methods of accountability presently being used by the department of education and local school districts to determine whether such methods, programs, and standards will ensure the delivery of an adequate education as set forth in RSA 193-E:2-a. III. Following a public hearing, the committee shall report its findings and recommendations concerning the sufficiency of existing statutory law to provide accountability for the delivery of the opportunity for an adequate education as defined in RSA 193-E:2-a, and the possible need for additional legislation, to the governor, the speaker of the house of representatives, the president of the senate, and the state librarian no later than November 15, 2008. 14 Joint Legislative Committee on Fiscal Capacity, Transition Aid, and Diseconomies of Scale. I. There is hereby established a joint legislative committee on fiscal capacity, transition aid and diseconomies of scale. The members of the committee shall be as follows: (a) Six members of the house of representatives, which shall include 2 members of the house finance committee, 2 members of the house ways and means committee, and 2 at-large members, appointed by the speaker of the house of representatives. (b) Six members of the senate, which shall include 2 members of the senate finance committee, 2 members of the senate ways and means committee, and 2 at-large members, appointed by the president of the senate.  II. The committee shall study the need for providing fiscal capacity and transition aid to municipalities, as well as additional aid to address the lack of economies of scale in small school districts, and the source of funds for such aid. III. Following a public hearing, the committee shall report its findings and recommendations concerning the need for fiscal capacity disparity aid, transition aid, and small school district aid, and the need for additional legislation, to the governor, the speaker of the house of representatives, the president of the senate, and the state librarian no later than December 1, 2008. 15 References Amended. Amend the following RSA sections by replacing "statewide enhanced education tax" with "education tax": RSA 21-J:14-h; RSA 76:3; RSA 76:8, I; RSA 76:8, III; RSA 76:9; RSA 83-F:9; RSA 198:46; RSA 198:47; RSA 198:57, III(a); and RSA 198:57, IV(c). 16 Severability. If any provision of this act or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the act which can be given effect without the invalid provision or application, and to this end the provisions of this act are declared to be severable. 17 Repeal. The following are repealed: I. 2005, 257:8, relative to determination of grants and excess enhanced education property tax payments. II. 2005, 257:23, I, relative to the July 1, 2009 effective date for 2005, 257:8. III. RSA 198:41, III as inserted by section 9 of this act, relative to total education grants distributed in the 2010 and 2011 fiscal years. 18 Effective Date. I. Paragraphs I and II of section 17 of this act shall take effect June 30, 2009. II. Section 8 and paragraph III of section 17 of this act shall take effect July 1, 2011. III. The remainder of this act shall take effect July 1, 2009.

Rep. Peter Allen (D - Ches 6)Thank you, Madam Speaker. I speak in favor of fully funding public education. In my experience, good leadership is doing the right thing and explaining why it is the right thing to do. I lived with my wife and four children in Wilmot, New Hampshire when the Kearsarge Regional School District began. Opponents used scurrilous arguments to defeat the bond issue necessary to build a new high school for the district of seven republican towns, so I got involved and spoke up. A few years later, I was chairman of Kearsarge Regional School Board. For eight years, seven republican towns, annual school meetings confronted budgets that brought many people, about 1500 one year, 1600 another, as I recall, in the auditorium, cafeteria and gym connected with communications run by students. We had excellent leaders. Our superintendent, his assistant and the principals could always explain why the funding was necessary. We always got our budgets passed. The year after I left the school board, Kearsarge Regional received a federal award for excellence in education. I believe that public education is the most responsible investment society can make. A state that spends 8% of its income on state and local tax burdens in 2007 can certainly afford to fully fund public education. Those who deny that are disingenuous at least. I struggled for a polite word. Speaker: The question before the House is on the Majority committee report of Ought to Pass as Amended on SB 539. The Chair recognizes the member from Keene, Representative Dunn.

Rep. J. Timothy Dunn (D - Ches 3)Thank you, Madam Speaker. Members of the General Court, I rise today in support of SB 539 which refers to the cost of an adequate education - cost of an adequate education, not funding, not distribution of funds - cost. There are spreadsheets out there, a number of them and you have either looked at them and celebrated with great joy or felt great despair. Let me try to alleviate either joy or despair by simply saying your reaction is misplaced and ill-timed by at least 16 months. It will be at least 16 months before we know what the funding and distribution will look like. We are voting today on an educational policy that is constitutional, far reaching and insightful. It is based on research and it is based on nationally known best practices in funding public education. Therefore, I hope you will join me and vote to support the Finance committee's and by extension the Education committee's Ought to Pass with Amendment recommendation on SB 539. Thank you, Madam Speaker. There have been too many words here today. Speaker: The question before the House is on the Majority committee report of Ought to Pass as Amended on SB 539. The Chair recognizes the member from Weare, Representative Kurk.

Rep. Neal Kurk (R - Hills 2)Thank you for recognizing me. I rise in opposition to the bill as amended by the Finance committee. The bill at the same time does both too much and too little. It does more than it has to and based on what it does, not enough. Let me be specific, this bill was supposed to be a costing bill. It clearly goes beyond costing. There is transition aid, there is fiscal disparity aid, and there are all sorts of things that we have heard about today. Indeed there are hold harmless on the upside and the downside, there is collar protecting the towns that would lose money on the one hand, protecting towns who would have to pay into the system under the property tax, the donor towns on the other. If this only had been a costing bill, if all we had done was truly cost an adequate education the way the commission recommended without a variety of these other things, then we would have a bill that was both affordable and appropriate to do nothing to fund with at this time. As you know, there are different methods of creating the cost of an adequate education. A number of years ago, when the other party was in power, we chose to use one of the accepted methods; it was called the comparative cost method. So you looked at what school districts were doing throughout the state, you found those that were producing decent results, what is their average cost and that becomes the cost of an adequate education. This group of folks have used another perfectly acceptable method, the market basket approach. What do we need to provide a good education, so many teachers, so many classrooms, so many aides, and so many librarians? What do they cost? Put it all together and you come up with an adequate education cost. Either method is acceptable to education finance experts and I think to our side of the aisle. If that's all that had been done, we would be arguing about small details, but the bill is, as I say, does too much, it goes beyond that and because it goes beyond that it creates problems for itself, it does too much. It doesn't say how it is going to pay for all of the extra costs, roughly $64 million in each year in 2010 and 2011. When I go into a restaurant and I order something off the menu, I see the price. But I also know that I have in my wallet - the money to pay for it or a credit card or there is somebody else at the table that is going to pick up the tab. (I was looking this way). But that is not what this bill does. The bill makes promises, the bill orders from the menu and there is no money in the wallet, there is no credit card although we like to borrow and there is no big sugar daddy from whom to borrow this money. That is why the bill does too much. It makes promises and doesn't say how they are going to be paid for. Wait until next year, of course after the election, wait until next year and we will tell you how we are going to do it and if there are problems with the bill, we can fix it next year. But meantime we have made promises that cost money. We promised to hold certain towns harmless, that costs money, not part of adequacy and we don't say how we are going to pay for it. That is why the bill does too much and for those reasons I find it very difficult to support the bill. The other part of the bill we have heard a lot about that creates problems for us and that is that there are two sections that are patently unconstitutional. One is the 15% cap. The supreme court has already told us several times, you can't do that. You have to pay for adequacy from day one, no transition. The other part is the donor town rebates. Again, the same thing, you have heard this stated before. I understand why this is being done because I have been in the majority and when we were faced with these problems, we did the same thing and we got our wrists slapped by the court. What I find ironic is the minority which is now the majority sees the world from the same way we did is doing the same things, but at least we didn't have the experience. We hadn't been slapped on the wrists at the time we did it. They know better and they still have unconstitutional provisions in here. It's not right; we shouldn't have them in here. For those reasons, the fact that the bill does both too little and too much and the fact that there are definitely unconstitutional provisions in here, I would ask you to vote no when we have the vote on this bill. Madam Speaker, I would ask for a roll call on this motion. Thank you, Madam Speaker. Speaker: The question before the House is on the Majority committee report of Ought to Pass as Amended on SB 539. The Chair recognizes the member from Stoddard,

Rep. Eaton. Rep. Daniel EatonMadam Speaker, I appreciate the previous gentlemen from Weare expressing the good will and support, validity of integrity of the funding process that we went through. He validates the costing commission did its job, the education committee did its job, the finance committee did its job. I don't know how many times I have been on this floor, a few years ago, overturning the majority for an education funding plan which then was trapped in the Senate and gave us an unconstitutional plan. Hearing the same arguments, we are not funding it. The gentlemen from Weare probably knows the budget of this place better than anybody on the planet and knows that you don't fund something the biennium before you're implementing. It would be very difficult to do so. He also knows that one legislature cannot obligate the next legislature. You come up with the best you can come up with, you build what you believe is a good plan, a workable plan, a constitutional plan and you hope that the next legislature in the next segment continues that work and finishes. As the gentlemen from New London stated, "We are in step two of step four." We need to get the work done and the gentlemen from Weare did say they worked on an unconstitutional plan. My recollection is that it was unconstitutional because it was staggering the tax rate. We don't do that in this bill, we work on a distribution adjustment. The tax rate is the same across the board. If I am wrong, the impetus would be that they might still slap the wrists of the gentlemen from Weare, but since I like him, I hope I'm right. Madam Speaker, it is one of the most important bills of the year, conceivably the most important. I don't think anyone in this Chamber would like to see the supreme court laying out our next costing plan after seeing what a wonderful job they did in doing redistricting. My friend from Weare, I think, would back me up on that point. With that said, Madam Speaker, I hope the House will back the Education committee, the costing commission and the Finance committee and, promise, get through this vote so we get to go on to the next committee. (Deputy Speaker Foster in the Chair) REGULAR CALENDAR (CONT'D) SB 264, relative to creating liens on personal and real property to recover uncollected small claims judgments. MAJORITY: OUGHT TO PASS WITH AMENDMENT. MINORITY: INEXPEDIENT TO LEGISLATE. Rep. Gregory M. Sorg for the Majority of Judiciary: This bill addresses the problem small claims judgment creditors often have in collecting their judgment debts. It does this in general by authorizing both pre- and post-judgment attachments and levies of execution on personal property and real estate in small claims actions, and in particular by allowing a post-judgment security interest in real estate to be created simply by recording the judgment in the registry of deeds in which the real estate is located. In order to prevent hardship to a judgment debtor who, having paid the judgment, has not received a written release of the recorded security interest from the judgment creditor, the bill, as amended, provides for such release to be issued by the clerk of the court upon presentation of satisfactory proof of payment. The amended bill provides penalties both to a judgment creditor who fails to provide a release when due, and to a judgment debtor who fraudulently induces a clerk of court to issue an undeserved release. Vote 12-4. Rep. Robert H. Rowe for the Minority of Judiciary: This bill makes two profound changes to the traditional small claims process. Under RSA 503, small claims was established "to be a simple, speedy and informal procedure for the determination of small claims." Initially the damage limit was $60. It is currently $5,000 and with the House bill we passed this year, damage limits will be increased to $10,000. The small claims process was designed primarily as a method for citizens to resolve small dollar amount disputes. The process was kept informal and simple. As such there are no rules of evidence mandated by law for the process. The defendant is without discovery. Hearsay evidence is allowed. Parties are not under oath. In recent years, as the damage amount has increased, more businesses, banks, and credit card companies have utilized the process in claims against citizens. The first change that this bill provides is to greatly simplify the real estate and attachment process after judgment. Under current law, the plaintiff must petition the court and notify the defendant then come to court and convince a judge why an attachment is necessary. The judge would protect against abuse. Under this bill, all the plaintiff need do is to send a copy of the judgment to the registry of deeds. The citizen defendant has no say and no chance to voice his or her objection. The second change is that this bill allows for pre-judgment attachments of real estate, personal property, including banking accounts under the provisions of RSA 511-A. Pre-judgment attachments have never been allowed in small claims actions. Until this law, pre-judgment attachment was only available in regular district court civil cases. With the increase of businesses, banks and credit card companies utilizing small claims as a collection method, this bill aids business plaintiffs, harms the citizens, and is contrary to the purpose of maintaining a simple, speedy and informal process for the resolution of disputes.  Majority Amendment (1311h) Amend the title of the bill by replacing it with the following: AN ACT relative to post-judgment attachments to secure small claims judgments. Amend the bill by replacing all after the enacting clause with the following: 1 New Section; Attachments to Secure Small Claims Judgments. Amend RSA 503 by inserting after section 11 the following new section: 503:12 Post-Judgment Attachment and Execution. I. Attachments and levies of execution on personal property and real estate may be made on judgments in small claims actions in district courts as provided in RSA 511, RSA 528 and RSA 529. II. A judgment entered in accordance with this chapter may be secured by real estate by recording or re-recording, at any time during the duration of the judgment, a certified copy of the judgment with the registry of deeds of the county in which the real estate is located. III. When a small claims judgment secured by real estate is satisfied, the plaintiff or his or her attorney shall deliver to the defendant or owner of the encumbered real estate a discharge thereof. The defendant or owner shall cause the discharge to be recorded and shall pay the register of deeds the recording fee established pursuant to RSA 478:17-g. The failure of the plaintiff to comply with the provisions of this paragraph shall be a violation. IV.(a) If such plaintiff fails to deliver such discharge of a satisfied small claims judgment within 30 days from receipt of a request to deliver such discharge, or if other exigent circumstances require an immediate discharge, such discharge may be issued by the clerk of the court in which the judgment was rendered upon presentation of proof that the judgment has been paid in full, in the form of either a bank check, a certified check, an attorney's client funds account check which bears no indication of a stop payment order or return for insufficient funds, or by other equivalent documentary evidence of such receipt of payment. (b) The discharge shall include the names and addresses of the plaintiff and the defendant, the date and amount of the judgment, the name of the underlying case, and the book and page of recording of the attachment. (c) The discharge, when recorded, shall constitute a complete discharge of the small claims judgment and a release of the lien created by the recording of the small claims judgment. (d) Any person who induces a clerk of court to execute a discharge in accordance with this paragraph, on the basis of information and statements known to the person to be false, shall be guilty of a class B misdemeanor. 2 Attachable Property; Availability of Prejudgment Attachment. Amend RSA 503:3-c to read as follows: 503:3-c Prejudgment Attachment Process. The prejudgment attachment process under RSA [511] 511-A shall apply to [judgments obtained in] small claims actions. 3 Effective Date. This act shall take effect 60 days after its passage.