Sec. 1. 20-A MRSA §7201, sub-§2, ¶C, as enacted by PL 1981, c. 693, §§5 and 8, is amended to read:

C. An exceptional student may be placed in a regional program, a residential school or institution, or in a private day school or program, only after supporting evaluative data justifying the placement have been submitted to and approved by the commissioner.

Sec. 2. 20-A MRSA §7253, sub-§4, as enacted by PL 1981, c. 693, §§5 and 8, is amended to read:

4. Funding. The regional program shall must be supported by funds included in the special education appropriations of each of the member school administrative units. The department shall appropriate funds only for out-of-district special education placements approved by the commissioner under section 7201, subsection 2, paragraph C.

Sec. 3. 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