SECTION 1. Section 2 of Chapter 70 of the General Laws, as appearing in the 2016 Official Edition, is hereby amended by inserting the following definitions:-

“Rural factors”, shall include, but not be limited, to: student population density of a public school based on foundation enrollment; average per pupil spending costs; a school’s rate of decline for foundation enrollment; local property taxes; a school’s average per capita income.

“Rural school”, any public school district of the Commonwealth, excluding charter schools, with a student density of less than 40 students per square mile based on foundation enrollment.

“Rural school aid”, state local aid distributed to eligible rural schools, and as established in section 16A of chapter 70.

SECTION 2. Said Chapter 70 is hereby further amended by adding the following new sections:-

Section 16. Funding for Rural Schools

The department shall consider additional rural factors when developing, calculating and distributing state school aid to municipalities with rural schools for purposes of ensuring that rural schools are equitably distributed state school aid. Subsequent to consideration of rural factors, the department shall further appropriately and reasonably reduce the minimum required local contributions of a municipality to fund its rural schools and increase the minimum state school aid calculated in the municipality’s foundation budget.

Section 16A. Rural School Aid

There shall be established rural school aid, to be distributed annually each fiscal year to eligible rural schools of the Commonwealth. Rural schools shall be eligible if the rural school district has not more than 40 students per square mile and an average per capita income of less than 115% of the mean per capita income for the Commonwealth for the same period; provided, that eligible schools shall receive $400 per pupil. Rural school aid shall not be considered chapter 70 aid for the purposes of the calculation of the minimum required local contribution for any fiscal year.

SECTION 3. The department of elementary and secondary education shall promulgate any necessary rules and regulations for purposes of implementing this act.