CSHB 124(FIN): "An Act establishing capital project matching grant programs for municipalities and unincorporated communities; and providing for an effective date."
00CS FOR HOUSE BILL NO. 124(FIN) 01 "An Act establishing capital project matching grant programs for municipalities 02 and unincorporated communities; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. PURPOSE. (a) The legislature recognizes the continued need for state-funded capital projects (1) 05 that are of regional or statewide significance, (2) that meet basic 06 needs, such as educational facility projects constructed under AS 14.11 and village safe water 07 projects, or (3) for which costs will exceed the amount available to a municipality or a 08 community under the capital project matching grant program. The legislature also recognizes 09 the continued need for legislatively directed funding of other capital projects. 10 (b) It is the purpose of this Act to 11 (1) provide a capital project funding system that is equitable to municipalities 12 and unincorporated communities throughout the state; 13 (2) enhance the role of communities in initiating and prioritizing the 14 construction of capital projects;
01 (3) encourage a sense of local ownership in capital projects by requiring local 02 participation in the funding of those projects; and 03 (4) improve the process for making grants for capital projects by providing a 04 more orderly and thoughtful planning process that involves the local community, the executive 05 branch, and the legislature. 06 * Sec. 2. AS 36.10.180(a) is amended to read: 07 (a) The preferences established in AS 36.10.150 - 36.10.175 apply to work 08 performed 09 (1) under a contract for construction, repair, preliminary surveys, 10 engineering studies, consulting, maintenance work, or any other retention of services 11 necessary to complete a given project that is let by the state or an agency of the state, 12 a department, office, state board, commission, public corporation, or other 13 organizational unit of or created under the executive, legislative, or judicial branch of 14 state government, including the University of Alaska and the Alaska Railroad 15 Corporation, or by a political subdivision of the state including a regional school board 16 with respect to an educational facility under AS 14.11.020; 17 (2) on a public works project under a grant to a municipality under 18 AS 37.05.315 or AS 37.06.010; 19 (3) on a public works project under a grant to a named recipient under 20 AS 37.05.316; 21 (4) on a public works project under a grant to an unincorporated 22 community under AS 37.05.317 or AS 37.06.020; and 23 (5) on any other public works project or construction project that is 24 funded in whole or in part by state money. 25 * Sec. 3. AS 37 is amended by adding a new chapter to read: 26 CHAPTER 06. CAPITAL PROJECT MATCHING GRANT PROGRAMS. 27 Sec. 37.06.010. MUNICIPAL CAPITAL PROJECT MATCHING GRANT 28 PROGRAM. (a) The municipal capital project matching grant program is established 29 in the department. Grants to municipalities under this program shall be administered 30 as provided in this section. 31 (b) The municipal capital project matching grant fund is established in the
01 department and consists of appropriations to the fund. Appropriations to the fund do 02 not lapse except as provided in (f) of this section. The money in the fund is held by 03 the department in custody under this subsection for each municipality. The department 04 shall establish, for each municipality, an individual grant account within the fund. As 05 provided in this subsection, each fiscal year the department shall allocate, to the 06 individual grant accounts, appropriations to the fund. The department shall credit 07 interest earned on money in an individual grant account to that account. Except as 08 provided in (c) of this section, the amount allocated under this subsection to an 09 individual grant account in a fiscal year is determined by multiplying the total amount 10 appropriated to the fund during that fiscal year by a fraction, 11 (1) the numerator of which equals for a municipality with a population 12 (A) under 1,000, the amount equal to that population multiplied 13 by 1.5; 14 (B) of at least 1,000 but less than 5,000, the amount equal to 15 that population multiplied by 1.4; 16 (C) of at least 5,000 but not greater than 10,000, the amount 17 equal to that population multiplied by 1.2; 18 (D) of over 10,000, the amount equal to that population; and 19 (2) the denominator of which equals the sum of the numerators 20 calculated for all municipalities under (1)(A) - (D) of this subsection. 21 (c) A minimum of $25,000 shall be allocated to each municipality's individual 22 grant account each fiscal year under (b) of this section. The department shall reduce 23 allocations under (b) of this section on a pro rata basis, based upon the population of 24 the municipalities, if necessary to fund the minimum amount for each municipality. 25 If appropriations are not sufficient to fully fund the minimum amount for each 26 municipality, the amount appropriated shall be allocated equally among the 27 municipality individual grant accounts. 28 (d) By October 1 of each fiscal year, each municipality shall submit to the 29 governor a prioritized list of capital projects and estimated costs to be financed with 30 money from the municipality's individual grant account established under (b) of this 31 section. The list must include the amount and source of the local share required by
01 AS 37.06.030. The governor shall include in the capital improvements program 02 presented to the legislature under AS 37.07.060 the projects submitted by each 03 municipality that the governor recommends for funding. If, in the capital 04 improvements program, the governor includes projects in other than the priority order 05 submitted by a municipality, the governor shall provide the legislature with a written 06 statement of the reasons for that action. 07 (e) The legislature may make appropriations from a municipality's individual 08 grant account established under (b) of this section to the municipality for capital 09 projects under this section. Subject to appropriations under this subsection and to the 10 local share requirements of AS 37.06.030, each municipality may draw amounts from 11 its individual grant account for a capital project, in accordance with an appropriation 12 for that project. In accepting a draw, the municipality covenants with the state that 13 it will provide for the operation and maintenance of the capital project for which the 14 draw is used for the practical life of the project, and acknowledges that the state is not 15 responsible for operating or maintaining the capital project or for paying for its 16 operation or maintenance. This requirement does not apply to use of money from a 17 draw for repair or improvement of an existing facility that is operated or maintained 18 by the state at the time that the draw is made if the repair or improvement for which 19 the draw is used will not substantially increase the operating or maintenance costs to 20 the state. No more than 10 percent of the total amount of money from a draw for land 21 acquisition, or planning, design, construction, or repair of a facility may be used for 22 administrative expenses. No more than five percent of the total amount of money 23 from a draw for equipment or equipment repairs may be used for administrative 24 expenses. If a municipality provides grant money from a draw to another recipient, 25 the municipality may not use any of the money from the draw for administrative 26 expenses. The municipality and its agents, contractors, and subcontractors shall 27 comply with the hiring preferences under AS 36.10 in hiring employees to be paid 28 wholly or in part with money from a draw. 29 (f) A municipality shall repay to the department money drawn from its 30 individual grant account if substantial, ongoing work on the capital project is not 31 started within five years after the effective date of the appropriation from which the
01 draw is funded. Money repaid shall be deposited into the general fund. Money from 02 an allocation to a municipality's individual grant account that has not been drawn out 03 by the municipality within five years after the effective date of the appropriation from 04 which the allocation is funded lapses into the general fund. 05 (g) For purposes of this section, in calculating the population of a borough the 06 population of each city in the borough is excluded. The determination of population 07 shall be based upon data used by the Department of Community and Regional Affairs 08 under AS 29.60.020. 09 (h) The provisions of AS 37.05.321 apply to a grant and draws made under 10 this section, and to earnings from the grant and draws. 11 (i) In this section, unless specified otherwise, "department" means the 12 Department of Administration. 13 Sec. 37.06.020. UNINCORPORATED COMMUNITY CAPITAL PROJECT 14 MATCHING GRANT PROGRAM. (a) The unincorporated community capital project 15 matching grant program is established in the department. Grants to unincorporated 16 communities under the program shall be administered as provided in this section. 17 (b) The unincorporated community capital project matching grant fund is 18 established in the department and consists of appropriations to the fund. 19 Appropriations to the fund do not lapse except as provided in (h) of this section. The 20 money in the fund is held by the department in custody under this subsection for each 21 unincorporated community eligible for an allocation under this subsection. The 22 department shall establish an individual grant account within the fund for each 23 unincorporated community that was entitled to receive state aid under AS 29.60.140 24 during the preceding fiscal year. As provided in this subsection, each fiscal year the 25 department shall allocate, to the individual grant accounts, appropriations to the fund. 26 An unincorporated community is eligible for an allocation in a fiscal year if the 27 community was eligible to receive state aid under AS 29.60.140 during the preceding 28 fiscal year. The department shall credit interest earned on money in an individual 29 grant account to that account. Except as provided in (c) of this section, the amount 30 allocated under this subsection to an individual grant account in a fiscal year is 31 determined by dividing the total amount appropriated to the fund during that fiscal year
01 by the number of unincorporated communities eligible for an allocation during that 02 fiscal year. 03 (c) A minimum of $25,000 shall be allocated to each eligible unincorporated 04 community's grant account each fiscal year under (b) of this section. If appropriations 05 are not sufficient to fully fund the minimum amount for each eligible unincorporated 06 community, the amount appropriated shall be allocated equally among the eligible 07 unincorporated communities. 08 (d) The department shall designate, in each eligible unincorporated community, 09 an incorporated nonprofit entity or a Native village council that agrees to receive and 10 spend grant money allocated to the unincorporated community's individual grant 11 account under (b) of this section. If there is more than one qualified entity in a 12 community, the department shall designate the entity that the department finds most 13 qualified to make draws from that unincorporated community's individual grant 14 account and spend the money. If there is no qualified incorporated nonprofit entity or 15 Native village council in an unincorporated community that will agree to receive and 16 spend money allocated to the community under (b) of this section, draws may not be 17 made from the unincorporated community's individual grant account and the amount 18 allocated to the account lapses into the general fund. 19 (e) By October 1 of each fiscal year, the incorporated nonprofit entity or 20 Native village council designated by the department under (d) of this section shall 21 submit to the governor a prioritized list of capital projects and estimated costs to be 22 financed with money from the community's individual grant account established under 23 (b) of this section. The list must include the amount and source of the local share 24 required by AS 37.06.030. The governor shall include in the capital improvements 25 program presented to the legislature under AS 37.07.060 the projects submitted by 26 designated entities under this subsection that the governor recommends for funding. 27 If, in the capital improvements program, the governor includes projects in other than 28 the priority order submitted by a designated entity, the governor shall provide the 29 legislature with a written statement of the reasons for that action. 30 (f) The legislature may make appropriations, from an unincorporated 31 community's individual grant account established under (b) of this section, for the
01 unincorporated community for capital projects under this section. Subject to 02 appropriations under this subsection and to the local share requirements of 03 AS 37.06.030, an entity designated by the department under (d) of this section may 04 draw, on behalf of the unincorporated community, amounts from that community's 05 individual grant account for a capital project in accordance with an appropriation for 06 that project. In accepting a draw, an entity designated by the department under (d) of 07 this section acknowledges that the state is not responsible for operating or maintaining 08 a capital project for which the draw is used, or for paying for its operation or 09 maintenance. The acknowledgment does not apply to use of money from a draw for 10 repair or improvement of an existing facility that is operated or maintained by the state 11 at the time that the draw is made if the repair or improvement for which the draw is 12 used will not substantially increase the operating or maintenance costs to the state. No 13 more than 10 percent of the total amount of money from a draw for land acquisition, 14 or planning, design, construction, or repair of a facility may be used for administrative 15 expenses. No more than five percent of the total amount of money from a draw for 16 equipment or equipment repairs may be used for administrative expenses. The 17 designated entity and its agents, contractors, and subcontractors shall comply with the 18 hiring preferences under AS 36.10 in hiring employees to be paid wholly or in part 19 with money from a draw. 20 (g) An entity designated by the department under (d) of this section that is a 21 Native village council may not draw money from an unincorporated community's 22 individual grant account unless the council waives immunity from suit for claims 23 arising out of activities of the council related to the draw. A waiver of immunity from 24 suit under this subsection must be on a form provided by the Department of Law. 25 Neither this subsection nor any action taken under it enlarges or diminishes the 26 governmental authority or jurisdiction of a Native village council. 27 (h) An entity designated by the department under (d) of this section shall repay 28 to the department money it has drawn from an unincorporated community's individual 29 grant account if substantial, ongoing work on the project is not started within five 30 years after the effective date of the appropriation from which the draw is funded. 31 Money repaid shall be deposited into the general fund. Money from an allocation to
01 an unincorporated community's individual grant account that has not been drawn out 02 by a designated entity within five years after the effective date of the appropriation 03 from which the allocation is funded lapses into the general fund. 04 (i) The limitations of AS 44.47.140 do not apply to a grant made under this 05 section. 06 (j) The provisions of AS 37.05.321 apply to a grant and draws made under this 07 section, and to earnings from the grant and draws. 08 (k) In this section, unless specified otherwise, "department" means the 09 Department of Community and Regional Affairs. 10 Sec. 37.06.030. LOCAL SHARE REQUIREMENTS. (a) For each draw made 11 by a municipality under AS 37.06.010, the municipality shall contribute a local share 12 to the cost of the capital project for which the draw is made. The amount of the local 13 share equals the local share percentage as calculated under (1) or (2) of this subsection, 14 divided by the state share percentage as calculated under (3) of this subsection, 15 multiplied by the amount of the draw. For purposes of this subsection, 16 (1) if the effective date of the appropriation from which the draw is 17 funded is no later than July 1, 1994, the local share percentage is 18 (A) 30 percent for a municipality with a population of 5,000 or 19 more; 20 (B) 15 percent for a municipality with a population of 1,000 - 21 4,999; 22 (C) five percent for a municipality with a population of under 23 1,000; 24 (2) if the effective date of the appropriation from which the draw is 25 funded is after July 1, 1994, the local share percentage is 26 (A) 40 percent for a municipality with a population of 5,000 or 27 more; 28 (B) 20 percent for a municipality with a population of 1,000 - 29 4,999; 30 (C) seven percent for a municipality with a population of under 31 1,000;
01 (3) the state share percentage equals one minus the local share 02 percentage; 03 (4) the local share to be contributed by a municipality may be satisfied 04 with (A) federal, municipal, or local money; (B) labor, materials, or equipment used 05 directly in the construction of the project, or land, including land transferred by the 06 state to the municipality; the department shall determine the value of a contribution 07 under this subparagraph; (C) money from another nonstate source; (D) money received 08 by the municipality under AS 29.60.010 - 29.60.375; (E) state taxes refunded or 09 reimbursed to the municipality whose use for the purposes of this subsection is not 10 prohibited; (F) allocations of state aid for the costs of school construction debt under 11 AS 14.11.100; and (G) money obtained from the sale or lease of land or other assets 12 transferred by the state to the municipality; except as provided in this paragraph, the 13 local share may not be satisfied with money from, or with the portion of an asset that 14 was obtained with money from, an appropriation, allocation, entitlement, grant, or 15 other payment from the state. 16 (b) For each draw made by an entity or council under AS 37.06.020, the 17 incorporated entity or Native village council that makes the draw shall contribute a 18 local share of the cost of the capital project for which the draw is made. The amount 19 of the local share equals the local share percentage as calculated under (1) of this 20 subsection, divided by the state share percentage as calculated under (2) of this 21 subsection, multiplied by the amount of the draw. For purposes of this subsection, 22 (1) the local share is five percent if the effective date of the 23 appropriation from which the draw is funded is no later than July 1, 1994, and seven 24 percent if the effective date is after July 1, 1994; 25 (2) the state share percentage equals one minus the local share 26 percentage; 27 (3) the local share may be satisfied from (A) federal or local money; 28 (B) locally funded or contributed labor, materials, or equipment used directly in the 29 construction of the project, or land; the department shall determine the value of a 30 contribution under this subparagraph; (C) money from another nonstate source; or (D) 31 money received by the unincorporated community under AS 29.60.010 - 29.60.375;
01 except for money received under AS 29.60.010 - 29.60.375, the local share may not 02 be satisfied with money from, or with the portion of an asset that was obtained with 03 money from, an appropriation, allocation, entitlement, grant, or other payment from the 04 state. 05 (c) For purposes of (a) of this section, in calculating the population of a 06 borough the population of each city in the borough is excluded. The determination of 07 population shall be based upon data used by the Department of Community and 08 Regional Affairs under AS 29.20.060. 09 Sec. 37.06.080. ADOPTION OF REGULATIONS. The Department of 10 Administration for grants under AS 37.06.010 and the Department of Community and 11 Regional Affairs for grants under AS 37.06.020 12 (1) may adopt regulations that impose additional requirements or 13 procedures to implement, interpret, make specific, or otherwise carry out the applicable 14 provisions of this chapter for grants administered by the department; 15 (2) shall adopt regulations providing for periodic audits of the use of 16 money for grants administered by the department under this chapter, including audit 17 of the department's determination of the value of, and adequacy of the verification of 18 the actual use of, locally funded or contributed labor on projects funded by a grant 19 under this chapter. 20 Sec. 37.06.090. DEFINITION OF "CAPITAL PROJECT." In this chapter, 21 "capital project" means a project with a cost exceeding $10,000 to acquire or improve 22 an asset with an anticipated life exceeding one year and includes land acquisition, 23 construction, repair or structural improvement of a facility, engineering and design for 24 a facility, and acquisition or repair of equipment. 25 * Sec. 4. IMPLEMENTATION; APPLICABILITY. (a) Notwithstanding sec. 5 of this 26 Act, a grant for a capital project may not be disbursed or drawn upon under AS 37.06, as 27 enacted by this Act, until after June 30, 1993. 28 (b) Notwithstanding provisions relating to lists of projects and appropriations for 29 projects in AS 37.06.010(d) and (e) and AS 37.06.020(e) and (f), as added by sec. 3 of this 30 Act, the office of management and budget shall select projects to be funded during fiscal year 31 1994 with money allocated to individual grant accounts. Selections shall be made from a list
01 of proposed projects submitted to the office of management and budget by each potential 02 grantee in writing. The Department of Administration shall make grants during fiscal year 03 1994 for the projects selected by the office of management and budget from the individual 04 grant accounts of municipalities, and the Department of Community and Regional Affairs shall 05 make grants during fiscal year 1994 for the projects selected by the office of management and 06 budget from individual grant accounts of unincorporated communities. 07 * Sec. 5. This Act takes effect immediately under AS 01.10.070(c).