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CSHB 13(RLS) am: "An Act relating to reimbursement of municipal bonds for school construction; increasing the base student allocation used in the formula for state financing of public education; relating to the district cost factors for state funding of public education; relating to school improvement funding; and providing for an effective date."

00 CS FOR HOUSE BILL NO. 13(RLS) am 01 "An Act relating to reimbursement of municipal bonds for school construction; 02 increasing the base student allocation used in the formula for state financing of public 03 education; relating to the district cost factors for state funding of public education; 04 relating to school improvement funding; and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 14.11.100(a) is amended to read: 07 (a) During each fiscal year, the state shall allocate to a municipality that is a 08 school district the following sums: 09 (1) payments made by the municipality during the fiscal year two years 10 earlier for the retirement of principal and interest on outstanding bonds, notes, or other 11 indebtedness incurred before July 1, 1977, to pay costs of school construction; 12 (2) 90 percent of 13 (A) payments made by the municipality during the fiscal year 14 two years earlier for the retirement of principal and interest on outstanding 15 bonds, notes, or other indebtedness incurred after June 30, 1977, and before

01 July 1, 1978, to pay costs of school construction; 02 (B) cash payments made after June 30, 1976, and before July 1, 03 1978, by the municipality during the fiscal year two years earlier to pay costs 04 of school construction; 05 (3) 90 percent of 06 (A) payments made by the municipality during the fiscal year 07 two years earlier for the retirement of principal and interest on outstanding 08 bonds, notes, or other indebtedness incurred after June 30, 1978, and before 09 January 1, 1982, to pay costs of school construction projects approved under 10 AS 14.07.020(a)(11); 11 (B) cash payments made after June 30, 1978, and before July 1, 12 1982, by the municipality during the fiscal year two years earlier to pay costs 13 of school construction projects approved under AS 14.07.020(a)(11); 14 (4) subject to (h) and (i) of this section, up to 90 percent of 15 (A) payments made by the municipality during the current 16 fiscal year for the retirement of principal and interest on outstanding bonds, 17 notes, or other indebtedness incurred after December 31, 1981, and authorized 18 by the qualified voters of the municipality before July 1, 1983, to pay costs of 19 school construction, additions to schools, and major rehabilitation projects that 20 exceed $25,000 and are approved under AS 14.07.020(a)(11); 21 (B) cash payments made after June 30, 1982, and before July 1, 22 1983, by the municipality during the fiscal year two years earlier to pay costs 23 of school construction, additions to schools, and major rehabilitation projects 24 that exceed $25,000 and are approved under AS 14.07.020(a)(11); and 25 (C) payments made by the municipality during the current 26 fiscal year for the retirement of principal and interest on outstanding bonds, 27 notes, or other indebtedness to pay costs of school construction, additions to 28 schools, and major rehabilitation projects that exceed $25,000 and are 29 submitted to the department for approval under AS 14.07.020(a)(11) before 30 July 1, 1983, and approved by the qualified voters of the municipality before 31 October 15, 1983, not to exceed a total project cost of (i) $6,600,000 if the

01 annual growth rate of average daily membership of the municipality is more 02 than seven percent but less than 12 percent, or (ii) $20,000,000 if the annual 03 growth rate of average daily membership of the municipality is 12 percent or 04 more; payments made by a municipality under this subparagraph on total 05 project costs that exceed the amounts set out in (i) and (ii) of this subparagraph 06 are subject to (5)(A) of this subsection; 07 (5) subject to (h) - (j) of this section, 80 percent of 08 (A) payments made by the municipality during the fiscal year 09 for the retirement of principal and interest on outstanding bonds, notes, or 10 other indebtedness authorized by the qualified voters of the municipality 11 (i) after June 30, 1983, but before March 31, 1990, to 12 pay costs of school construction, additions to schools, and major 13 rehabilitation projects that exceed $25,000 and are approved under 14 AS 14.07.020(a)(11); or 15 (ii) before July 1, 1989, and reauthorized before 16 November 1, 1989, to pay costs of school construction, additions to 17 schools, and major rehabilitation projects that exceed $25,000 and are 18 approved under AS 14.07.020(a)(11); and 19 (B) cash payments made after June 30, 1983, by the 20 municipality during the fiscal year two years earlier to pay costs of school 21 construction, additions to schools, and major rehabilitation projects that exceed 22 $25,000 and are approved by the department before July 1, 1990, under 23 AS 14.07.020(a)(11); 24 (6) subject to (h) - (j) and (m) of this section, 70 percent of payments 25 made by the municipality during the fiscal year for the retirement of principal and 26 interest on outstanding bonds, notes, or other indebtedness authorized by the qualified 27 voters of the municipality on or after April 30, 1993, but before July 1, 1996, to pay 28 costs of school construction, additions to schools, and major rehabilitation projects 29 that exceed $200,000 and are approved under AS 14.07.020(a)(11); 30 (7) subject to (h) - (j) and (m) of this section, 70 percent of payments 31 made by the municipality during the fiscal year for the retirement of principal and

01 interest on outstanding bonds, notes, or other indebtedness authorized by the qualified 02 voters of the municipality after March 31, 1990, but before April 30, 1993, to pay 03 costs of school construction, additions to schools, and major rehabilitation projects; 04 (8) subject to (h), (i), (j)(2) - (5), and (n) of this section and after 05 projects funded by the bonds, notes, or other indebtedness have been approved by the 06 commissioner, 70 percent of payments made by the municipality during the fiscal year 07 for the retirement of principal and interest on outstanding bonds, notes, or other 08 indebtedness authorized by the qualified voters of the municipality on or after July 1, 09 1995, but before July 1, 1998, to pay costs of school construction, additions to 10 schools, and major rehabilitation projects that exceed $200,000 and are approved 11 under AS 14.07.020(a)(11); 12 (9) subject to (h), (i), (j)(2) - (5), and (n) of this section and after 13 projects funded by the bonds, notes, or other indebtedness have been approved by the 14 commissioner, 70 percent of payments made by the municipality during the fiscal year 15 for the retirement of principal and interest on outstanding bonds, notes, or other 16 indebtedness authorized by the qualified voters of the municipality on or after July 1, 17 1998, but before July 1, 2006, to pay costs of school construction, additions to 18 schools, and major rehabilitation projects that exceed $200,000 and are approved 19 under AS 14.07.020(a)(11); 20 (10) subject to (h), (i), (j)(2) - (5), and (o) of this section, and after 21 projects funded by the bonds, notes, or other indebtedness have been approved by the 22 commissioner, 70 percent of payments made by the municipality during the fiscal year 23 for the retirement of principal and interest on outstanding bonds, notes, or other 24 indebtedness authorized by the qualified voters of the municipality on or after June 30, 25 1998, to pay costs of school construction, additions to schools, and major 26 rehabilitation projects that exceed $200,000, are approved under AS 14.07.020(a)(11), 27 and are not reimbursed under (n) of this section; 28 (11) subject to (h), (i), and (j)(2) - (5) of this section, and after projects 29 funded by the bonds, notes, or other indebtedness have been approved by the 30 commissioner, 70 percent of payments made by a municipality during the fiscal year 31 for the retirement of principal and interest on outstanding bonds, notes, or other

01 indebtedness authorized by the qualified voters of the municipality on or after June 30, 02 1999, but before January 1, 2005, to pay costs of school construction, additions to 03 schools, and major rehabilitation projects and education-related facilities that exceed 04 $200,000, are approved under AS 14.07.020(a)(11), and are not reimbursed under (n) 05 or (o) of this section; 06 (12) subject to (h), (i), and (j)(2), (3), and (5) of this section, 60 percent 07 of payments made by a municipality during the fiscal year for the retirement of 08 principal and interest on outstanding bonds, notes, or other indebtedness authorized by 09 the qualified voters of the municipality on or after June 30, 1999, but before January 1, 10 2005, to pay costs of school construction, additions to schools, and major 11 rehabilitation projects and education-related facilities that exceed $200,000, are 12 reviewed under AS 14.07.020(a)(11), and are not reimbursed under (n) or (o) of this 13 section; 14 (13) subject to (h), (i), (j)(2) - (5), and (p) of this section, and after 15 projects funded by the tax exempt bonds, notes, or other indebtedness have been 16 approved by the commissioner, 70 percent of payments made by a municipality during 17 the fiscal year for the retirement of principal and interest on outstanding tax exempt 18 bonds, notes, or other indebtedness authorized by the qualified voters of the 19 municipality on or after June 30, 1999, but before October 31, 2006, to pay costs of 20 school construction, additions to schools, and major rehabilitation projects and 21 education-related facilities that exceed $200,000, are approved under 22 AS 14.07.020(a)(11), and are not reimbursed under (n) or (o) of this section; 23 (14) subject to (h), (i), (j)(2), (3), and (5), and (p) of this section, 60 24 percent of payments made by a municipality during the fiscal year for the retirement 25 of principal and interest on outstanding tax exempt bonds, notes, or other indebtedness 26 authorized by the qualified voters of the municipality on or after June 30, 1999, but 27 before October 31, 2006, to pay costs of school construction, additions to schools, and 28 major rehabilitation projects and education-related facilities that exceed $200,000, are 29 reviewed under AS 14.07.020(a)(11), and are not reimbursed under (n) or (o) of this 30 section; 31 (15) subject to (h), (i), (j)(2) - (5), and (q) of this section, and after

01 projects funded by the bonds, notes, or other indebtedness have been approved by the 02 commissioner, 90 percent of payments made by a municipality during the fiscal year 03 for the retirement of principal and interest on outstanding bonds, notes, or other 04 indebtedness authorized by the qualified voters of the municipality on or after June 30, 05 1999, but before October 31, 2006, to pay costs of school construction, additions to 06 schools, and major rehabilitation projects and education-related facilities that exceed 07 $200,000, are approved under AS 14.07.020(a)(11), meet the 10 percent participating 08 share requirement for a municipal school district under AS 14.11.008(b), and are not 09 reimbursed under (n) or (o) of this section; 10 (16) subject to (h), (i), and (j)(2) - (5) of this section, and after 11 projects funded by the tax exempt bonds, notes, or other indebtedness have been 12 approved by the commissioner, 70 percent of payments made by a municipality 13 during the fiscal year for the retirement of principal and interest on outstanding 14 tax exempt bonds, notes, or other indebtedness authorized by the qualified voters 15 of the municipality on or after October 1, 2006, but before November 30, 2008, to 16 pay costs of school construction, additions to schools, and major rehabilitation 17 projects and education-related facilities that exceed $200,000, are approved 18 under AS 14.07.020(a)(11), and are not reimbursed under (o) of this section; 19 (17) subject to (h), (i), and (j)(2), (3), and (5) of this section, 60 20 percent of payments made by a municipality during the fiscal year for the 21 retirement of principal and interest on outstanding tax exempt bonds, notes, or 22 other indebtedness authorized by the qualified voters of the municipality on or 23 after October 1, 2006, but before November 30, 2008, to pay costs of school 24 construction, additions to schools, and major rehabilitation projects and 25 education-related facilities that exceed $200,000, are reviewed under 26 AS 14.07.020(a)(11), and are not reimbursed under (o) of this section. 27 * Sec. 2. AS 14.11.100(j) is amended to read: 28 (j) Except as provided in (l) of this section, the state may not allocate money 29 to a municipality for a school construction project under (a)(5), (6), or (7) of this 30 section unless the municipality complies with the requirements of (1) - (5) of this 31 subsection, the project is approved by the commissioner before the local vote on the

01 bond issue for the project or for bonds authorized after March 31, 1990, but on or 02 before April 30, 1993, the bonds are approved by the commissioner before 03 reimbursement by the state, and the local vote occurs before July 1, 1987, or after 04 June 30, 1988. In approving a project under this subsection, and to the extent required 05 under (a)(8) - (17) [(a)(8) - (15)] of this section, the commissioner shall require 06 (1) the municipality to include on the ballot for the bond issue, for 07 bonds authorized on or before March 31, 1990, or after April 30, 1993, the estimated 08 total cost of each project including estimated total interest, estimated annual operation 09 and maintenance costs, the estimated amounts that will be paid by the state and by the 10 municipality, and the approximate amount that would be due in annual taxes on 11 $100,000 in assessed value to retire the debt; 12 (2) that the bonds may not be refunded unless the annual debt service 13 on the refunding issue is not greater than the annual debt service on the original issue; 14 (3) that the bonds must be repaid in approximately equal annual 15 principal payments or approximately equal debt service payments over a period of at 16 least 10 years; 17 (4) the municipality to demonstrate need for the project by establishing 18 that the school district has 19 (A) projected long-term student enrollment that indicates the 20 district has inadequate facilities to meet present or projected enrollment; 21 (B) facilities that require repair or replacement in order to meet 22 health and safety laws or regulations or building codes; 23 (C) demonstrated that the project will result in a reduction in 24 annual operating costs that economically justifies the cost of the project; or 25 (D) facilities that require modification or rehabilitation for the 26 purpose of improving the instructional program; 27 (5) evidence acceptable to the department that the district 28 (A) has a preventive maintenance plan that 29 (i) includes a computerized maintenance management 30 program, cardex system, or other formal systematic means of tracking 31 the timing and costs associated with planned and completed

01 maintenance activities, including scheduled preventive maintenance; 02 (ii) addresses energy management for buildings owned 03 or operated by the district; 04 (iii) includes a regular custodial care program for 05 buildings owned or operated by the district; 06 (iv) includes preventive maintenance training for 07 facility managers and maintenance employees; and 08 (v) includes renewal and replacement schedules for 09 electrical, mechanical, structural, and other components of facilities 10 owned or operated by the district; and 11 (B) is adequately following the preventive maintenance plan. 12 * Sec. 3. AS 14.11.100(p) is amended to read: 13 (p) The total amount of school construction projects approved for 14 reimbursement by the department under (a)(13) and (a)(14) of this section 15 (1) may not exceed $179,256,000 [$177,256,000]; 16 (2) after June 30, 1999, and until October 31, 2006, shall be allocated 17 as follows: 18 (A) $61,925,000 to projects in a municipality with a public 19 school enrollment of 45,000 or more students in fiscal year 2005, as 20 determined under AS 14.17.500; 21 (B) $40,570,000 to projects in a municipality with a public 22 school enrollment of at least 14,600 but less than 20,000 students in fiscal year 23 2005, as determined under AS 14.17.500; 24 (C) $20,000,000 to projects in a municipality with a public 25 school enrollment of at least 10,000 but less than 14,600 students in fiscal year 26 2005, as determined under AS 14.17.500; 27 (D) $2,588,000 to projects in a municipality with a public 28 school enrollment of at least 7,500 but less than 10,000 students in fiscal year 29 2005, as determined under AS 14.17.500; 30 (E) $5,995,000 to projects in a municipality with a public 31 school enrollment of at least 4,000 but less than 6,000 students in fiscal year

01 2005, as determined under AS 14.17.500; 02 (F) $1,237,000 to projects in a municipality with a public 03 school enrollment of at least 2,400 but less than 2,800 students in fiscal year 04 2005, as determined under AS 14.17.500; 05 (G) $1,100,000 to projects in a municipality with a public 06 school enrollment of at least 2,200 but less than 2,400 students in fiscal year 07 2005, as determined under AS 14.17.500; 08 (H) $2,000,000 to projects in a municipality with a public 09 school enrollment of at least 1,501 but less than 1,800 students in fiscal 10 year 2005, as determined under AS 14.17.500; 11 (I) [(H)] $7,164,000 to projects in a municipality with a public 12 school enrollment of at least 1,300 but less than 1,500 students in fiscal year 13 2005, as determined under AS 14.17.500; 14 (J) [(I)] $1,260,000 to projects in a municipality with a public 15 school enrollment of at least 740 but less than 757 students in fiscal year 2005, 16 as determined under AS 14.17.500; 17 (K) [(J)] $608,000 to projects in a municipality with a public 18 school enrollment of at least 650 but less than 700 students in fiscal year 2005, 19 as determined under AS 14.17.500; 20 (L) [(K)] $32,000,000 to projects in a municipality with a 21 public school enrollment of at least 500 but less than 600 students in fiscal year 22 2005, as determined under AS 14.17.500; 23 (M) [(L)] $2,809,000 to projects in a municipality with a public 24 school enrollment of at least 370 but less than 390 students in fiscal year 2005, 25 as determined under AS 14.17.500. 26 * Sec. 4. AS 14.17.460(a) is amended to read: 27 (a) For purposes of calculating a district's adjusted ADM under 28 AS 14.17.410(b)(1), the district cost factor for a school district is as follows: 29 DISTRICT DISTRICT COST FACTOR 30 Alaska Gateway 1.367 [1.291] 31 Aleutians East 1.565 [1.423]

01 Aleutians Region 1.787 [1.736 02 ALYESKA CENTRAL SCHOOL 1.000] 03 Anchorage 1.000 04 Annette Island 1.093 [1.011] 05 Bering Strait 1.643 [1.525] 06 Bristol Bay 1.316 [1.262] 07 Chatham 1.234 [1.120] 08 Chugach 1.345 [1.294] 09 Copper River 1.211 [1.176] 10 Cordova 1.131 [1.096] 11 Craig 1.059 [1.010] 12 Delta/Greely 1.140 [1.106] 13 Denali 1.318 [1.313] 14 Dillingham 1.277 [1.254] 15 Fairbanks 1.047 [1.039] 16 Galena 1.359 [1.348] 17 Haines 1.056 [1.008] 18 Hoonah 1.141 [1.055] 19 Hydaburg 1.190 [1.085] 20 Iditarod 1.564 [1.470] 21 Juneau 1.040 [1.005] 22 Kake 1.134 [1.025] 23 Kashunamiut 1.447 [1.389] 24 Kenai Peninsula 1.046 [1.004] 25 Ketchikan 1.043 [1.000] 26 Klawock 1.088 [1.017] 27 Kodiak Island 1.142 [1.093] 28 Kuspuk 1.509 [1.434] 29 Lake and Peninsula 1.667 [1.558] 30 Lower Kuskokwim 1.534 [1.491] 31 Lower Yukon 1.544 [1.438]

01 Matanuska-Susitna 1.025 [1.010] 02 Mt. Edgecumbe 1.049 [1.000] 03 Nenana 1.287 [1.270] 04 Nome 1.352 [1.319] 05 North Slope 1.576 [1.504] 06 Northwest Arctic 1.618 [1.549] 07 Pelican 1.337 [1.290] 08 Petersburg 1.061 [1.000] 09 Pribilof 1.487 [1.419] 10 Sitka 1.049 [1.000] 11 Skagway 1.151 [1.143] 12 Southeast Island 1.194 [1.124] 13 Southwest Region 1.489 [1.423] 14 St. Mary's 1.419 [1.351] 15 Tanana 1.569 [1.496] 16 Unalaska 1.294 [1.245] 17 Valdez 1.114 [1.095] 18 Wrangell 1.040 [1.000] 19 Yakutat 1.138 [1.046] 20 Yukon Flats 1.780 [1.668] 21 Yukon/Koyukuk 1.585 [1.502] 22 Yupiit 1.533 [1.469]. 23 * Sec. 5. AS 14.17.460(a) is amended to read: 24 (a) For purposes of calculating a district's adjusted ADM under 25 AS 14.17.410(b)(1), the district cost factor for a school district is as follows: 26 DISTRICT DISTRICT COST FACTOR 27 Alaska Gateway 1.291 [1.367] 28 Aleutians East 1.423 [1.565] 29 Aleutians Region 1.736 [1.787 30 ALYESKA CENTRAL SCHOOL 1.000] 31 Anchorage 1.000

01 Annette Island 1.011 [1.093] 02 Bering Strait 1.525 [1.643] 03 Bristol Bay 1.262 [1.316] 04 Chatham 1.120 [1.234] 05 Chugach 1.294 [1.345] 06 Copper River 1.176 [1.211] 07 Cordova 1.096 [1.131] 08 Craig 1.010 [1.059] 09 Delta/Greely 1.106 [1.140] 10 Denali 1.313 [1.318] 11 Dillingham 1.254 [1.277] 12 Fairbanks 1.039 [1.047] 13 Galena 1.348 [1.359] 14 Haines 1.008 [1.056] 15 Hoonah 1.055 [1.141] 16 Hydaburg 1.085 [1.190] 17 Iditarod 1.470 [1.564] 18 Juneau 1.005 [1.040] 19 Kake 1.025 [1.134] 20 Kashunamiut 1.389 [1.447] 21 Kenai Peninsula 1.004 [1.046] 22 Ketchikan 1.000 [1.043] 23 Klawock 1.017 [1.088] 24 Kodiak Island 1.093 [1.142] 25 Kuspuk 1.434 [1.509] 26 Lake and Peninsula 1.558 [1.667] 27 Lower Kuskokwim 1.491 [1.534] 28 Lower Yukon 1.438 [1.544] 29 Matanuska-Susitna 1.010 [1.025] 30 Mt. Edgecumbe 1.000 [1.049] 31 Nenana 1.270 [1.287]

01 Nome 1.319 [1.352] 02 North Slope 1.504 [1.576] 03 Northwest Arctic 1.549 [1.618] 04 Pelican 1.290 [1.337] 05 Petersburg 1.000 [1.061] 06 Pribilof 1.419 [1.487] 07 Sitka 1.000 [1.049] 08 Skagway 1.143 [1.151] 09 Southeast Island 1.124 [1.194] 10 Southwest Region 1.423 [1.489] 11 St. Mary's 1.351 [1.419] 12 Tanana 1.496 [1.569] 13 Unalaska 1.245 [1.294] 14 Valdez 1.095 [1.114] 15 Wrangell 1.000 [1.040] 16 Yakutat 1.046 [1.138] 17 Yukon Flats 1.668 [1.780] 18 Yukon/Koyukuk 1.502 [1.585] 19 Yupiit 1.469 [1.533] 20 * Sec. 6. AS 14.17.470 is amended to read: 21 Sec. 14.17.470. Base student allocation. The base student allocation is $5,380 22 [$4,919]. 23 * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 24 read: 25 SCHOOL IMPROVEMENT GRANT. (a) In fiscal year 2007, as a component of 26 public school funding under AS 14.17, a district is eligible to receive a school improvement 27 grant in the amount of the district's ADM for fiscal year 2007 multiplied by $81. 28 (b) For purposes of the reduction required under AS 14.17.400(b), funding authorized 29 under (a) of this section is treated the same as the state share of public school funding under 30 AS 47.17.410. 31 (c) In this section, "ADM" and "district," have the meanings given in AS 14.17.990.

01 * Sec. 8. AS 14.17.460(a), as amended by sec. 5 of this Act, takes effect July 1, 2007. 02 * Sec. 9. Except as provided in sec. 8 of this Act, this Act takes effect July 1, 2006.