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Enrolled HB 13: 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.

00Enrolled HB 13 01 Relating to reimbursement of municipal bonds for school construction; increasing the base 02 student allocation used in the formula for state financing of public education; relating to the 03 district cost factors for state funding of public education; relating to school improvement 04 funding; and providing for an effective date. 05 _______________ 06 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 07 to read: 08 INTENT. It is the intent of the legislature that the state establish the public school 09 performance incentive program described in sec. 2 of this Act to serve as an incentive for 10 public school personnel to create a learning environment in which the students at that school 11 demonstrate improved academic achievement more rapidly than would usually be expected, 12 or, if already at an advanced level of achievement, continue to perform at an advanced level. 13 It is intended that payments under the program described in sec. 2 of this Act be available to 14 all employees at such a school, including all teachers, administrators, and noncertificated 15 personnel such as paraprofessionals and other support staff, so that all personnel collaborate

01 to promote overall student achievement. A payment under the program described in sec. 2 of 02 this Act is not intended to supplant or otherwise affect public school employee salaries or to 03 have any effect on evaluation, promotion, discipline, or retirement of public school 04 employees. The program described in sec. 2 of this Act is not intended to replace or affect any 05 current state, local, or federal financing of public education or any necessary future increases 06 in that state, local, or federal financing. 07 * Sec. 2. AS 14.03 is amended by adding a new section to read: 08 Sec. 14.03.126. Public school performance incentive program. (a) The 09 department shall establish by regulation a program that provides, subject to 10 appropriation, for an annual school performance incentive payment by the department 11 to personnel employed at public schools at which students have demonstrated 12 significant improvement in performance on statewide assessments, as determined by 13 the department. The department shall set the amount of the school performance 14 incentive payment, not to exceed $5,500 for each certificated employee and $2,500 for 15 each noncertificated employee. Notwithstanding any other provision of law, a school 16 performance incentive payment under this section may not be included in the 17 calculation of benefits for purposes of AS 14.25 or AS 39.35. 18 (b) The department shall establish a procedure by regulation for a school 19 performance incentive payment by the department to personnel employed at the 20 central office of a school district in which at least one school has met the requirements 21 for distribution of a school performance incentive payment to employees of the school. 22 The amount paid under this subsection may not exceed five percent of the total paid to 23 all employees at all schools eligible under this section for the school performance 24 incentive payment in the district. A payment under this subsection 25 (1) may be made only to an employee who the department, in 26 consultation with the chief school administrator of the district, determines has 27 substantially contributed to the improvement in achievement at the schools in the 28 district that meet the requirements for the school performance incentive payment; and 29 (2) may not exceed the highest school performance incentive payment 30 paid to a certificated teacher in the district. 31 (c) A school district may not consider school performance incentive payments

01 when determining salaries for school personnel. Neither a school district nor the 02 Professional Teaching Practices Commission may consider the receipt or nonreceipt of 03 a school performance incentive payment by a school employee when evaluating, 04 promoting, or disciplining the employee. 05 (d) Notwithstanding (a) of this section, the department may not distribute a 06 school performance incentive payment to more than 850 certificated employees 07 annually. The limitation of this subsection does not apply to payments made under (a) 08 or (b) of this section to noncertificated employees or school district central office 09 personnel. The department shall include the limitation of this subsection in regulations 10 adopted under this section. 11 (e) In this section, 12 (1) "school district" means a borough school district, a city school 13 district, a regional educational attendance area, or a state boarding school; 14 (2) "school performance incentive payment" means a payment under 15 the program established under this section. 16 * Sec. 3. AS 14.11.100(a) is amended to read: 17 (a) During each fiscal year, the state shall allocate to a municipality that is a 18 school district the following sums: 19 (1) payments made by the municipality during the fiscal year two years 20 earlier for the retirement of principal and interest on outstanding bonds, notes, or other 21 indebtedness incurred before July 1, 1977, to pay costs of school construction; 22 (2) 90 percent of 23 (A) payments made by the municipality during the fiscal year 24 two years earlier for the retirement of principal and interest on outstanding 25 bonds, notes, or other indebtedness incurred after June 30, 1977, and before 26 July 1, 1978, to pay costs of school construction; 27 (B) cash payments made after June 30, 1976, and before July 1, 28 1978, by the municipality during the fiscal year two years earlier to pay costs 29 of school construction; 30 (3) 90 percent of 31 (A) payments made by the municipality during the fiscal year

01 two years earlier for the retirement of principal and interest on outstanding 02 bonds, notes, or other indebtedness incurred after June 30, 1978, and before 03 January 1, 1982, to pay costs of school construction projects approved under 04 AS 14.07.020(a)(11); 05 (B) cash payments made after June 30, 1978, and before July 1, 06 1982, by the municipality during the fiscal year two years earlier to pay costs 07 of school construction projects approved under AS 14.07.020(a)(11); 08 (4) subject to (h) and (i) of this section, up to 90 percent of 09 (A) payments made by the municipality during the current 10 fiscal year for the retirement of principal and interest on outstanding bonds, 11 notes, or other indebtedness incurred after December 31, 1981, and authorized 12 by the qualified voters of the municipality before July 1, 1983, to pay costs of 13 school construction, additions to schools, and major rehabilitation projects that 14 exceed $25,000 and are approved under AS 14.07.020(a)(11); 15 (B) cash payments made after June 30, 1982, and before July 1, 16 1983, by the municipality during the fiscal year two years earlier to pay costs 17 of school construction, additions to schools, and major rehabilitation projects 18 that exceed $25,000 and are approved under AS 14.07.020(a)(11); and 19 (C) payments made by the municipality during the current 20 fiscal year for the retirement of principal and interest on outstanding bonds, 21 notes, or other indebtedness to pay costs of school construction, additions to 22 schools, and major rehabilitation projects that exceed $25,000 and are 23 submitted to the department for approval under AS 14.07.020(a)(11) before 24 July 1, 1983, and approved by the qualified voters of the municipality before 25 October 15, 1983, not to exceed a total project cost of (i) $6,600,000 if the 26 annual growth rate of average daily membership of the municipality is more 27 than seven percent but less than 12 percent, or (ii) $20,000,000 if the annual 28 growth rate of average daily membership of the municipality is 12 percent or 29 more; payments made by a municipality under this subparagraph on total 30 project costs that exceed the amounts set out in (i) and (ii) of this subparagraph 31 are subject to (5)(A) of this subsection;

01 (5) subject to (h) - (j) of this section, 80 percent of 02 (A) payments made by the municipality during the fiscal year 03 for the retirement of principal and interest on outstanding bonds, notes, or 04 other indebtedness authorized by the qualified voters of the municipality 05 (i) after June 30, 1983, but before March 31, 1990, to 06 pay costs of school construction, additions to schools, and major 07 rehabilitation projects that exceed $25,000 and are approved under 08 AS 14.07.020(a)(11); or 09 (ii) before July 1, 1989, and reauthorized before 10 November 1, 1989, to pay costs of school construction, additions to 11 schools, and major rehabilitation projects that exceed $25,000 and are 12 approved under AS 14.07.020(a)(11); and 13 (B) cash payments made after June 30, 1983, by the 14 municipality during the fiscal year two years earlier to pay costs of school 15 construction, additions to schools, and major rehabilitation projects that exceed 16 $25,000 and are approved by the department before July 1, 1990, under 17 AS 14.07.020(a)(11); 18 (6) subject to (h) - (j) and (m) of this section, 70 percent of payments 19 made by the municipality during the fiscal year for the retirement of principal and 20 interest on outstanding bonds, notes, or other indebtedness authorized by the qualified 21 voters of the municipality on or after April 30, 1993, but before July 1, 1996, to pay 22 costs of school construction, additions to schools, and major rehabilitation projects 23 that exceed $200,000 and are approved under AS 14.07.020(a)(11); 24 (7) 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 after March 31, 1990, but before April 30, 1993, to pay 28 costs of school construction, additions to schools, and major rehabilitation projects; 29 (8) subject to (h), (i), (j)(2) - (5), and (n) of this section and after 30 projects funded by the bonds, notes, or other indebtedness have been approved by the 31 commissioner, 70 percent of payments made by the municipality during the fiscal year

01 for the retirement of principal and interest on outstanding bonds, notes, or other 02 indebtedness authorized by the qualified voters of the municipality on or after July 1, 03 1995, but before July 1, 1998, to pay costs of school construction, additions to 04 schools, and major rehabilitation projects that exceed $200,000 and are approved 05 under AS 14.07.020(a)(11); 06 (9) subject to (h), (i), (j)(2) - (5), and (n) of this section and after 07 projects funded by the bonds, notes, or other indebtedness have been approved by the 08 commissioner, 70 percent of payments made by the municipality during the fiscal year 09 for the retirement of principal and interest on outstanding bonds, notes, or other 10 indebtedness authorized by the qualified voters of the municipality on or after July 1, 11 1998, but before July 1, 2006, to pay costs of school construction, additions to 12 schools, and major rehabilitation projects that exceed $200,000 and are approved 13 under AS 14.07.020(a)(11); 14 (10) subject to (h), (i), (j)(2) - (5), and (o) of this section, and after 15 projects funded by the bonds, notes, or other indebtedness have been approved by the 16 commissioner, 70 percent of payments made by the municipality during the fiscal year 17 for the retirement of principal and interest on outstanding bonds, notes, or other 18 indebtedness authorized by the qualified voters of the municipality on or after June 30, 19 1998, to pay costs of school construction, additions to schools, and major 20 rehabilitation projects that exceed $200,000, are approved under AS 14.07.020(a)(11), 21 and are not reimbursed under (n) of this section; 22 (11) subject to (h), (i), and (j)(2) - (5) of this section, and after projects 23 funded by the bonds, notes, or other indebtedness have been approved by the 24 commissioner, 70 percent of payments made by a municipality during the fiscal year 25 for the retirement of principal and interest on outstanding bonds, notes, or other 26 indebtedness authorized by the qualified voters of the municipality on or after June 30, 27 1999, but before January 1, 2005, to pay costs of school construction, additions to 28 schools, and major rehabilitation projects and education-related facilities that exceed 29 $200,000, are approved under AS 14.07.020(a)(11), and are not reimbursed under (n) 30 or (o) of this section; 31 (12) subject to (h), (i), and (j)(2), (3), and (5) of this section, 60 percent

01 of payments made by a municipality during the fiscal year for the retirement of 02 principal and interest on outstanding bonds, notes, or other indebtedness authorized by 03 the qualified voters of the municipality on or after June 30, 1999, but before January 1, 04 2005, to pay costs of school construction, additions to schools, and major 05 rehabilitation projects and education-related facilities that exceed $200,000, are 06 reviewed under AS 14.07.020(a)(11), and are not reimbursed under (n) or (o) of this 07 section; 08 (13) subject to (h), (i), (j)(2) - (5), and (p) of this section, and after 09 projects funded by the tax exempt bonds, notes, or other indebtedness have been 10 approved by the commissioner, 70 percent of payments made by a municipality during 11 the fiscal year for the retirement of principal and interest on outstanding tax exempt 12 bonds, notes, or other indebtedness authorized by the qualified voters of the 13 municipality on or after June 30, 1999, but before October 31, 2006, to pay costs of 14 school construction, additions to schools, and major rehabilitation projects and 15 education-related facilities that exceed $200,000, are approved under 16 AS 14.07.020(a)(11), and are not reimbursed under (n) or (o) of this section; 17 (14) subject to (h), (i), (j)(2), (3), and (5), and (p) of this section, 60 18 percent of payments made by a municipality during the fiscal year for the retirement 19 of principal and interest on outstanding tax exempt bonds, notes, or other indebtedness 20 authorized by the qualified voters of the municipality on or after June 30, 1999, but 21 before October 31, 2006, to pay costs of school construction, additions to schools, and 22 major rehabilitation projects and education-related facilities that exceed $200,000, are 23 reviewed under AS 14.07.020(a)(11), and are not reimbursed under (n) or (o) of this 24 section; 25 (15) subject to (h), (i), (j)(2) - (5), and (q) of this section, and after 26 projects funded by the bonds, notes, or other indebtedness have been approved by the 27 commissioner, 90 percent of payments made by a municipality during the fiscal year 28 for the retirement of principal and interest on outstanding bonds, notes, or other 29 indebtedness authorized by the qualified voters of the municipality on or after June 30, 30 1999, but before October 31, 2006, to pay costs of school construction, additions to 31 schools, and major rehabilitation projects and education-related facilities that exceed

01 $200,000, are approved under AS 14.07.020(a)(11), meet the 10 percent participating 02 share requirement for a municipal school district under AS 14.11.008(b), and are not 03 reimbursed under (n) or (o) of this section; 04 (16) subject to (h), (i), and (j)(2) - (5) of this section, and after 05 projects funded by the tax exempt bonds, notes, or other indebtedness have been 06 approved by the commissioner, 70 percent of payments made by a municipality 07 during the fiscal year for the retirement of principal and interest on outstanding 08 tax exempt bonds, notes, or other indebtedness authorized by the qualified voters 09 of the municipality on or after October 1, 2006, but before November 30, 2008, to 10 pay costs of school construction, additions to schools, and major rehabilitation 11 projects and education-related facilities that exceed $200,000, are approved 12 under AS 14.07.020(a)(11), and are not reimbursed under (o) of this section; 13 (17) subject to (h), (i), and (j)(2), (3), and (5) of this section, 60 14 percent of payments made by a municipality during the fiscal year for the 15 retirement of principal and interest on outstanding tax exempt bonds, notes, or 16 other indebtedness authorized by the qualified voters of the municipality on or 17 after October 1, 2006, but before November 30, 2008, to pay costs of school 18 construction, additions to schools, and major rehabilitation projects and 19 education-related facilities that exceed $200,000, are reviewed under 20 AS 14.07.020(a)(11), and are not reimbursed under (o) of this section. 21 * Sec. 4. AS 14.11.100(j) is amended to read: 22 (j) Except as provided in (l) of this section, the state may not allocate money 23 to a municipality for a school construction project under (a)(5), (6), or (7) of this 24 section unless the municipality complies with the requirements of (1) - (5) of this 25 subsection, the project is approved by the commissioner before the local vote on the 26 bond issue for the project or for bonds authorized after March 31, 1990, but on or 27 before April 30, 1993, the bonds are approved by the commissioner before 28 reimbursement by the state, and the local vote occurs before July 1, 1987, or after 29 June 30, 1988. In approving a project under this subsection, and to the extent required 30 under (a)(8) - (17) [(a)(8) - (15)] of this section, the commissioner shall require 31 (1) the municipality to include on the ballot for the bond issue, for

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

01 facility managers and maintenance employees; and 02 (v) includes renewal and replacement schedules for 03 electrical, mechanical, structural, and other components of facilities 04 owned or operated by the district; and 05 (B) is adequately following the preventive maintenance plan. 06 * Sec. 5. AS 14.17.460(a) is amended to read: 07 (a) For purposes of calculating a district's adjusted ADM under 08 AS 14.17.410(b)(1), the district cost factor for a school district is as follows: 09 DISTRICT DISTRICT COST FACTOR 10 Alaska Gateway 1.367 [1.291] 11 Aleutians East 1.565 [1.423] 12 Aleutians Region 1.787 [1.736 13 ALYESKA CENTRAL SCHOOL 1.000] 14 Anchorage 1.000 15 Annette Island 1.093 [1.011] 16 Bering Strait 1.643 [1.525] 17 Bristol Bay 1.316 [1.262] 18 Chatham 1.234 [1.120] 19 Chugach 1.345 [1.294] 20 Copper River 1.211 [1.176] 21 Cordova 1.131 [1.096] 22 Craig 1.059 [1.010] 23 Delta/Greely 1.140 [1.106] 24 Denali 1.318 [1.313] 25 Dillingham 1.277 [1.254] 26 Fairbanks 1.047 [1.039] 27 Galena 1.359 [1.348] 28 Haines 1.056 [1.008] 29 Hoonah 1.141 [1.055] 30 Hydaburg 1.190 [1.085] 31 Iditarod 1.564 [1.470]

01 Juneau 1.040 [1.005] 02 Kake 1.134 [1.025] 03 Kashunamiut 1.447 [1.389] 04 Kenai Peninsula 1.046 [1.004] 05 Ketchikan 1.043 [1.000] 06 Klawock 1.088 [1.017] 07 Kodiak Island 1.142 [1.093] 08 Kuspuk 1.509 [1.434] 09 Lake and Peninsula 1.667 [1.558] 10 Lower Kuskokwim 1.534 [1.491] 11 Lower Yukon 1.544 [1.438] 12 Matanuska-Susitna 1.025 [1.010] 13 Mt. Edgecumbe 1.049 [1.000] 14 Nenana 1.287 [1.270] 15 Nome 1.352 [1.319] 16 North Slope 1.576 [1.504] 17 Northwest Arctic 1.618 [1.549] 18 Pelican 1.337 [1.290] 19 Petersburg 1.061 [1.000] 20 Pribilof 1.487 [1.419] 21 Sitka 1.049 [1.000] 22 Skagway 1.151 [1.143] 23 Southeast Island 1.194 [1.124] 24 Southwest Region 1.489 [1.423] 25 St. Mary's 1.419 [1.351] 26 Tanana 1.569 [1.496] 27 Unalaska 1.294 [1.245] 28 Valdez 1.114 [1.095] 29 Wrangell 1.040 [1.000] 30 Yakutat 1.138 [1.046] 31 Yukon Flats 1.780 [1.668]

01 Yukon/Koyukuk 1.585 [1.502] 02 Yupiit 1.533 [1.469]. 03 * Sec. 6. AS 14.17.460(a) is amended to read: 04 (a) For purposes of calculating a district's adjusted ADM under 05 AS 14.17.410(b)(1), the district cost factor for a school district is as follows: 06 DISTRICT DISTRICT COST FACTOR 07 Alaska Gateway 1.291 [1.367] 08 Aleutians East 1.423 [1.565] 09 Aleutians Region 1.736 [1.787] 10 Anchorage 1.000 11 Annette Island 1.011 [1.093] 12 Bering Strait 1.525 [1.643] 13 Bristol Bay 1.262 [1.316] 14 Chatham 1.120 [1.234] 15 Chugach 1.294 [1.345] 16 Copper River 1.176 [1.211] 17 Cordova 1.096 [1.131] 18 Craig 1.010 [1.059] 19 Delta/Greely 1.106 [1.140] 20 Denali 1.313 [1.318] 21 Dillingham 1.254 [1.277] 22 Fairbanks 1.039 [1.047] 23 Galena 1.348 [1.359] 24 Haines 1.008 [1.056] 25 Hoonah 1.055 [1.141] 26 Hydaburg 1.085 [1.190] 27 Iditarod 1.470 [1.564] 28 Juneau 1.005 [1.040] 29 Kake 1.025 [1.134] 30 Kashunamiut 1.389 [1.447] 31 Kenai Peninsula 1.004 [1.046]

01 Ketchikan 1.000 [1.043] 02 Klawock 1.017 [1.088] 03 Kodiak Island 1.093 [1.142] 04 Kuspuk 1.434 [1.509] 05 Lake and Peninsula 1.558 [1.667] 06 Lower Kuskokwim 1.491 [1.534] 07 Lower Yukon 1.438 [1.544] 08 Matanuska-Susitna 1.010 [1.025] 09 Mt. Edgecumbe 1.000 [1.049] 10 Nenana 1.270 [1.287] 11 Nome 1.319 [1.352] 12 North Slope 1.504 [1.576] 13 Northwest Arctic 1.549 [1.618] 14 Pelican 1.290 [1.337] 15 Petersburg 1.000 [1.061] 16 Pribilof 1.419 [1.487] 17 Sitka 1.000 [1.049] 18 Skagway 1.143 [1.151] 19 Southeast Island 1.124 [1.194] 20 Southwest Region 1.423 [1.489] 21 St. Mary's 1.351 [1.419] 22 Tanana 1.496 [1.569] 23 Unalaska 1.245 [1.294] 24 Valdez 1.095 [1.114] 25 Wrangell 1.000 [1.040] 26 Yakutat 1.046 [1.138] 27 Yukon Flats 1.668 [1.780] 28 Yukon/Koyukuk 1.502 [1.585] 29 Yupiit 1.469 [1.533] 30 * Sec. 7. AS 14.17.470 is amended to read: 31 Sec. 14.17.470. Base student allocation. The base student allocation is $5,380

01 [$4,919]. 02 * Sec. 8. AS 14.03.126, as added by sec. 2 of this Act, is repealed June 30, 2009. 03 * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to 04 read: 05 REPORT AND RECOMMENDATIONS. Before December 31, 2008, the Legislative 06 Budget and Audit Committee shall review the school performance incentive program 07 established under AS 14.03.126, as enacted in sec. 2 of this Act, and submit a report to the 08 legislature that includes recommendations for legislation pertaining to the program. 09 * Sec. 10. The uncodified law of the State of Alaska is amended by adding a new section to 10 read: 11 SCHOOL IMPROVEMENT GRANT. (a) In fiscal year 2007, as a component of 12 public school funding under AS 14.17, a district is eligible to receive a school improvement 13 grant in the amount of the district's ADM for fiscal year 2007 multiplied by $81. 14 (b) For purposes of the reduction required under AS 14.17.400(b), funding authorized 15 under (a) of this section is treated the same as the state share of public school funding under 16 AS 47.17.410. 17 (c) In this section, "ADM" and "district," have the meanings given in AS 14.17.990. 18 * Sec. 11. AS 14.17.460(a), as amended by sec. 6 of this Act, takes effect July 1, 2007. 19 * Sec. 12. Except as provided in sec. 11 of this Act, this Act takes effect July 1, 2006.