CSHB 82(FIN): "An Act relating to school construction grants and major maintenance grants to school districts; providing for school district participation in the cost of school construction and major maintenance; creating a major maintenance grant fund; creating an education facilities maintenance and construction fund; and providing for an effective date."

00CS FOR HOUSE BILL NO. 82(FIN) 01 "An Act relating to school construction grants and major maintenance grants to 02 school districts; providing for school district participation in the cost of school 03 construction and major maintenance; creating a major maintenance grant fund; 04 creating an education facilities maintenance and construction fund; and providing 05 for an effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. AS 14.03.150(c) is amended to read: 08  (c) The department may not award a school construction or major 09 maintenance grant under AS 14.11 to a municipality that is a school district or a 10 regional educational attendance area that is not in compliance with (a) of this section. 11 The department shall reduce the amount of state foundation aid under AS 14.17.021 12 for which a school district may qualify, by the amount, if any, paid by the department 13 under (b) of this section. 14 * Sec. 2. AS 14.07.020(a)(11) is amended to read:

01  (11) review plans for construction of new public elementary and 02 secondary schools and for additions to and major rehabilitation of existing public 03 elementary and secondary schools and, in accordance with regulations adopted by the 04 department, determine and approve the extent of eligibility for state aid of a school 05 construction or major maintenance project [BEGUN AFTER JULY 1, 1978]; for the 06 purposes of this paragraph, "plans" include educational specifications, schematic 07 designs, and final contract documents; 08 * Sec. 3. AS 14.11 is amended by adding new sections to read: 09  Sec. 14.11.007. MAJOR MAINTENANCE GRANT FUND. There is created 10 a major maintenance grant fund as an account in the general fund. The fund shall be 11 used to make grants for the costs of school major maintenance. Legislative 12 appropriations for school major maintenance shall be deposited in the fund. 13  Sec. 14.11.008. SCHOOL DISTRICT PARTICIPATION IN GRANT 14 PROGRAM. (a) In order to receive a grant under this chapter or an appropriation 15 under AS 37.16.010, a district must provide a percentage share of the project cost, as 16 determined under (b) or (c) of this section. A district shall provide the required 17 participating share within three years after the date that the appropriation bill funding 18 the grant is passed by the legislature. 19  (b) The required participating share for a municipal school district is based on 20 the district's full value per ADM, which is calculated by dividing the full and true 21 value of the taxable real and personal property in the district, calculated as described 22 in AS 14.17.025(a)(1), by the district average daily membership (ADM) as defined in 23 AS 14.17.250, for the same fiscal year for which the valuation was made. The 24 municipal district's full value per ADM determines the district's required participating 25 share, as follows: 26 Full Value Per ADM District Participating Share 27 $1 - $100,000 5 percent 28 100,001 - 200,000 10 percent 29 200,001 - 600,000 30 percent 30 over 600,000 35 percent. 31  (c) The required participating share for a regional educational attendance area

01 is two percent. The participating share for any district may be satisfied by money 02 from federal, local, or other sources, or with locally contributed labor, material, or 03 equipment. 04  (d) If a district with full value per ADM of $200,000 or less can demonstrate 05 in writing that it is unable to provide the required participating share or that the 06 participating share required under this section will jeopardize receipt of federal 07 assistance, the commissioner may waive all or a portion of the required participating 08 share. 09  (e) State funds provided under this chapter may not be a source of the 10 participating share required under (b) or (c) of this section. 11 * Sec. 4. AS 14.11.011 is amended to read: 12  Sec. 14.11.011. GRANT APPLICATIONS. (a) A municipality that is a 13 school district or a regional educational attendance area may submit a [GRANT] 14 request to the department for a [SCHOOL CONSTRUCTION] grant under this 15 chapter. 16  (b) For a municipality that is a school district or a regional educational 17 attendance area to be eligible for a [SCHOOL CONSTRUCTION] grant under this 18 chapter, the district shall submit 19  (1) a six-year capital improvement plan that includes a description of 20 the district's fixed asset inventory system and preventive maintenance program no later 21 than September 1 of the fiscal year before the fiscal year for which the request is 22 made; the six-year plan must contain for each proposed project a detailed scope of 23 work, a project budget, and documentation of conditions justifying the project; 24  (2) evidence that the district has secured and will maintain adequate 25 property loss insurance for the replacement cost of all facilities for which state funds 26 are available under AS 14.11.005 or 14.11.007 or has a program of insurance 27 acceptable to the department; and 28  (3) evidence acceptable to the department that the proposed project 29 should be a capital improvement [CONSTRUCTION] project and not part of a 30 preventive maintenance program or regular custodial care program. 31 * Sec. 5. AS 14.11.013(a) is amended to read:

01  (a) With regard to projects for which grants are requested under AS 14.11.011, 02 the department shall 03  (1) annually review the six-year plans submitted by each district under 04 AS 14.11.011(b) and recommend to the board a revised and updated six-year capital 05 improvement project [CONSTRUCTION] grant schedule that serves the best interests 06 of the state and each district; in recommending projects for this schedule, the 07 department shall verify that each proposed project qualifies as a project required to 08  (A) avert imminent danger or correct life-threatening situations; 09  (B) house students who would otherwise be unhoused; 10  (C) protect the structure of existing school facilities; 11  (D) correct building code deficiencies that require major repair 12 or rehabilitation in order for the facility to continue to be used for the 13 educational program; 14  (E) achieve an operating cost savings; 15  (F) modify or rehabilitate facilities for the purpose of improving 16 the instructional program; 17  (G) meet an educational need not specified in (A) - (F) of this 18 paragraph, identified by the department; 19  (2) prepare an estimate of the amount of money needed to finance each 20 project; 21  (3) provide to the governor, by November 1, and to the legislature 22 within the first 10 days of each regular legislative session, a revised and updated 23 six-year capital improvement project [CONSTRUCTION] grant schedule, together 24 with a proposed schedule of appropriations. 25 * Sec. 6. AS 14.11.013(b) is amended to read: 26  (b) In preparing the capital improvement project [CONSTRUCTION] grant 27 schedule, the department shall establish priorities among projects for which grants are 28 requested and shall award [SCHOOL CONSTRUCTION] grants in the order of priority 29 established. In establishing priorities, the department shall evaluate at least the 30 following factors: 31  (1) emergency requirements;

01  (2) priorities assigned by the district to the projects requested; 02  (3) new local elementary and secondary programs; 03  (4) existing regional, community, and school facilities, and their 04 condition; and 05  (5) alternate education program options for accomplishing the project's 06 objectives. 07 * Sec. 7. AS 14.11.015 is amended to read: 08  Sec. 14.11.015. APPROVAL OF GRANT APPLICATIONS. (a) The board 09 shall review grant applications that have been recommended by the department under 10 AS 14.11.013, and may approve a grant application if the board determines that the 11 project meets the criteria specified in AS 14.11.013(a)(1). The department may not 12 award a [SCHOOL CONSTRUCTION] grant unless the grant application is approved 13 by the board. 14  (b) To the extent that money is available in the appropriate fund, the 15 [THE] department shall award grants approved under (a) of this section in the order 16 of the projects' priority on the date the appropriation bill funding the appropriate 17 [SCHOOL CONSTRUCTION] grant fund is passed by the legislature, regardless of 18 any appeal pending under AS 14.11.016. Appeals pending under AS 14.11.016 at the 19 time that grants are awarded may not delay the funding of grants awarded under this 20 section. 21  (c) If a project is assigned a new priority ranking under AS 14.11.016 after the 22 date of passage by the legislature of the appropriation bill for the appropriate 23 [SCHOOL CONSTRUCTION] grant fund, the project must be funded from the 24 appropriate fund in accordance with the new priority ranking at the next time that 25 [SCHOOL CONSTRUCTION] grants are awarded. 26 * Sec. 8. AS 14.11.017 is amended to read: 27  Sec. 14.11.017. [SCHOOL CONSTRUCTION] GRANT CONDITIONS. (a) 28 The department shall require in the grant agreement that a municipality that is a school 29 district or a regional educational attendance area 30  (1) agree to construction of a facility of appropriate size and use that 31 meets criteria adopted by the department if the grant is for school construction;

01  (2) provide reasonable assurance by a means acceptable to the 02 department, that the cost of the project will be uniform with the costs of the most 03 current construction or major maintenance projects, as appropriate, in the area; 04  (3) agree to limit equipment purchases to that required for the approved 05 project [SCHOOL CONSTRUCTION] plan submitted under (5) of this subsection 06 and account for all equipment purchased for the project under a fixed asset inventory 07 system approved by the department; 08  (4) submit project budgets for department approval and agree that the 09 grant amount may, at the discretion of the department, be reduced or increased by 10 amounts equal to the amounts by which contracts vary from the budget amounts 11 approved by the department; and 12  (5) submit to the department for approval, before award of the 13 [CONSTRUCTION] contract, a plan for the project [SCHOOL CONSTRUCTION] 14 that includes educational specifications, final [CONSTRUCTION] drawings, and 15 contract documents. 16  (b) The cost of any school construction or major maintenance activity 17 encompassed by the definition of "costs of school construction" under AS 14.11.135 18 is payable under a grant awarded from the appropriate fund under AS 14.11.015 19 without regard to whether the costs were incurred before [PRIOR TO] the 20  (1) award of the grant; 21  (2) approval of the grant application by the board; or 22  (3) effective date of an appropriation to the appropriate [SCHOOL 23 CONSTRUCTION] grant fund for the year in which the grant is funded. 24 * Sec. 9. AS 14.11.017 is amended by adding a new subsection to read: 25  (c) The department, by regulation, may establish the time period in which 26 activities described in (b) of this section must have occurred in order to be paid under 27 a grant. 28 * Sec. 10. AS 14.11.019 is amended to read: 29  Sec. 14.11.019. [SCHOOL CONSTRUCTION] GRANT APPROPRIATIONS. 30 Within the general appropriation bill submitted to the legislature under AS 37.07.020, 31 the governor shall include an appropriation for [SCHOOL CONSTRUCTION] grants

01 in the succeeding fiscal year as determined by the six-year capital improvement 02 project [CONSTRUCTION] grant schedule prepared under AS 14.11.013. 03 * Sec. 11. AS 14.11.135 is repealed and reenacted to read: 04  Sec. 14.11.135. DEFINITIONS. In this chapter, unless the context requires 05 otherwise, 06  (1) "approved school construction project" means the plan for a new 07 school or an addition to or major rehabilitation of an existing school to the extent that 08 the plan has been approved by the commissioner under AS 14.07.020(a)(11); 09  (2) "capital improvement project" or "project" means school 10 construction or major maintenance; 11  (3) "costs of school construction" means the cost of acquiring, 12 constructing, enlarging, repairing, remodeling, equipping, or furnishing of public 13 elementary and secondary schools that are owned or operated by the state, a 14 municipality, or a district and includes the sum total of all costs of financing and 15 carrying out the project; these include the costs of all necessary studies, surveys, plans 16 and specifications, architectural, engineering or other special services, acquisition of 17 real property, site preparation and development, purchase, construction, reconstruction 18 and improvement of real property and the acquisition of machinery and equipment that 19 may be necessary in connection with the project; an allocable portion of the 20 administrative and operating expenses of the grantee; the cost of financing the project, 21 including interest on bonds issued to finance the project; and the cost of other items, 22 including indemnity and surety bonds and premiums on insurance, legal fees, fees and 23 expenses of trustees, depositaries, financial advisors, and paying agents for the bonds 24 issued as the issuer considers necessary; 25  (4) "district" means the districts described in AS 14.12.010; 26  (5) "grant" means a grant under this chapter for school construction or 27 for major maintenance; 28  (6) "major maintenance" means a project described in 29 AS 14.11.013(a)(1)(C) or (D); 30  (7) "school construction" means a project described in 31 AS 14.11.013(a)(1)(A), (B), (E), (F), or (G).

01 * Sec. 12. AS 37 is amended by adding a new chapter to read: 02 CHAPTER 16. MISCELLANEOUS FUNDS. 03  Sec. 37.16.010. EDUCATIONAL FACILITIES MAINTENANCE AND 04 CONSTRUCTION FUND. (a) The educational facilities maintenance and 05 construction fund is established as a separate fund in the general fund. The fund 06 consists of all money appropriated to it. 07  (b) The educational facilities maintenance and construction fund shall be 08 invested by the Department of Revenue so as to yield competitive market rates, as 09 provided in AS 37.10.071. Money in the fund may be appropriated 10  (1) to finance the design, construction, and maintenance of public 11 school facilities; and 12  (2) for maintenance of University of Alaska facilities. 13  (c) Appropriations from the education facilities maintenance and construction 14 fund are subject to AS 14.11.008. 15 * Sec. 13. APPLICABILITY. The changes made by this Act apply to grants awarded 16 under AS 14.11.005 - 14.11.019 after June 30, 1993. 17 * Sec. 14. This Act takes effect July 1, 1993.