CSSB 59(HES): "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; and providing for an effective date."

00CS FOR SENATE BILL NO. 59(HES) 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; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 14.03.150(c) is amended to read: 06  (c) The department may not award a school construction or major 07 maintenance grant under AS 14.11 to a municipality that is a school district or a 08 regional educational attendance area that is not in compliance with (a) of this section. 09 The department shall reduce the amount of state foundation aid under AS 14.17.021 10 for which a school district may qualify [,] by the amount, if any, paid by the 11 department under (b) of this section. 12 * Sec. 2. AS 14.07.020(a)(11) is amended to read: 13  (11) review plans for construction of new public elementary and 14 secondary schools and for additions to and major rehabilitation of existing public

01 elementary and secondary schools and, in accordance with regulations adopted by the 02 department, determine and approve the extent of eligibility for state aid of a school 03 construction or major maintenance project [BEGUN AFTER JULY 1, 1978]; for the 04 purposes of this paragraph, "plans" include educational specifications, schematic 05 designs, and final contract documents; 06 * Sec. 3. AS 14.11.005 is amended to read: 07  Sec. 14.11.005. SCHOOL [CONSTRUCTION] GRANT FUND. There is 08 created a school [CONSTRUCTION] grant fund as an account in the general fund. 09 The fund shall be used to make grants for the costs of school construction or major 10 maintenance. Legislative appropriations for school construction or major 11 maintenance shall be deposited in the fund, and the proceeds from the sale of general 12 obligation bonds for school construction may be deposited in the fund. 13 * Sec. 4. AS 14.11 is amended by adding a new section to read: 14  Sec. 14.11.008. SCHOOL DISTRICT PARTICIPATION IN GRANT 15 PROGRAM. (a) In order to receive a grant, a school district must provide a 16 percentage share of the project cost, as determined under (b) or (c) of this section. 17  (b) The required participating share for a city or borough school district is 18 based on the district's full value per ADM, which is calculated by dividing the full and 19 true value of the taxable real and personal property in the district, calculated as 20 described in AS 14.17.025(a)(1), by the district average daily membership (ADM) as 21 defined in AS 14.17.250, for the same fiscal year for which the valuation was made. 22 The district's full value per ADM determines the district's required participating share, 23 as follows: 24 Full Value Per ADM District Participating Share 25 $1 - $100,000 5 percent 26 100,001 - 200,000 15 percent 27 over 200,000 30 percent. 28  (c) The required participating share for a regional educational attendance area 29 is 3.8 percent. The required share may be satisfied by federal or local money, locally 30 contributed labor, material, or equipment, or money from other sources. If a regional 31 educational attendance area can demonstrate in writing that it is unable to provide the

01 required participating share or that the requirement to provide a participating share will 02 jeopardize receipt of federal assistance, the commissioner may waive all or a portion 03 of the required participating share. 04  (d) State funds received under this chapter may not be used as a source of the 05 required participating share under (b) or (c) of this section. 06 * Sec. 5. AS 14.11.011 is amended to read: 07  Sec. 14.11.011. GRANT APPLICATIONS. (a) A municipality that is a 08 school district or a regional educational attendance area may submit a [GRANT] 09 request to the department for a [SCHOOL CONSTRUCTION] grant under this 10 chapter. 11  (b) For a municipality that is a school district or a regional educational 12 attendance area to be eligible for a [SCHOOL CONSTRUCTION] grant under this 13 chapter, the district shall submit 14  (1) a six-year capital improvement plan that includes a description of 15 the district's fixed asset inventory system and preventive maintenance program no later 16 than September 1 of the fiscal year before the fiscal year for which the request is 17 made; the six-year plan must contain for each proposed project a detailed scope of 18 work, a project budget, and documentation of conditions justifying the project; 19  (2) evidence that the district has secured and will maintain adequate 20 property loss insurance for the replacement cost of all facilities for which state funds 21 are available under AS 14.11.005 or has a program of insurance acceptable to the 22 department; and 23  (3) evidence acceptable to the department that the proposed project 24 should be a capital improvement [CONSTRUCTION] project and not part of a 25 preventive maintenance program or regular custodial care program. 26 * Sec. 6. AS 14.11.013(a) is amended to read: 27  (a) With regard to projects for which grants are requested under AS 14.11.011, 28 the department shall 29  (1) annually review the six-year plans submitted by each district under 30 AS 14.11.011(b) and recommend to the board a revised and updated six-year capital 31 improvement project [CONSTRUCTION] grant schedule that serves the best interests

01 of the state and each district; in recommending projects for this schedule, the 02 department shall verify that each proposed project qualifies as a project required to 03  (A) avert imminent danger or correct life-threatening situations; 04  (B) house students who would otherwise be unhoused; 05  (C) protect the structure of existing school facilities; 06  (D) correct building code deficiencies that require major repair 07 or rehabilitation in order for the facility to continue to be used for the 08 educational program; 09  (E) achieve an operating cost savings; 10  (F) modify or rehabilitate facilities for the purpose of improving 11 the instructional program; 12  (G) meet an educational need not specified in (A) - (F) of this 13 paragraph [,] identified by the department; 14  (2) prepare an estimate of the amount of money needed to finance each 15 project; 16  (3) provide to the governor, by November 1, and to the legislature 17 within the first 10 days of each regular legislative session, a revised and updated 18 six-year capital improvement project [CONSTRUCTION] grant schedule, together 19 with a proposed schedule of appropriations. 20 * Sec. 7. AS 14.11.013(b) is amended to read: 21  (b) In preparing the capital improvement project [CONSTRUCTION] grant 22 schedule, the department shall establish priorities among projects for which grants are 23 requested and shall award [SCHOOL CONSTRUCTION] grants in the order of priority 24 established. In establishing priorities, the department shall evaluate at least the 25 following factors, which shall be considered as a whole and the department may 26 not give one factor priority over another: 27  (1) emergency requirements; 28  (2) priorities assigned by the district to the projects requested; 29  (3) new local elementary and secondary programs; 30  (4) existing regional, community, and school facilities, and their 31 condition; and

01  (5) alternate education program options for accomplishing the project's 02 objectives. 03 * Sec. 8. AS 14.11.015 is amended to read: 04  Sec. 14.11.015. APPROVAL OF GRANT APPLICATIONS. (a) The board 05 shall review grant applications that have been recommended by the department under 06 AS 14.11.013, and may approve a grant application if the board determines that the 07 project meets the criteria specified in AS 14.11.013(a)(1). The department may not 08 award a [SCHOOL CONSTRUCTION] grant unless the grant application is approved 09 by the board. 10  (b) To the extent that money is available, the [THE] department shall award 11 grants approved under (a) of this section in the order of the projects' priority on the 12 date the appropriation bill funding the [SCHOOL CONSTRUCTION] grant fund is 13 passed by the legislature, regardless of any appeal pending under AS 14.11.016. 14 Appeals pending under AS 14.11.016 at the time that grants are awarded may not 15 delay the funding of grants awarded under this section. 16  (c) If a project is assigned a new priority ranking under AS 14.11.016 after the 17 date of passage by the legislature of the appropriation bill for the [SCHOOL 18 CONSTRUCTION] grant fund, the new priority ranking applies with respect to any 19 subsequent legislative appropriation to the grant fund [THE PROJECT MUST BE 20 FUNDED IN ACCORDANCE WITH THE NEW PRIORITY RANKING AT THE 21 NEXT TIME THAT SCHOOL CONSTRUCTION GRANTS ARE AWARDED]. 22 * Sec. 9. AS 14.11.017 is amended to read: 23  Sec. 14.11.017. [SCHOOL CONSTRUCTION] GRANT CONDITIONS. (a) 24 The department shall require in the grant agreement that a municipality that is a school 25 district or a regional educational attendance area 26  (1) agree to construction of a facility of appropriate size and use that 27 meets criteria adopted by the department if the grant is for school construction; 28  (2) provide reasonable assurance by a means acceptable to the 29 department, that the cost of the project will be uniform with the costs of the most 30 current construction or major maintenance projects, as appropriate, in the area; 31  (3) agree to limit equipment purchases to that required for the approved

01 project [SCHOOL CONSTRUCTION] plan submitted under (5) of this subsection 02 and account for all equipment purchased for the project under a fixed asset inventory 03 system approved by the department; 04  (4) submit project budgets for department approval and agree that the 05 grant amount may, at the discretion of the department, be reduced or increased by 06 amounts equal to the amounts by which contracts vary from the budget amounts 07 approved by the department; and 08  (5) submit to the department for approval, before award of the 09 [CONSTRUCTION] contract, a plan for the project [SCHOOL CONSTRUCTION] 10 that includes educational specifications, final [CONSTRUCTION] drawings, and 11 contract documents. 12  (b) The cost of any school construction or major maintenance activity 13 encompassed by the definition of "costs of school construction" under AS 14.11.135 14 is payable under a grant awarded under AS 14.11.015 without regard to whether the 15 costs were incurred before [PRIOR TO] the 16  (1) award of the grant; 17  (2) approval of the grant application by the board; or 18  (3) effective date of an appropriation to the [SCHOOL 19 CONSTRUCTION] grant fund for the year in which the grant is funded. 20 * Sec. 10. AS 14.11.017 is amended by adding a new subsection to read: 21  (c) The department, by regulation, may establish the time period in which 22 activities described in (b) of this section must have occurred in order to be paid under 23 a grant. 24 * Sec. 11. AS 14.11.019 is amended to read: 25  Sec. 14.11.019. [SCHOOL CONSTRUCTION] GRANT APPROPRIATIONS. 26 Within the general appropriation bill submitted to the legislature under AS 37.07.020, 27 the governor shall include an appropriation for [SCHOOL CONSTRUCTION] grants 28 in the succeeding fiscal year as determined by the six-year capital improvement 29 project [CONSTRUCTION] grant schedule prepared under AS 14.11.013. 30 * Sec. 12. AS 14.11.135 is repealed and reenacted to read: 31  Sec. 14.11.135. DEFINITIONS. In this chapter, unless the context requires

01 otherwise, 02  (1) "approved school construction project" means the plan for a new 03 school or an addition to or major rehabilitation of an existing school to the extent that 04 the plan has been approved by the commissioner in accordance with 05 AS 14.07.020(a)(11); 06  (2) "capital improvement project" or "project" means school 07 construction or major maintenance; 08  (3) "costs of school construction" means the cost of acquiring, 09 constructing, enlarging, repairing, remodeling, equipping, or furnishing of public 10 elementary and secondary schools that are owned or operated by the state, a 11 municipality, or a district and includes the sum total of all costs of financing and 12 carrying out the project; these include the costs of all necessary studies, surveys, plans 13 and specifications, architectural, engineering or other special services, acquisition of 14 real property, site preparation and development, purchase, construction, reconstruction 15 and improvement of real property and the acquisition of machinery and equipment that 16 may be necessary in connection with the project; an allocable portion of the 17 administrative and operating expenses of the grantee; the cost of financing the project, 18 including interest on bonds issued to finance the project; and the cost of other items, 19 including indemnity and surety bonds and premiums on insurance, legal fees, fees and 20 expenses of trustees, depositaries, financial advisors, and paying agents for the bonds 21 issued as the issuer considers necessary; 22  (4) "district" means a district described in AS 14.12.010; 23  (5) "grant" means a grant under this chapter for school construction or 24 for major maintenance; 25  (6) "major maintenance" means a project described in 26 AS 14.11.013(a)(1)(C) or (D); 27  (7) "school construction" means a project described in 28 AS 14.11.013(a)(1)(A), (B), (E), (F), or (G). 29 * Sec. 13. Notwithstanding AS 14.11.008(c), enacted in sec. 4 of this Act, the required 30 participating share for a regional educational attendance area is 31 (1) not required for grants made from appropriations passed by the legislature

01 in 1993; 02 (2) two percent for grants made from appropriations passed by the legislature 03 in 1994; 04 (3) three percent for grants made from appropriations passed by the legislature 05 in 1995. 06 * Sec. 14. SUSPENSION OF CERTAIN GRANT PROVISIONS; DUTY OF 07 DEPARTMENT OF EDUCATION. (a) Notwithstanding any other provision of law, the 08 provisions of AS 14.11.011 - 14.11.019, except AS 14.11.011(b)(2), do not apply to grants 09 made from appropriations passed by the legislature in 1993, except as otherwise provided by 10 the legislature in an Act making an appropriation to the school grant fund (AS 14.11.005). 11 (b) The Department of Education shall award and administer grants made from the 12 school grant fund (AS 14.11.005) for costs of school construction or major maintenance, from 13 appropriations to the fund passed by the legislature in 1993. The department may adopt 14 regulations to implement this subsection. 15 * Sec. 15. This Act takes effect July 1, 1993.