SB 258: "An Act relating to the state's participation in the financing of construction and major maintenance of public school facilities; giving notice of and approving the entry into, and the issuance of certificates of participation in, lease-financing agreements for public school facilities; and providing an effective date."
00SENATE BILL NO. 258 01 "An Act relating to the state's participation in the financing of construction and 02 major maintenance of public school facilities; giving notice of and approving the 03 entry into, and the issuance of certificates of participation in, lease-financing 04 agreements for public school facilities; and providing an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 14.11.008 is repealed and reenacted to read: 07 Sec. 14.11.008. School district participation in grant program. (a) In order 08 to receive a grant under this chapter or money from an appropriation under 09 AS 37.05.560, a district must provide a percentage share of the project cost as 10 determined under (b) or (c) of this section. A district shall provide the required 11 participating share within three years after the date that the appropriation bill financing 12 the grant is passed by the legislature and enacted into law. 13 (b) The required participating share for a municipal school district is based on 14 the district's full value per average daily membership (ADM), which is calculated by
01 dividing the full and true value of the taxable real and personal property in the district, 02 calculated as described in AS 14.17.025(a)(1), by the district ADM, for the same fiscal 03 year for which the valuation was made. The municipal district's full value per ADM 04 determines the district's required participating share, as follows: 05 Full Value Per ADM District Participating Share 06 $ 1 - 100,000 5 percent 07 $100,001 - 200,000 10 percent 08 $200,001 - 750,000 30 percent 09 over $750,000 35 percent. 10 (c) The required participating share for a regional educational attendance area 11 is two percent. The participating share for any district may be satisfied by money 12 from federal, local, or other sources, or with locally contributed labor, material, 13 equipment, or land. 14 (d) State money provided for school construction or major maintenance may 15 not be a source of the participating share required under (b) or (c) of this section. 16 (e) If the required participating share for a municipal school district is provided 17 from the proceeds of local government general obligation bonds, the department may 18 not provide financing under this chapter for the project unless the project was approved 19 by the commissioner of the Department of Education. 20 (f) In this section, "ADM" has the meaning given in AS 14.17.250. 21 * Sec. 2. AS 14.11.013(a) is amended to read: 22 (a) With regard to projects for which grants are requested under AS 14.11.011, 23 the department shall 24 (1) annually review the six-year plans submitted by each district under 25 AS 14.11.011(b) and recommend to the board a revised and updated construction 26 project grant schedule, a major maintenance project grant schedule, and a 27 six-year capital spending plan [IMPROVEMENT PROJECT GRANT SCHEDULE] 28 that serve [SERVES] the best interests of the state and each district; in recommending 29 projects for these schedules [THIS SCHEDULE], the department shall verify that each 30 proposed project meets the criteria established under AS 14.11.014(b) and qualifies as 31 a project required to
01 (A) avert imminent danger or correct life-threatening situations; 02 (B) house students who would otherwise be unhoused; for 03 purposes of this subparagraph, students are considered unhoused if the students 04 attend school in temporary facilities; 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 construction and major maintenance grant schedules and a six-year capital 19 spending plan [IMPROVEMENT PROJECT GRANT SCHEDULE], together with a 20 proposed schedule of appropriations. 21 * Sec. 3. AS 14.11.013(b) is amended to read: 22 (b) In preparing the construction and major maintenance grant schedules 23 [SCHEDULE], the department shall establish priorities among eligible projects for 24 which grants are requested and shall award [SCHOOL CONSTRUCTION] grants in 25 the order of priorities [PRIORITY] established. In establishing priorities , the 26 department shall evaluate at least the following factors, without establishing an 27 absolute priority for any one factor: 28 (1) emergency requirements; 29 (2) priorities assigned by the district to the projects requested; 30 (3) new local elementary and secondary programs; 31 (4) existing regional, community, and school facilities, and their
01 condition; this paragraph does not include administrative facilities; 02 (5) the amount of district operating money [FUNDS] expended for 03 maintenance; and 04 (6) other options that would reduce or eliminate the need for the 05 request. 06 * Sec. 4. AS 14.11.013(c) is amended to read: 07 (c) The department may 08 (1) modify a project request when necessary to achieve a cost-effective 09 project [SCHOOL CONSTRUCTION]; 10 (2) require that a [SCHOOL CONSTRUCTION] project be phased for 11 purposes of planning, design, and construction; and 12 (3) reject project requests and omit them from the schedules 13 [SIX-YEAR SCHEDULE] due to 14 (A) incomplete information or documentation provided by the 15 district; 16 (B) a determination by the department that existing facilities can 17 adequately serve the program requirements, or that alternative projects are in 18 the best interests of the state; or 19 (C) a determination that the project is not in the best interests 20 [INTEREST] of the state. 21 * Sec. 5. AS 14.11.014(b) is amended to read: 22 (b) The committee shall 23 (1) [REVIEW THE DEPARTMENT'S PRIORITIES AMONG 24 PROJECTS FOR WHICH SCHOOL CONSTRUCTION GRANTS ARE 25 REQUESTED; 26 (2) MAKE RECOMMENDATIONS TO THE BOARD CONCERNING 27 SCHOOL CONSTRUCTION GRANTS AND MAKE RECOMMENDATIONS TO 28 THE COMMISSIONER CONCERNING PROJECTS FOR WHICH BOND 29 REIMBURSEMENT IS REQUESTED; 30 (3)] develop criteria for construction and major maintenance of 31 schools in the state; criteria developed under this paragraph must include requirements
01 intended to achieve a cost effective project [SCHOOL CONSTRUCTION]; 02 (2) [(4)] analyze existing prototypical designs for school construction 03 projects; 04 (3) [(5)] establish a form for grant applications; 05 (4) [(6)] establish a method of ranking grant projects; 06 (5) [(7)] recommend to the board necessary changes to the approval 07 process for construction and major maintenance [SCHOOL CONSTRUCTION] 08 grants and for projects for which bond reimbursement is requested ; 09 (6) recommend to the board suggested improvements relating to 10 school facilities, construction, and major maintenance . 11 * Sec. 6. AS 14.11.017(a) is amended to read: 12 (a) The department shall require in the grant agreement that a municipality that 13 is a school district or a regional educational attendance area 14 (1) agree to construction of a facility of appropriate size and use that 15 meets criteria adopted by the department if the grant is for school construction; 16 (2) provide reasonable assurance , by a means acceptable to the 17 department, that the cost of the project will be uniform with the costs of the most 18 current construction or major maintenance projects, as appropriate, in the area; 19 (3) agree to limit equipment purchases to that required for the approved 20 project plan submitted under (5) of this subsection and account for all equipment 21 purchased for the project under a fixed asset inventory system approved by the 22 department; 23 (4) submit project budgets for department approval and agree that the 24 grant amount may, at the discretion of the department, be reduced or increased by 25 amounts equal to the amounts by which contracts vary from budget amounts approved 26 by the department; [AND] 27 (5) submit to the department for approval, before award of the contract, 28 a plan for the project that includes educational specifications, final drawings, and 29 contract documents ; 30 (6) agree that all interest earned on the grant money provided by 31 the department will be spent only on the project for which the grant was
01 awarded; and 02 (7) provide to the state, for no longer than the term of the state's 03 financing instrument plus five years, an interest in the facility as required for the 04 state's issuance of certificates of participation or other financing instruments used 05 by the state to finance its share of the project cost . 06 * Sec. 7. AS 14.11.019 is amended to read. 07 Sec. 14.11.019. Grant appropriations. Within the appropriation bill 08 authorizing capital expenditures submitted to the legislature under AS 37.07.020(a)(3), 09 the governor shall include an appropriation for grants in the succeeding fiscal year as 10 determined by the construction [SIX-YEAR CAPITAL IMPROVEMENT] project 11 grant schedule and major maintenance project grant schedule prepared under 12 AS 14.11.013. All projects financed under this section must meet all requirements 13 of AS 14.11. 14 * Sec. 8. NOTICE OF THE ENTRY INTO AND FINANCING OF LEASE-FINANCING 15 AGREEMENTS. (a) The Department of Education, under a delegation of authority from the 16 Department of Administration, is authorized to enter into lease-financing agreements, each 17 subject to annual appropriation, for the projects described in secs. 2 and 3 of this Act and in 18 (c) of this section. The state bond committee is authorized to provide for the issuance of 19 certificates of participation in one or more series in the aggregate principal amount of 20 $400,000,000 for the cost of construction, acquisition, and equipping the projects described 21 in secs. 2 and 3 of this Act and in (c) of this section and for payment of costs of issuance, 22 including credit enhancement and underwriting expenses and capitalized interest. The 23 anticipated total costs of construction, acquisition, and equipping the projects are 24 $400,000,000. The anticipated annual amount of the rental obligations under the lease- 25 financing agreements is $34,600,000. The anticipated total lease payments for the full term 26 of the lease-financing agreements are $692,000,000. Under terms approved by the Department 27 of Education, the leasehold interests of the state in the projects financed under this section 28 may terminate following the payment and retirement of the series of certificates of 29 participation or at another later date as considered reasonable by the Department of Education. 30 (b) The state bond committee may contract for the credit instruments and trust services 31 it considers necessary in financing the projects described in secs. 2 and 3 of this Act and in
01 (c) of this section. 02 (c) The projects described in secs. 2 and 3 of this Act that may be financed with 03 lease-financing agreements from time to time are those public school projects included in the 04 construction project grant schedule and the major maintenance project grant schedule that are 05 prepared under AS 14.11.013 as of the date of issuance of the series of certificates of 06 participation relating to those lease-financing agreements. The Department of Education may 07 only authorize the projects in the order of priority established by those schedules. All projects 08 financed under this section are required to meet the requirements of AS 14.11. 09 * Sec. 9. APPROVAL. Section 8 of this Act constitutes the notice and approval of the 10 lease-financing agreements described in sec. 8 of this Act required by AS 36.30.085. 11 * Sec. 10. This Act takes effect July 1, 1998.