SB 227: "An Act relating to the evaluation of capital projects; establishing the capital project evaluation division in the office of management and budget and the capital project evaluation task force; relating to school construction grants and bond reimbursement; relating to harbor facility grants; and providing for an effective date."
00 SENATE BILL NO. 227 01 "An Act relating to the evaluation of capital projects; establishing the capital project 02 evaluation division in the office of management and budget and the capital project 03 evaluation task force; relating to school construction grants and bond reimbursement; 04 relating to harbor facility grants; and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 14.11.013(a) is amended to read: 07 (a) With regard to projects for which grants are requested under AS 14.11.011, 08 the department shall 09 (1) annually review the six-year plans submitted by each district under 10 AS 14.11.011(b) and recommend to the board a revised and updated six-year capital 11 improvement project grant schedule that serves the best interests of the state and each 12 district; in recommending projects for this schedule, the department shall verify that 13 each proposed project meets the criteria established under AS 14.11.014(b) and 14 qualifies as a project required to
01 (A) avert imminent danger or correct life-threatening 02 situations; 03 (B) house students who would otherwise be unhoused; for 04 purposes of this subparagraph, students are considered unhoused if the students 05 attend school in temporary facilities; 06 (C) protect the structure of existing school facilities; 07 (D) correct building code deficiencies that require major repair 08 or rehabilitation in order for the facility to continue to be used for the 09 educational program; 10 (E) achieve an operating cost savings; 11 (F) modify or rehabilitate facilities for the purpose of 12 improving the instructional program; 13 (G) meet an educational need not specified in (A) - (F) of this 14 paragraph, identified by the department; 15 (2) prepare an estimate of the amount of money needed to finance each 16 project; 17 (3) provide to the governor, by November 1, and to the legislature 18 within the first 10 days of each regular legislative session, a revised and updated six- 19 year capital improvement project grant schedule, together with a proposed schedule of 20 appropriations; 21 (4) encourage each school district to use previously approved school 22 construction design plans and building systems if the use will result in cost savings for 23 the project; 24 (5) consider the regionally based model school construction standards 25 developed under AS 14.11.017(d); 26 (6) submit each project to the capital project evaluation division 27 for an evaluation under AS 37.07.200(c). 28 * Sec. 2. AS 14.11.013(b) is amended to read: 29 (b) In preparing the construction grant schedule, the department shall establish 30 priorities among projects for which grants are requested and shall award school 31 construction grants in the order of priority established. In establishing priorities, the
01 department shall evaluate at least the following factors, without establishing an 02 absolute priority for any one factor: 03 (1) emergency requirements; 04 (2) priorities assigned by the district to the projects requested; 05 (3) new local elementary and secondary programs; 06 (4) existing regional, community, and school facilities, and their 07 condition; this paragraph does not include administrative facilities; 08 (5) the amount of district operating funds expended for maintenance; 09 (6) other options that would reduce or eliminate the need for the 10 request; 11 (7) the district's use of previously approved school construction design 12 plans and building systems if the use will result in cost savings for the project; [AND] 13 (8) consideration of regionally based model school construction 14 standards under AS 14.11.017(d); and 15 (9) the evaluation conducted under AS 37.07.200(c). 16 * Sec. 3. AS 29.60.810 is amended by adding a new subsection to read: 17 (b) The Department of Transportation and Public Facilities shall submit each 18 capital project proposed in an application submitted under this section to the capital 19 project evaluation division for an evaluation under AS 37.07.200(c). In this 20 subsection, "capital project" has the meaning given in AS 37.07.120. 21 * Sec. 4. AS 29.60.820(a) is amended to read: 22 (a) The Department of Transportation and Public Facilities may award a 23 harbor facility grant during a fiscal year only for a proposed project eligible under 24 AS 29.60.810(a) [AS 29.60.810] based on a grant application filed during the 25 immediately preceding fiscal year before February 1. The total amount of grant money 26 made available to a municipality or regional housing authority during a fiscal year 27 may not exceed $5,000,000. 28 * Sec. 5. AS 29.60.820(b) is amended to read: 29 (b) The Department of Transportation and Public Facilities shall award a grant 30 for every proposed project eligible under AS 29.60.810(a) [AS 29.60.810] that is for 31 repair and major maintenance of a harbor facility that was transferred by the state to a
01 municipality or regional housing authority before grants may be made for other 02 proposed harbor facility projects during a fiscal year. However, after the department 03 makes a grant for the repair and major maintenance of a harbor facility under this 04 subsection, no other grants for the repair and major maintenance of that facility may 05 be made during the same or any other fiscal year. 06 * Sec. 6. AS 29.60.820(c) is amended to read: 07 (c) The Department of Transportation and Public Facilities shall establish 08 priorities for the award of grants for proposed harbor facility projects under (b) of this 09 section and priorities for the award of grants for other proposed harbor facility 10 projects, with new construction projects having the lowest priority. The department 11 shall award grants in the order of priority established. In establishing priorities, the 12 department shall include at least the following, in the order listed: 13 (1) the extent to which the municipality or regional housing authority 14 can demonstrate that it will have sufficient revenue to operate and maintain the harbor 15 facility in the future without state aid; 16 (2) public safety and emergency factors; 17 (3) the amount spent by the municipality or regional housing authority 18 on maintenance of the harbor facility; 19 (4) the project's numerical score, as calculated under 20 AS 37.07.200(c); 21 (5) [(4)] other options that would reduce or eliminate the need for the 22 proposed project; and 23 (6) [(5)] whether alternative harbor projects would better serve the 24 public interest. 25 * Sec. 7. AS 37.07.040 is amended to read: 26 Sec. 37.07.040. Office of management and budget. The Alaska office of 27 management and budget shall 28 (1) assist the governor in meeting the requirements of AS 37.07.020, 29 including the coordination and analysis of state agency goals and objectives, plans, 30 and budget requests; 31 (2) prepare for submission to the governor an annually updated six-
01 year capital improvements program and the proposed capital improvements budget for 02 the coming fiscal year, the latter to include individual project justification with 03 documentation of estimated project cost and a copy of the evaluation conducted 04 under AS 37.07.200(c) for each project; 05 (3) develop procedures to produce the information needed for effective 06 policy decision making, including procedures to provide for the dissemination of 07 information about plans, programs, and budget requests to be included in the annual 08 budget and opportunity for public review and comment during the period of budget 09 preparation; 10 (4) assist state agencies in their statement of goals and objectives to 11 achieve, among other things, the legislature's mission and desired results, preparation 12 of plans, assessments of the extent to which missions and desired results have been 13 achieved, budget requests, and reporting of program performance; all documents 14 forwarded by the office to a state agency containing instructions for the preparation of 15 program plans and budget requests and the reporting of program performance are 16 public information after the date they are forwarded; 17 (5) administer its responsibilities under the program execution 18 provisions of this chapter so that the policy decisions and budget determinations of the 19 governor and the legislature are implemented; 20 (6) provide the legislative finance division with the budget information 21 it may request; 22 (7) provide the legislative finance division with an advance copy of the 23 governor's budget workbooks at least seven days before the legislature convenes in a 24 regular session; 25 (8) prepare the proposed capital improvements budget for the coming 26 fiscal year and evaluate all [EVALUATING BOTH STATE AND LOCAL] requests 27 as provided in AS 37.07.200(c) [FROM THE STANDPOINT OF NEED, EQUITY, 28 AND PRIORITIES OF THE JURISDICTION; OTHER FACTORS SUCH AS 29 PROJECT AMOUNTS, POPULATION, LOCAL FINANCIAL MATCH, FEDERAL 30 FUNDS BEING USED FOR LOCAL MATCH, MUNICIPALITY OR 31 UNINCORPORATED COMMUNITY ACCEPTANCE OF THE FACILITY, AND
01 ALL ASSOCIATED COSTS OF THE FACILITY MAY BE CONSIDERED]; 02 (9) for each department in the executive branch, report to the 03 legislature by the 45th day of each regular session the amount of money appropriated 04 to the department that is expected to lapse into the general fund at the end of the 05 current fiscal year; 06 (10) establish and administer a state agency program performance 07 management system involving planning, performance budgeting, performance 08 measurement, and program evaluation; the office shall ensure that information 09 generated under this system is useful for managing and improving the efficiency and 10 effectiveness of agency operations; 11 (11) by January 15, list each lease-purchase agreement entered into by 12 an agency during the immediately preceding fiscal year for the acquisition of 13 equipment or other personal property, together with a description of the property 14 acquired and financial details, including the purchase price, the term for payments, the 15 amount of each payment, and the amount of interest or financing charges paid; 16 (12) work with state agencies to develop a standardized methodology 17 to collect and store energy consumption and expense data. 18 * Sec. 8. AS 37.07.060(b) is amended to read: 19 (b) The governor shall present the proposed comprehensive operating and 20 capital improvements programs, and fiscal plan if it is required under 21 AS 37.07.020(b), in a message to a joint session of the legislature before the fourth 22 legislative day following the convening of the legislature in regular session. The 23 message must be accompanied by an explanatory report that summarizes 24 recommended goals, plans, and appropriations. The report must contain 25 (1) the coordinated program goals and objectives that the governor 26 recommends to guide the decisions on the proposed program plans and budget 27 appropriations; 28 (2) the governor's operating program and budget recommendations for 29 the succeeding fiscal year organized by agency as required by AS 37.07.020(a); 30 (3) the governor's capital improvements program and budget 31 recommendations for the succeeding fiscal year and capital improvements program for
01 the succeeding six fiscal years, which must include 02 (A) a description of each project, its estimated cost for the year 03 construction is to start and the estimated cost of the project adjusted for 04 inflation over the estimated period of construction, [AND] the source of 05 financing for the project, and an evaluation of the project under 06 AS 37.07.200(c); the project description for a new building or a new facility or 07 for a major addition to a building or facility should include a site plan, 08 preliminary drawings, and architect's or engineer's total cost estimate for the 09 project; 10 (B) a summary of projects previously authorized and not yet 11 completed; 12 (C) a summary, listed by agency, of all previously proposed 13 projects that have been deferred beyond the six years covered by the plan and 14 the year in which construction has been rescheduled to begin; 15 (D) a forecast of the debt structure of the state and the various 16 debt ratios over the life of the state's bonds outstanding, bonds authorized and 17 to be issued, and bond authorizations recommended in the plan; 18 (E) a description of additional revenue measures needed to 19 finance the plan in lieu of debt; 20 (F) bond election bills to authorize the bonds required to fund 21 the projects scheduled for the first three years of the plan; 22 (G) projections of population of the state and its regions and 23 communities; 24 (H) economic data and projections necessary for the evaluation 25 of the plan; 26 (4) a summary of state receipts in the last fiscal year, a revised estimate 27 for the current fiscal year, and an estimate for the succeeding fiscal year; 28 (5) a summary of expenditures during the last fiscal year, those 29 authorized for the current fiscal year, and an estimate for the succeeding fiscal year; 30 (6) any additional information that will facilitate understanding of the 31 governor's proposed programs and financial plans by the legislature and the public.
01 * Sec. 9. AS 37.07.062(a) is amended to read: 02 (a) Each appropriation bill authorizing capital expenditures required to be 03 submitted to the legislature in AS 37.07.020(a) must be accompanied by documents 04 supporting the expenditures. The documents must include [LIST], for each project, 05 the 06 (1) project identification number; 07 (2) project title; 08 (3) source of funding; 09 (4) amount expended on the project during the preceding fiscal year, 10 the amount authorized for the current fiscal year, the amount proposed to be expended 11 during the succeeding fiscal year, and the amount proposed to be expended each year 12 until project completion; 13 (5) estimated start for construction; 14 (6) cost of each subsequent phase with estimated construction start and 15 completion dates, for projects that will be completed in phases; [AND] 16 (7) schedule of bond elections pertaining to the appropriation, 17 including elections previously held; and 18 (8) evaluation of the project conducted under AS 37.07.200(c). 19 * Sec. 10. AS 37.07.120 is amended to read: 20 Sec. 37.07.120. Definitions. In AS 37.07.010 - 37.07.130 [THIS CHAPTER], 21 (1) "agency" means a department, officer, institution, board, 22 commission, bureau, division, or other administrative unit forming the state 23 government and includes the Alaska Pioneers' Home, the Alaska Veterans' Home, and 24 the University of Alaska, but does not include the legislature or the judiciary; 25 (2) "allocation" means an amount set out as a legislative guideline for 26 expenditure by a state agency for a stated purpose within the total amount of an 27 appropriation; 28 (3) "appropriation" means a maximum amount available for 29 expenditure by a state agency for a stated purpose set out in an appropriation act; 30 (4) "capital projects" and "capital improvements" mean an allocation 31 or appropriation item for an asset with an anticipated life exceeding one year and a
01 cost exceeding $25,000 and include land acquisition, construction, structural 02 improvement, engineering and design for the project, and equipment and repair costs; 03 (5) "facility operations" means activities and expenses relating to the 04 day-to-day operations of a building or facility, including utilities, janitorial service, 05 security service, snow removal, and direct supervision of related maintenance 06 activities; 07 (6) "fiscal year" means a year beginning on July 1 of one calendar year 08 and ending on June 30 of the following calendar year; 09 (7) "maintenance and repair" means the day-to-day scheduled and 10 preventive maintenance effort, including minor repair work, required to keep a 11 building or facility operational and in a continuous state of readiness; 12 (8) "object of expenditure" means a line item of expenditure within an 13 allocation or an appropriation; 14 (9) "office" means the Alaska office of management and budget 15 established in the Office of the Governor by AS 44.19.141; 16 (10) "renewal and replacement" means the scheduled replacement of 17 worn-out major building components and the replacement or retrofitting of obsolete or 18 inefficient building systems in order to maintain or extend the life of a building or 19 facility. 20 * Sec. 11. AS 37.07 is amended by adding new sections to read: 21 Article 2. Capital Project Evaluation Division. 22 Sec. 37.07.200. Capital project evaluation division. (a) The capital project 23 evaluation division is established in the office of management and budget on July 1, 24 2025. 25 (b) The capital project evaluation division shall implement a system of 26 standardized criteria to score and evaluate proposed capital projects. 27 (c) Beginning on July 1, 2028, the division shall evaluate each proposed 28 capital project submitted to the division by another entity. In the evaluation for the 29 proposed project, the division shall 30 (1) classify the project as either new construction or maintenance and 31 repair;
01 (2) identify whether the project is or will be owned by the state; 02 (3) identify a specific problem in the state that the project will solve; 03 identifying the purpose of general economic investment is not sufficient to satisfy this 04 paragraph; 05 (4) calculate a numerical score for the project using the rubric 06 developed by the capital project evaluation task force; 07 (5) calculate a regional weighted score for the project, as provided in 08 (d) of this section; 09 (6) calculate a priority ranking score, using the criteria established by 10 the capital project evaluation task force, for a project by a municipality or other 11 political subdivision of the state; 12 (7) calculate a numerical score for the project by incorporating the 13 factors identified in (1) - (6) of this subsection; and 14 (8) calculate a final weighted score by dividing the number calculated 15 in (7) of this subsection by a weighted factor that incorporates the total amount of state 16 funds required to complete the project; in this paragraph, "state funds" does not 17 include federal funds, municipal funds, or matching funds from a source other than the 18 general fund. 19 (d) The division shall develop a regional weighted scoring system to compare 20 proposed capital projects in different regions of the state. The regional weighted 21 scoring system must be a quantitative assessment. Beginning in 2030, the division 22 shall review and if necessary update the regional weighted scoring system within one 23 year after a decennial census conducted by the United States Bureau of the Census. 24 (e) The division shall submit a copy of an evaluation conducted under this 25 section to the director of the office of management and budget and the Office of the 26 Governor and make the evaluation available to the public on the division's Internet 27 website. 28 (f) In this section, 29 (1) "capital project" or "project" has the meaning given to "capital 30 project" in AS 37.07.120; 31 (2) "division" means the capital project evaluation division.
01 Sec. 37.07.210. Capital project evaluation task force. (a) Within one year 02 after the Redistricting Planning Committee under AS 15.10.300 receives population 03 data from a decennial census conducted by the United States Bureau of the Census, 04 beginning with the 2030 decennial census, the director of the capital project evaluation 05 division may form a capital project evaluation task force. The task force is established 06 in the office of management and budget. The task force is composed of 07 (1) the commissioner of transportation and public facilities or the 08 commissioner's designee; 09 (2) the commissioner of natural resources or the commissioner's 10 designee; 11 (3) the commissioner of education and early development or the 12 commissioner's designee; 13 (4) the commissioner of commerce, community, and economic 14 development or the commissioner's designee; 15 (5) a current employee of the division of the Department of 16 Transportation and Public Facilities responsible for developing the statewide 17 transportation improvement program, designated by the director of that division; and 18 (6) eight persons, appointed by the director of the office of 19 management and budget, who possess expertise in one or more of the following fields: 20 (A) aviation or maritime infrastructure; 21 (B) school construction or facilities maintenance; 22 (C) state construction standards or building codes; 23 (D) public safety; 24 (E) regulations adopted under AS 18.70.010 - 18.70.100; 25 (F) recreational or remote trail infrastructure; and 26 (G) commercial supply chains in the state. 27 (b) A capital project evaluation task force shall reassess and, if necessary, 28 update the standardized rubric used to evaluate proposed capital projects submitted to 29 the division. The updated rubric must produce a numerical score for a capital project 30 after evaluating the project in the following categories: 31 (1) safety, including the reduction of fatalities or serious injuries the
01 expenditure is likely to achieve, the proximity of the project to safety hazards, and any 02 possible reduction of emergency response time; 03 (2) accessibility, including an increase in access to jobs or services or a 04 reduction in traffic congestion; 05 (3) land use, including the project's efficient use of land for the land's 06 intended function; 07 (4) environmental impact, including improvement to the natural 08 environment, mitigation of harm to the natural environment, and changes to air or 09 water quality; 10 (5) economic development, including the project's effect on the 11 movement of goods, economic development projects, private sector development, and 12 future economic development and private sector economic growth; 13 (6) maintenance, including whether the project adequately accounts for 14 ongoing maintenance costs and the project's effect on future maintenance and 15 operation costs to the state and, if applicable, a political subdivision of the state; 16 (7) urgency, foreseeability, and the availability of municipal funds for 17 the project; in this paragraph, "foreseeability" includes, when applicable, an evaluation 18 of whether the current owner of the project has adequately maintained the project; 19 (8) operational importance, including the number of people served by 20 the project and available alternatives; and 21 (9) local ranking; in this paragraph, 22 (A) "local ranking" means whether a municipality or other 23 political subdivision of the state or a regional development organization has 24 requested a project and the importance of the project to that municipality, 25 political subdivision, or regional development organization; 26 (B) "regional development organization" has the meaning 27 given in AS 44.33.896. 28 (c) Members of a capital project evaluation task force serve without 29 compensation but are entitled to per diem and travel expenses authorized for boards 30 and commissions under AS 39.20.180. 31 (d) A capital project evaluation task force terminates after the task force
01 completes its work under (b) of this section. 02 (e) In this section, 03 (1) "capital project" or "project" has the meaning given to "capital 04 project" in AS 37.07.120; 05 (2) "task force" means the capital project evaluation task force. 06 * Sec. 12. AS 44.19.145(d) is amended to read: 07 (d) The office shall 08 (1) coordinate its services and activities with those of other state 09 departments and agencies to the fullest extent possible to avoid duplication; 10 (2) [REPEALED 11 (3)] cooperate with the University of Alaska and other appropriate 12 public and private institutions in research and investigations; 13 (3) cooperate with the Department of Transportation and Public 14 Facilities on the statewide transportation improvement program. 15 * Sec. 13. The uncodified law of the State of Alaska is amended by adding a new section to 16 read: 17 TRANSITION: INITIAL CAPITAL PROJECT EVALUATION TASK FORCE. (a) 18 Notwithstanding AS 37.07.210, enacted by sec. 11 of this Act, the initial capital project 19 evaluation task force is established in the office of management and budget. The task force is 20 composed of 21 (1) the commissioner of transportation and public facilities or the 22 commissioner's designee; 23 (2) the commissioner of natural resources or the commissioner's designee; 24 (3) the commissioner of education and early development or the 25 commissioner's designee; 26 (4) the commissioner of commerce, community, and economic development 27 or the commissioner's designee; 28 (5) a current employee of the division of the Department of Transportation and 29 Public Facilities responsible for developing the statewide transportation improvement 30 program, designated by the director of that division; 31 (6) one current and one former member of the committee responsible for
01 expenditures made from the harbor facility grant fund established under AS 29.60.800, 02 designated by the commissioner of transportation and public facilities; 03 (7) one current and one former member of the bond reimbursement and grant 04 review committee under AS 14.11.014, designated by the commissioner of education and 05 early development; and 06 (8) six persons, appointed by the director of the office of management and 07 budget, who possess expertise in one or more of the following fields: 08 (A) aviation or maritime infrastructure; 09 (B) school construction or facilities maintenance; 10 (C) state construction standards or building codes; 11 (D) public safety; 12 (E) regulations adopted under AS 18.70.010 - 18.70.100; 13 (F) recreational or remote trail infrastructure; and 14 (G) commercial supply chains in the state. 15 (b) The task force shall develop a standardized rubric to evaluate proposed capital 16 projects submitted to the division. The rubric must produce a numerical score for a capital 17 project after evaluating the project in the following categories: 18 (1) safety, including the reduction of fatalities or serious injuries the 19 expenditure is likely to achieve, the proximity of the project to safety hazards, and any 20 possible reduction of emergency response time; 21 (2) accessibility, including an increase in access to jobs or services or a 22 reduction in traffic congestion; 23 (3) land use, including the project's efficient use of land for the land's intended 24 function; 25 (4) environmental impact, including improvement to the natural environment, 26 mitigation of harm to the natural environment, and changes to air or water quality; 27 (5) economic development, including the project's effect on the movement of 28 goods, economic development projects, private sector development, and future economic 29 development and private sector economic growth; 30 (6) maintenance, including whether the project adequately accounts for 31 ongoing maintenance costs and the project's effect on future maintenance and operation costs
01 to the state and, if applicable, a political subdivision of the state; 02 (7) urgency, foreseeability, and the availability of municipal funds for the 03 project; in this paragraph, "foreseeability" includes, when applicable, an evaluation of 04 whether the current owner of the project has adequately maintained the project; 05 (8) operational importance, including the number of people served by the 06 project and available alternatives; and 07 (9) local ranking; in this paragraph, 08 (A) "local ranking" means whether a municipality or other political 09 subdivision of the state or a regional development organization has requested a project 10 and the importance of the project to that municipality, political subdivision, or 11 regional development organization; 12 (B) "regional development organization" has the meaning given in 13 AS 44.33.896. 14 (c) The task force shall establish criteria to prioritize a capital project proposed by a 15 municipality or other political subdivision of the state. 16 (d) Within one year after the formation of the capital project evaluation task force 17 established under this section, 18 (1) the capital project evaluation task force shall create a provisional scoring 19 rubric using the criteria listed in AS 37.07.210(b), enacted by sec. 11 of this Act, and transmit 20 the rubric to the capital project evaluation division established under AS 37.07.200, enacted 21 by sec. 11 of this Act; 22 (2) the capital project evaluation division shall use the provisional scoring 23 rubric to evaluate one historical capital project for each judicial district in the state for each 24 year from 1980 through 2020 using the method provided in AS 37.07.200(c), and transmit the 25 evaluations to the capital project evaluation task force; in this paragraph, "historical capital 26 project" means a capital project that was considered by the legislature in an appropriation bill; 27 (3) the capital project evaluation task force shall review the evaluations under 28 (2) of this subsection before adopting a final standardized rubric under (b) of this section; and 29 (4) the capital project evaluation division shall adopt regulations relating to 30 the final standardized rubric adopted by the task force. 31 (e) The initial capital project evaluation task force terminates on June 30, 2028.
01 (f) In this section, 02 (1) "capital project" or "project" has the meaning given to "capital project" in 03 AS 37.07.120; 04 (2) "task force" means the capital project evaluation task force. 05 * Sec. 14. Sections 10, 11, and 13 of this Act take effect July 1, 2025. 06 * Sec. 15. Sections 1 - 6 and 12 of this Act take effect July 1, 2026. 07 * Sec. 16. Sections 7 - 9 of this Act take effect July 1, 2028.