CS FOR HOUSE BILL NO. 212(RLS) "An Act relating to funding for school construction and major maintenance; relating to the regional educational attendance area and small municipal school district fund; and providing for an effective date." 3:12:46 PM Co-Chair MacKinnon reported the bill had been heard on April 23, 2018 when the public hearing had been heard and closed and the fiscal notes had been reviewed. Vice-Chair Bishop MOVED to ADOPT the committee substitute for CSHB 212(RLS), Work Draft 30-LS0741\M (Laffen, 5/4/18). Co-Chair MacKinnon OBJECTED for discussion. JULI LUCKY, STAFF, SENATOR ANNA MACKINNON, reviewed the two changes in the CS. She referenced previous bill hearing where there had been discussion on the effective date. The effective date had been changed to immediate in the CS. Additionally, the previous version of the bill had specified 20 percent for major maintenance. The new CS removed the 20 percent specification, but noted on page 1, lines 10 through 11 that the fund's primary function was to fund school construction projects. 3:14:09 PM JANE PIERSON, STAFF, REPRESENTATIVE NEAL FOSTER, discussed the bill. She explained the bill would allow more major maintenance in Regional Educational Attendance Area (REAA) and small municipal school districts. The bill did not add more money to increase the size of the pie. She detailed the bill would reallocate how the pie was cut. Currently the REAA and Small Municipal School District Fund could only be used for new school construction. The bill would allow the fund to be used for major maintenance in addition to new school construction in REAA and small municipal school district areas, with construction taking precedence. The bill would help reduce the deterioration of schools, which would save millions of dollars in the long run. For example, it was preferable to be proactive and replace a roof than to be reactive and replace an entire school. The sponsor had reviewed the CS and was amenable to the changes. Co-Chair MacKinnon WITHDREW her OBJECTION. There being NO further OBJECTION, Work Draft 30-LS0741\M was ADOPTED. Co-Chair MacKinnon MOVED to ADOPT Amendment 1, 30-LS0741\M (Laffen, 5/4/18) (copy on file): Page 1, following line 4: Insert new bill sections to read: "* Section 1. AS 14.11.013(a) is amended to read: (a) With regard to projects for which grants are requested under AS 14.11.011, the department shall (1) annually review the six-year plans submitted by each district under AS 14.11.011(b) and recommend to the board a revised and updated six-year capital improvement project grant schedule that serves the best interests of the state and each district; in recommending projects for this schedule, the department shall verify that each proposed project meets the criteria established under AS 14.11.014(b) and qualifies as a project required to (A) avert imminent danger or correct life-threatening situations; (B) house students who would otherwise be unhoused; for purposes of this subparagraph, students are considered unhoused if the students attend school in temporary facilities; (C) protect the structure of existing school facilities; (D) correct building code deficiencies that require major repair or rehabilitation in order for the facility to continue to be used for the educational program; (E) achieve an operating cost savings; (F) modify or rehabilitate facilities for the purpose of improving the instructional program; (G) meet an educational 1 need not specified in (A) - (F) of this paragraph, identified by the department; (2) prepare an estimate of the amount of money needed to finance each project; (3) provide to the governor, by November 1, and to the legislature within the first 10 days of each regular legislative session, a revised and updated six-year capital improvement project grant schedule, together with a proposed schedule of appropriations; (4) encourage each school district to use previously approved school construction design plans and building systems if the use will result in cost savings for the project; (5) consider the regionally based model school standards developed under AS 14.11.017(d). * Sec. 2. AS 14.11.013(b) is amended to read: (b) In preparing the construction grant schedule, the department shall establish priorities among projects for which grants are requested and shall award school construction grants in the order of priority established. In establishing priorities the department shall evaluate at least the following factors, without establishing an absolute priority for any one factor: (1) emergency requirements; (2) priorities assigned by the district to the projects requested; (3) new local elementary and secondary programs; (4) existing regional, community, and school facilities, and their condition; this paragraph does not include administrative facilities; (5) the amount of district operating funds expended for maintenance; [AND] (6) other options that would reduce or eliminate the need for the request; (7) the district's use of previously approved school construction design plans and building systems if the use will result in cost savings for the project; and (8) consideration of regionally 1 based model school standards under AS 14.11.017(d). * Sec. 3. AS 14.11.013(c) is amended to read: (c) The department may (1) modify a project request when necessary to achieve cost-effective school construction; (2) require that a school construction project be phased for purposes of planning, design, and construction; [AND] (3) reject project requests and omit them from the six-year schedule due to (A) incomplete information or documentation provided by the district; (B) a determination by the department that existing facilities can adequately serve the program requirements, or that alternative projects are in the best interests of the state; (C) a determination that the project is not in the best interest of the state; and (4) require that a school construction project include all or part of the regionally based model school standards developed under AS 14.11.017(d) or reuse previously approved design plans and building systems that would result in capital or operating cost savings for the project. * Sec. 4. AS 14.11.017 is amended by adding a new subsection to read: (d) The department shall develop and periodically update regionally based model school construction standards that describe acceptable building systems and anticipated costs and establish school design ratios to achieve efficient and cost-effective school construction. In developing the standards, the department shall consider the standards and criteria developed under AS 14.11.014(b)." Page 1, line 5: Delete "Section 1" Insert "Sec. 5" Renumber the following bill sections accordingly. Vice-Chair Bishop OBJECTED for discussion. Co-Chair MacKinnon explained the amendment. She detailed the legislature had been going through a process for over a decade looking at schools and how schools were built across Alaska. The research had been to determine whether there was a different way the state could do business that would allow designs to be reused and building components to be standardized. A study had been done by the department [Department of Education and Early Development] that specified the changes would not bring a cost savings unless multiple schools were being built. There were three schools on the REAA list in the same district that were all being built and had developed designs independent of each other that were costing the state $30 million, $35 million, and $40 million-plus schools. The amendment established a guideline - if districts allowed and under the direction of the department - to organize and try to save the state some money in design development and building construction. She relayed a process had been conducted and the review committee had rejected the process with cost savings. She asked the department to address the committee. 3:17:26 PM TIM MEARIG, FACILITIES MANAGER, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT (DEED), relayed the amendment introduced a couple of provisions not currently in statute. The amendment allowed the opportunity to develop the criteria for regionally based model school construction standards in a new paragraph under AS 14.11.017(d), Section 4. He believed the opportunity to develop the standards and describe acceptable building systems to be used in Alaska schools was positive and would allow the state, districts, and department to work collaboratively. He detailed the provision impacted other areas of the bill as the department analyzed school construction grant applications. The other provision was based around considering previous school designs and when they could appropriately be used in establishing a design for another school. There were some additional provisions in the amendment that would allow the department to encourage, measure, and enforce the consideration of when previous school designs could be used when designing other schools. Co-Chair MacKinnon asked whether her staff had been working with Mr. Mearig on the amendment. Mr. Merrick replied in the affirmative. 3:19:27 PM Co-Chair MacKinnon WITHDREW the OBJECTION. There being NO further OBJECTION, Amendment 1 was ADOPTED. Co-Chair MacKinnon asked if Ms. Pierson had any comments on Amendment 1. Ms. Pierson reported that Representative Foster was amenable to the amendment. Senator Micciche spoke about the materials components, construction experience, and transportation of goods related to school construction. He asked if the items were something DEED would look at in the future to reduce costs. Mr. Mearig answered that the provision to develop regionally based model school standards would help to identify best practices in the areas mentioned by Senator Micciche as well, including logistics and systems. Specifically, the department was looking at standards of acceptable building systems and associated costs as well as design ratios that would achieve efficiency. The department would measure things like the exterior envelope square footage for the building volume to identify an appropriate building efficiency. For example, the process would ensure a building did not end up with 100 corners. Many of the costs mentioned by Senator Micciche were not necessarily things that were easy for DEED to develop in standards. He explained that mobilization and shipping costs would be difficult for DEED to control. However, the department understood that the heavier the material, the more expensive the school would be to construct. Vice-Chair Bishop appreciated the amendment. He asked if DEED worked with the Cold Climate Housing Research Center (CCHRC) at the University of Alaska and whether that work would be incorporated into actions directed under the amendment. Mr. Mearig responded that DEED had not had significant interaction with CCHRC with regard to commercial building and schools. He followed CCHRC's work and believed there was good opportunity for collaboration between the two entities in regard to actions under the amendment. Co-Chair MacKinnon suggested that the Alaska Energy Authority (AEA) may be another natural partner to help with weatherization of the commercial buildings. She noted that sometimes there was a substantial amount of glass used in the buildings. Part of the problem she had with the current design process was that the architect chose what the building would look like and sometimes beautiful entrances were created that were not functionally compatible with the climate. She hoped the amendment would enable DEED to work with districts to obtain a beautiful and functional school design. Co-Chair MacKinnon communicated the committee did not yet have the fiscal note for the bill, which she believed would be around $300,000. She believed the bill would report out the following day. CSHB 212(RLS) was HEARD and HELD in committee for further consideration. 3:24:34 PM AT EASE 3:25:37 PM RECONVENED