Anchorage -- Representative Eldon Mulder (R-Anchorage) announced Friday that the House Finance Committee will introduce a major legislative proposal in the upcoming 2nd Session of the 21st Alaska Legislature. Mulder, the Committee Co-Chair, said the proposal would fund capital needs of elementary and secondary schools, the University of Alaska, ADA compliance in state buildings, and harbors in Alaska.

"This proposal will fund $665 million worth of our critical needs over a five year period," Mulder said. "We propose using general obligation bonds (GO Bonds) to fund Alaska's critical building needs. We intend to put this proposal before the voters in the November 2000 general election."

The proposal includes $500 million for new schools and repairing existing schools, $90 million for repairing University of Alaska buildings and completing the UAA library, $40 million to bring state buildings into compliance with federal ADA requirements, and $35 million to upgrade several state harbors so they can be transferred to local ownership.

"Alaskans have historically and rightly held education to be an important state function. We desperately need to accommodate the repair needs for schools in rural Alaska, but there are also needs for new schools in Anchorage, Fairbanks, the Mat-Su, and other fast-growing urban areas," said Mulder. "The University of Alaska needs adequate teaching space and equipment if we expect it to train young Alaskans for a productive future."

"We need to bring our state facilities up to ADA standards for two reasons. First, it is the right thing to do -- and we have been chipping away at the problem," Mulder said. Second, Alaska will begin to lose federal highway funds if we are not in compliance by 2002."

The proposal includes funding to bring some harbors up to standard. "These funds will allow us to transfer the harbors to local governments. With the transfer, the local government can operate the harbors as enterprise activities," said Mulder. "We have already done this in Kodiak, Seward, and Homer. They have been a real 'win-win-win' for the state, the local government and the harbor."

The proposal recommends bonding over a five-year period in order to avoid overheating Alaska's economy, as happened in the 1980s. The first two years would each be $145 million. The following three years would be $125 million each. GO Bonds require a vote of the people.

This proposal addresses both rural and urban school needs. The 65% to 35% division of funding recognizes the additional cost of rural construction as well as the growth needs of the urban areas. "Certainly this is not the final solution to our capital construction needs for schools," Mulder said. "But it gets us a long way down the road."

The proposal grew out of the work the Deferred Maintenance Task Force did in 1997 and 1998 as well as his continuing concern for education in Alaska. That task force, which Mulder chaired, identified deferred maintenance needs in the state and the need for schools. The legislature has been addressing the needs identified in the task force report for the past two years. In FY 1999 the legislature authorized over $300 million to address the problem.

Broadcasters note: Audio comments are available on the Majority Actuality line, 1-800-478-6540
= Eldon Mulder, 35 K

Further Resources:

1. Spreadsheet
2. Draft Bill

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Note: This draft was provided to Legislative Drafting to be put into final form for introduction on January 10, 2000. We expect that the style may be changed, but the basic content will be as indicated in this draft.

By House Finance Committee

An act providing for the issuance of General obligation bonds in the amount of $665,000,000 for the purpose of paying the cost of construction, renovation, and improvement of elementary and secondary schools, the University of Alaska educational facilities, harbors, and improving state facilities to comply with ADA requirements, and providing for an effective date.

Be it enacted

Section 1. For the purpose of paying the costs of construction, renovation, and improvement of elementary and secondary schools, the University of Alaska educational facilities, harbors, and improving state facilities to comply with ADA requirements general obligation bonds of the state in the principal amount of not more than $665,000,000 shall be issued and sold for projects designated over the next five years. The full faith and credit of the state of Alaska are pledged to the payment of the principle and interest and redemption premium, if any, on those bonds.

Section 2. If the issuance of these bonds is authorized by the qualified voters of the state, a special fund of the state to be known as the "Build Alaska Fund" shall be established, to which shall be credited the proceeds of the sale of the bonds described in section 1 of this Act except for accrued interest and premiums.

Section 3. The bonds authorized by this act may be sold in an amount not greater than $145,000,000 in the fiscal year beginning with the fiscal year in which the issuance of these bonds is authorized by the qualified voters of the state, $145,000,000 in the second fiscal year and $125,000,000 each fiscal year thereafter to a maximum of $665,000,000.

Section 4. The amount not to exceed $410,000,000 is appropriated from the "Build Alaska Fund" to the school construction grant fund to pay for renovation, and improvement of elementary and secondary educational facilities. The appropriation will not exceed $82,000,000 in any fiscal year. The funds shall be allocated annually based on the priority list found in the capital improvement project grant schedule for school construction delivered to the legislature pursuant to AS 14.11.013 by the Department of Education and Early Development in January 2001, except that

1. Each year no more than 65% ($53,300,000)of the funding shall be given to school districts contributing 15% or less to the costs pursuant to AS 14.11.008
2. Each year at least 35% ($28,700,000)of the funding shall be given to school districts contributing 30% or more to the costs pursuant to AS 14.11.008

Section 5. The amount not to exceed $90,000,000 is appropriated from the "Build Alaska Fund" to the major maintenance grant fund to pay for renovation, and improvement of elementary and secondary educational facilities. The appropriation will not exceed $18,000,000 in any fiscal year. The funds shall be allocated annually based on the priority list found in the capital improvement project grant schedule for major maintenance delivered to the legislature pursuant to AS 14.11.013 by the Department of Education and Early Development in January 2000, except that

1. Each year no more than 65% ($11,700,000)of the funding shall be given to school districts contributing 15% or less to the costs pursuant to AS 14.11.008
2. Each year at least 35% ($6,300,000)of the funding shall be given to school districts contributing 30% or more to the costs pursuant to AS 14.11.008
3. After all projects on the specified list are funded, new projects added subsequent to January 2000 may be funded in priority order, maintaining the requirements listed in subsections 1 and 2 above.

Section 6. The amount not to exceed $35,000,000 is appropriated from the "Build Alaska Fund" to the department of transportation and public facilities for the upgrade of harbors under the condition that the ownership and operation of the facility is transferred to a local government. Funds shall be made available in amounts not to exceed $10,000,000 in the first year, $10,000,000 in the second year, $10,000,000 in the third year and $5,000,000 in the fourth year. Harbor and port facilities in the following communities are eligible for funding: Cordova, Juneau, Ketchikan, Petersburg, Seldovia, Sitka, Valdez, Whittier, and Wrangell.

Section 7. The amount not to exceed $40,000,000 is appropriated from the "Build Alaska Fund" to the department of transportation and public facilities to pay for the cost of modification of state facilities to comply with federal ADA requirements. Funds shall be made available in amounts not to exceed $20,000,000 in the first year and $20,000,000 in the second year. All ADA compliance modifications should be accomplished by the end of the 2002 calendar year.

Section 8. The amount not to exceed $90,000,000 is appropriated from the "Build Alaska Fund" to the University of Alaska to pay for renovation, and improvement of University of Alaska educational facilities, at least $30,000,000 of which is designated for the library at the University of Alaska Anchorage campus. The appropriation will be in the following amounts: $15,000,000 in the first year, $15,000,000 in the second year, $15,000,000 in the third year, $20,000 in the fourth year, and $25,000,000 in the fifth year.

Section 9. (Use standard language in drafting manual to accomplish the following) If the issuance of these bonds is authorized … the amount of $1,000,000 or as much of that amount as is necessary … is appropriated from the general fund. The amounts appropriated shall be reimbursed from proceeds of the bond sale authorized by this act.

Section 10. (Use standard language in drafting manual to accomplish the following) The question whether the bonds authorized in this act are to be issued shall be submitted to the qualified voters ….

Section 11. (Use standard language in drafting manual to accomplish the following) This act takes effect immediately ….

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Last Updated on 12/10/99
By Legislative Affairs Agency