Regular Session 2015-2016 Senate Bill 0694 P.N. 0693

PRINTER'S NO. 693

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

694

Session of

2015

INTRODUCED BY EICHELBERGER, MENSCH, RAFFERTY, AUMENT,

VULAKOVICH, YAW, McILHINNEY, STEFANO, SCHWANK, WHITE AND

WARD, APRIL 7, 2015

REFERRED TO EDUCATION, APRIL 7, 2015

AN ACT

Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An

act relating to the public school system, including certain

provisions applicable as well to private and parochial

schools; amending, revising, consolidating and changing the

laws relating thereto," in grounds and buildings, further

providing for approval by department of plans of buildings

and exceptions, providing for accountability and reducing

costs in construction process, further providing for

limitation on new applications for Department of Education

approval of public school building projects; and, in

reimbursements by Commonwealth and between school districts,

further providing for definitions, for approved reimbursable

rental for leases hereafter approved and approved

reimbursable sinking fund charges on indebtedness, for

payments on account of leases hereafter approved and on

account of sinking fund charges on indebtedness for school

buildings hereafter constructed and for payments on account

of building costs and providing for lump sum reimbursement

for construction or reconstruction.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 731 of the act of March 10, 1949 (P.L.30,

No.14), known as the Public School Code of 1949, amended June

27, 1973 (P.L.75, No.34) and June 30, 2011 (P.L.112, No.24), is

amended to read:

Section 731. Approval by Department of Plans, etc., of

Buildings; Exceptions.--(a) The Department of Education, with

respect to construction or reconstruction of public school

buildings, shall have the power and its duties shall be:

(1) To review all projects, plans and specifications for

school building construction or reconstruction, and to make

recommendations thereon to the General Assembly and the

Governor: Provided, however, That approval of the Department of

Education shall not be required for projects, plans and

specifications for school construction projects for which

reimbursement from the Commonwealth is not requested;

(2) To assist school districts in preplanning construction

and reconstruction projects, and offer such architectural,

engineering and financial advice as will enable the project to

comply with the standards prescribed by the State Board of

Education;

(3) To hold hearings on any or all projects and subpoena

witnesses, administer oaths, take testimony and compel the

production of documents relevant to any investigation;

(4) To act as liaison between the public, local school

officials, the General Assembly, and the Governor on school

building construction and reconstruction projects;

(5) To receive and investigate complaints from the public or

other source concerning any school building construction or

reconstruction project;

(6) To conduct investigations on any phase of school

building construction or reconstruction projects.

(7) To provide for an electronic database on its publicly

accessible Internet website for the purpose of providing public

access to information on public school construction and

reconstruction projects, building purchases and charter school

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lease reimbursements submitted for the approval of, or approved

by, the Department of Education. The electronic database shall

indicate the date each application for reimbursement was

submitted to the Department of Education and the date of

approval for each step of the reimbursement process as outlined

in section 731.2 of this act. The Department of Education shall

establish the database no later than July 1, 2016.

(b) The Department of Education shall employ engineers,

architects, financial advisors, and such other staff personnel

as may be necessary for the proper performance of the duties of

the Department with respect to construction or reconstruction of

public school buildings.

constructed, or reconstructed, in any school district of the

second, third, or fourth class until the plans and

specifications therefor have been approved by the Department of

Education[.

When ordinary repairs are proposed, such as plastering,

painting, replacement of floors, improvement of school grounds,

repairing or providing walks, roadways or retaining walls, the

cost of which in districts of the second class or in districts

of the third and fourth class will not exceed fifteen thousand

dollars ($15,000) per building, no approval shall be required.

Where any structural change is involved, such as moving or

adding doors, windows, partitions, making additions or any

excavations, or any work which may affect the safety or health

of the pupils, or any work which comes under the jurisdiction of

another department of the Commonwealth, approval of the

Department of Education shall be required regardless of the cost

of such structural change.]: Provided, however, That approval of

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the Department of Education shall not be required for projects,

plans and specifications for school construction projects for

which reimbursement from the Commonwealth is not requested.

(d) No school building shall be purchased by any school

district until such purchase shall have been approved by the

Department of Education. Such approval shall not be given unless

the school building to be purchased and any approved structural

changes or renovations meet the standards required to operate

public school buildings of a similar age currently in use in the

Commonwealth.

Section 2. The act is amended by adding a section to read:

Section 731.2. Accountability and Reducing Costs in

Construction Process.--(a) No later than July 1, 2016, the

department shall develop and implement a process, including

standardized forms and procedures, which shall be used by school

districts to apply for Commonwealth reimbursement for school

construction and reconstruction projects and which shall be

known as the Accountability and Reducing Costs in Construction

Process. In developing the Accountability and Reducing Costs in

Construction Process, the department shall separate the process

into five (5) benchmark steps of department approval which shall

be labeled one (1) through five (5) and shall minimally include

the following:

(1) Step 1 shall consist of the following:

(i) project description;

(ii) project justification; and

(iii) a technical schematic design review conference with

the department.

(2) Step 2 shall consist of the following:

(i) site acquisition, if applicable to the project;

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(ii) project accounting based on cost estimates; and

(iii) a conference with the department to review completed

construction documents, including bid specifications, drawings

for the project and documentation regarding the fulfillment of

State and local agency requirements.

(3) Step 3 shall consist of the following:

(i) project accounting based on costs for actual

construction bids for which contracts shall be awarded; and

(ii) project financing, including financing method and the

calculation of the temporary reimbursable percent for the

project. In calculating the temporary reimbursable percent, the

department shall factor in a five (5) percentage point reduction

which shall be utilized until the calculation of the permanent

reimbursable percent is completed in Step 4.

Approval through Step 3 shall initiate project reimbursement

from the Commonwealth.

(4) Step 4 shall consist of the following:

(i) interim reporting of project modifications, including

the reporting of change orders and supplemental contracts; and

(ii) project accounting based on the final costs of a

project after completion of the following:

(A) construction of the project; and

(B) payment for all construction or reconstruction work,

unless the department has granted an exception.

The calculation of the permanent reimbursable percent for a

project shall take place during Step 4.

(5) Step 5 shall consist of project refinancing, where

applicable, to allow for the restructuring, refinancing or

refunding of existing indebtedness.

(b) (1) Except as provided for in paragraph (2), school

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districts shall be reimbursed by the department in the order in

which their projects received approval for Commonwealth

reimbursement by the department.

(2) The Secretary of Education may prioritize the

reimbursement of a school construction or reconstruction project

of a school district declared to be in financial recovery status

under Article VI-A of this act. Projects that are given priority

under this paragraph shall be reimbursed before all other

projects.

wide facility study of all district educational facilities,

including the district administrative offices. The study shall

be completed prior to, and within five (5) years of, the initial

date of submission to the department of an application for

Commonwealth reimbursement of a school construction or

reconstruction project.

(2) The study shall provide an appraisal as to each

facility's ability to meet current and planned education program

requirements, the degree to which the present facilities meet

reasonably current construction standards, and an estimated cost

of necessary repairs and improvements.

(3) The study shall be submitted to the department along

with an initial application for Commonwealth reimbursement of a

school construction or reconstruction project.

(4) The department shall not grant to school districts any

exceptions, waivers or variances to the provisions of this

subsection.

(d) (1) In order to receive Commonwealth reimbursement for

the construction of a new building, a school district shall,

within Step 1 of the Accountability and Reducing Costs in

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Construction Process provided for in subsection (a), complete

and submit to the department a cost-benefit analysis of the

project that compares the construction of the proposed new

building to the expansion or renovation of an existing building

for the same purpose.

(2) If the cost of a new building exceeds that of the

expansion or renovation of an existing building for the same

purpose, the school district shall only be eligible for

Commonwealth reimbursement for the new building if substantial

evidence is presented which demonstrates the necessity of a new

building and how a new building would better meet the needs of

the school district and its students than a building expansion

or renovation.

(3) A determination by the department that insufficient

evidence was provided to demonstrate the necessity of a new

building rather than a building expansion or renovation shall be

appealable by a school district under 2 Pa.C.S. (relating to

administrative law and procedure).

(4) The department shall not grant to school districts any

exceptions, waivers or variances to the provisions of this

subsection.

(e) (1) School districts shall not be eligible for

Commonwealth reimbursement of school construction or

reconstruction project costs for any existing building which is

less than thirty (30) years old or for which a Commonwealth

reimbursable project has been approved by the department within

the preceding thirty (30) years. The thirty (30) year period

between eligible Commonwealth reimbursable projects for a school

building shall be calculated from the bid opening date of the

previous Commonwealth reimbursable project to the bid opening

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date of the proposed Commonwealth reimbursable project.

(2) The department shall not grant to school districts any

exceptions, waivers or variances to the provisions of this

subsection except in the case of an emergency. For the purposes

of this paragraph, an emergency shall include a natural

disaster, fire, flood, mold contamination, a criminal or

terrorist attack or an extraordinary and unanticipated increase

in student enrollment.

(f) (1) School districts shall not be eligible for

Commonwealth reimbursement of school construction or

reconstruction project costs for any existing building where the

cost of expansion or renovation of the building, excluding costs

for building purchase, movable fixtures and equipment, asbestos

abatement, roof replacement, site development and architect

fees, is less than forty (40) percent of the replacement value

of the entire building.

(2) The provisions of this subsection shall not apply to

area vocational-technical school construction or reconstruction

projects.

(3) The department shall not grant to school districts any

exceptions, waivers or variances to the provisions of this

subsection.

(g) The department shall, where possible and appropriate,

automate the Accountability and Reducing Costs in Construction

Process to allow school districts to submit plans and documents

relating to reimbursement for a school construction or

reconstruction project electronically.

(h) A school district shall not be required to submit any

school construction or reconstruction project plans, drawings,

bid specifications or other documents to the department on

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microfilm as a condition of receiving Commonwealth reimbursement

for a construction or reconstruction project.

(i) A school district shall not be required to resubmit to

the department any completed plans, drawings, bid specifications

or other documents for a school construction or reconstruction

project for which the department received a completed initial

application before July 1, 2016, due to the implementation of

this section.

(j) Subsections (c), (d), (e) and (f) shall not apply to any

school construction or reconstruction project for which a

completed initial school construction or reconstruction project

application was submitted to the department before July 1, 2016.

(k) No later than twelve (12) months after the effective

date of this section, the department shall develop such rules

and guidelines as may be necessary to implement this section:

Provided, however, That the department shall not create steps of

approval in addition to those provided for under subsection (a)

and shall not require more than one school board resolution at

each step.

(l) For the purposes of this section, the term "department"

shall mean the Department of Education of the Commonwealth.

Section 3. Section 732.1(b) of the act, amended July 9, 2013

(P.L.408, No.59), is amended and the section is amended by

adding a subsection to read:

Section 732.1. Limitation on New Applications for Department

of Education Approval of Public School Building Projects.--* * *

(b) (1) The Department of Education shall, in consultation

with school district officials and the General Assembly, conduct

a review of the Department of Education's current process

through which public school building projects are reviewed and

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approved for Commonwealth reimbursement. The review shall

incorporate an analysis of impacting local factors, including,

but not limited to, tax effort and building requirements, and

shall make recommendations to the chair and minority chair of

the Appropriations Committee of the Senate, the chair and

minority chair of the Education Committee of the Senate, the

chair and minority chair of the Appropriations Committee of the

House of Representatives and the chair and minority chair of the

Education Committee of the House of Representatives by May 1,

2013. The Department of Education shall also conduct a Statewide

analysis of school facilities and future capital needs and shall

submit a preliminary report on that analysis by May 1, 2014.

(2) The Statewide analysis shall be completed and submitted

to the chairman and minority chairman of the Appropriations

Committee of the Senate, the chairman and minority chairman of

the Education Committee of the Senate, the chairman and minority

chairman of the Appropriations Committee of the House of

Representatives and the chairman and minority chairman of the

Education Committee of the House of Representatives no later

than May 1, 2016.

construction or reconstruction project during the time in which

the Department of Education was not accepting or approving new

school construction and reconstruction project applications for

reimbursement under subsection (a) shall be eligible and may

apply for Commonwealth reimbursement for those school

construction or reconstruction projects.

(2) No later than twelve (12) months after the effective

date of this section the department shall develop such rules and

guidelines as may be necessary to implement this subsection.

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Section 4. Section 2501 of the act is amended by adding a

definition to read:

Section 2501. Definitions.--For the purposes of this article

the following terms shall have the following meanings:

* * *

(40) "Department." The Department of Education of the

Commonwealth.

Section 5. Section 2574(b.1) and (c.6) of the act, amended

or added July 13, 2005 (P.L.226, No.46) and July 11, 2006

(P.L.1092, No.114), are amended to read:

Section 2574. Approved Reimbursable Rental for Leases

Hereafter Approved and Approved Reimbursable Sinking Fund

Charges on Indebtedness.--* * *

(b.1) (1) For school buildings constructed and based on an

approved school facility design received from the Department of

Education's school facility design clearinghouse, for which the

general construction contract is awarded subsequent to January

1, 2005, and for approved school building projects for which the

general construction contract was awarded but for which a lease

or general obligation bond resolution was not approved by the

Department of Education prior to January 1, 2005, the approved

building construction cost shall additionally include the

product of the rated pupil capacity as determined by the

Department of Education at the time the project is approved and

(i) four hundred seventy dollars ($470) in the case of

elementary schools, (ii) six hundred twenty dollars ($620) in

the case of secondary schools, (iii) an amount in the case of

combined elementary-secondary schools obtained by multiplying

the rated elementary pupil capacity by four hundred seventy

dollars ($470) and the rated secondary pupil capacity by six

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hundred twenty dollars ($620) and dividing the sum by the total

rated pupil capacity.

(2) The provisions of this subsection shall only apply to

school construction or reconstruction projects for which a

completed initial school construction or reconstruction project

application was submitted to the department before July 1, 2016.

* * *

(c.4) (1) For school buildings for which the general

construction contract is awarded on or after January 1, 2005,

and for approved school building projects for which the general

construction contract was awarded but for which a lease or

general obligation bond resolution was not approved by the

Department of Education prior to January 1, 2005, and where the

school building receives a silver, gold or platinum

certification from the United States Green Building Council's

Leadership in Energy and Environmental Design Green Building

Rating System or two, three or four Globes under the Green

Building Initiative's Green Globes Green Building Rating System

on or after January 1, 2005, the Department of Education shall

adjust the approved building construction cost to additionally

include the product of the rated pupil capacity as determined by

the Department of Education at the time the project is approved

and (i) four hundred seventy dollars ($470) in the case of

elementary schools, (ii) six hundred twenty dollars ($620) in

the case of secondary schools, (iii) an amount in the case of

combined elementary-secondary schools obtained by multiplying

the rated elementary pupil capacity by four hundred seventy

dollars ($470) and the rated secondary pupil capacity by six

hundred twenty dollars ($620) and dividing the sum by the total

rated pupil capacity. The Department of Education in

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consultation with the Governor's Green Government Council shall

issue guidelines to carry out this section.

(2) The provisions of this subsection shall only apply to

school construction or reconstruction projects for which a

completed initial school construction or reconstruction project

application was submitted to the department before July 1, 2016.

* * *

(c.6) (1) If a school district receives reimbursement for a

school construction project under this section, the school

district, upon request by the Department of Education, shall do

all of the following:

(i) Provide information required by the department to

determine whether the school construction project meets criteria

established by the department for certification as an approved

school facility design for purposes of the department's school

facility design clearinghouse.

(ii) Authorize the department, in its discretion, to certify

the school construction project as an approved school facility

design and to include information about the certified project in

the department's school facility design clearinghouse.

(2) The provisions of this subsection shall only apply to

school construction or reconstruction projects for which a

completed initial school construction or reconstruction project

application was submitted to the department before July 1, 2016.

* * *

Section 6. Section 2575(a) of the act, amended July 12, 1968

(P.L.192, No.96), is amended and the section is amended by

adding a subsection to read:

Section 2575. Payments on Account of Leases Hereafter

Approved and on Account of Sinking Fund Charges on Indebtedness

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for School Buildings Hereafter Constructed.--(a) (1) The

Commonwealth shall pay annually to each school district erecting

or sharing in the erection of a building or buildings under the

provisions of the Public School Building Authority Act, the

Municipality Authority Act, section 758 [of the Public School

Code of 1949,] or section 791 of [the Public School Code of

1949,] this act on account of buildings for which the lease is

approved on or after March 22, 1956, or through the incurring of

indebtedness by the issuance of general obligation bonds on

account of buildings for which the general construction contract

is awarded on or after March 22, 1956, an amount to be

determined by multiplying the district's capital account

reimbursement fraction computed for the year 1967 or aid ratio

whichever is larger by the approved reimbursable rental or

approved reimbursable sinking fund charge.

(2) The provisions of this subsection shall only apply to

school construction or reconstruction projects for which a

completed initial school construction or reconstruction project

application was submitted to the Department of Education before

July 1, 2016.

(a.1) (1) The Commonwealth shall pay annually to each

school district erecting or sharing in the erection of a

building or buildings under the provisions of the Public School

Building Authority Act, the Municipality Authority Act or

section 758 or 791 of this act, on account of buildings for

which the lease is approved on or after July 1, 2016, or through

the incurring of indebtedness by the issuance of general

obligation bonds on account of buildings for which the general

construction contract is awarded on or after July 1, 2016, an

amount to be determined by multiplying the district's aid ratio

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by the approved reimbursable rental or approved reimbursable

sinking fund charge.

(2) The provisions of this subsection shall only apply to

school construction or reconstruction projects for which a

completed initial school construction or reconstruction project

application was submitted to the Department of Education on or

after July 1, 2016.

* * *

Section 7. Section 2575.1 of the act, amended July 9, 1992

(P.L.392, No.85), is amended to read:

Section 2575.1. Payments on Account of Building Costs.--(a)

(1) The Commonwealth shall pay to any school district making a

preliminary payment on account of the approved building

construction or approved renovation cost as authorized by

section 783 or by clause (4) of section 790 or by clause (5) of

section 791 of this act, an amount determined by multiplying the

district's capital account reimbursement fraction computed for

the year 1967 or aid ratio whichever is larger by the amount of

the payment made by the school district.

(2) The provisions of this subsection shall only apply to

school construction or reconstruction projects for which a

completed initial school construction or reconstruction project

application was submitted to the Department of Education before

July 1, 2016.

(a.1) (1) The Commonwealth shall pay to any school district

making a preliminary payment on account of the approved building

construction or approved renovation cost as authorized by

section 783 or by clause (4) of section 790 or by clause (5) of

section 791 of this act, an amount determined by multiplying the

district's aid ratio by the amount of the payment made by the

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school district.

(2) The provisions of this subsection shall only apply to

school construction or reconstruction projects for which a

completed initial school construction or reconstruction project

application was submitted to the Department of Education on or

after July 1, 2016.

(b) (1) Whenever any school district provides the full

payment on account of approved building construction or approved

renovation cost without incurring debt, or without assuming a

lease, the Commonwealth shall pay to such school district an

amount determined by multiplying the district's capital account

reimbursement fraction computed for the year 1967 or aid ratio

whichever is larger by the amount of the payment made by the

school district.

(2) The provisions of this subsection shall only apply to

school construction or reconstruction projects for which a

completed initial school construction or reconstruction project

application was submitted to the Department of Education before

July 1, 2016.

(b.1) (1) Whenever any school district provides the full

payment on account of approved building construction or approved

renovation cost without incurring debt, or without assuming a

lease, the Commonwealth shall pay to such school district an

amount determined by multiplying the district's aid ratio by the

amount of the payment made by the school district.

(2) The provisions of this subsection shall only apply to

school construction or reconstruction projects for which a

completed initial school construction or reconstruction project

application was submitted to the Department of Education on or

after July 1, 2016.

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the year in which the school district made its payment on

account of the approved building construction or approved

renovation cost.

Section 8. The act is amended by adding a section to read:

Section 2581. Lump Sum Reimbursement for Construction or

Reconstruction.--(a) The department may, at any time, upon the

availability of sufficient funds and the mutual agreement of the

department and a school district, provide an immediate lump sum

payment to the school district as full reimbursement for a

construction or reconstruction project that has received all

required approvals from the department for Commonwealth

reimbursement. The lump sum payment provided for under this

section shall be no greater than seventy-five percent (75%) of

the total allowable construction or reconstruction reimbursement

provided for under Article XXV of this act for which the school

district is eligible: Provided, however, That such payments

shall not include reimbursement for interest incurred by a

school district. A school district that does not agree to a lump

sum payment under this section shall remain eligible for the

total allowable construction or reconstruction reimbursement

provided for under Article XXV of this act.

(b) Each agreement for lump sum reimbursement under this

section shall require the school district receiving a lump sum

payment to relinquish any current claim to the total allowable

construction or reconstruction reimbursement provided for under

Article XXV of this act for which the school district is

eligible in exchange for the immediate lump sum payment of a

lesser amount.

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payment available to school districts in the order in which each

school district construction or reconstruction project receives

approval for Commonwealth reimbursement by the department. A

school district that does not agree to a lump sum payment under

this section shall retain its place in the order in which the

department reimburses school districts.

(d) No later than twelve (12) months after the effective

date of this section, the department shall develop such rules

and guidelines as may be necessary to implement this section.

Section 9. For the 2015-2016 fiscal year and each fiscal

year thereafter, the State Public School Building Authority

shall assist all school districts with refinancing projects that

are currently receiving State reimbursement for a portion of

their school construction costs to make additional funds

available through which to provide State reimbursement to

projects that have not yet begun receiving State reimbursement.

Section 10. This act shall take effect in 60 days.

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