1Amend Bill, page 1, lines 1 through 25; page 2, lines 1
2through 14, by striking out all of said lines on said pages and
3inserting

4Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An
5act relating to the public school system, including certain
6provisions applicable as well to private and parochial
7schools; amending, revising, consolidating and changing the
8laws relating thereto," in grounds and buildings, further
9providing for approval by Department of Education of plans,
10etc. of buildings and exceptions; providing for
11accountability and reducing costs in construction process;
12further providing for limitation on new applications for
13Department of Education approval of school building projects;
14providing for interest on delayed reimbursement; and, in
15reimbursements by Commonwealth and between school districts,
16further providing for definitions, for approved reimbursable
17rental for leases hereafter approved and approved
18reimbursable sinking fund charges on indebtedness, for
19payments on account of leases hereafter approved and on
20account of sinking fund charges on indebtedness for school
21buildings hereafter constructed and for payments on account
22of building costs; and providing for lump sum reimbursement
23for construction or reconstruction.

24The General Assembly finds and declares that:

25(1) Recognizing challenges have developed and escalated
26over a period of years in the process of Commonwealth
27reimbursement for public school construction and
28reconstruction, which have caused delays in approvals by the
29Department of Education for reimbursement payments owed to
30school districts throughout this Commonwealth as well as the
31limitation on school district submission of new applications
32for Commonwealth reimbursement, and acknowledging that these
33challenges were born of an antiquated, complex and overly
34burdensome administrative process, as well as financially
35unsustainable Commonwealth construction and reconstruction
36reimbursement obligations, it is a matter of high priority
37that these challenges be addressed.

1(2) Therefore, it is the intent of the General Assembly
2to reform the existing process of Commonwealth reimbursement
3for public school construction and reconstruction to ensure
4that a modern, simplified and financially sustainable process
5is instituted.

6Amend Bill, page 2, lines 17 through 30; pages 3 through 25,
7lines 1 through 30; page 26, lines 1 through 22, by striking out
8all of said lines on said pages and inserting

9Section 1. Section 731 of the act of March 10, 1949 (P.L.30,
10No.14), known as the Public School Code of 1949, amended June
1127, 1973 (P.L.75, No.34), is amended to read:

12Section 731. Approval by Department of Plans, etc., of
13Buildings; Exceptions.--(a) The Department of Education, with
14respect to construction or reconstruction of public school
15buildings, shall have the power and its duties shall be:

16(1) To review all projects, plans and specifications for
17school building construction or reconstruction, and to make
18recommendations thereon to the General Assembly and the
19Governor: Provided, however, That approval of the Department of 
20Education shall not be required for projects, plans and 
21specifications for school construction projects for which 
22reimbursement from the Commonwealth is not requested;

23(2) To assist school districts in preplanning construction
24and reconstruction projects, and offer such architectural,
25engineering and financial advice as will enable the project to
26comply with the standards prescribed by the State Board of
27Education;

28(3) To hold hearings on any or all projects and subpoena
29witnesses, administer oaths, take testimony and compel the
30production of documents relevant to any investigation;

31(4) To act as liaison between the public, local school
32officials, the General Assembly, and the Governor on school
33building construction and reconstruction projects;

34(5) To receive and investigate complaints from the public or
35other source concerning any school building construction or
36reconstruction project;

37(6) To conduct investigations on any phase of school
38building construction or reconstruction projects.

39(7) To provide for an electronic database on its publicly
40accessible Internet website for the purpose of providing public
41access to information on public school construction and
42reconstruction projects, building purchases and charter school
43lease reimbursements submitted for the approval of, or approved
44by, the Department of Education. The electronic database shall
45indicate the date each application for reimbursement was
46submitted to the Department of Education and the date of
47approval for each step of the reimbursement process as outlined
48in section 731.2 of this act.

1(b) The Department of Education shall employ engineers,
2architects, financial advisors, and such other staff personnel
3as may be necessary for the proper performance of the duties of
4the Department with respect to construction or reconstruction of
5public school buildings.

6(c) No public school building shall be contracted for,
7constructed, or reconstructed, in any school district of the
8second, third, or fourth class until the plans and
9specifications therefor have been approved by the Department of
10Education[.

11When ordinary repairs are proposed, such as plastering,
12painting, replacement of floors, improvement of school grounds,
13repairing or providing walks, roadways or retaining walls, the
14cost of which in districts of the second class or in districts
15of the third and fourth class will not exceed fifteen thousand
16dollars ($15,000) per building, no approval shall be required.
17Where any structural change is involved, such as moving or
18adding doors, windows, partitions, making additions or any
19excavations, or any work which may affect the safety or health
20of the pupils, or any work which comes under the jurisdiction of
21another department of the Commonwealth, approval of the
22Department of Education shall be required regardless of the cost
23of such structural change.]:

24Provided, however, That approval of the Department of Education
25shall not be required for projects, plans and specifications for
26school construction projects for which reimbursement from the
27Commonwealth is not requested.

28(d) No school building shall be purchased by any school
29district until such purchase shall have been approved by the
30Department of Education. Such approval shall not be given unless
31the school building to be purchased and any approved structural
32changes or renovations meet the standards required to operate
33public school buildings of a similar age currently in use in the
34Commonwealth.

35Section 2. The act is amended by adding a section to read:

36Section 731.2. Accountability and Reducing Costs in
37Construction Process.--(a) No later than July 1, 2015, the
38department shall develop and implement a process, including
39standardized forms and procedures, which shall be used by school
40districts to apply for Commonwealth reimbursement for school
41construction and reconstruction projects and which shall be
42known as the Accountability and Reducing Costs in Construction
43Process. In developing the Accountability and Reducing Costs in
44Construction Process, the department shall separate the process
45into five (5) benchmark steps of department approval which shall
46be labeled one (1) through five (5) and shall minimally include
47the following:

48(1) Step 1 shall consist of the following:

49(i) project description;

50(ii) project justification; and

51(iii) a technical schematic design review conference with

1the department.

2(2) Step 2 shall consist of the following:

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

4(ii) project accounting based on cost estimates; and

5(iii) a conference with the department to review completed
6construction documents, including bid specifications, drawings
7for the project and documentation regarding the fulfillment of
8State and local agency requirements.

9(3) Step 3 shall consist of the following:

10(i) project accounting based on costs for actual
11construction bids for which contracts shall be awarded; and

12(ii) project financing, including financing method and the
13calculation of the temporary reimbursable percent for the
14project. In calculating the temporary reimbursable percent, the
15department shall factor in a twenty (20) percentage point
16reduction which shall be utilized until the calculation of the
17permanent reimbursable percent is completed in Step 4.

18Approval through Step 3 shall initiate project reimbursement
19from the Commonwealth.

20(4) Step 4 shall consist of the following:

21(i) interim reporting of project modifications, including
22the reporting of change orders and supplemental contracts; and

23(ii) project accounting based on the final costs of a
24project after completion of the following:

25(A) construction of the project; and

26(B) payment for all construction or reconstruction work,
27unless the department has granted an exception.

28The calculation of the permanent reimbursable percent for a
29project shall take place during Step 4.

30(5) Step 5 shall consist of project refinancing, where
31applicable, to allow for the restructuring, refinancing or
32refunding of existing indebtedness.

33(b) (1) Except as provided for in paragraph (2), school
34districts shall be reimbursed by the department in the order in
35which their projects received approval for Commonwealth
36reimbursement by the Department of Education.

37(2) The Secretary of Education may prioritize the
38reimbursement of a school construction or reconstruction project
39of a school district declared to be in financial recovery status
40under Article VI-A of this act. Projects that are given priority
41under this paragraph shall be reimbursed before all other
42projects.

43(c) (1) School districts shall develop a complete
44districtwide facility study of all district educational
45facilities, including the district administrative offices. The
46study shall be completed prior to, and within five (5) years of,
47the initial date of submission to the department of an
48application for Commonwealth reimbursement of a school
49construction or reconstruction project.

50(2) The study shall provide an appraisal as to each
51facility's ability to meet current and planned education program

1requirements, the degree to which the present facilities meet
2reasonably current construction standards, and an estimated cost
3of necessary repairs and improvements.

4(3) The study shall be submitted to the department along
5with an initial application for Commonwealth reimbursement of a
6school construction or reconstruction project.

7(4) The department shall not grant to school districts any
8exceptions, waivers or variances to the provisions of this
9subsection.

10(d) (1) In order to receive Commonwealth reimbursement for
11the construction of a new building, a school district shall,
12within Step 1 of the Accountability and Reducing Costs in
13Construction Process provided for in subsection (a), complete
14and submit to the department a cost-benefit analysis of the
15project that compares the construction of the proposed new
16building to the expansion or renovation of an existing building
17for the same purpose.

18(2) If the cost of a new building exceeds that of the
19expansion or renovation of an existing building for the same
20purpose, the school district shall only be eligible for
21Commonwealth reimbursement for the new building if substantial
22evidence is presented which demonstrates the necessity of a new
23building and how a new building would better meet the needs of
24the school district and its students than a building expansion
25or renovation.

26(3) A determination by the department that insufficient
27evidence was provided to demonstrate the necessity of a new
28building rather than a building expansion or renovation shall be
29appealable by a school district under 2 Pa.C.S. (relating to
30administrative law and procedure).

31(4) The department shall not grant to school districts any
32exceptions, waivers or variances to the provisions of this
33subsection.

34(e) (1) School districts shall not be eligible for
35Commonwealth reimbursement of school construction or
36reconstruction project costs for any existing building which is
37less than thirty (30) years old or for which a Commonwealth
38reimbursable project has been approved by the department within
39the preceding thirty (30) years. The thirty (30) year period
40between eligible Commonwealth reimbursable projects for a school
41building shall be calculated from the bid opening date of the
42previous Commonwealth reimbursable project to the bid opening
43date of the proposed Commonwealth reimbursable project.

44(2) The department shall not grant to school districts any
45exceptions, waivers or variances to the provisions of this
46subsection except in the case of an emergency. For the purposes
47of this paragraph, an emergency shall include a natural
48disaster, fire or flood.

49(f) (1) School districts shall not be eligible for
50Commonwealth reimbursement of school construction or
51reconstruction project costs for any existing building where the

1cost of expansion or renovation of the building, excluding costs
2for building purchase, movable fixtures and equipment, asbestos
3abatement, roof replacement, site development and architect
4fees, is less than forty (40) percent of the replacement value
5of the entire building.

6(2) The provisions of this subsection shall not apply to
7area vocational-technical school construction or reconstruction
8projects.

9(3) The department shall not grant to school districts any
10exceptions, waivers or variances to the provisions of this
11subsection.

12(g) The department shall, where possible and appropriate,
13automate the Accountability and Reducing Costs in Construction
14Process to allow school districts to submit plans and documents
15relating to reimbursement for a school construction or
16reconstruction project electronically.

17(h) A school district shall not be required to submit any
18school construction or reconstruction project plans, drawings,
19bid specifications or other documents to the department on
20microfilm as a condition of receiving Commonwealth reimbursement
21for a construction or reconstruction project.

22(i) A school district shall not be required to resubmit to
23the department any completed plans, drawings, bid specifications
24or other documents for a school construction or reconstruction
25project for which the department received a completed
26application by October 1, 2012, due to the implementation of
27this section.

28(j) Subsections (c), (d), (e) and (f) shall not apply to any
29school construction or reconstruction project for which a
30completed school construction or reconstruction project
31application was submitted to the department by October 1, 2012.

32(k) No later than twelve (12) months after the effective
33date of this section, the department shall develop such rules
34and guidelines as may be necessary to implement this section:
35Provided, however, That the department shall not create steps of
36approval in addition to those provided for under subsection (a)
37and shall not require more than one school board resolution at
38each step.

39(l) For the purposes of this section, the term "department"
40shall mean the Department of Education of the Commonwealth.

41Section 3. Section 732.1(b) of the act, amended July 9, 2013
42(P.L.408, No.59), is amended to read and the section is amended
43by adding a subsection to read:

44Section 732.1. Limitation on New Applications for Department
45of Education Approval of Public School Building Projects.--* * *

46(b) (1) The Department of Education shall, in consultation
47with school district officials and the General Assembly, conduct
48a review of the Department of Education's current process
49through which public school building projects are reviewed and
50approved for Commonwealth reimbursement. The review shall
51incorporate an analysis of impacting local factors, including,

1but not limited to, tax effort and building requirements, and
2shall make recommendations to the chair and minority chair of
3the Appropriations Committee of the Senate, the chair and
4minority chair of the Education Committee of the Senate, the
5chair and minority chair of the Appropriations Committee of the
6House of Representatives and the chair and minority chair of the
7Education Committee of the House of Representatives by May 1,
82013. The Department of Education shall also conduct a Statewide
9analysis of school facilities and future capital needs and shall
10submit a preliminary report on that analysis by May 1, 2014.

11(2) The Statewide analysis shall be completed and submitted
12to the chairman and minority chairman of the Appropriations
13Committee of the Senate, the chairman and minority chairman of
14the Education Committee of the Senate, the chairman and minority
15chairman of the Appropriations Committee of the House of
16Representatives and the chairman and minority chairman of the
17Education Committee of the House of Representatives no later
18than May 1, 2015.

19(c) (1) Any school district that began a school
20construction or reconstruction project during the time in which
21the Department of Education was not accepting or approving new
22school construction and reconstruction project applications for
23reimbursement pursuant to subsection (a) shall remain eligible
24and may apply for Commonwealth reimbursement for those school
25construction or reconstruction projects following the expiration
26of the limitation provided for under subsection (a).

27(2) No later than twelve (12) months after the effective
28date of this section the department shall develop such rules and
29guidelines as may be necessary to implement this subsection.

30Section 4. The act is amended by adding a section to read:

31Section 732.2. Interest on Delayed Reimbursement.--(a) Each
32school district which has satisfactorily met all construction or
33reconstruction reimbursement requirements established by this
34act, 22 Pa. Code (relating to education) and the Department of
35Education, has submitted all appropriate documentation to the
36Department of Education, necessary to receive approval for
37reimbursement for a school construction or reconstruction
38project and has not been approved for reimbursement after a
39period of one (1) year following the last date of submission of
40required documentation shall be eligible to receive interest on
41the delayed reimbursement.

42(b) The interest on delayed reimbursement shall be an amount
43equal to the prime rate of interest, as listed in the first
44edition of the Wall Street Journal published in the year,
45multiplied by the total amount of construction or reconstruction
46reimbursement for which the school district is eligible under
47Article XXV of this act but has not received, calculated for
48each year in which the school district does not receive
49reimbursement.

50(c) Interest payments on delayed reimbursement shall be
51included in those payments made to a school district for

1Commonwealth reimbursement of a construction or reconstruction
2project when such payments commence.

3Section 5. Section 2501 of the act is amended by adding a
4definition to read:

5Section 2501. Definitions.--For the purposes of this article
6the following terms shall have the following meanings:

7* * *

8(31) "Department." The Department of Education of the
9Commonwealth.

10Section 6. Section 2574(b.1), (c.4) and (c.6) of the act,
11amended or added July 13, 2005 (P.L.226, No.46) and July 11,
122006 (P.L.1092, No.114), are repealed:

13Section 2574. Approved Reimbursable Rental for Leases
14Hereafter Approved and Approved Reimbursable Sinking Fund
15Charges on Indebtedness.--* * *

16[(b.1) For school buildings constructed and based on an
17approved school facility design received from the Department of
18Education's school facility design clearinghouse, for which the
19general construction contract is awarded subsequent to January
201, 2005, and for approved school building projects for which the
21general construction contract was awarded but for which a lease
22or general obligation bond resolution was not approved by the
23Department of Education prior to January 1, 2005, the approved
24building construction cost shall additionally include the
25product of the rated pupil capacity as determined by the
26Department of Education at the time the project is approved and
27(i) four hundred seventy dollars ($470) in the case of
28elementary schools, (ii) six hundred twenty dollars ($620) in
29the case of secondary schools, (iii) an amount in the case of
30combined elementary-secondary schools obtained by multiplying
31the rated elementary pupil capacity by four hundred seventy
32dollars ($470) and the rated secondary pupil capacity by six
33hundred twenty dollars ($620) and dividing the sum by the total
34rated pupil capacity.]

35* * *

36[(c.4) For school buildings for which the general
37construction contract is awarded on or after January 1, 2005,
38and for approved school building projects for which the general
39construction contract was awarded but for which a lease or
40general obligation bond resolution was not approved by the
41Department of Education prior to January 1, 2005, and where the
42school building receives a silver, gold or platinum
43certification from the United States Green Building Council's
44Leadership in Energy and Environmental Design Green Building
45Rating System or two, three or four Globes under the Green
46Building Initiative's Green Globes Green Building Rating System
47on or after January 1, 2005, the Department of Education shall
48adjust the approved building construction cost to additionally
49include the product of the rated pupil capacity as determined by
50the Department of Education at the time the project is approved
51and (i) four hundred seventy dollars ($470) in the case of

1elementary schools, (ii) six hundred twenty dollars ($620) in
2the case of secondary schools, (iii) an amount in the case of
3combined elementary-secondary schools obtained by multiplying
4the rated elementary pupil capacity by four hundred seventy
5dollars ($470) and the rated secondary pupil capacity by six
6hundred twenty dollars ($620) and dividing the sum by the total
7rated pupil capacity. The Department of Education in
8consultation with the Governor's Green Government Council shall
9issue guidelines to carry out this section.]

10* * *

11[(c.6) If a school district receives reimbursement for a
12school construction project under this section, the school
13district, upon request by the Department of Education, shall do
14all of the following:

15(i) Provide information required by the department to
16determine whether the school construction project meets criteria
17established by the department for certification as an approved
18school facility design for purposes of the department's school
19facility design clearinghouse.

20(ii) Authorize the department, in its discretion, to certify
21the school construction project as an approved school facility
22design and to include information about the certified project in
23the department's school facility design clearinghouse.]

24* * *

25Section 7. Section 2575(a) of the act, amended July 12, 1968
26(P.L.192, No.96), is amended to read:

27Section 2575. Payments on Account of Leases Hereafter
28Approved and on Account of Sinking Fund Charges on Indebtedness
29for School Buildings Hereafter Constructed.--(a) The
30Commonwealth shall pay annually to each school district erecting
31or sharing in the erection of a building or buildings under the
32provisions of the Public School Building Authority Act, the
33Municipality Authority Act, section 758 of the Public School
34Code of 1949, or section 791 of the Public School Code of 1949,
35on account of buildings for which the lease is approved on or
36after March 22, 1956, or through the incurring of indebtedness
37by the issuance of general obligation bonds on account of
38buildings for which the general construction contract is awarded
39on or after March 22, 1956, an amount to be determined by
40multiplying the district's [capital account reimbursement
41fraction computed for the year 1967 or] aid ratio [whichever is
42larger] by the approved reimbursable rental or approved
43reimbursable sinking fund charge.

44* * *

45Section 8. Section 2575.1 of the act, amended July 9, 1992
46(P.L.392, No.85), is amended to read:

47Section 2575.1. Payments on Account of Building Costs.--(a)
48The Commonwealth shall pay to any school district making a
49preliminary payment on account of the approved building
50construction or approved renovation cost as authorized by
51section 783 or by clause (4) of section 790 or by clause (5) of

1section 791 of this act, an amount determined by multiplying the
2district's [capital account reimbursement fraction computed for
3the year 1967 or] aid ratio [whichever is larger] by the amount
4of the payment made by the school district.

5(b) Whenever any school district provides the full payment
6on account of approved building construction or approved
7renovation cost without incurring debt, or without assuming a
8lease, the Commonwealth shall pay to such school district an
9amount determined by multiplying the district's [capital account
10reimbursement fraction computed for the year 1967 or] aid ratio
11[whichever is larger] by the amount of the payment made by the
12school district.

13(c) The payment required by this section shall be made for
14the year in which the school district made its payment on
15account of the approved building construction or approved
16renovation cost.

17Section 9. The act is amended by adding a section to read:

18Section 2581. Lump Sum Reimbursement for Construction or
19Reconstruction.--

20(1) The department may, upon the availability of sufficient
21funds and the mutual agreement of the department and a school
22district, provide an immediate lump sum payment to the school
23district as full reimbursement for a construction or
24reconstruction project that has received all required approvals
25from the department for Commonwealth reimbursement. The lump sum
26payment provided for under this section shall be equal to
27seventy-five percent (75%) of the total allowable construction
28or reconstruction reimbursement provided for under Article XXV
29of this act for which the school district is eligible: Provided,
30however, That such payments shall not include reimbursement for
31interest incurred by a school district.

32(2) No later than twelve (12) months after the effective
33date of this section, the department shall develop such rules
34and guidelines as may be necessary to implement this section.

35Section 10. For the 2014-2015 fiscal year the General
36Assembly shall appropriate not less than $396,198,000 to the
37Authority Rentals and Sinking Fund Requirements line item in the
38General Appropriation Act.

39Section 11. This act shall take effect as follows:

40(1) The addition of section 731.2(d), (e), (f) and (g)
41of the act shall take effect July 1, 2015.

42(2) The remainder of this act shall take effect
43immediately.