(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 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 construction standards developed under AS 14.11.017(d).

(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;

(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 based model school construction standards under AS 14.11.017(d).

(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;

(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 construction standards developed under AS 14.11.017(d) or use previously approved design plans and building systems that would result in capital or operating cost savings for the project.

(d) The department shall reduce a project budget by the cost of those portions of a project design that the department determines (1) are for construction of student residential space, planetariums, hockey rinks, saunas, and other facilities for single purpose sporting or recreational uses that are not suitable for other activities; or (2) do not meet the criteria developed under AS 14.11.014(b) that are applicable to the project. This subsection does not apply to funding for swimming pools that meet criteria established by the department.

(e) By November 5, the department shall provide public notice of the grant applications submitted under (a) of this section and the priorities established under (b) of this section. After public notice has been given, the department shall, not later than December 1, hold a public hearing on the priorities established under (b) of this section. In this subsection, “public notice” means notice published in a newspaper of general circulation and notice to every person who has requested notice about the grant application program from the department.