Bill Text: VA SB471 | 2022 | Regular Session | Comm Sub
Bill Title: Literary Fund; open application process for loans, maximum loan amounts, etc., rates of interest.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2022-03-12 - Continued to 2022 Sp. Sess. 1 pursuant to HJR455 [SB471 Detail]
Download: Virginia-2022-SB471-Comm_Sub.html
Be it enacted by the General Assembly of Virginia:
1. That §§22.1-147, 22.1-148, and 22.1-150 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding a section numbered 22.1-146.2 as follows:
§22.1-146.2. Loan closing cost subsidies.
A. The Board shall establish a competitive program for the award of up to $25,000 to a school division that receives a Literary Fund loan for the purpose of subsidizing all or a portion of the closing costs for such loan.
B. The aggregate amount of subsidies provided pursuant to this section shall not exceed $250,000 total statewide each year or any such allocation specified in the general appropriation act for each fiscal year.
§22.1-147. Application for and distribution of funds.
A. The Board shall establish an annual open application process for Literary Fund loans that shall occur during the period that the Board deems most suitable. The Board shall prioritize applications on the basis of the composite index of local ability-to-pay.
B. The Board of Education shall provide for an
equitable distribution of the funds loaned or provided as loan interest rate
subsidy payments from the Literary Fund among the several school divisions. In
providing for such equitable distribution, the Board shall impose a maximum
limit of not more than $7.5 $25 million on the amount of any loan
from the Literary Fund. The Board shall offer a loan add-on not to exceed $5
million per loan for projects that result in school consolidation and the net
reduction of at least one existing school.
§22.1-148. Restrictions upon making loans; retirement of previous loans; waiting lists.
A. No loan from the Literary Fund shall exceed 100%
100 percent of the cost of the building, addition thereto, and site on
account of for which such loan is made. No loan shall be made from
the Literary Fund to aid in the erection of a building or addition to cost
that costs less than $500. Whenever a loan is made from the Literary Fund
for the purpose of enlarging a building, any part of the proceeds of such loan
may, in the discretion of the Board, be used to retire any previous loan or
loans on such building although not matured at the time of such additional
loan. The Board may refuse to make any loan from the Literary Fund to any
school board which that is in default in the payment of any part
of the principal of any previous loan from the Literary Fund or which for the
two years next preceding the loan has been more than six months in default in
the payment of interest due on any loan from the Literary Fund.
B. Any school division which that has an
application for a Literary Fund loan for an approved school project pending
before the Board of Education shall not be denied or delayed in
obtaining such loan solely for the reason that alternative financing had been
obtained to begin or complete construction on such project.
C. Notwithstanding the provisions of subsection B, the Board may remove any project that has been inactive for at least five years from any project waiting list that it maintains.
§22.1-150. Rate of interest.
The Board of Education is authorized in its discretion to
fix the interest rate on all loans made from the Literary Fund at not less than
two per centum per annum and not more than six per centum per annum, payable
annually, in consultation with the Department of Treasury, shall
establish loan interest rates that are benchmarked to a market index on an
annual basis, not to exceed two percent per year for the localities with a
school division composite index of local ability-to-pay between 0.0 and 0.299.
The Board shall utilize a sliding scale based on the local school division's
composite index of local ability-to-pay to determine the interest rate on each
such loan. Every loan made under the provisions of this chapter by selling the
bonds, notes, or other evidences of debt of school boards for investment
of the trust funds of the Virginia Retirement System shall bear interest at a
rate not to exceed six per centum the maximum interest rate per
year as established by the Board.
2. That the Board of Education shall make such amendments to its Regulations Governing Literary Loan Applications in Virginia (8VAC20-100) as are necessary to effectuate the provisions of the first enactment of this act.
