HB253:

Literary Fund; open application process for loans, maximum loan amounts, etc.

Bill Summary:

Literary Fund; loans; application
process; maximum loan amounts; rates of interest; closing costs; waiting lists.
Makes several changes to the provisions relating to loans from the Literary
Fund to finance the construction and renovation of public elementary and
secondary school buildings in the Commonwealth. The bill requires the Board of
Education (the Board) to establish an annual open application process for
Literary Fund loans to occur during the period that the Board deems most
suitable. The bill increases from $7.5 million to $25 million the maximum
Literary Fund loan amount and permits the Board to increase such maximum to up
to $35 million for loans for any school construction or
renovation project that facilitates the consolidation of schools. The bill requires
the Board to fix the interest rate on all loans made from the Literary Fund at
not less than one percent per year, not more than
three percent per year, and at increments of one
half of one percent per year between such minimum
and maximum rates, payable annually, and to 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. Under current law, such rates
are required to be set between two and six percent per year. The bill requires
the Board to 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. The bill also
permits the Board to remove any project that has been
inactive for at least five years from any Literary Fund loan project waiting list that it
maintains. This bill is a recommendation of the Commission on School
Construction and Modernization.