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. Requires the Board of Education (the Board) to establish an annual open application process for Literary Fund loans to finance the construction and renovation of public elementary and secondary school buildings in the Commonwealth to occur during the period that the Board deems most suitable and requires the Board to prioritize applications on the basis of the composite index of local ability-to-pay. The bill increases from $7.5 million to $25 million the maximum Literary Fund loan amount and requires the Board to 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. The bill further requires the Board, in consultation with the Department of Treasury, to 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 and requires the Board 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. In addition, the bill 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. As introduced, this bill is a recommendation of the Commission on School Construction and Modernization.

Bill Patron: McClellan

Last Action(s):
(House) VOTE: Adoption (95-Y 0-N) March 12, 2022
(Senate) Continued to 2022 Sp. Sess. 1 pursuant to HJR455 March 12, 2022

Bill Status:
Passed House
Passed Senate
Carried Over