Virginia Regulatory Town Hall View Comments

Department of Education

State Board of Education

Guidance Document Change: The Literary Fund is authorized under Article VIII, Section 8 of the Constitution of Virginia as a permanent and perpetual school fund to be used for public school purposes. Certain revenue sources are dedicated to the Literary Fund, primarily escheated property, property forfeited to the Commonwealth, fines for offenses committed against the Commonwealth, and annual interest on the Literary Fund. A minimum asset balance of $80.0 million must be maintained in the Fund. Title 22.1, Chapter 10, Code of Virginia, Chapter 100 of the Virginia Administrative Code, and provisions in the state appropriation act further govern the Literary Fund and its uses. The Board of Education (“Board”) is responsible for administering the Literary Fund; the Department of the Treasury serves as accountant for the Fund. The Code of Virginia and regulations of the Board in the Virginia Administrative Code establish public school construction and renovation through revolving loans as a primary purpose of the Literary Fund. The state appropriation act further authorizes the Board to issue loans from the Literary Fund to the school boards of local school divisions that apply for loans, authorized by the locality and the school board, for the purposes of a) erecting, altering, or enlarging school buildings in local school divisions, or b) refinancing prior indebtedness or obligations incurred by a locality on behalf of a school division which has an application for a Literary Fund loan for an approved school project pending before the Board. Several new budget language provisions impacting Literary Fund school construction loans were enacted in Item 137, Paragraph C.11 of the 2022 Appropriation Act (i.e., Chapter 2) for the 2022-2024 biennium, as follows: ? Language authorizing the Board to offer up to $200,000,000 in fiscal year (FY) 2023 and up to $200,000,000 in FY 2024 from the Literary Fund for school construction loans, subject to the availability of funds. Amounts designated for school construction loans that are not obligated in FY 2023 may be obligated in FY 2024; ? Establish an annual open enrollment process by which localities and school boards apply to the Literary Fund for school construction loans, replacing the First Priority and Second Priority waiting lists for awarding loans. Priority for loan funding is based on the local composite index of ability-to-pay (but the Board may consider other critical projects for priority); ? Establish a maximum Literary Fund loan amount per project of $25.0 million (from $7.5 million currently authorized in the Code of Virginia); ? In consultation with the Department of the Treasury, establish loan interest rates that are benchmarked to a market index interest rate on an annual basis, not to exceed 2.0 percent for the tier of localities with a school division local composite index of ability-to-pay between 0.0000 and 0.2999; and ? Language authorizing the Board to offer a loan add-on not to exceed $5.0 million per loan for projects that will result in school consolidation and the net reduction of at least one existing school.

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10/21/22 7:56 pm

Commenter: Anonymous

Oppose Higher Loan Limits

I oppose increasing the amount of loans that schools can get from the literary fund $7.5 million to $25 million. A major source of revenue for the literary fund is fine revenue, and I fear that allowing larger loans will create a demand for more money which, in turn, will cause the legislature to increase existing fines or create new fines to raise the money to fund the loans. But this is bad public policy. While I understand that DOE cannot undo the policy of funding school construction using criminal fine money using guidance documents, I would suggest that it should keep the current $7.5 million limit in place to keep down the demand for money, and in turn remove one incentive to create more and higher fines.

CommentID: 192654

10/28/22 10:10 am

Commenter: Frank Rogers

Guidelines for Implementing New Appropriations Provisions for Lit Loan-PPEA consideration

The application process for Literary Fund School Construction Loans under the new Appropriation provisions should contemplate and accommodate the potential for receipt of solicited or un-solicited PPEA proposals. Localities that receive un-solicited PPEA proposals and that subsequently conform to requirements under the PPEA should not be deemed ineligible for Literary Fund School Construction Loans for having initiated a project prior to submission of a Literary Fund School Construction Loan application.

CommentID: 204059