                                 CODE OF VIRGINIA

LOANS TO LOCAL SCHOOL BOARDS (§ 22.1-166.1)

The Authority is authorized to make loans or loan interest rate subsidy
payments, from any of the funds of the Authority available for such purpose, to
local school boards for the purpose of acquiring and installing capital projects
for school purposes for which loans from the Literary Fund are not immediately
available. For the purpose of this section and § 22.1-166.2, capital projects
for school purposes shall mean motor vehicles and educational technology
equipment.

A. No loan from the Authority shall exceed 100 percent of the cost of the
capital project for school purposes for which such loan is made.

B. A loan from the Authority shall be evidenced by notes payable to the
Authority, executed or signed by the chairman of the school board, with the
approval of the local governing body, attested by the clerk thereof and
deposited with the State Treasurer. Payments of interest and principal on such
notes shall be made to the State Treasurer. Any loan from the Authority shall be
repayable in installments as shall be approved by the local school board, as
appropriate, with the final installment being due not more than thirty years
after the date of such loan. The time of payment may be extended in the
discretion of the Authority.

C. The local governing bodies and the local school boards of the several school
divisions are authorized to borrow money from the Authority, at such rate or
rates, fixed or variable, as shall be approved by the local school board; any
local school board to borrow from the Authority shall first make written
application to the Authority for such loan on a form to be prescribed by the
Authority.

D. The governing body of any county, city, or town, if the town constitutes the
school division, in which the local school board has borrowed money from the
Authority shall include in its levies, and appropriate to the local school
board, a fund sufficient to meet the liabilities of the local school board on
such loan if and to the extent such liabilities are not otherwise provided for
by the General Assembly. The governing body of any county in which the local
school board has borrowed money from the Authority for capital projects located
in a town in such county constituting a separate school division shall have
authority to include, in its levies for such town, a levy sufficient to meet the
liabilities of the local school board on such loan if and to the extent such
liabilities are not otherwise provided for by the General Assembly and shall
levy a separate tax in the rest of the county to meet its liabilities on any
contract for capital projects outside such town. In the event that such local
school board shall fail to pay any installment of interest or principal
promptly, upon notice in writing to that effect from the State Treasurer, the
county, city, or town treasurer shall pay to the State Treasurer any such past
due installment of interest or principal out of the funds in his hands belonging
to such county, city, or town. The failure of such governing body to provide for
the payment of such loan or the interest thereon when and as due shall be deemed
a cause for removal of the members thereof from office on motion before the
circuit court having jurisdiction in such county, city, or town, instituted by
the attorney for the Commonwealth of such county or city or by the Attorney
General where the attorney for the Commonwealth refuses or neglects to act after
demand on him to proceed.

E. The local school board of any school division composed of part or all of a
county, with the approval of the governing body of the county, is authorized to
borrow from the Authority for the purpose of financing capital projects in such
county to serve a portion of such county. Taxes on property in the magisterial
districts served by such capital projects shall be levied by the governing body
of the county and collected for the purpose of repaying such loan; for the
purposes of this section, a magisterial district shall not include a town
constituting a separate school division but the governing body of the county may
levy a separate tax on property in a town in such county constituting a separate
school division to repay money borrowed by such county from the Authority for
the purpose of financing capital projects in such town. Except as otherwise
provided by this subsection, all other provisions of law relating to loans from
the Authority shall apply to a loan authorized by this subsection.

F. Any local school board which is indebted for any money borrowed from the
Authority may anticipate the payment of the principal amount of any such loans,
or any part thereof, by the payment of such principal amount with interest
thereon to the date of such anticipated payment and may borrow money and issue
bonds for the purpose of raising funds to pay any notes or other obligations of
the local school board now and hereafter held by the Authority.

HISTORY: 1990, c. 909.