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									April 11, 2008

TO:            Division Superintendents

FROM:          Budget Office

SUBJECT:        Literary Fund Information

This complete Excel file contains several important files to assist you as you
start the application process.

   • Literary Fund Application (as adopted by the Board, April 2007 and updated
     April 11, 2008)
   • Application Checklist
   • Code of Virginia Changes to the Literary Fund, March 2007
   • Regulations
   • Literary Fund Process Flowchart
   • Qualifying Uses of Literary Fund Loans
   • Sample Reimbursement Resolution Form

There are some advantages to using this document: (1) The Application
form is in an Excel format, so it can be completed more easily
without retyping; (2) The checklist, which is used by the Budget
Office, should help prevent an omission from a loan application package;
and (3) Future changes in the Code and Regulations will be updated in this file
and clarified as to how they will affect school divisions.

In addition, the Literary Fund now has its own Web site:
http://www.doe.virginia.gov/support/facility_construction/literary_fund_loans/index.shtml .
Web pages pertaining to the Literary Fund that were formerly located
under the Budget Office Web site have been included. All of the information
contained in this Excel file can be found on the new Web site as well.

We hope these changes will simplify the Literary Fund application process for
school divisions. Please feel free to direct any suggestions or questions to the
Budget Office at (804) 225-2025.
Board Approved - April 2007
                          VIRGINIA                DEPARTMENT OF EDUCATION                                           Attachment A
                   APPLICATION FOR LOAN FROM THE LITERARY FUND OF VIRGINIA
                             For Applications Received beginning July 1, 2008

                                           DOE Staff Only
      Literary Fund Loan Number:
                               25-Feb-11




Division Number                             <SELECT DIVISION>


Name of County or City

Name of School

Contact Name
Contact Phone Number
Contact E-mail Address

TO THE VIRGINIA BOARD OF EDUCATION,

   The School Board hereby makes application for a loan of
                            from the Literary Fund of Virginia for the purpose of erecting, enlarging, or altering
(making permanent improvement to) which is located at:

                      Street Address:
               County/City, Zip Code:

         Description of Project:




1.   Has advertised an Invitation for Bids for the said project described above?
       Select YES or NO here:




2.  The said building, addition, or permanent improvement described above, will be used as a
                                                                                         building, and the total
value of the construction on the above referenced project is estimated to cost:

3. The total amount of the loan will not exceed the cost of the building, addition, or permanent improvement thereto, and site, on
account of which such loan is made.

4. The plans and specifications for the building or improvement, complying with the Virginia Statewide Building Code (§36.99,
Code of Virginia ), have been or will be approved by the division superintendent of schools and received by the Superintendent
of Public Instruction before construction is begun. It is understood that the Virginia Board of Education reserves the right to
withhold any part or all of the amount of this loan, if the plans and specifications received by the Superintendent of Public
Instruction are not followed.

5. has not defaulted or failed to meet its debt service obligations as and when due for the past five years except as follows (Enter
N/A below if has never defaulted):
Board Approved - April 2007
                          VIRGINIA                         DEPARTMENT OF EDUCATION                                            Attachment A
                   APPLICATION FOR LOAN FROM THE LITERARY FUND OF VIRGINIA
                             For Applications Received beginning July 1, 2008

                                               DOE Staff Only
      Literary Fund Loan Number:
                                 25-Feb-11




Division Number                                    <SELECT DIVISION>


Name of County or City

Name of School

6. Adequate and satisfactory supervision of construction will be provided by the school board in accordance with the Virginia
Statewide Building Code (§36.99, Code of Virginia ).

7. This loan is to be made for                     years, and is to be paid with interest at the rate of   #N/A percent per annum,
payable annually.

8. The Board of Supervisors for the County, or the Council for the City, has by resolution agreed to provide for the repayment of
this loan. (Note: Please submit the authorizing resolutions from the school board and local governing body (with original seals
and signatures) along with your Literary Fund application. No application will be approved until these resolutions are
submitted.)

9. The School Board is not in default in the payment of any part of the principal of any previous loan from the Literary Fund and,
for at least two years immediately before this loan, has not been in default in the payment of interest due on any loan from the
Literary Fund.

Given under my hand this day of:
                                                                         Date


THE SCHOOL BOARD



                                             By:    INCOMPLETE APPLICATION                                 , Chairman
                                                                  Original Signature Required


                            ATTEST:                 INCOMPLETE APPLICATION                                 , Clerk
                                                                  Original Signature Required


                                                           THE SCHOOL BOARD SEAL
                          (Note: Original SEAL is Required in the Area Provided Below on the Signed Application)




                  File Error, Please Contact the Budget Office at
                           (804) 225-2025 for assistance
Board Approved - April 2007
                          VIRGINIA                 DEPARTMENT OF EDUCATION                                           Attachment A
                   APPLICATION FOR LOAN FROM THE LITERARY FUND OF VIRGINIA
                             For Applications Received beginning July 1, 2008

                                            DOE Staff Only
      Literary Fund Loan Number:
                                25-Feb-11




Division Number                              <SELECT DIVISION>


Name of County or City

Name of School

              Certification of Authorizing Resolution Adopted by the Local Governing Body

             At a meeting of the Board of Supervisors for
held in the said County or City on                                                                  :

WHEREAS, The School Board presented to this Board or Council on
                          an application addressed to the Virginia Board of Education for the purpose of borrowing
          $0              from the Literary Fund for the purpose set out in said application for
0                                                                                      to be paid in
           0              #N/A

RESOLVED, That the application of the School Board to the Virginia
Board of Education for a loan of $000,000.00 from the Literary Fund is hereby approved, and authority is hereby
granted to the School Board to borrow $000,000.00 for the purpose set out in said application.

The Board of Supervisors for said County or Council of said City will each year during the life of this loan, at the time they fix
the regular levies, fix a rate of levy for schools or make a cash appropriation sufficient for operation expenses and to pay this
loan in annual installments and the interest thereon, as required by law regulating loans from the Literary Fund.

I hereby certify that the foregoing is a true copy as taken from the minutes of the
Board of Supervisors.

                                            INCOMPLETE APPLICATION                                  , Clerk

 BOARD OF SUPERVISORS FOR 0

                                                 LOCAL GOVERNING BODY SEAL
                           (Note: Original SEAL is Required in the Area Provided Below on the Signed Application)




                  File Error, Please Contact the Budget Office at
                           (804) 225-2025 for assistance
Board Approved - April 2007
                          VIRGINIA            DEPARTMENT OF EDUCATION                             Attachment A
                   APPLICATION FOR LOAN FROM THE LITERARY FUND OF VIRGINIA
                             For Applications Received beginning July 1, 2008

                                       DOE Staff Only
     Literary Fund Loan Number:
                           25-Feb-11




Division Number                         <SELECT DIVISION>


Name of County or City

Name of School
                                               FINAL INSTRUCTIONS:

1. E-mail this application to:      K12Budget@doe.virginia.gov
2. Mail the hardcopy with original signature to:
                                    Kent C. Dickey, Deputy Superintendent for Finance and Operations
                                    Virginia Department of Education
                                    P.O. Box 2120
                                    Richmond, VA 23218-2120

                                                        DOE Staff Only
This application has been reviewed by:



            Date                                          Reviewed By

This application is approved by DOE staff for Board of Education approval:



            Date                         Budget Director / Associate Budget Director


                                                                                       Updated January 18, 2011
                  Checklist for Literary Fund Application


Verify that the loan amount is the same on the Literary Fund Application form
as the Local Governing Body and School Board's authorizing resolutions.

Complete Literary Fund application using the Excel template.

Make sure the application is signed by the School Board Chairman and
Clerk who should also affix seal.

Be certain to complete the last section of the application - the Certification of
Authorizing Resolution adopted by Local Governing Body.

□   The County/City Clerk of the Board should sign the resolution.
□   The Clerk must notarize the resolution.
□   The date the resolution is adopted should be prior to date of application.
Submit with application an Authorizing Resolution in which County/City approves
the loan application and agrees to provide for repayment of the loan.

□   Verify the loan request amount is the same as in the application.
□   Verify that the resolution date is prior to date of application.
□   Verify that funding authorized is for the same project as in the application.
□   Make sure the Clerk signs and affixes seal.
Submit with application an Authorizing Resolution in which School Board
agrees to provide for repayment of the loan.

□   Verify loan request amount is the same as in the application.
□   Verify that the resolution date is prior to date of application.
□   Verify that funding authorized is for the same project as in the application.
□   Make sure the Clerk signs and affixes seal.
                                                   CHAPTER 121


An Act to amend and reenact §§ 22.1-146, 22.1-148, 22.1-151, 22.1-153, and 22.1-161 of the Code of Virginia,
and to repeal §§ 22.1-154 through 22.1-157 of the Code of Virginia, relating to the Literary Fund.
                                            [H 2350]
                                      Approved March 8, 2007


Be it enacted by the General Assembly of Virginia:

1. That §§ 22.1-146, 22.1-148, 22.1-151, 22.1-153, and 22.1-161 of the Code of Virginia are amended and
reenacted as follows:

§ 22.1-146. Power of Board to make loans from fund for erection, etc., of school buildings and fueling facilities for
school buses.

The Board of Education may make loans or, subject to the approval of the General Assembly, loan interest rate
subsidy payments from the Literary Fund to the school boards of the several school divisions making application
therefor in the manner prescribed by law, authorized by the governing body and the school board, for the                Change 1: Authorizing
purposes of (i) erecting, altering or enlarging school buildings in such school divisions; (ii) purchasing and          chairman of the school b
installing educational technology equipment and infrastructure; (iii) equipping school buses for alternative fuel       the local governing body
conversions and for construction of school bus fueling facilities for supplying compressed natural gas or other         time of initial application
                                                                                                                        release of any funds.
alternative fuels; and (iv) refinancing or redemption of negotiable notes, bonds, and other evidences of
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 of Education. For the purpose of this
section, "alternative fuels" means motor fuels other than gasoline and diesel fuel.

§ 22.1-148. Restrictions upon making loans; retirement of previous loans.

A. No loan from the Literary Fund shall exceed 100% of the cost of the building, addition thereto, and site on
account of 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 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. No loan shall
be made from the Literary Fund in any case in which the payment of same with interest would, in the judgment of
the Board of Education, entail too heavy a charge upon the revenues of the county, city or town comprising the
school division to which such loan is granted. The Board may refuse to make any loan from the Literary Fund to
any school board which 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 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.

§ 22.1-151. Evidence of loan.

A loan from the Literary Fund shall be evidenced by bonds or notes payable to the Commonwealth of Virginia for
the benefit of the Literary Fund, executed or signed by the mayor or the chairman of the governing body and the
chairman of the school board and attested by the clerk thereof. Evidence of debt taken for such loans and a
certificate of recordation of a memorandum of lien in the appropriate circuit court shall be deposited with the State
Treasurer and kept by him.

§ 22.1-153. School boards authorized to borrow from Fund; form of application.

The school boards of the several school divisions are authorized to borrow money belonging to the Literary Fund,
and any school board desiring to borrow from the Fund shall make written application to the Board of Education for
such loan on a form to be prescribed by the Board.


The Board shall not disburse any proceeds of any approved loan prior to its receipt of the concurrent approval of
the governing body at the time of initial disbursement and an acceptable opinion of bond counsel obtained by the
governing body as to the validity of the loan.
governing body as to the validity of the loan.

§ 22.1-161. Loan declared indebtedness of the county, city or town; lien on locality's funds created.

Any bonds or notes of a school board held by the Literary Fund are hereby declared to be valid and legally binding
indebtedness of the county, city or combination thereof constituting the school division or of the town if the town
constitutes the school division. There shall be a lien in favor of the Literary Fund on all funds and income of the
county, city or town for the amount of such bonds and notes. Therefore, Literary Fund loans are considered to be
general obligation debt of the governing body as defined in § 15.2-2602, and are subject to the provisions of §§
15.2-2638 and 15.2-2659.

2. That §§ 22.1-154 through 22.1-157 of the Code of Virginia are repealed.
Change 1: Authorizing signatures of both the
chairman of the school board and the chairman of
the local governing body are now required at the
time of initial application and again prior to the
release of any funds.




     Change 2: Documents no longer required are (a) the
     Attorney's Certificate of Title and accompanying
     Certificate of the Clerk of the Court, OR a policy of
     insurance in lieu of; (b) Statement of the Court or City
     Treasurer; and (c) recordation of a Memorandum of
     Lien.
Change 3: The bond counsel opinion is still required
but only as to the validity of the loan, not in regard to
the tax-exempt status of the loan. Prior to release of
funds, the Department of Treasury will send local
governing body and school board a Temporary Note
to be executed.
                                                     CHAPTER 365

An Act to amend and reenact §§ 22.1-151 and 22.1-161 of the Code of Virginia, relating to the Literary Fund.
                                             [H 769]
                                      Approved March 5, 2008


Be it enacted by the General Assembly of Virginia:

1. That §§ 22.1-151 and 22.1-161 of the Code of Virginia are amended and reenacted as follows:

§ 22.1-151. Evidence of loan.

A. A loan from the Literary Fund shall be evidenced by bonds or notes payable to the Commonwealth of Virginia
for the benefit of the Literary Fund, executed or signed by the mayor or the chairman of the governing body and
the chairman of the school board and attested by the clerk thereof. Evidence of debt taken for such loans shall be
deposited with the State Treasurer and kept by him.

B. Upon the request of a locality, any memorandum of lien held on behalf of the Literary Fund prior to July 1, 2007,
and deposited with the State Treasurer or recorded in the appropriate circuit court shall be marked as released.
The release of such lien shall in no way affect the obligations of the locality under the loan.

§ 22.1-161. Loan declared indebtedness of the county, city or town; lien on locality's funds created.

Any bonds or notes of a school board held by the Literary Fund are hereby declared to be valid and legally binding
indebtedness of the county, city or combination thereof constituting the school division or of the town if the town
constitutes the school division. There shall be a lien in favor of the Literary Fund on all funds and income of the
county, city or town for the amount of such bonds and notes. Therefore, Literary Fund loans are considered to be
general obligation debt of the governing body as defined in § 15.2-2602, and are subject to the provisions of §§
15.2-2638 and 15.2-2659. The provisions of this section shall not be affected by the release of any memorandum
of lien pursuant to subsection B of § 22.1-151.
VR270-01-0009
Department of Education (State Board of Education)

Regulations
Governing Literary Loan Applications in Virginia
                                                       PART I
                                                       POLICY
'1.1. Policy.

  It is the policy of the Board of Education to assist localities in borrowing from the Literary Fund to the greatest extent fe asible,
taking into consideration, the size of the Literary Fund, the availability to school divisions of alternative financing, the number
and repayment ability of school divisions desiring to borrow from the Literary Fund, and the sense of the General Assembly fo r
the administration and equitable distribution of the Literary Fund.

                                                     PART II
                                                   DEFINITIONS
э2.1. Definitions.

 The following words and terms, when used in these regulations, shall have the following meaning:

 "Approved Application List" means the list maintained by the Department of Education of those Literary Loan applications
which initially have been approved as to form by the Board of Education but have not been placed on the "Waiting List".

 "Board" means the State Board of Education.

 "Department" means the State Department of Education.

  "Project" means capital construction for the purpose of erecting, altering, or enlarging a school building in a public school
division of Virginia, or a regional center operating under a Board of Control as defined by board regulations.

  "Waiting List" means the list maintained by the department of those Literary Loan applications which the board has placed on
the Waiting List of loans anticipating the release of loan funds from the Literary Fund.

                                                  PART III
                                           APPLICATION APPROVAL

'3.1. Application Form.

  A school division applying for a Literary Loan shall meet the statutory requirements for such a loan as set forth in ''22.1-142
through 22.1-161 of the Code of Virginia and the Appropriations Act. The application shall be submitted to the department on
Form V.A. 005, completed, signed and sealed by the appropriate local officials and examining attorney certifying to the
information contained in the application.

'3.2. Application Review.

  After examination and review of the contents of the application by the staff of the department and review of the application
and the certifications by the Office of the Attorney General, the Department shall recommend to the board the approval of
those applications which are in proper form for further consideration by the board and for placement on the Approved
Application List.

'3.3. Application approval.

  Upon approval of a Literary Fund loan application, a Memorandum of Lien form, properly executed, and recorded in the
appropriate circuit court is to be returned to the department. It is recognized that the lien is not effective until the Boa rd of
Education approves the initial release/commitment of funds against the project. Section 22.1-157 of the Code of Virginia
provides that no recordation tax shall be assessable.




'3.4. Nonapproval of application.
VR270-01-0009
Department of Education (State Board of Education)

Regulations
Governing Literary Loan Applications in Virginia
                                                      PART
  Applications for Literary Fund loans will not be approved Iby the board if the project already has been bid prior to receipt o f
the application in the department, except in the case of a documented emergency.


                                                PART IV
                                         APPROVED APPLICATION LIST
'4.1. Placement on list.

  The board shall place applications on the Approved Application List upon the recommendation of the department made by
the Superintendent of Public Instruction or his designee.

'4.2. Qualification for placement.

  For applications on the Approved Application List to qualify for placement on the Waiting List, school divisions shall submit a
copy of the plans and specifications with a letter of approval by the division superintendent, accompanied with a statement b y
an architect or professional engineer licensed by the Virginia Board for Architects, Professional Engineers, Land Surveyors a nd
Landscape Architects that such plans and specifications are, to the best of his knowledge and belief, in compliance with the
regulations of the Board of Education and the [Virginia] Uniform [Statewide] Building Code.

'4.3. Removal from list.

 Applications which remain on the Approved Application List for three years shall be removed from the list. Localities shall be
notified at the end of the second year of the three-year cancellation policy.


                                                 PART V
                                        RANGE AND DURATION OF LOANS
'5.1. Maximum loan amount.

 The maximum loan amount available for any single project through the Literary Fund is $ 7.5 million (effective for all
applications approved by the Board subsequent to the effective date of these regulations).

'5.2. Minimum loan amount.

  The minimum loan amount available for any single project through the Literary Fund is $50,000. The several applications to
fund a regional project shall be combined for the purpose of meeting this minimum amount.

'5.3. Duration of loans.

 Literary Fund loans shall be made for a period of not less than five years nor more than 20 years. Literary Fund loans in an
amount between $50,000 and $100,000 shall be for a period of five years.


                                                   PART VI
                                                INTEREST RATES

'6.1. Composite index.

  Except as modified by Section 6.3, the interest rate for a Literary Loan shall be based on the school division's Composite
Index, used for distribution of State Basic Aid, in effect when the board places the project on the Waiting List.




'6.2. Determination of interest rate.
VR270-01-0009
Department of Education (State Board of Education)

Regulations
Governing Literary Loan Applications in Virginia
'6.2. Determination of interest rate.
                                                      PART I
  The interest rate for a loan generally shall be determined on the basis of a composite index of the applying school division as
follows:

                                                                               Per Annum
VR270-01-0009
Department of Education (State Board of Education)

Regulations
Governing Literary Loan Applications in Virginia
                                                      PART I                      Per Annum
                                                                                 Interest Rate

                      Step 1.        Composite Index between    .2 and .2999            2.0%
                      Step 2.        Composite Index between    .3 and .3999            3.0%
                      Step 3.        Composite Index between    .4 and .4999            4.0%
                      Step 4.        Composite Index between    .5 and .5999            5.0%
                      Step 5.        Composite Index between    .6 and .8000            6.0%

'6.3. Fixed rate.

  The board reserves its option under '22.1-150 of the Code of Virginia to fix the actual rate for a Literary Loan, on the date
funds for the Literary Loan are approved for release, at one percentage point above or below the rate applicable on the date
the application was placed on the Waiting List.


                                                 PART VII
                                                WAITING LIST

'7.1. Placement on Waiting List.

  After a loan application initially has been approved by the department and the division submits a copy of the plans, approval
by the division superintendent and architect, the board shall consider placement of the application on the Waiting List.

'7.2. Priorities.

  Applications shall be placed into priorities on the Waiting List as follows:

     Priority 1: Applications placed on the Waiting List by the Board of Education from school divisions having
     a composite index less than .6000, and an outstanding indebtedness (including the application
     considered for release of funds by the Board of Education) to the Literary Fund less than $20 million.

     Priority 2: Applications placed on the Waiting List by the Board of Education from school divisions having
     a composite index of .6000 or above, or an outstanding indebtedness (including the application
     considered for release of funds by the Board of Education) to the Literary Fund greater than $20 million.

'7.3. Eligibility for release of funding.

 Within each priority, applications shall become eligible for release of funding in the same relative order as having been
approved by the board as having met all conditions for a Literary Fund loan.

'7.4. Eligibility of Priority 2 applications.

 Applications in Priority 2 shall be eligible for funding only when the board determines that all applications, current and
anticipated, and the applications to be added from Priority 2 can be funded within one year.
VR270-01-0009
Department of Education (State Board of Education)

Regulations
Governing Literary Loan Applications in Virginia
                                                      PART I


'7.5. Reassignment of application.

  The board may place an individual application ahead of its position assigned by '7.3, if the board finds that the best interest
for the education in the state is served by such placement. Reasons for such placement may include, but are not limited to ( i)
asbestos containment or removal; (ii) natural disasters; (iii) unique circumstances that may be detrimental to education in t he
absence of a Literary Fund loan. Such placement shall be acted on by the board on an individual application basis when all
requirements for release of a Literary Fund loan have been met by the school division.

'7.6. Priority funding.

  The board shall provide priority funding for any application resulting directly from the consolidation of two or more divisio ns
into a single school division.


                                                PART VIII
                                        RELEASE OF LITERARY FUNDS

'8.1. Unencumbered sum available.

 The release of Literary Funds shall be approved by the board for an application when the Literary Fund has an
unencumbered sum available that is at least equal to the amount of the application.

'8.2. Expenditure of other funds.

  All other funds committed to a Literary Fund project shall be expended before the Literary Fund loan shall be available for
disbursement to the locality for the approved project.

'8.3. Actual disbursements.

  Actual disbursements charged to the approved Literary Fund loan shall be subject to the submission of actual invoices
or other evidence of bills paid or due and payable by the locality.

'8.4. Award of construction contract.

  Upon the award of the construction contract for an application in Priority 1 on the Waiting List, funds shall be released
for the reimbursement of the design phase of architectural and engineering services for the project. Applications in Priorit y 2
shall be eligible for reimbursement of the design phase of architectural and engineering services only when the application h as
been certified to be eligible for funding by the board under '7.4.

'8.5. Conditions.

  After the submission to the Superintendent of Public Instruction of a copy of the plans and specifications with a letter
of approval by the division superintendent, accompanied with a statement by an architect or professional engineer licensed by
the Virginia Board for Architects, Professional Engineers, Land Surveyors and Landscape Architects that such plans and
specifications are, to the best of his knowledge and belief, in compliance with the regulations of the Board of Education and the
[Virginia] Uniform [Statewide] Building Code, the locality may proceed with a Literary Fund project and still qualify for
reimbursement from the Literary Fund under the following conditions.

   (1) A formal declaration is made by the governing body of intent to reimburse itself for prior expenditures
   paid for out of its general fund or to refinance debt that was used to pay or to reimburse itself for prior
   expenditures.
VR270-01-0009
Department of Education (State Board of Education)

Regulations
Governing Literary Loan Applications in Virginia
                                                      PART I

   (2) Short term financing, or advances from other fund balances and current operating funds, is used for
   that portion of the project to be financed by a Literary Fund loan ( '22.1-148.B of the Code of Virginia) which
   shall be subject to the restrictions found in '22.1-110 of the Code of Virginia; or permanent financing such
   as bond funds authorized through locally approved referenda, by local charter, the Virginia Public School
   Authority, or other funding mechanisms are used for the Literary Fund portion of the project, and the literary
   funds can be used for the refinancing or redemption of such negotiable notes, bonds, or other evidences of
   indebtedness or obligations.

'8.6. Returning application to Approved Application List.

 An application which has been approved for release of funds and which has not been bid within two months of the board
action to release funds will be returned to the Approved Application List. Upon the written request by the locality for
reinstatement, any application so returned shall be reinstated by the board at the bottom of the appropriate priority ( '7.2) of the
Waiting List. The date of the board's reinstatement on the Waiting List by this section shall determine the relative order f or
eligibility of funding.


                                                PART IX
                                           PROPERTY TRANSFER

'9.1. Property Transfer.

  When a school board or a local governing body sells or transfers property on which there is an outstanding balance on a
Literary Loan, such balance becomes due and must be paid before title to the property is conveyed to the new owner. In no
event, however, shall this provision be applicable where a court of competent jurisdiction decrees otherwise in an annexation
settlement, or where fee simple title, after sale or transfer, remains in either the school board or its governing body.

Authority: Chapter 10 ('22.1-140 and '22.1-142 et seq.) of Title 22.1 of the Code of Virginia; '8 of Article VIII of the
Constitution of Virginia
VR270-01-0009
Department of Education (State Board of Education)

Regulations
Governing Literary Loan Applications in Virginia
                                                     PART I


                                        Virginia Department of Education
                                       Non-Regulatory Supplemental Guidance for
                                                Literary Fund Regulations


Please note: The non-regulatory supplemental guidance provided in this section restates certain Literary Fund regulations
and then provides additional non-regulatory guidance for the regulation in italicized font.

'3.4. Nonapproval of application.

 Applications for Literary Fund loans will not be approved by the board if the project already has been bid prior to receipt o f the
application in the department, except in the case of a documented emergency.

Non-Regulatory Supplemental Guidance for '3.4. Nonapproval of application: If you consider applying for a loan from
the Literary Fund, please note that Literary Fund Loan applications must be received in the Department of Education prior to
the advertisement of bids. Neither the Board of Education nor the Superintendent of Public Instruction has the authority to
waive this requirement. Section 3.4 of the Regulations Governing Literary Loans in Virginia (8 VAC 20 -100-60) provides that
applications for Literary Fund loans will not be approved by the Board of Education if the project already has been bid prior to
receipt of the application in the Department of Education, except in the case of a documented emergency. “To Bid” is to issu e
the Invitation for Bid (IFB) (as defined in §2.2-4301 of the Code of Virginia). The issuance date is the date when the project is
advertised to the public.


'4.2. Qualification for placement.

 For applications on the Approved Application List to qualify for placement on the Waiting List, school divisions shall submit a
copy of the plans and specifications with a letter of approval by the division superintendent, accompanied with a statement b y
an architect or professional engineer licensed by the Virginia Board for Architects, Professional Engineers, Land Surveyors a nd
Landscape Architects that such plans and specifications are, to the best of his knowledge and belief, in compliance with the
regulations of the Board of Education and the [Virginia] Uniform [Statewide] Building Code.

Non-Regulatory Supplemental Guidance for '4.2. Qualification for placement: In addition, please note that '22.1-140 of
the Code of Virginia states that school divisions are required to send to the Department of Education (1) an approval letter
from the division superintendent; (2) a letter from the architect/engineer that the plans and specifications are in complianc e with
the School Building Regulations and Uniform Statewide Building Code; and, (3) a complete set of final plans and
specifications. Your application will not be placed on the Waiting List until each of these required items have been receiv ed by
the department. Please submit this information to the department as soon as it is available.


'5.1. Maximum loan amount.

 The maximum loan amount available for any single project through the Literary Fund is $5 million (effective for all applicati ons
approved by the Board subsequent to the effective date of these regulations).

Non-Regulatory Supplemental Guidance for '5.1. Maximum loan amount: The 1998 General Assembly amended '22.1-
147, Code of Virginia, that required the Board of Education to increase the maximum amount of a Literary Fund loan from $5.0
million to $7.5 million for a project. This statutory provision supersedes the current Board regulations ( '5.1. Maximum loan
amount) that set the maximum amount at $5.0 million. The maximum indebtedness to the Literary Fund will still remain at
$20.0 million in order for projects to be eligible for the First Priority Waiting List.
VR270-01-0009
Department of Education (State Board of Education)

Regulations
Governing Literary Loan Applications in Virginia
                                                 PART I
VR270-01-0009
Department of Education (State Board of Education)

Regulations
Governing Literary Loan Applications in Virginia
                                                 PART I
VR270-01-0009
Department of Education (State Board of Education)

Regulations
Governing Literary Loan Applications in Virginia
                                                 PART I
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                                                          Virginia Department of Education
                                                     Literary Fund Process Effective July 1, 2007

                 Step 1 - To apply                           Step 2 - To submit Requisition for Draws                Step 3 - To finalize Treasury Fund Loan


Locality applies to Literary Fund by submitting          After Board of Education releases loan, locality
application and resolutions certifying local             obtains bond counsel opinion and submits it with       Locality is required to pay accrued interest after
governing board and school board approval                requisition and supporting invoices, if required, to   completion of final draw
                                                         Department of Education for first draw




                                                         Department of Education reviews requisition,           Department of Treasury will send a Permanent Bond
Application processed through Department of              prepares voucher and sends to Department of            to the local governing body and school board to
Education office                                         Treasury to wire funds. Process repeated for future    execute
                                                         draws




                                                         Department of Treasury sends the local governing
Board of Education approves application which is         body and school board a Temporary Note to be           Treasury finalizes the debt service schedule and
moved to Approved Application List                       executed                                               notifies locality




Once plans are submitted to Department of
Education, application moves to First Priority           Locality returns executed note to Department of
Waiting List                                             Treasury




Board of Education approves funding; releases loan       Locality will complete the total loan requisition
                 GUIDELINES FOR LITERARY LOAN PROJECTS


Literary Loans may be used for:

The primary purpose of Literary Fund loans is to provide localities with capital construction
funds for the purpose of erecting, altering, or enlarging a public school building. Some
specific examples of qualifying costs include:

   ●   Brick and mortar
   ●   Asbestos abatement/radon mitigation/IAQ retrofits/Lead paint abatement
   ●   Site work to make the site ready for construction, drainage
   ●   Parking lot
   ●   Renovation/retrofit work (add, relocate walls)
   ●   Additions
   ●   Major electrical upgrades
   ●   Major plumbing upgrades
   ●   Energy improvement projects (Energy certificates no longer required)
           ■ HVAC
           ■ Efficient windows
           ■ Roofing (with additional roof insulation)
           ■ Boiler upgrades
           ■ Lighting (install energy efficient fixtures) including ceilings if lay-in
              fixtures
   ●   ADA upgrades
           ■ Ramps
           ■ Elevators
           ■ Accessible bathrooms and toilets
           ■ Signage
   ●   Materials and fixtures that are basic to finishing off construction project or
       required to use the building (lockers, ceiling tiles, trim work)
   ●   Technology infrastructure and built-in equipment
   ●   Equipment tied to safety (exhaust fans, showers)
   ●   Perimeter fencing around the school property for security purposes
   ●   Flagpoles

Literary Loans may NOT be used for:

   ● Site purchase
   ● Travel for hourly workers, such as architects or surveyors
   ● Landscaping that is cosmetic in nature
         ■ Earthwork or grading
         ■ Sowing of grass
         ■ Planting of shrubs
   ● Free standing furniture (office or instructional)
   ● Site work or materials and labor for detached gymnasium, ballparks, backdrops,
     playfields, stadiums, or bleachers
   ● Athletic equipment
   ● Loose technology equipment (computers, servers, „TV‟s, CD or laser disk players)
   ● Removal, upgrading or installing of aboveground or underground storage tanks
If you feel it useful, here is an example of a reimbursement resolution; however, it does not have
to be submitted to the Department of Education.



                           SAMPLE REIMBURSEMENT RESOLUTION


                                    RESOLUTION NO. ________


RESOLUTION OF THE [NAME OF GOVERNING BOARD] OF [NAME OF ISSUER] DECLARING ITS
INTENTION TO REIMBURSE ITSELF FROM THE PROCEEDS OF ONE OR MORE TAX-EXEMPT
FINANCINGS FOR CERTAIN EXPENDITURES MADE AND/OR TO BE MADE IN CONNECTION
WITH THE ACQUISITION, CONSTRUCTION AND EQUIPPING OF CERTAIN CAPITAL
IMPROVEMENTS

WHEREAS, [NAME OF ISSUER] (the “Issuer”) is a political subdivision organized and existing under the
laws of the Commonwealth of Virginia; and

WHEREAS, the Issuer [has paid, beginning no earlier than {DATE THAT IS NO MORE THAN 60 DAYS
PRIOR TO ADOPTION OF RESOLUTION} and] will pay, on and after the date hereof, certain
expenditures (the “Expenditures”) in connection with the capital project (the “Project”), as more fully
described in Appendix A attached hereto; and

WHEREAS, the [NAME OF GOVERNING BOARD] of the Issuer (the “Board”) has determined that the
money [previously advanced no more than 60 days prior to the date hereof and] to be advanced on and
after the date hereof to pay the Expenditures are available only for a temporary period and it is
necessary to reimburse the Issuer for the Expenditures from the proceeds of one or more issues of tax-
exempt bonds (the "Bonds");

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD AS FOLLOWS:

Section 1. The Board hereby declares the Issuer‟s intent to reimburse the Issuer with the proceeds of
the Bonds for the Expenditures with respect to the Project made on and after [{DATE THAT IS NO
MORE THAN 60 DAYS PRIOR TO ADOPTION OF RESOLUTION}, which date is no more than 60 days
prior to] the date hereof. The Issuer reasonably expects on the date hereof that it will reimburse the
Expenditures with the proceeds of the Bonds.

Section 2. Each Expenditure [was and] will be (a) of a type properly chargeable to capital account under
general federal income tax principles (determined in each case as of the date of the Expenditure) and (b)
complies with all applicable Literary Fund regulations.

Section 3. The maximum cost of the Project is expected to be $______________

Section 4. The Issuer will make a reimbursement allocation, which is a written allocation by the Issuer
that evidences the Issuer‟s use of proceeds of the Bonds to reimburse an Expenditure, no later than 18
months after the later of the date on which the Expenditure is paid or the Project is placed in service or
abandoned, but in no event more than three years after the date on which the Expenditure is paid. The
Division recognizes that exceptions are available for certain “preliminary expenditures,” costs of
issuance, certain de minimis amounts, expenditures by “small issuers” (based on the year of issuance
and not the year of expenditure) and expenditures for construction projects of at least 5 years.

Section 5. This resolution shall take effect immediately upon its passage.
           PASSED AND ADOPTED this ____________ day of ___________, 200__


                                                       ____________________________
                                                                  (Name)
                                                                  (Title)


Attested to:

_____________________________
         (Name)
         (Title)




___________________________________________________________________________________
                                                 APPENDIX A


DESCRIPTION OF PROJECT


[Describe the project for which the Expenditures have been and/or will be paid.]
sting under the




e than 60 days




nditure) and (b)

								
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