Proposal would offer school districts interest-free loans for building projects

The commissioner of school and public lands could approve loans for school building projects. Eligible districts could borrow up to 40% of the cost to construct or expand buildings housing kindergarten through 12th-grade instruction and other school functions. Loans would depend on approval and available money; the proposal sets aside only $1. Districts would pay no interest and would not have to pledge property as security. The commissioner could use up to 1% of a loan's principal to cover the costs of managing it. Districts would make equal annual payments over 20 years, with the first payment due one year from the date the loan is funded.

The state treasurer would transfer $1 from the general fund to the school building construction fund, with that money set aside for loans. The commissioner of school and public lands would manage the school building construction fund. Interest earned would stay in the fund, and repaid principal would support further loans. Money designated for loans would be set aside through the state's general budget bill. The commissioner would report loan numbers, amounts, recipients, and other requested program information to the special legislative committee identified in section 4-8A-2. Reports would be due on or before August 1 each year. The proposal specifies June 30, 2026, as its effective date, but the recorded actions do not show enactment.

The commissioner of school and public lands would set rules for applications, loan approval, and payment of loans. These eligibility and review rules would apply to school districts seeking loans from the school building construction fund. Districts eligible for a loan under section 11-15-8 would be excluded. Districts with fewer than 150 students in fall enrollment would be excluded unless officially designated as sparse school districts. Review rules would set limits for school building fund balances, money transferred out during the previous ten years, and current property tax rates for that fund. Rules would also set the minimum increase in the district's school building property tax rate needed to repay the loan.