1. (a) There is established the Academic Facilities High-Growth School District Loan Program (HGLP) under which the Department of Education shall provide an interest-free loan for construction of new academic facilities to a high-growth school district in which the mills required to service the existing bonded indebtedness incurred for existing academic facilities exceeds the maximum expected millage for the high-growth school district.

2. (b) A school district may be eligible for the HGLP if:

   1. (1) The district participates in the Academic Facilities Partnership Program;
   2. (2) The school district has raised the maximum expected millage and the revenue generated from the maximum expected millage is less than the amount required to service the bonded indebtedness incurred for academic facilities;
   3. (3) The ADM of the school district in the present school year is at least four percent (4%) higher than the ADM of the school year that is two (2) years prior to the present year; and
   4. (4) Total space available in the district is less than the amount needed to accommodate the growth of students.

3. (c)

   1. (1) The purpose of the loan to a high-growth school district is to assist such a school district with building new academic facilities.
   2. (2) All projects submitted through the HGLP must first have approval through the Academic Facilities Partnership Program.

4. (d)

   1. (1) Applications for the HGLP must be submitted to the Division of Public School Academic Facilities and Transportation between February 1 and April 15 of each year.

   2. (2) The application process is as follows:

      1. (A)
5. (i) In January of each year, the department will publish a preliminary list of school districts that:
6. (a) (a) Have voted at least ten (10) debt service mills; and

7. (b) (b) Require at least ten (10) debt service mills to service outstanding bonded indebtedness.

   1. (ii) The required breakdown into academic and nonacademic debt service mills required and voted will not be available at the time of the publication of this list;

      1. (B)

         1. (i) The division will verify that school districts submitting applications meet the requirement of participation in the partnership program.
         2. (ii) If this requirement is met, the division will calculate the Academic Facilities Factor;
      2. (C) The division will provide the Academic Facilities Factor to the department within five (5) business days of the receipt of the application;
      3. (D) The department will use the Academic Facilities Factor to determine that the school district qualifies based on the maximum expected millage;
      4. (E) Following receipt of the ADM data for the school district from APSCN, the department will verify that the school district qualifies based on growth;

      5. (F) The division will:

         1. (i) Verify that the total space available in the high-growth district is less than the amount needed to accommodate the growth of students;
         2. (ii) Determine if the district has restructured the delivery of education to use all available space; and
         3. (iii) Forward the school district loan application to the department;
      6. (G) The application will be considered at the May Loans and Bonds Committee meeting;
      7. (H) The State Funding/Loans and Bonds Unit will present applications to the State Board of Education at its June meeting; and
      8. (I) The district will be notified in writing of the decision by the state board.

8. (e) The amount of the loan shall be the amount of moneys required for academic facilities less the sum of:

   1. (1) The revenues generated by the maximum expected millage; and
   2. (2) The state revenue received by the high-growth school district under the Academic Facilities Partnership Program.

9. (f) The high-growth school district shall apply for the loan from the Revolving Loan Fund, subject to:

   1. (1) Arkansas Code §§ 6-20-801 – 6-20-816;
   2. (2) Arkansas Code § 6-20-2511; and
   3. (3) This part.
10. (g) When the revenue required to service the bonded indebtedness incurred for the high-growth school district’s academic facilities is less than the revenue generated by maximum expected millage, the high-growth school district shall repay the loan.

11. (h)

    1. (1) The high-growth school district shall make annual payments to the department in the amount of:

       1. (A) The revenue generated by the high-growth school district’s millage up to the amount of the revenues generated from the maximum expected millage for the year; less
       2. (B) The revenue required to service the high-growth school district’s bonded indebtedness for academic facilities.

    2. (2) The payments under subsections (g) and (h) of this section shall continue until the loan is paid in full.

       1. (i) During the time that the loan to the high-growth school district is in repayment, the high-growth school district:
    3. (1) Shall use all revenues generated below the maximum expected millage to repay the loan;
    4. (2) Shall not issue revolving loan refunding bonds or revolving loan refunding certificates as provided under Arkansas Code § 6-20-815; and

    5. (3)

       1. (A) Shall not otherwise change the amount of ad valorem tax revenues from debt service mills available to repay the loan without the prior approval of the department.
       2. (B) Bonds issuances or millage changes that would adversely affect the repayment of this loan will not be considered in the calculation of the annual payment under subsection (h) of this section.

12. (j)

    1. (1) Within a reasonable time after its receipt, each application under subsections (b) – (f) of this section shall be examined by the department and division in accordance with rules established by the state board as to the accuracy of the answers contained therein.
    2. (2) Changes to information contained in the application may be submitted up to the date of the May committee meeting.
    3. (3) Subsequent changes will not be considered.
    4. (4) If a determination is made by the department that the district knowingly provided false or misleading information in the application process, the department has the discretion to void the loan approval, seek restitution, and/or revoke the superintendent’s license as allowed under Arkansas Code § 6-17-410.

13. (k) In considering each application, the division shall determine:

    1. (1) That the district meets the definition of a “high-growth school district” as contained in 6 CAR § 274-102(5);
    2. (2) That the total space available in the high-growth school district is less than the amount needed to accommodate the high growth; and

    3. (3) That the high-growth school district has already restructured the delivery of education to use all available space.

       1. (l) After considering each application, the committee may in its discretion recommend:

    4. (1) Approval of the application to the state board for:

       1. (A) The full amount of the proposed loan; or
       2. (B) A lesser amount than the amount requested; or

    5. (2) Disapproval of the application to the state board.

       1. (m) The committee should notify each applicant school district by June 30 of each year as to whether the high-growth school district loan has been approved or denied.
14. (n) The department and division shall promulgate forms and documents to be used by school districts in the loan application process.
15. (o) This implementation of this program is subject to funding specifically made available for this purpose.

Codification Notes: "ADM" means Average Daily Membership. "APSCN" means Arkansas Public School Computer Network.