CHAP. 187.—An ACT to amend ard re-enact chapter 252 of acts of the
general assembly of 1906, entitled an act to authorize the several
school boards of the school districts in this State to borrow money
belonging to the literary fund for certain purposes, and to authorize
the loan of said funds to each district, as amended by chapter 82 of
the acts of 1908 and chapter 359 of the acts of 1914.

(H. B. 129.)

Approved March 16, 1916.

1. Be it enacted by the general assembly of Virginia. That
chapter two hundred and fifty-two of the acts of assembly of
nineteen hundred and six, entitled an act to authorize the sev-
eral schcol boards of the school districts in this State to borrow
money belonging to the literary fund for certain purposes, and
to authorize the loan of said funds to each district, as amended
by chapter eighty-two of the acts of nineteen hundred and e’ght
and chapter three hundred and fiftv-nine of the acts of nine-
teen hundred and fourteen, be amended and re-enacted so as to
read as follows:
1916.] ACTS OF ASSEMBLY. 379

Section 1. That the State board of education be, and it is
hereby authorized to lend to the school boards of the school dis-
tricts and cities in this State making application therefor, money
belonging to the literary fund and in hand for investment for
the purpose of erecting or enlarging school-houses in such dis-
tricts and cities, on the terms and conditions hereinafter set
forth and subject to such rules and regulations as may be pro-
mulgated by the said board.

Sec. 2. The several school boards in this State, as afore-
said, are hereby authorized to borrow money belonging to the
said literary fund, and the district or city school board desiring
to borrow a part of said fund shall make written application to
the State board of education and shall set forth therein (one)
the amount of the proposed loan; (two) the plans and specifi-
cations, estimated cost and Iccation of the building to be erected;
and (three) facts showing the advisability of erecting the same.

Sec. 3. Upon the approval of the State superintendent of
public instruction of the plans and specifications for the loca-
tion of the proposed building and of the making of the loan,
the State board of education may, in its discretion, make such
joan: provided, that no such loan shall exceed the sum of fifteen
thousand dollars, nor shall it exceed two-thirds of the cost of
the school house and any addition thereto, and no loan shall be
made to aid in the erection of a building or addition to cost less
than two hundred and fifty dollars. Whenever such loans are
made for the purpose of enlarging a school house, any part of
the proceeds of such loans may, in the discretion of the State
board, be used to retire any previous loans on such school houses,
although such previous loan may not have matured.

Sec. 4. All loans not exceeding three thousand dollars, shall
bear interest at the rate of three per centum per annum, and all
loans over said amount shall bear interest at the rate of four
per centum per annum, payable on the ............ day of
pases seme aewpeweaowes , the principal thereof shall be payable
in fifteen annual installments, and shall be evidenced by bonds
or notes payab’e to the Commonwealth of Virginia for the bene-
fit of the literary fund,—executed or signed by the chairman of
the school boards of each district and attested bv the clerk
thereof.. Payments of interest and principal shall be made to
the State treasurer through the second auditor and evidences
of debt taken for such loans shall be deposited with second
auditor end kept by him.

Sec. 5. The school boards borrowing funds under the pro-
visions of this act shall request the board of supervisors or the
councils of their respective counties or cities or towns to cause
a district tax to be levied sufficient to meet its liabilities on such
contract; and in the event that such board shall fail to pay any
installment of interest or principal promptly, then upon notice
in writing to that effect from the second auditor or from the
State superintendent of public instruction, the county or city
treasurer or other person having the custody of the district
funds of such district shall pay to the State treasurer, through
the second auditor, any such past due installment of interest or
principal out of any district funds in his hands belonging to
the district or school board. The failure of the school board
of a district or city, or the board of supervisors, or the council
of a city or town to provide for the payment of such loan shall
be deemed a cause for removal from office.

Sec. 6. Befcre making any loan under this act, the State
board of education shall be satisfied that the school district or
board borrowing the fund has a good and sufficient title in fee
to the real estate on which the proposed building is to be erected,
or that the same has been leased by the local school authorities
for a period of twenty years, or more, upon such terms that
there is no liability of the loss of any money that may be loaned
under the provisions of this act, and that the same is free from
incumbrances, and shall take proper measure to secure the ex-
penditures of the money for the purpose for which it is loaned;
and in cases where loans are made for the enlargement of school
houses, previous loans thereon made from the literary fund shall
not be considered an incumbrance within the meaning of this
section, provided in no case shall the total amount of loans from
the literary fund be in excess of the amount herein prescribed,
nor more than two-thirds, of the cost of such school house and
the addition thereto.

Sec. 7. The board of education by reasonable rules and
regulations, shall provide for an equitable distribution of the
funds loaned under this act amongst the several school districts
and sections of the State.

Sec. 8. All loans made under this act, including interest
thereon, shall constitute a specific lien on said school houses and
any additions thereto and upon the school lots whereon said
buildings are situated; and all such buildings shall be kept fully
and adequately insured for the benefit of the literary fund of
the Commonwealth of Virginia, and the policy or policies of in-
surance shall be kept on file in the office of the second auditor.

No loan shall be made under this act in any case in which
the payment of the same with interest would, in the judgment
of the State board of education, entail too heavy a charge upon
the revenues of the school district to which such loan is granted.