(1) For purposes of this section:

(a) "Capital improvement" means:

(I) The acquisition or purchase of buildings or grounds;

(II) The enlargement, improvement, remodeling, repairing, or making of additions to any school building;

(III) The construction or erection of school buildings;

(IV) The equipping or furnishing of any school building, but only in conjunction with a construction project for a new building or for an addition to an existing building or in conjunction with a project for substantial remodeling, improvement, or repair of an existing building; or

(V) The improvement of school grounds.

(b) "Growth district" means any district whose supplemental pupil enrollment exceeded the district's pupil enrollment for the most recently completed budget year by a number greater than one percent of the district's pupil enrollment for that budget year or fifty pupils, whichever is less.

(2) As authorized under the provisions of section 3 of article IX of the state constitution, the state treasurer may make loans to growth districts for the purpose of funding capital improvements. The procedures for the making of loans shall be determined by the state treasurer subject to the following:

(a) No loan shall be authorized for any capital improvement that has not been approved by the state board in accordance with subsection (3) of this section.

(b) No loan shall be authorized in an amount other than the amount determined by the state board unless the state board approves the change in the loan amount; except that the state board shall not authorize an amount of a loan for any growth district that exceeds ten percent of the amount of the public school fund that the state treasurer has determined may be loaned out in accordance with subsection (5) of this section.

(c) No loan shall be authorized unless the debt is approved by the voters of the growth district.

(d) No loan shall be authorized unless the method for repayment of the loan is specified in the application. If the loan is to be repaid from a property tax mill levy, such levy must be approved at the same election that authorized the creation of the debt.

(e) The loan shall be made as soon as possible upon approval of the loan by the state board.

(3) (a) On and after January 1, 2003, a growth district may apply to the state board for a loan of public school fund moneys to be used by the growth district to pay for one or more capital improvements. The amount of the loan requested shall be an amount equal to the full cost of the capital improvement or a lesser amount that in combination with other financial resources of the growth district shall allow the capital improvement to be completed. The loan application shall be in a form prescribed by the state board and shall include:

(I) A description of the capital improvement for which a loan is sought and a statement of the reasons why the capital improvement is necessary;

(II) A timeline for completion of the capital improvement;

(III) A building permit for the capital improvement, if applicable;

(IV) A statement of the amount of the loan requested together with an estimate of the cost of the capital improvement prepared by a qualified builder or contractor. If the amount of the loan requested differs from the amount of the estimate of the cost of the capital improvement, the growth district shall also provide an explanation for the difference.

(V) A plan for repaying the loan, including a proposed repayment schedule;

(VI) A statement of the amount of moneys from other sources, if any, that the growth district intends to use to help defray the costs of the capital improvement; and

(VII) Any additional information that the state board may reasonably require, by rules promulgated in accordance with article 4 of title 24, C.R.S., to help it determine whether or not to approve the loan application.

(b) To ensure that a growth district applying for a loan can move forward with any capital improvements quickly or develop alternative financing strategies without undue delay, the state board shall approve or disapprove a loan application no later than forty-five days after the application is submitted. To ensure that loan applications can be processed efficiently, the state board may delegate the authority to approve loan applications to a designated employee of the department. The state board or its designee shall consider all of the information in an application before approving or disapproving the application and a growth district whose loan application is denied shall have no right to further review by the state board or its designee.

(4) The state board shall establish a repayment schedule that shall require the growth district to make monthly payments on the loan and fully repay all moneys borrowed within ten years after the date a loan is made available pursuant to subsection (2) of this section.

(5) The state treasurer shall determine the amount of the public school fund that may be loaned out pursuant to this section and the rate of interest to be charged on loans. The state treasurer shall charge interest on loans made at a rate designed to match the rate of interest derived from the deposit and investment of moneys in the public school fund. Payments of the principal of and interest on all loans shall be returned to the fund.

(6) The general assembly shall appropriate money from the general fund to restore moneys to the public school fund, together with interest, that are lost by reason of the failure of any school district to repay a loan made pursuant to this section.