10.1-603.19 - Purposes for which Fund is to be used; Authority to set terms and conditions of loans.
§ 10.1-603.19. Purposes for which Fund is to be used; Authority to set termsand conditions of loans.
A. The Director is authorized to make grants or loans to any local governmentfor the purpose of assisting the local government in the development andimplementation of flood prevention or protection projects, or for floodprevention or protection studies.
B. The Director is authorized to expend from the Fund up to $50,000 annuallyfor cost share with federal agencies in flood protection studies of statewideor regional significance.
C. The Director is also authorized, in order to protect public safety andwelfare, to make grants or loans to local governments owning dams and to makeloans to private entities for the design, repair and the safety modificationsof dams identified in safety reports generated pursuant to § 10.1-607 or10.1-609, and to make grants to local governments and private entities fordam break analysis, the mapping and digitization of dam break inundationzones, and incremental damage analysis.
D. The total amount of expenditures for grants in any fiscal year shall notexceed 50 percent of the total noninterest or income deposits made to theFund during the previous fiscal year, together with the total amountcollected in interest or income from the investment of moneys in the Fundfrom the previous fiscal year as determined at the beginning of the fiscalyear.
E. Any grants made from the Fund shall require a 50 percent project match bythe applicant. Any loans made from the Fund shall require a minimum of a 10percent project match by the applicant.
F. Except as otherwise provided in this article, money in the Fund shall beused solely to make loans or grants to local governments or private entitiesto finance or refinance the cost of a project. The local government orprivate entity to which loans or grants are made, the purposes of the loan orgrant, the required match for the specific loan or grant, and the amount ofeach loan or grant, shall be designated in writing by the Director to theAuthority. No loan or grant from the Fund shall exceed the total cost of theproject to be financed or the outstanding principal amount of theindebtedness to be refinanced plus reasonable financing expenses. Loans mayalso be from the Fund, at the Director's discretion, to a local governmentthat has developed a low-interest loan program to provide loans or otherincentives to facilitate the correction of dam or impounding structuredeficiencies, as required by the Department, provided that the moneys are tobe used only for the program and that the dams or impounding structures to berepaired or upgraded are owned by private entities.
G. Except as otherwise provided in this article, the Authority shalldetermine the interest rate and terms and conditions of any loan from theFund, which may vary between different loans and between local governmentsand private entities to finance or refinance the cost of a project. Each loanshall be evidenced by appropriate bonds or notes of the local government orby the appropriate debt instrument for private entities payable to the Fund.Private entities shall duly authorize an appropriate debt instrument andexecute same by their authorized legal representatives. The bonds or notesshall have been duly authorized by the local government and executed by itsauthorized legal representatives. The Authority may require in connectionwith any loan from the Fund such documents, instruments, certificates, legalopinions, covenants, conditions, and other information as it may deemnecessary or convenient to further the purpose of the loan. In addition toany other terms or conditions that the Authority may establish, the Authoritymay require, as a condition to making any loan from the Fund, that the localgovernment or private entity receiving the loan covenant to perform any ofthe following:
1. Establish and collect rents, rates, fees, and charges to produce revenuesufficient to pay all or a specified portion of (i) the costs of operation,maintenance, replacement, renewal, and repairs of the project; (ii) anyoutstanding indebtedness incurred for the purposes of the project, includingthe principal of, premium, if any, and interest on the loan from the Fund;and (iii) any amounts necessary to create and maintain any required reserve,including any rate stabilization fund deemed necessary or appropriate by theAuthority to offset the need, in whole or part, for future increases inrents, rates, fees, or charges;
2. With respect to local governments, levy and collect ad valorem taxes onall property within the jurisdiction of the local government subject to localtaxation sufficient to pay the principal of and premium, if any, and intereston the loan from the Fund to the local government;
3. Create and maintain a special fund or funds for the payment of theprincipal of, premium, if any, and interest on the loan from the Fund and anyother amounts becoming due under any agreement entered into in connectionwith the loan, or for the operation, maintenance, repair, or replacement ofthe project or any portions thereof or other property of the borrower, anddeposit into any fund or funds amounts sufficient to make any payments on theloan as they become due and payable;
4. Create and maintain other special funds as required by the Authority;
5. Perform other acts otherwise permitted by applicable law to secure paymentof the principal of, premium, if any, and interest on the loan from the Fundand to provide for the remedies of the Fund in the event of any default bythe borrower in payment of the loan, including, without limitation, any ofthe following:
a. The conveyance of, or the granting of liens on or security interests in,real and personal property, together with all rights, title and interesttherein;
b. The procurement of insurance, guarantees, letters of credit and otherforms of collateral, security, liquidity arrangements or credit supports forthe loan from any source, public or private, and the payment therefor ofpremiums, fees, or other charges;
c. The combination of one or more projects, or the combination of one or moreprojects with one or more other undertakings, facilities, utilities, orsystems, for the purpose of operations and financing, and the pledging of therevenues from such combined projects, undertakings, facilities, utilities andsystems to secure the loan from the Fund borrower made in connection withsuch combination or any part or parts thereof;
d. The maintenance, replacement, renewal, and repair of the project; and
e. The procurement of casualty and liability insurance;
6. Obtain a review of the accounting and internal controls from the Auditorof Public Accounts or his legally authorized representatives, as applicable.The Authority may request additional reviews at any time during the term ofthe loan. In addition, anyone receiving a report in accordance with §10.1-603.23 may request an additional review as set forth in this section; and
7. Directly offer, pledge, and consent to the Authority to take actionpursuant to § 62.1-216.1 to obtain payment of any amounts in default, asapplicable.
All local governments or private entities borrowing money from the Fund areauthorized to perform any acts, take any action, adopt any proceedings, andmake and carry out any contracts that are contemplated by this article. Suchcontracts need not be identical among all local governments or privateentities, but may be structured as determined by the Authority according tothe needs of the contracting local governments or private entities and theFund.
Subject to the rights, if any, of the registered owners of any of the bondsof the Authority, the Authority may consent to and approve any modificationin the terms of any loan to any local government.
(1989, cc. 462, 498; 1995, c. 510; 2002, c. 320; 2005, c. 80; 2006, cc. 648,765; 2010, c. 13.)