36-156.2 - Virginia Defective Drywall Correction and Restoration Assistance Fund established; uses.
§ 36-156.2. Virginia Defective Drywall Correction and Restoration AssistanceFund established; uses.
A. There is hereby created and set apart a special, permanent, perpetual, andnonreverting fund to be known as the Virginia Defective Drywall Correctionand Restoration Assistance Fund for the purposes of promoting the correctionand restoration of residential property affected by the environmentalproblems attributable to defective drywall or overcoming obstacles to theremediation of such properties attributable to the real or presumed presenceof defective drywall. The Fund shall consist of such sums that may beappropriated to the Fund by the General Assembly, sums from all receipts bythe Fund from loans made by it, all income from the investment of moneys heldin the Fund, and any other sums designated for deposit to the Fund from anysource, public or private, including any federal grants, awards, or otherforms of financial assistance received by the Commonwealth.
B. The Authority shall administer and manage the Fund and establish theinterest rates and repayment terms for loans made to eligible entities orindividuals in accordance with a memorandum of agreement with the Departmentof Housing and Community Development. The Department of Housing and CommunityDevelopment shall direct the distribution of loans or grants from the Fund toparticular recipients based upon guidelines developed for this purpose. Withapproval from the Department of Housing and Community Development, theAuthority may disperse moneys from the Fund for the payment of reasonable andnecessary costs and expenses incurred in the administration and management ofthe Fund. The Authority may establish and collect a reasonable fee onoutstanding loans for its management services.
C. All money belonging to the Fund shall be deposited in an account oraccounts in banks or trust companies organized under the laws of theCommonwealth or in national banking associations located in Virginia or insavings institutions located in Virginia organized under the laws of theCommonwealth or the United States. The money in these accounts shall be paidby check and signed by the Executive Director of the Authority or otherofficers or employees designated by the Board of Directors of the Authority.All deposits of money shall, if required by the Authority, be secured in amanner determined by the Authority to be prudent, and all banks, trustcompanies, and savings institutions are authorized to give security for thedeposits. Money in the Fund shall not be commingled with other money of theAuthority. Money in the Fund not needed for immediate use or disbursement maybe invested or reinvested by the Authority in obligations or securities thatare considered lawful investments for public funds under the laws of theCommonwealth. Expenditures and disbursements from the Fund shall be made bythe Authority upon written request signed by the Director of the Departmentof Housing and Community Development.
D. The Authority is empowered to collect, or to authorize others to collecton its behalf, amounts due to the Fund under any loan including, ifappropriate, taking the action required by § 15.2-2659 to obtain payment ofany amounts in default. Proceedings to recover amounts due to the Fund may beinstituted by the Authority in the name of the Fund in the appropriatecircuit court.
E. The Department of Housing and Community Development may approve grants tolocal governments for the purposes of promoting the correction or restorationof residential real property and addressing environmental problems orobstacles to the correction or restoration of such properties. The grants maybe used to pay the reasonable and necessary costs associated with theremediation of a contaminated property to remove hazardous substances,hazardous wastes, or solid wastes or the stabilization or restoration ofthese structures or the demolition and removal of the existing structures orother work necessary to remediate or reuse the real property. The Departmentof Housing and Community Development may establish such terms and conditionsas it deems appropriate and shall evaluate each grant request in accordancewith the guidelines developed for this purpose. The Authority shall disbursegrants from the Fund in accordance with a written request from the Departmentof Housing and Community Development.
F. The Authority may make loans to local governments, public authorities,corporations, partnerships, or innocent landowners to finance or refinancethe cost of any defective drywall restoration or remediation project for thepurposes of promoting the restoration and redevelopment of residential realproperty and addressing real environmental problems or obstacles to reuse ofthese properties. The loans shall be used to pay the reasonable and necessarycosts related to the restoration and redevelopment of residential realproperty for the remediation of a contaminated property to remove hazardoussubstances, hazardous wastes, or solid wastes; stabilization or restorationof the affected properties; demolition and removal of existing structures; orother work necessary to remediate or reuse the real property.
The Department of Housing and Community Development shall designate inwriting the recipient of each loan, the purposes of the loan, and the amountof each such loan. No loan 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.
G. Except as otherwise provided in this chapter, the Authority shalldetermine the interest rate and terms and conditions of any loan from theFund, which may vary between local governments. Each loan shall be evidencedby appropriate bonds or notes of the loan recipient payable to the Fund. Thebonds or notes shall have been duly authorized by the local government andexecuted by its authorized legal representatives. The Authority is authorizedto require in connection with any loan from the Fund such documents,instruments, certificates, legal opinions, and other information as it maydeem necessary or convenient. In addition to any other terms or conditionsthat the Authority may establish, the Authority may require, as a conditionto making any loan from the Fund, that the entity receiving the loan covenantand perform any of the following:
1. Establish and collect rents, rates, fees, taxes, and charges to producerevenue sufficient to pay all or a specified portion of (i) the costs of theproject, (ii) any outstanding indebtedness incurred for the purposes of theproject, including the principal of, premium, if any, and interest on theloan from the Fund to the local government, and (iii) any amounts necessaryto create and maintain any required reserve.
2. Levy and collect ad valorem taxes on all property within the jurisdictionof the local government subject to local taxation sufficient to pay theprincipal of and premium, if any, and interest on the loan from the Fund tothe 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 to thelocal government and any other amounts becoming due under any agreemententered into in connection with the loan, or the project or any portionsthereof or other property of the local government, and deposit into any fundor funds amounts sufficient to make any payments on the loan as they becomedue 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 Fundto the local government and to provide for the remedies of the Fund in theevent of any default by the local government in the payment of the loan,including, without limitation, any of the 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, to the Fund;
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, for the purpose of financing,and the pledging of the revenues from such combined projects and undertakingsto secure the loan from the Fund to the local government made in connectionwith such 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 the internal controls from theAuditor of Public Accounts or his legally authorized representatives. TheAuthority may request additional reviews at any time during the term of theloan.
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.
H. All local governments borrowing money from the Fund are authorized toperform any acts, take any action, adopt any proceedings, and make and carryout any contracts that are contemplated by this chapter. Such contracts neednot be identical among all local governments, but may be structured asdetermined by the Authority according to the needs of the contracting localgovernments and the Fund.
I. Subject to the rights, if any, of the registered owners of any of thebonds of the Authority, the Authority may consent to and approve anymodification in the terms of any loan to any local government.
J. The Department of Housing and Community Development, through its Director,shall have the authority to access and release moneys in the Fund forpurposes of this section as long as the disbursement does not exceed thebalance of the Fund. If the Department of Housing and Community Development,through its Director, requests a disbursement in an amount exceeding thecurrent Fund balance, the disbursement shall require the written approval ofthe Governor. Disbursements from the Fund may be made for the purposesoutlined in this section, including, but not limited to, personnel,administrative, and equipment costs and expenses directly incurred by thePartnership or the Authority, or by any other agency or political subdivisionacting at the direction of the Department of Housing and CommunityDevelopment.
K. The Authority is empowered at any time and from time to time to sell, uponsuch terms and conditions as the Authority shall deem appropriate, any loan,or interest therein, made pursuant to this chapter. The net proceeds of saleremaining after the payment of the costs and expenses of the sale shall bedesignated for deposit to, and become part of, the Fund.
L. The Authority may, with the approval of the Department of Housing andCommunity Development, pledge, assign, or transfer from the Fund to banks ortrust companies designated by the Authority any or all of the assets of theFund to be held in trust as security for the payment of the principal of,premium, if any, and interest on any or all of the bonds, as defined in §62.1-199, issued to finance any project. The interests of the Fund in anyassets so transferred shall be subordinate to the rights of the trustee underthe pledge, assignment, or transfer. To the extent funds are not availablefrom other sources pledged for such purpose, any of the assets or payments ofprincipal and interest received on the assets pledged, assigned, ortransferred or held in trust may be applied by the trustee thereof to thepayment of the principal of, premium, if any, and interest on such bonds ofthe Authority secured thereby, and, if such payments are insufficient forsuch purpose, the trustee is empowered to sell any or all of such assets andapply the net proceeds from the sale to the payment of the principal of,premium, if any, and interest on such bonds of the Authority. Any assets ofthe Fund pledged, assigned, or transferred in trust as set forth above andany payments of principal, interest, or earnings received thereon shallremain part of the Fund but shall be subject to the pledge, assignment, ortransfer to secure the bonds of the Authority and shall be held by thetrustee to which they are pledged, assigned, or transferred until no longerrequired for such purpose by the terms of the pledge, assignment, or transfer.
M. The Department of Housing and Community shall develop guidelines governingthe use of the Fund and including criteria for project eligibility thatconsiders the extent to which a grant or loan will facilitate the use orreuse of the existing residential property, the extent to which a grant orloan will meet the needs of a recipient, the potential restoration of theproperty, the economic and environmental benefits to the surroundingcommunity, and the extent of the perceived or real environmentalcontamination at the site.
(2010, c. 820.)