                                 CODE OF VIRGINIA

PURPOSES FOR WHICH FUND IS TO BE USED; AUTHORITY TO SET TERMS AND CONDITIONS OF
LOANS (§ 10.1-603.19)

A. The Director may make grants or loans to any local government for the purpose
of assisting the local government in the development and implementation of flood
prevention or protection projects, or for flood prevention or protection
studies.

B. The Director may expend from the Fund up to $50,000 annually for cost share
with federal agencies in flood protection studies of statewide or regional
significance.

C. The Director may, in order to protect public safety and welfare, make (i)
grants or loans to a local government that owns a dam, to a local government for
a dam located within the locality, or to a private entity that owns a dam for
the design, repair, and safety modifications of such a dam if it is identified
in a safety report generated pursuant to &#xA7; 10.1-607 or 10.1-609 and (ii)
grants to a local government or private entity for the determination of the
hazard classification for impounding structures, dam break analysis, the mapping
and digitization of dam break inundation zones, incremental damage analysis, and
other engineering requirements, such as emergency action plan development and
inspection reports.

D. The Director may, in order to reduce dam owner expenses associated with
hazard classification, dam break analysis, the mapping and digitization of dam
break inundation zones, incremental damage analysis, and other engineering
requirements, such as emergency action plan development and inspection reports,
expend moneys from the Fund to employ staff or to directly contract for these
services. The Director may establish a fee to be paid by the dam owner to offset
a portion of these services. Such fee shall not exceed 50 percent of the cost
incurred by the Department.

E. The Director may, in order to protect people at risk from a dam failure and
to assist dam owners, localities, and emergency responders, expend moneys from
the Fund to maintain a statewide dam failure early warning system in cooperation
with the Department of Emergency Management and the U.S. National Weather
Service.

F. The total amount of expenditures for grants in any fiscal year shall not
exceed 50 percent of the total noninterest or income deposits made to the Fund
during the previous fiscal year, together with the total amount collected in
interest or income from the investment of moneys in the Fund from the previous
fiscal year as determined at the beginning of the fiscal year.

G. Any grants made from the Fund pursuant to clause (i) of subsection C shall
require a 30 percent project match by the applicant. Any loans made from the
Fund for such activities or for engineering requirements needed to complete such
activities included in clause (i) of subsection C shall require a minimum of a
10 percent project match by the applicant.

H. Any grants made from the Fund pursuant to clause (ii) of subsection C shall
require no more than a 10 percent match by the applicant except that the
applicant shall be required to provide a minimum of $5,000 of the cost of the
project, if funded. The match provided by the applicant may be used to pay the
application fees for the necessary impounding structure operation and general
permit pursuant to &#xA7; 10.1-605.3 or maintenance certificate.

I. Except as otherwise provided in this article, moneys in the Fund shall be
used solely to make loans or grants to local governments or private entities to
finance or refinance the cost of a project. The local government or private
entity to which loans or grants are made, the purposes of the loan or grant, the
required match for the specific loan or grant, and the amount of each loan or
grant, shall be designated in writing by the Director to the Authority. No loan
or grant from the Fund shall exceed the total cost of the project to be financed
or the outstanding principal amount of the indebtedness to be refinanced plus
reasonable financing expenses. Loans may also be from the Fund, at the
Director&#8217;s discretion, to a local government that has developed a
low-interest loan program to provide loans or other incentives to facilitate the
correction of dam or impounding structure deficiencies, as required by the
Department, provided that the moneys are to be used only for the program and
that the dams or impounding structures to be repaired or upgraded are owned by
private entities.

J. Except as otherwise provided in this article, the Authority shall determine
the interest rate and terms and conditions of any loan from the Fund, which may
vary between different loans and between local governments and private entities
to finance or refinance the cost of a project. Each loan shall be evidenced by
appropriate bonds or notes of the local government or by the appropriate debt
instrument for private entities payable to the Fund. Private entities shall duly
authorize an appropriate debt instrument and execute same by their authorized
legal representatives. The bonds or notes shall have been duly authorized by the
local government and executed by its authorized legal representatives. The
Authority may require in connection with any loan from the Fund such documents,
instruments, certificates, legal opinions, covenants, conditions, and other
information as it may deem necessary or convenient to further the purpose of the
loan. In addition to any other terms or conditions that the Authority may
establish, the Authority may require, as a condition to making any loan from the
Fund, that the local government or private entity receiving the loan covenant to
perform any of the following:

   1. Establish and collect rents, rates, fees, and charges to produce revenue
   sufficient to pay all or a specified portion of (i) the costs of operation,
   maintenance, replacement, renewal, and repairs of the project; (ii) any
   outstanding indebtedness incurred for the purposes of the project, including
   the 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 the
   Authority to offset the need, in whole or part, for future increases in rents,
   rates, fees, or charges;

   2. With respect to local governments, levy and collect ad valorem taxes on all
   property within the jurisdiction of the local government subject to local
   taxation sufficient to pay the principal of and premium, if any, and interest
   on the loan from the Fund to the local government;

   3. Create and maintain a special fund or funds for the payment of the
   principal of, premium, if any, and interest on the loan from the Fund and any
   other amounts becoming due under any agreement entered into in connection with
   the loan, or for the operation, maintenance, repair, or replacement of the
   project or any portions thereof or other property of the borrower, and deposit
   into any fund or funds amounts sufficient to make any payments on the loan 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 payment
   of the principal of, premium, if any, and interest on the loan from the Fund
   and to provide for the remedies of the Fund in the event of any default by the
   borrower in 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 interest
   therein;
   				b. The procurement of insurance, guarantees, letters of credit and other
   forms of collateral, security, liquidity arrangements or credit supports for
   the loan from any source, public or private, and the payment therefor of
   premiums, fees, or other charges;
   				c. The combination of one or more projects, or the combination of one or
   more projects with one or more other undertakings, facilities, utilities, or
   systems, for the purpose of operations and financing, and the pledging of the
   revenues from such combined projects, undertakings, facilities, utilities and
   systems to secure the loan from the Fund borrower made in connection with 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 internal controls from the Auditor of
   Public Accounts or his legally authorized representatives, as applicable. The
   Authority may request additional reviews at any time during the term of the
   loan. In addition, anyone receiving a report in accordance with &#xA7;
   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 action
   pursuant to &#xA7; 62.1-216.1 to obtain payment of any amounts in default, as
   applicable.
   				All local governments or private entities borrowing money from the Fund
   are authorized to perform any acts, take any action, adopt any proceedings,
   and make and carry out any contracts that are contemplated by this article.
   Such contracts need not be identical among all local governments or private
   entities but may be structured as determined by the Authority according to the
   needs of the contracting local governments or private entities and the Fund.
   				Subject to the rights, if any, of the registered owners of any of the
   bonds of the Authority, the Authority may consent to and approve any
   modification in the terms of any loan to any local government.

HISTORY: 1989, cc. 462, 498; 1995, c. 510; 2002, c. 320; 2005, c. 80; 2006, cc.
648, 765; 2010, c. 13; 2011, c. 637; 2017, c. 245; 2025, cc. 228, 241.