                                 CODE OF VIRGINIA

LOANS TO LOCAL GOVERNMENTS (§ 15.2-2435)

A. Except as otherwise provided in this chapter, money in the Fund shall be used
solely to make loans to local governments to finance or refinance the cost of
any project. No loan from the Fund shall exceed the total cost of the project to
be financed or the outstanding principal amount of indebtedness to be refinanced
plus reasonable financing expenses.

B. The Authority shall determine the terms and conditions of any loan from the
Fund, which may vary between local governments. Each loan shall be evidenced by
appropriate bonds or notes of the local government payable to the Fund. The
bonds or notes shall have been duly authorized by the local government and
executed by its authorized legal representatives. The Authority is authorized to
require in connection with any loan from the Fund such documents, instruments,
certificates, legal opinions, and other information as it may deem necessary or
convenient. 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 receiving the loan covenant 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 and premium, if any, and interest on the loan from the Fund to
   the local government; 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 in part, for
   future increases in rents, rates, fees, or charges;

   2. 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 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 and premium, if any, and interest on the loan from the Fund to the
   local government 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 local government, 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; and

   5. Perform other acts, including 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, to the Fund, or to take other actions as
   may be deemed necessary or desirable by the Authority to secure payment of the
   principal and premium, if any, and interest on the loan from the Fund to the
   local government and to provide for the remedies of the Fund in the event of
   any default by the local government in the payment of the loan, including,
   without limitation, any of the following:
   				a. 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;
   				b. 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 to the local government made in
   connection with such combination or any part or parts thereof;
   				c. The maintenance, replacement, renewal, and repair of the project; and
   				d. The procurement of casualty and liability insurance.

C. All local governments borrowing money from the Fund are authorized to perform
any acts, take any actions, adopt any proceedings, and make and carry out any
contracts that are contemplated by this chapter. Such contracts need not be
identical among all local governments, but may be structured as determined by
the Authority according to the needs of the contracting local governments and
the Fund.

D. 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 subject to the guidelines adopted
by the Board of Directors of the Authority.

HISTORY: 2010, c. 724.