                                 CODE OF VIRGINIA

SECURITY FOR PAYMENT; APPROPRIATIONS (§ 22.1-167.2)

A. The Authority is authorized to issue bonds to finance and refinance
acquisition of bonds, notes and other obligations of counties, cities and towns
(local school bonds) issued for the purpose of financing and refinancing capital
projects for school purposes and to pledge to the bonds all or any combination
of the following sources: (i) payments of principal and interest on the local
school bonds purchased by the Authority; (ii) payments to the localities by the
Commonwealth as contemplated under the provisions of &#xA7; 15.2-2659 (state aid
intercept) of the Code of Virginia; (iii) funds in the Literary Fund available
and appropriated for such purpose; and (iv) any funds in the general fund of the
Commonwealth appropriated for such purpose.

B. The Governor&#8217;s Budget Bill presented each year to the General Assembly
shall include an appropriation to the Authority of a sum sufficient first, from
funds in the Literary Fund available for such purpose, and second, from the
general fund of the Commonwealth, to cure any shortfall in pledged primary
revenues on any debt service payment date on the bonds of the Authority
described by this section. A shortfall in pledged primary revenues shall exist
when the sum of the payments made on local school bonds due on or before such
date and any proceeds derived from the implementation of &#xA7; 15.2-2659 (state
aid intercept) of the Code of Virginia as of such date is less than required to
pay the debt service due on the Authority&#8217;s bonds on such date.

C. The Literary Fund and the general fund of the Commonwealth shall be
subrogated to the rights of the Authority to the extent of any such funds paid
to the Authority and shall be entitled to enforce the Authority&#8217;s remedies
with respect to the local school bonds and to full recovery of the amount of
such shortfall.

D. On or before September 30 of each year, the Authority shall submit to the
Governor and the chairmen of the House Committee on Appropriations and the
Senate Committee on Finance and Appropriations a report as of the end of the
prior fiscal year detailing the total amount of the Authority&#8217;s
outstanding bonds secured by appropriations as described in subsection B. The
report shall also describe any instances where any such appropriation has been
used.

HISTORY: 1998, cc. 4, 900.