                                 CODE OF VIRGINIA

LOANS TO LOCAL GOVERNMENTS (§ 3.2-3116)

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 that has an identifiable revenue stream from which the loan proceeds
may be repaid. The local government to which a loan is to be made, the purpose
of the loan, the amount of the loan, and the associated identifiable revenue
stream shall be designated in writing by the Commission to the Authority
following consultation with the Authority. No loan 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.

B. Except as otherwise provided in this chapter, the Authority shall determine
the interest rate and 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.

C. 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 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 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. 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 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.

   3. Create and maintain other special funds as required by the Authority.

   4. 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
   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.

   5. Obtain a review of the accounting and the internal controls from the
   Auditor of Public Accounts or his legally authorized representative. 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;
   3.2-3109 may request an additional review as set forth in this section.

D. Any local government borrowing money from the Fund is 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 government and the
Fund.

E. 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: 2015, cc. 399, 433.