                                 CODE OF VIRGINIA

VIRGINIA DEFECTIVE DRYWALL CORRECTION AND RESTORATION ASSISTANCE FUND
ESTABLISHED; USES (§ 36-156.2)

A. There is hereby created and set apart a special, permanent, perpetual, and
nonreverting fund to be known as the Virginia Defective Drywall Correction and
Restoration Assistance Fund for the purposes of promoting the correction and
restoration of residential property affected by the environmental problems
attributable to defective drywall or overcoming obstacles to the remediation of
such properties attributable to the real or presumed presence of defective
drywall. The Fund shall consist of such sums that may be appropriated to the
Fund by the General Assembly, sums from all receipts by the Fund from loans made
by it, all income from the investment of moneys held in the Fund, and any other
sums designated for deposit to the Fund from any source, public or private,
including any federal grants, awards, or other forms of financial assistance
received by the Commonwealth.

B. The Authority shall administer and manage the Fund and establish the interest
rates and repayment terms for loans made to eligible entities or individuals in
accordance with a memorandum of agreement with the Department of Housing and
Community Development. The Department of Housing and Community Development shall
direct the distribution of loans or grants from the Fund to particular
recipients based upon guidelines developed for this purpose. With approval from
the Department of Housing and Community Development, the Authority may disperse
moneys from the Fund for the payment of reasonable and necessary costs and
expenses incurred in the administration and management of the Fund. The
Authority may establish and collect a reasonable fee on outstanding loans for
its management services.

C. All money belonging to the Fund shall be deposited in an account or accounts
in banks or trust companies organized under the laws of the Commonwealth or in
national banking associations located in Virginia or in savings institutions
located in Virginia organized under the laws of the Commonwealth or the United
States. The money in these accounts shall be paid by check and signed by the
Executive Director of the Authority or other officers or employees designated by
the Board of Directors of the Authority. All deposits of money shall, if
required by the Authority, be secured in a manner determined by the Authority to
be prudent, and all banks, trust companies, and savings institutions are
authorized to give security for the deposits. Money in the Fund shall not be
commingled with other money of the Authority. Money in the Fund not needed for
immediate use or disbursement may be invested or reinvested by the Authority in
obligations or securities that are considered lawful investments for public
funds under the laws of the Commonwealth. Expenditures and disbursements from
the Fund shall be made by the Authority upon written request signed by the
Director of the Department of Housing and Community Development.

D. The Authority is empowered to collect, or to authorize others to collect on
its behalf, amounts due to the Fund under any loan including, if appropriate,
taking the action required by &#xA7; 15.2-2659 to obtain payment of any amounts
in default. Proceedings to recover amounts due to the Fund may be instituted by
the Authority in the name of the Fund in the appropriate circuit court.

E. The Department of Housing and Community Development may approve grants to
local governments for the purposes of promoting the correction or restoration of
residential real property and addressing environmental problems or obstacles to
the correction or restoration of such properties. The grants may be used to pay
the reasonable and necessary costs associated with the remediation of a
contaminated property to remove hazardous substances, hazardous wastes, or solid
wastes or the stabilization or restoration of these structures or the demolition
and removal of the existing structures or other work necessary to remediate or
reuse the real property. The Department of Housing and Community Development may
establish such terms and conditions as it deems appropriate and shall evaluate
each grant request in accordance with the guidelines developed for this purpose.
The Authority shall disburse grants from the Fund in accordance with a written
request from the Department of Housing and Community Development.

F. The Authority may make loans to local governments, public authorities,
corporations, partnerships, or innocent landowners to finance or refinance the
cost of any defective drywall restoration or remediation project for the
purposes of promoting the restoration and redevelopment of residential real
property and addressing real environmental problems or obstacles to reuse of
these properties. The loans shall be used to pay the reasonable and necessary
costs related to the restoration and redevelopment of residential real property
for the remediation of a contaminated property to remove hazardous substances,
hazardous wastes, or solid wastes; stabilization or restoration of the affected
properties; demolition and removal of existing structures; or other work
necessary to remediate or reuse the real property.
			The Department of Housing and Community Development shall designate in
writing the recipient of each loan, the purposes of the loan, and the amount of
each such loan. 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.

G. 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 loan recipient 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 entity receiving the loan covenant and perform any of the
following:

   1. Establish and collect rents, rates, fees, taxes, and charges to produce
   revenue sufficient to pay all or a specified portion of (i) the costs 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.

   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 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 to the
   local government and any other amounts becoming due under any agreement
   entered into in connection with the loan, or 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.

   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
   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 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;
   				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, for the purpose of
   financing, and the pledging of the revenues from such combined projects and
   undertakings to secure the loan from the Fund to the local government 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 the internal controls from the
   Auditor of Public Accounts or his legally authorized representatives. The
   Authority may request additional reviews at any time during the term of the
   loan.

   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.

H. All local governments 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 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.

I. 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.

J. The Department of Housing and Community Development, through its Director,
shall have the authority to access and release moneys in the Fund for purposes
of this section as long as the disbursement does not exceed the balance of the
Fund. If the Department of Housing and Community Development, through its
Director, requests a disbursement in an amount exceeding the current Fund
balance, the disbursement shall require the written approval of the Governor.
Disbursements from the Fund may be made for the purposes outlined in this
section, including, but not limited to, personnel, administrative, and equipment
costs and expenses directly incurred by the Partnership or the Authority, or by
any other agency or political subdivision acting at the direction of the
Department of Housing and Community Development.

K. The Authority is empowered at any time and from time to time to sell, upon
such terms and conditions as the Authority shall deem appropriate, any loan, or
interest therein, made pursuant to this chapter. The net proceeds of sale
remaining after the payment of the costs and expenses of the sale shall be
designated for deposit to, and become part of, the Fund.

L. The Authority may, with the approval of the Department of Housing and
Community Development, pledge, assign, or transfer from the Fund to banks or
trust companies designated by the Authority any or all of the assets of the Fund
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 &#xA7; 62.1-199,
issued to finance any project. The interests of the Fund in any assets so
transferred shall be subordinate to the rights of the trustee under the pledge,
assignment, or transfer. To the extent funds are not available from other
sources pledged for such purpose, any of the assets or payments of principal and
interest received on the assets pledged, assigned, or transferred or held in
trust may be applied by the trustee thereof to the payment of the principal of,
premium, if any, and interest on such bonds of the Authority secured thereby,
and, if such payments are insufficient for such purpose, the trustee is
empowered to sell any or all of such assets and apply 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 of the Fund pledged, assigned, or transferred
in trust as set forth above and any payments of principal, interest, or earnings
received thereon shall remain part of the Fund but shall be subject to the
pledge, assignment, or transfer to secure the bonds of the Authority and shall
be held by the trustee to which they are pledged, assigned, or transferred until
no longer required for such purpose by the terms of the pledge, assignment, or
transfer.

M. The Department of Housing and Community shall develop guidelines governing
the use of the Fund and including criteria for project eligibility that
considers the extent to which a grant or loan will facilitate the use or reuse
of the existing residential property, the extent to which a grant or loan will
meet the needs of a recipient, the potential restoration of the property, the
economic and environmental benefits to the surrounding community, and the extent
of the perceived or real environmental contamination at the site.

HISTORY: 2010, c. 820.