                                 CODE OF VIRGINIA

RESERVE FUNDS AND APPROPRIATIONS (§ 36-55.41)

A. 1. HDA may create and establish one or more special funds (herein referred to
as &#8220;capital reserve funds&#8221;), and shall pay into each such capital
reserve fund (i) any moneys appropriated and made available by the Commonwealth
for the purpose of such fund, (ii) any proceeds of sale of notes or bonds, to
the extent provided in the resolution or resolutions of HDA authorizing the
issuance thereof, and (iii) any other moneys which may be made available to HDA
for the purpose of such fund from any other source or sources. All moneys held
in any capital reserve fund, except as hereinafter provided, shall be used, as
required, solely for the payment of the principal of bonds secured in whole or
in part by such fund or of the sinking fund payments hereinafter mentioned with
respect to such bonds, the purchase or redemption of such bonds, the payment of
interest on such bonds or the payment of any redemption premium required to be
paid when such bonds are redeemed prior to maturity; however, if moneys in any
such fund at any time are less than the minimum capital reserve fund requirement
established for such fund as hereinafter provided, HDA shall not use such moneys
for any optional purchase or redemption of such bonds. Any income or interest
earned by, or increment to, any capital reserve fund due to the investment
thereof may be transferred by HDA to other funds or accounts of HDA to the
extent it does not reduce the amount of such capital reserve fund below the
minimum capital reserve fund requirement for such fund;

   2. HDA shall not at any time issue bonds, secured in whole or in part by a
   capital reserve fund, if upon the issuance of such bonds, the amount of such
   capital reserve fund will be less than the minimum capital reserve fund
   requirement of such fund, unless HDA, at the time of issuance of such bonds,
   shall deposit in such fund from the proceeds of the bonds to be issued, or
   from other sources, an amount which, together with the amount then in such
   fund, will not be less than the minimum capital reserve fund requirement for
   such fund. For purposes of this section, the term &#8220;minimum capital
   reserve fund requirement&#8221; shall mean, as of any particular date of
   computation, an amount of money, as provided in the resolutions of HDA
   authorizing the bonds with respect to which such fund is established, equal to
   not more than the greatest of the respective amounts, for the current or any
   future fiscal year of HDA, of annual debt service on the bonds of HDA secured
   in whole or in part by such fund, such annual debt service for any fiscal year
   being the amount of money equal to the aggregate of (i) all interest payable
   during such fiscal year on all bonds secured in whole or in part by such fund
   outstanding on the date of computation, plus (ii) the principal amount of all
   such bonds outstanding on said date of computation which mature during such
   fiscal year, plus (iii) all amounts specified in any resolution of the
   authority authorizing any of such bonds as payable during such fiscal year as
   a sinking fund payment with respect to any of such bonds which mature after
   such fiscal year, all calculated on the assumption that such bonds will after
   said date of computation cease to be outstanding by reason, but only by
   reason, of the payment of bonds when due, and the payment when due and
   application in accordance with the resolution authorizing those bonds, of all
   of such sinking fund payments payable at or after said date of computation;
   however, in computing the annual debt service for any fiscal year as
   aforesaid, bonds deemed to have been paid in accordance with the defeasance
   provisions of the resolution or resolutions of HDA authorizing the issuance
   thereof shall not be included in bonds outstanding on the date of computation
   aforesaid;

   3. In computing the amount of any capital reserve funds for the purpose of
   this section, securities in which all or a portion of such funds shall be
   invested shall be valued at par or if purchased at less than par, at their
   cost to HDA;

   4. To assure the continued operation and solvency of HDA for the carrying out
   of its corporate purposes, provision is made in subdivision 1 of this
   subsection for the accumulation in each capital reserve fund of an amount
   equal to the minimum capital reserve fund requirement for such fund.

B. In order further to assure the maintenance of the foregoing capital reserve
funds, the chairman of HDA shall annually, on or before December 1, make and
deliver to the Governor and Director of the Budget his certificate stating the
sum, if any, required to restore each such capital reserve fund to the minimum
capital reserve fund requirement for such fund. Within five days after the
beginning of each session of the General Assembly, the Governor shall submit to
the presiding officer of each house printed copies of a budget including the
sum, if any, required to restore each such capital reserve fund to the minimum
capital reserve fund requirement for such fund. All sums appropriated by the
legislature for such restoration and paid shall be deposited by HDA in the
applicable capital reserve fund.

C. HDA shall create and establish such other fund or funds as may be necessary
or desirable for its corporate purposes.

D. All amounts paid over to HDA by the Commonwealth pursuant to the provisions
of this section shall constitute and be accounted for as advances by the
Commonwealth to HDA and, subject to the rights of the holders of any bonds or
notes of HDA theretofore or thereafter issued, shall be repaid to the
Commonwealth without interest from all available operating revenues of HDA in
excess of amounts required for the payment of bonds, notes or other obligations
of HDA, the capital reserve funds and operating expenses.

E. The outstanding principal amount of notes and bonds issued by HDA secured by
capital reserve funds pursuant to this section, other than notes and bonds for
which refunding obligations shall have been issued pursuant to &#xA7; 36-55.42,
shall not exceed $1.5 billion. For the purpose of this subdivision, the
outstanding principal amount of notes or bonds issued by HDA at a price less
than the face amount thereof shall be deemed to be the issue price of such notes
or bonds.

HISTORY: 1972, c. 830; 1974, c. 263; 1987, c. 451; 1994, c. 378; 1997, c. 41.