                                 CODE OF VIRGINIA

LOANS TO LOCAL GOVERNMENTS (§ 5.1-30.5)

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. The local governments to which loans are to be made, the purposes
of the loan, and the amount of each such loan, shall be designated in writing by
the Board 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.
		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. In addition to any other terms or conditions which 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 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 representatives. 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; 5.1-30.9 may request an
additional review as set forth in this section.
			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.
			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: 1999, c. 897.