                                 CODE OF VIRGINIA

LOANS TO LOCAL GOVERNMENTS OR OTHER ENTITIES (§ 62.1-229)

Except as otherwise provided in this chapter, money in the Fund shall be used
solely to make loans to local governments or other entities as permitted by
federal law to finance or refinance the cost of any project. The local
governments or other entities to which loans are to be made, the purposes of the
loan, the amount of each such loan, the interest rate thereon and the repayment
terms thereof, which may vary between loan recipients, 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. Loans may also be made from the Fund, in the
Board&#8217;s discretion, to a local government (i) for the purpose of
correcting onsite sewage disposal problems (small water facility projects) to
protect or improve water quality and prevent the pollution of state waters or
(ii) which has developed a funding program to provide low-interest loans or
other incentives to facilitate the correction of onsite sewage disposal problems
(small water facility projects), provided that the moneys may be used only for
the program and that the onsite sewage disposal systems to be repaired or
upgraded are owned by eligible businesses or individual citizens of the
Commonwealth where (a) public health or water quality concerns are present and
(b) connection to a public sewer system is not feasible because of location or
cost. To be eligible for loan funding, a business shall be located within a
locality that is in the Rural Coastal Virginia Community Enhancement Authority,
as defined in § 15.2-7600. Eligible businesses include bed-and-breakfast
operations, campgrounds, and restaurants, as those terms are defined in §
35.1-1, and businesses that use working waterfronts, as defined in § 15.2-2201.
		Except as set forth above, the Authority shall determine the terms and
conditions of any loan from the Fund, which may vary between loan recipients.
Each loan shall be evidenced by appropriate bonds or notes of the local
government or other entity payable to the Fund. The bonds or notes shall have
been duly authorized by the local government or other entity 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 or other entity receiving the loan covenant to
perform any of the following:

A. 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 and premium, if any, and interest on the loan from the Fund to the
local government or other entity; 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 part,
for future increases in rents, rates, fees or charges;

B. With respect to local governments, 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;

C. Create and maintain a special fund or funds for the payment of the principal
of and premium, if any, and interest on the loan from the Fund to the local
government or other entity 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 or other entity, and deposit into any
fund or funds amounts sufficient to make any payments on the loan as they become
due and payable;

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

E. Perform other acts, including 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, or take other actions as may be deemed
necessary or desirable by the Authority to secure payment of the principal of
and premium, if any, and interest on the loan from the Fund and to provide for
the remedies of the Fund in the event of any default in the payment of the loan,
including, without limitation, any of the following:

   1. 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;

   2. 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 made in connection with such
   combination or any part or parts thereof;

   3. The maintenance, replacement, renewal and repair of the project; and

   4. The procurement of casualty and liability insurance.
   				All local governments or other entities 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 or other entities,
   but may be structured as determined by the Authority according to the needs of
   the contracting local governments or other entities 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 subject to guidelines adopted by the
   Board.

HISTORY: 1986, c. 415; 1996, c. 20; 1999, c. 1012; 2023, c. 97.