                                 CODE OF VIRGINIA

LOANS TO LOCAL GOVERNMENTS (§ 62.1-241.6)

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; the interest rate thereon and the
repayment terms thereof, which may vary between local governments, 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 set forth above, the Authority shall determine the 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 and 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. 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
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
and 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;

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

5. 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 and
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.
			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 subject to guidelines adopted by
the Board.

HISTORY: 1992, c. 378.