10.1-643 - Period of loan; interest rate; loan shall constitute a lien.
§ 10.1-643. Period of loan; interest rate; loan shall constitute a lien.
Any loan made pursuant to the provisions of § 10.1-638 A may be made for anyperiod not to exceed twenty years and shall bear interest at the rate of onepercent annually for the first ten years or until such time as water storedunder the provisions of this article is used by the borrower for the purposestated in the application for the loan, if such use occurs within the firstten years. Interest on the loan for the second ten-year period plus thebalance of the first ten-year period during which water was used, if any,shall bear interest at a rate set jointly by the Board and the State TreasuryBoard. Such interest rate shall conform as nearly as possible to the intereston bonds sold for water development or similar purposes within theCommonwealth within the last six months prior to setting such interest rate,taking into consideration any fluctuations of the money market which may haveoccurred subsequent to the last sale of such bonds within the six-monthperiod. If no such bonds have been sold within the six-month period, theinterest rate shall be set to conform as nearly as possible with the ratecharged by the commercial money market for such or similar purposes. However,when the attendant facilities, such as but not limited to a filtration plant,pumping station, and pipelines, necessary for the use of the water storedcost the borrower more than $100,000, interest on the loan for the secondten-year period or the ten-year period plus the balance of the first ten-yearperiod during which water was used, if any, shall be at the rate of threepercent annually. Any borrower receiving a loan under the provisions of thisarticle shall agree to repay the loan in equal annual installments ofprincipal together with interest at the applicable rate on the unpaid balanceof the loan. Payments of interest and principal shall be made to the StateTreasurer and credited to the revolving fund, and evidence of debt taken forsuch loan shall be deposited with the State Treasurer and kept by him.Whenever a loan is made in accordance with the provisions of this article, alien is hereby created against all of the funds and income of the borrower,as well as upon any real or personal property acquired with loan proceeds.Prepayment of the principal of any such loan, in whole or in part, may bemade by the borrower without penalty; however, the borrower shall be liablefor interest accrued on the principal at the time of prepayment.
(1970, c. 591, § 21-11.6; 1988, c. 891.)