62.1-238 - Loans to local governments or other entities.
§ 62.1-238. Loans to local governments or other entities.
Money in the Fund shall be used solely to make loans or loan subsidies tolocal governments or other entities to finance or refinance the cost of anyproject or to establish or fund an endowment fund to assist in the cost ofany project. The local governments or other entities to which loans or loansubsidies are to be made, the purposes of the loan or loan subsidy, and theamount of each such loan or loan subsidy, the interest rate thereon and therepayment terms and those public health conditions deemed necessary by theBoard thereof, which may vary between loan recipients, shall be designated inwriting by the Board to the Authority following consultation with theAuthority. No loan or loan subsidy from the Fund shall exceed the total costof the project to be financed or the outstanding principal amount of theindebtedness to be refinanced plus reasonable financing expenses.
Except as set forth above, the Authority shall determine the terms andconditions of any loan or loan subsidy from the Fund, which may vary betweenlocal governments or other entities. Each loan shall be evidenced byappropriate bonds, notes, or agreements of the local government or otherentity payable to the Fund. The bonds or notes shall have been dulyauthorized by the local government or other entity and executed by itsauthorized legal representatives. The Authority is authorized to require inconnection with any loan or loan subsidy from the Fund such documents,instruments, certificates, legal opinions and other information as it maydeem necessary or convenient. In addition to any other terms or conditionswhich the Authority may establish, the Authority may require, as a conditionto making any loan or loan subsidy from the Fund, that the local governmentor other entity receiving the loan or loan subsidy covenant to perform any ofthe following:
A. Establish and collect rents, rates, fees and charges to produce revenuesufficient to pay all or a specified portion of (i) the costs of operation,maintenance, replacement, renewal and repairs of the project; (ii) anyoutstanding indebtedness incurred for the purposes of the project, includingthe principal of and premium, if any, and interest on the loan from the Fundto the local government or other entity; and (iii) any amounts necessary tocreate and maintain any required reserve, including any rate stabilizationfund deemed necessary or appropriate by the Authority to offset the need, inwhole or part, for future increases in rents, rates, fees or charges;
B. With respect to a local government, levy and collect ad valorem taxes onall property within the jurisdiction of the local government subject to localtaxation sufficient to pay the principal of and premium, if any, and intereston the loan or loan subsidy from the Fund to the local government;
C. Create and maintain a special fund or funds for the payment of theprincipal of and premium, if any, and interest on the loan or loan subsidyfrom the Fund to the local government or other entity and any other amountsbecoming due under any agreement entered into in connection with the loan orloan subsidy, or for the operation, maintenance, repair or replacement of theproject or any portions thereof or other property of the local government orother entity, and deposit into any fund or funds amounts sufficient to makeany payments on the loan or loan subsidy 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 lienson or security interests in, real and personal property, together with allrights, title and interest therein, to the Fund, or take other actions as maybe deemed necessary or desirable by the Authority to secure payment of theprincipal of and premium, if any, and interest on the loan or loan subsidyfrom the Fund and to provide for the remedies of the Fund in the event of anydefault in the payment of the loan or loan subsidy, including, withoutlimitation, any of the following:
1. The procurement of insurance, guarantees, letters of credit and otherforms of collateral, security, liquidity arrangements or credit supports forthe loan or loan subsidy from any source, public or private, and the paymenttherefor of premiums, fees or other charges;
2. The combination of one or more projects, or the combination of one or moreprojects with one or more other undertakings, facilities, utilities orsystems, for the purpose of operations and financing, and the pledging of therevenues from such combined projects, undertakings, facilities, utilities andsystems to secure the loan or loan subsidy from the Fund made in connectionwith 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 areauthorized to perform any acts, take any action, adopt any proceedings andmake and carry out any contracts that are contemplated by this chapter. Suchcontracts need not be identical among all local governments or otherentities, but may be structured as determined by the Authority according tothe 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 bondsof the Authority, the Authority may consent to and approve any modificationin the terms of any loan or loan subsidy subject to guidelines adopted by theBoard.
(1987, c. 324; 1997, cc. 651, 665.)