Code of Virginia

Code of Virginia
Title 10.1. Conservation
5/30/2020

Article 1.2. Dam Safety, Flood Prevention, and Protection Assistance Fund.

§ 10.1-603.16. Definitions.

As used in this article unless the context requires a different meaning:

"Authority" means the Virginia Resources Authority created in Chapter 21 (§ 62.1-197 et seq.) of Title 62.1.

"Board" means the Board of Directors of the Virginia Resources Authority.

"Cost," as applied to any project financed under the provisions of this article, means the total of all costs incurred by the local government or private entity as reasonable and necessary for carrying out all works and undertakings necessary or incident to the accomplishment of any project. It includes, without limitation, all necessary developmental, planning and feasibility studies, surveys, plans and specifications; hydrologic and hydraulic studies and analyses; architectural, engineering, financial, legal or other special services; mapping; the cost of acquisition of flood-prone land and any buildings and improvements thereon, including the discharge of any obligations of the sellers of such land, buildings or improvements; site preparation and development, including demolition or removal of existing structures; construction and reconstruction; labor; materials, machinery and equipment; the reasonable costs of financing incurred by the local government or private entity in the course of the development of the project; carrying charges incurred before placing the project in service; necessary expenses incurred in connection with placing the project in service; the funding of accounts and reserves that the Authority may require; and the cost of other items that the Authority determines to be reasonable and necessary.

"Dam owner" means the owner of the land on which a dam is situated, the holder of an easement permitting the construction of a dam and any person or entity agreeing to maintain a dam.

"Department" means the Department of Conservation and Recreation.

"Director" means the Director of the Department of Conservation and Recreation.

"Flood prevention or protection" means the construction of dams, levees, flood walls, channel improvements or diversions, local flood proofing, evacuation of flood-prone areas or land use controls which reduce or mitigate damage from flooding.

"Flood prevention or protection studies" means hydraulic and hydrologic studies of flood plains with historic and predicted floods, the assessment of flood risk and the development of strategies to prevent or mitigate damage from flooding.

"Fund" or "revolving fund" means the Dam Safety, Flood Prevention and Protection Assistance Fund.

"Local funds" means cash provided for project or study implementation that is not derived from federal or state grants or loans.

"Local government" means any county, city, town, municipal corporation, authority, district, commission, or political subdivision created by the General Assembly or pursuant to the Constitution or laws of the Commonwealth, or any combination of any two or more of the foregoing.

"Private entities" means dam owners, whether individuals, partnerships, corporations, or other nongovernmental entities.

"Project" means the development and implementation of activities or measures performed to eliminate, prevent, reduce, or mitigate damages caused by flooding or to identify flood hazards; the design, repair, and safety modifications of a dam or impounding structure, as defined in § 10.1-604, and identified in dam safety reports generated pursuant to § 10.1-607 or 10.1-609; or the mapping and digitization of dam break inundation zones. The term includes, without limitation, the construction, modification or repair of dams, levees, flood walls, channel improvements or diversions; evacuation, relocation, and retrofitting of flood-prone structures; flood warning and response systems; redevelopment, acquisition, and open-space use of flood-prone areas; hydrologic and hydraulic studies of floodplains with historic and predicted floods; remapping of regulated flood hazard areas; the assessment of flood risks; the development of flood hazard mitigation strategies and plans, flood prevention and protection studies, and matching funds for federal funds for these activities. The lands involved with such projects shall be located within the Commonwealth.

1989, cc. 462, 498; 1995, c. 510; 2002, c. 320; 2006, cc. 648, 765.

§ 10.1-603.16:1. Certified mail; subsequent mail or notices may be sent by regular mail.

Whenever in this article the Board is required to send any mail or notice by certified mail and such mail or notice is sent certified mail, return receipt requested, then any subsequent, identical mail or notice that is sent by the Board may be sent by regular mail.

2011, c. 566.

§ 10.1-603.17. Dam Safety, Flood Prevention and Protection Assistance Fund established.

The Dam Safety, Flood Prevention and Protection Assistance Fund is hereby established and set apart as a permanent and nonreverting fund. The Fund shall consist of any moneys appropriated by the General Assembly, funds returned by localities or other public or private sources in the form of interest and repayment of loan principal, deposits pursuant to §§ 15.2-2243.1 and 38.2-401.1, all income from the investment of moneys held in the Fund, and any other sums designated for deposit in the Fund from any source public or private, including without limitation any federal grants, and awards or other forms of assistance received by the Commonwealth that are eligible for deposit in the Fund under federal law. Any moneys remaining in the Fund at the end of the biennium including any appropriated funds and all principal interest accrued, interest and payments shall not revert to the general fund.

1989, cc. 462, 498; 2002, c. 320; 2006, cc. 648, 765; 2008, c. 491.

§ 10.1-603.18. Administration of the Fund.

The Authority shall administer and manage the Fund, and establish the interest rates and the repayment terms of such loans as provided in this article, in accordance with a memorandum of agreement with the Director. The Director shall, after consultation with all interested parties, develop a guidance document governing project eligibility and project priority criteria, and the Director, upon approval from the Virginia Soil and Water Conservation Board, shall direct the distribution of loans and grants from the Fund to local governments and private entities. In order to carry out the administration and management of the Fund, the Authority may employ officers, employees, agents, advisers and consultants, including without limitation, attorneys, financial advisors, engineers, and other technical advisors and public accountants, and determine their duties and compensation without the approval of any other agency or instrumentality. The Authority may disburse from the Fund reasonable costs and expenses incurred in the administration and management of the Fund and may establish and collect a reasonable fee for its management services. However, any such fee shall not exceed one-eighth of one percent of any bond par, loan or grant amount.

1989, cc. 462, 498; 1995, c. 510; 2002, c. 320; 2006, cc. 648, 765; 2010, c. 13.

§ 10.1-603.18:1. Deposit of money; expenditures; investments.

All money belonging to the Fund shall be deposited in an account or accounts in banks or trust companies organized under the laws of the Commonwealth or in national banking associations located in Virginia or in savings institutions located in Virginia organized under the laws of the Commonwealth or the United States. The money in these accounts shall be paid by check signed by the Executive Director of the Authority or other officers or employees designated by the Board of Directors of the Authority. All deposits of money shall, if required by the Authority, be secured in a manner determined by the Authority to be prudent, and all banks, trust companies, and savings institutions are authorized to give security for the deposits. Money in the Fund shall not be commingled with other money of the Authority. Money in the Fund not needed for immediate use or disbursement may be invested or reinvested by the Authority in obligations or securities that are considered lawful investments for public funds under the laws of the Commonwealth.

2006, cc. 648, 765.

§ 10.1-603.18:2. Collection of money due Fund.

The Authority is empowered to collect, or to authorize others to collect on its behalf, amounts due to the Fund under any loan to a local government or private entity, including, if appropriate, taking the action required by § 15.2-2659 or 62.1-216.1 to obtain payment of any amounts in default. Proceedings to recover amounts due to the Fund may be instituted by the Authority in the name of the Fund in the appropriate circuit court.

2006, cc. 648, 765.

§ 10.1-603.19. Purposes for which Fund is to be used; Authority to set terms and conditions of loans.

A. The Director may make grants or loans to any local government for the purpose of assisting the local government in the development and implementation of flood prevention or protection projects, or for flood prevention or protection studies.

B. The Director may expend from the Fund up to $50,000 annually for cost share with federal agencies in flood protection studies of statewide or regional significance.

C. The Director may, in order to protect public safety and welfare, make (i) grants or loans to a local government that owns a dam, to a local government for a dam located within the locality, or to a private entity that owns a dam for the design, repair, and the safety modifications of such a dam if it is identified in a safety report generated pursuant to § 10.1-607 or 10.1-609 and (ii) grants to a local government or private entity for the determination of the hazard classification for impounding structures, dam break analysis, the mapping and digitization of dam break inundation zones, incremental damage analysis, and other engineering requirements such as emergency action plan development.

D. The Director may, in order to reduce dam owner expenses associated with hazard classification, dam break analysis, the mapping and digitization of dam break inundation zones, incremental damage analysis, and other engineering requirements such as emergency action plan development, expend moneys from the Fund to employ staff or to directly contract for these services. The Director may establish a fee to be paid by the dam owner to offset a portion of these services. Such fee shall not exceed 50 percent of the cost incurred by the Department.

E. The Director may, in order to protect people at risk from a dam failure and to assist dam owners, localities, and emergency responders, expend moneys from the Fund to maintain a statewide dam failure early warning system in cooperation with the Department of Emergency Management and the U.S. National Weather Service.

F. The total amount of expenditures for grants in any fiscal year shall not exceed 50 percent of the total noninterest or income deposits made to the Fund during the previous fiscal year, together with the total amount collected in interest or income from the investment of moneys in the Fund from the previous fiscal year as determined at the beginning of the fiscal year.

G. Any grants made from the Fund shall require a 50 percent project match by the applicant. Any loans made from the Fund shall require a minimum of a 10 percent project match by the applicant.

H. Except as otherwise provided in this article, moneys in the Fund shall be used solely to make loans or grants to local governments or private entities to finance or refinance the cost of a project. The local government or private entity to which loans or grants are made, the purposes of the loan or grant, the required match for the specific loan or grant, and the amount of each loan or grant, shall be designated in writing by the Director to the Authority. No loan or grant 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 from the Fund, at the Director's discretion, to a local government that has developed a low-interest loan program to provide loans or other incentives to facilitate the correction of dam or impounding structure deficiencies, as required by the Department, provided that the moneys are to be used only for the program and that the dams or impounding structures to be repaired or upgraded are owned by private entities.

I. Except as otherwise provided in this article, the Authority shall determine the interest rate and terms and conditions of any loan from the Fund, which may vary between different loans and between local governments and private entities to finance or refinance the cost of a project. Each loan shall be evidenced by appropriate bonds or notes of the local government or by the appropriate debt instrument for private entities payable to the Fund. Private entities shall duly authorize an appropriate debt instrument and execute same by their authorized legal representatives. The bonds or notes shall have been duly authorized by the local government and executed by its authorized legal representatives. The Authority may require in connection with any loan from the Fund such documents, instruments, certificates, legal opinions, covenants, conditions, and other information as it may deem necessary or convenient to further the purpose of the loan. In addition to any other terms or conditions that the Authority may establish, the Authority may require, as a condition to making any loan from the Fund, that the local government or private entity receiving the loan covenant to 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; 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;

2. 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;

3. 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 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 borrower, 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;

5. 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 and to provide for the remedies of the Fund in the event of any default by the borrower in payment of the loan, including, without limitation, any of the following:

a. 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;

b. 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;

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

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

e. The procurement of casualty and liability insurance;

6. Obtain a review of the accounting and internal controls from the Auditor of Public Accounts or his legally authorized representatives, as applicable. The Authority may request additional reviews at any time during the term of the loan. In addition, anyone receiving a report in accordance with § 10.1-603.23 may request an additional review as set forth in this section; and

7. Directly offer, pledge, and consent to the Authority to take action pursuant to § 62.1-216.1 to obtain payment of any amounts in default, as applicable.

All local governments or private 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 article. Such contracts need not be identical among all local governments or private entities but may be structured as determined by the Authority according to the needs of the contracting local governments or private 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 to any local government.

1989, cc. 462, 498; 1995, c. 510; 2002, c. 320; 2005, c. 80; 2006, cc. 648, 765; 2010, c. 13; 2011, c. 637; 2017, c. 245.

§ 10.1-603.19:1. Payments from a developer or subdivider.

A. The Authority shall administer and manage deposits made to the Fund pursuant to § 15.2-2243.1 in accordance with a memorandum of agreement with the Director. From funds deposited pursuant to this section the Authority may charge an administrative fee, which shall be determined in consultation with the Director. The Director is authorized to expend these deposits to allow a dam owner to make the necessary upgrades to an impounding structure made necessary by a proposed development or subdivision in a dam break inundation zone.

B. Fifty percent of any funds held pursuant to subsection A shall be provided to the owner upon receipt of an alteration permit from the Virginia Soil and Water Conservation Board. The remaining funds shall be provided to the owner upon completion of the necessary upgrades and receipt of a regular operation and maintenance certificate from the Board. The owner shall post a bond or other financial guarantee payable to the Fund conditioned on completion of the stages of necessary upgrades prior to any release of payment to the owner. Such bond or other financial guarantee shall be released within 60 days of the receipt of a regular operation and maintenance certificate by the dam owner.

C. Interest generated pursuant to these deposits shall remain in the Fund and may be utilized for the purposes set out in § 10.1-603.19.

2008, c. 491.

§ 10.1-603.20. Condition for making loans or grants.

A. The Director may authorize a loan or grant for flood prevention or protection projects, or for flood prevention or protection studies under the provisions of § 10.1-603.19 only when the following conditions exist:

1. An application for the loan or grant has been submitted by an applicant in the manner and form specified by the Director, setting forth the amount of the loan or grant requested, and the use to which the loan or grant will be applied. The application shall describe in detail (i) the area to be studied or protected, including the population and the value of property to be protected, historic flooding data and hydrologic studies projecting flood frequency; (ii) the estimated cost-benefit ratio of the project; (iii) the ability of the locality to provide its share of the cost; (iv) the administration of local flood plain management regulations; and (v) other necessary information to establish project or study priority.

2. The local government agrees and furnishes assurance, satisfactory to the Director, that it will satisfactorily maintain any structure financed, in whole or in part, through the loans or grants provided under this article.

3. If the requested loan or grant is sought to acquire land, the Director shall require satisfactory evidence prior to acting on the request that the local government will acquire the land if the loan or grant is made.

4. A local government is eligible to receive a grant once every five years, provided that it has a flood mitigation plan approved by the Director and has demonstrated satisfactory evidence of plan implementation. Lacking an approved plan the local government is eligible for a grant once every ten years.

5. [Repealed.]

B. The Director shall develop guidance criteria for making loans and grants for dam safety repair projects. Priority shall be given to making loans for high hazard dams.

1989, cc. 462, 498; 1995, c. 510; 2002, c. 320; 2006, cc. 648, 765.

§ 10.1-603.21. Repealed.

Repealed by Acts 2006, cc. 648 and 765, cl. 2.

§ 10.1-603.22:1. Pledge of loans to secure bonds of Authority.

The Authority is empowered at any time and from time to time to pledge, assign, or transfer from the Fund to banks or trust companies designated by the Authority any or all of the assets of the Fund to be held in trust as security for the payment of the principal of, premium, if any, and interest on any or all of the bonds, as defined in § 62.1-199, issued to finance any project. The interests of the Fund in any assets so transferred shall be subordinate to the rights of the trustee under the pledge, assignment, or transfer. To the extent funds are not available from other sources pledged for such purpose, any of the assets or payments of principal and interest received on the assets pledged, assigned, or transferred or held in trust may be applied by the trustee thereof to the payment of the principal of, premium, if any, and interest on such bonds of the Authority secured thereby, and, if such payments are insufficient for such purpose, the trustee is empowered to sell any or all of such assets and apply the net proceeds from the sale to the payment of the principal of, premium, if any, and interest on such bonds of the Authority. Any assets of the Fund pledged, assigned, or transferred in trust as set forth above and any payments of principal, interest, or earnings received thereon shall remain part of the Fund but shall be subject to the pledge, assignment, or transfer to secure the bonds of the Authority and shall be held by the trustee to which they are pledged, assigned, or transferred until no longer required for such purpose by the terms of the pledge, assignment, or transfer.

2006, cc. 648, 765.

§ 10.1-603.22:2. Sale of loans.

The Authority is empowered at any time and from time to time to sell, upon such terms and conditions as the Authority shall deem appropriate, any loan, or interest therein, made pursuant to this article. The net proceeds of sale remaining after the payment of the costs and expenses of the sale shall be designated for deposit to, and become part of, the Fund.

2006, cc. 648, 765.

§ 10.1-603.22:3. Powers of the Authority.

The Authority is authorized to do any act necessary or convenient to the exercise of the powers granted in this article or reasonably implied thereby.

2006, cc. 648, 765.

§ 10.1-603.22:4. Liberal construction of article.

The provisions of this article shall be liberally construed to the end that its beneficial purposes may be effectuated. Insofar as the provisions of this article are inconsistent with the provisions of any other law, general, special or local, the provisions of this article shall be controlling.

2006, cc. 648, 765.

§ 10.1-603.23. Record of application for grants or loans and action taken.

A record of each application for a grant or loan and the action taken thereon shall be open to public inspection at the office of the Department. The Authority shall report annually to the General Assembly and the Governor on the Fund and the administration of all grants and loans made from the Fund.

1989, cc. 462, 498; 2006, cc. 648, 765.

The chapters of the acts of assembly referenced in the historical citation at the end of these sections may not constitute a comprehensive list of such chapters and may exclude chapters whose provisions have expired.

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