Code of Virginia

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Code of Virginia
Title 10.1. Conservation
Chapter 6. Flood Protection and Dam Safety
11/25/2020

Article 4. Conservation, Small Watersheds Flood Control and Area Development Fund.

§ 10.1-636. Definitions.

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

"Board" means the Virginia Soil and Water Conservation Board.

"Facility" means any structures, foundations, appurtenances, spillways, lands, easements and rights-of-way necessary to (i) store additional water for immediate or future use in feasible flood prevention sites; (ii) create the potential to store additional water by strengthening the foundations and appurtenances of structures in feasible flood prevention sites; or (iii) store water in sites not feasible for flood prevention programs, and to properly operate and maintain such stores of water or potential stores of water.

"Fund" or "revolving fund" means the Conservation, Small Watersheds Flood Control and Area Development Fund.

"Storing additional water in feasible flood prevention sites" means storage of water for other than flood prevention purposes above the capacity of any given structure to hold water for the purpose of flood prevention in flood prevention sites within a flood prevention project having a favorable benefit-cost ratio where it is economically feasible to provide the capacity to store additional water or the potential for additional water storage capacity.

1970, c. 591, § 21-11.2; 1988, c. 891.

§ 10.1-637. Fund continued; administrative control.

The "Conservation, Small Watersheds Flood Control and Area Development Fund," is continued and shall be administered and used as hereinafter provided. The revolving fund shall also consist of any moneys appropriated by the General Assembly.

The administrative control of the fund and the responsibility for the administration of the provisions of this article are hereby vested in the Virginia Soil and Water Conservation Board. The Board is authorized to establish guidelines for the proper administration of the fund and the provisions of this article.

1970, c. 591, §§ 21-11.1, 21-11.4; 1988, c. 891.

§ 10.1-638. Purposes for which fund to be used.

A. The Board is authorized, with the concurrence of the State Treasurer, to order the State Comptroller to make loans from the revolving fund to any county, city, town, water authority, utility or service authority or special taxing district, hereafter referred to as the borrower, having the legal capacity and organizational arrangements necessary for obtaining, giving security for, and raising revenues for repaying authorized loans, and for operating and maintaining facilities for which the loan is made. The money loaned shall be used by the borrower for facilities to store additional water in feasible flood prevention sites or to store water in sites not feasible for flood prevention programs. The amount of any loan or the sum of any outstanding loans to any one borrower shall not exceed $500,000 without the written approval of the Governor.

B. To promote the economic growth of the Commonwealth, the Board, after public hearing and with the written approval of the Governor, may invest funds from the revolving fund in facilities to store additional water in feasible flood prevention sites for municipal, industrial, and other beneficial uses where localities fail to do so, or in facilities to create the potential to store additional water in feasible flood prevention sites where impoundment projects are being developed to less than optimum potential, thereby allowing the enlargement of such impoundments as the need arises. Such action may be initiated by a request from the soil and water conservation district or districts encompassing such water storage sites.

C. The Board may draw on the revolving fund to meet maintenance expenses incident to the proper management and operation of facilities resulting from the investments authorized by subsection B above. In addition, the Board may draw on the revolving fund for emergency repairs to the above facilities and facilities constituting the security for loans made by authority of subsection A above. The Board shall not provide funds for emergency repairs to facilities constituting security for loans unless it appears to the Board that funds for repairs are not available from other sources.

D. The Board is authorized to purchase, operate and maintain necessary machinery and other equipment suitable for engineering and other operations incident to soil and water conservation and other purposes of the Board. The Board shall have the custody and control of the machinery and other equipment, and shall provide storage for it, and it shall be available to the districts upon terms the Board prescribes. In addition to other terms the Board may prescribe, it shall have authority to execute rental-purchase contracts with individual districts for the equipment, whereby the title to machinery and other equipment purchased under authority of this law may be transferred to such district when approved by the Board. The Board may, in its discretion, sell the same to any person upon terms and conditions it may deem proper. The proceeds derived from the sale or rental of machinery, provided for in this section and in § 10.1-552, shall be paid into the revolving fund.

E. The Board is authorized to make loans from the revolving fund to any soil and water conservation district for the purchase of necessary machinery and other equipment suitable for engineering and other operations incident to soil and water conservation and other purposes of the district. Terms for loans to districts under this section shall be prescribed by the Board, and payments of interest and principal shall be made to the State Treasurer and credited to the revolving fund.

1970, c. 591, § 21-11.3; 1972, c. 821; 1982, c. 68; 1988, c. 891.

§ 10.1-639. Conditions for making loan.

The Board shall authorize the making of a loan under the provisions of § 10.1-638 A only when the following conditions exist:

1. An application for the loan has been submitted by the borrower in the manner and form specified by the Board, setting forth in detail the need for the storage of water, the amount of the loan requested and the use to which the loan shall be applied as well as any efforts made to secure funds from any other source, and such other information required by the Board. The application shall be first submitted to the soil and water conservation district or districts encompassing the watershed wherein the proceeds of the loan would be applied. When the application is approved by the district or districts, the application shall be forwarded to the Board.

2. The borrower agrees and furnishes assurance, satisfactory to the Board, that it will satisfactorily maintain any structure financed in whole or in part through the loans provided by this article.

3. The purpose for which the loan is sought is to acquire land, easements and rights-of-way, or engineering or legal services necessary for a water storage facility or project, or to construct the water storage facility itself.

If the requested loan or any part thereof is for the purpose of acquiring land, easements and rights-of-way, then the loan or part thereof designated for such purpose shall not be granted in the absence of evidence satisfactory to the Board that the borrower requesting the loan will in fact acquire the land, easements or rights-of-way if the loan is granted.

1970, c. 591, § 21-11.5; 1988, c. 891.

§ 10.1-640. Political subdivisions may borrow from other sources.

Any entity eligible under § 10.1-638 A may borrow funds as provided in this article before, simultaneously, or after borrowing funds from other sources for the same purpose for which funds are borrowed under the provisions of this article.

1970, c. 591, § 21-11.11; 1988, c. 891.

§ 10.1-641. Powers of Board in aid of the provisions of § 10.1-638.

The Board shall have the following powers to effectuate the provisions of § 10.1-638 B:

1. To expend funds from the revolving fund for field surveys and investigations, notwithstanding the possibility that the Board may subsequently determine that the proposed investment is not feasible.

2. To make and execute contracts and other instruments necessary or convenient to the construction, improvement, operation and maintenance of facilities.

3. To make agreements with and act as agent for the United States, or any of its agencies, or for this Commonwealth or any of its agencies, or any local government in connection with the acquisition, construction, maintenance, operation, or administration of any project in which the Board has invested funds; to accept donations, gifts, and contributions in money, services, materials, or otherwise, from the United States or any of its agencies, or from this Commonwealth or any of its agencies or from any other source; and to use or expend such moneys, services, materials, or other contributions in carrying on its investment function.

4. To obtain options upon and to acquire, by purchase, exchange, lease, gift, grant, bequest, devise, or otherwise, any property, real or personal, or rights or interests therein, and improve any properties acquired.

1970, c. 591, § 21-11.13; 1988, c. 891.

§ 10.1-642. Record of applications for loans and action taken.

A record of each application for a loan pursuant to § 10.1-639 received by the Board and the action taken thereon shall be open to public inspection at the office of the Board.

1970, c. 591, § 21-11.8; 1988, c. 891; 2007, c. 637.

§ 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 any period not to exceed twenty years and shall bear interest at the rate of one percent annually for the first ten years or until such time as water stored under the provisions of this article is used by the borrower for the purpose stated in the application for the loan, if such use occurs within the first ten years. Interest on the loan for the second ten-year period plus the balance 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 Treasury Board. Such interest rate shall conform as nearly as possible to the interest on bonds sold for water development or similar purposes within the Commonwealth within the last six months prior to setting such interest rate, taking into consideration any fluctuations of the money market which may have occurred subsequent to the last sale of such bonds within the six-month period. If no such bonds have been sold within the six-month period, the interest rate shall be set to conform as nearly as possible with the rate charged 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 stored cost the borrower more than $100,000, interest on the loan for the second ten-year period or the ten-year period plus the balance of the first ten-year period during which water was used, if any, shall be at the rate of three percent annually. Any borrower receiving a loan under the provisions of this article shall agree to repay the loan in equal annual installments of principal together with interest at the applicable rate on the unpaid balance of the loan. Payments of interest and principal shall be made to the State Treasurer and credited to the revolving fund, and evidence of debt taken for such 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, a lien 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 be made by the borrower without penalty; however, the borrower shall be liable for interest accrued on the principal at the time of prepayment.

1970, c. 591, § 21-11.6; 1988, c. 891.

§ 10.1-644. Recovery of money due to fund.

If a borrower defaults on any payment due the State Treasurer pursuant to § 10.1-643 or on any other obligation incurred pursuant to the provisions of this article, the amounts owed to the fund by the borrower may be recovered by the State Comptroller transferring to the revolving fund the amount of the payment due to the revolving fund from the distribution of state funds to which the defaulting borrower may be entitled pursuant to any state law; or, any money which ought to be paid into the revolving fund may be recoverable with interest by the Commonwealth, in the name of the Board, on motion in the Circuit Court of the City of Richmond. The Attorney General shall institute and prosecute such proceedings after a request for such action has been made by the Board.

1970, c. 591, § 21-11.7; 1988, c. 891.

§ 10.1-645. Limits on expenditures authorized under § 10.1-638 B; sale of resulting facilities; sale of stored water; renting facilities.

Expenditures by the Board for any one facility under the provisions of § 10.1-638 B shall not exceed $500,000 without the written approval of the Governor for construction and seeding, acquisition of land, easements, and rights-of-way, engineering costs, appraisal costs, legal services, and other costs related to the facility. The Board is authorized to sell any facility resulting from an expenditure authorized by § 10.1-638 B to any entity to whom a loan could be made pursuant to the provisions of § 10.1-638 A under the terms and conditions prescribed hereinafter. Conveyances of any such facilities shall be executed by the chairman of the Board acting pursuant to a resolution of the Board and shall be approved by the Governor and Attorney General as to form and substance. Upon the transfer of title of such facilities, the purchasing entity shall grant an easement or right-of-way to the appropriate soil and water conservation district to assure the continued operation, inspection and repair of the works of improvement on the land sold, and in all cases, the purchasing entity shall agree to maintain the facility in a satisfactory manner. The Board may contract with an entity eligible to borrow from the revolving fund pursuant to § 10.1-638 A, for the sale of water stored at facilities constructed by expenditures pursuant to § 10.1-638 B. However, it is not the intent of this article to provide a means whereby the Commonwealth shall store and sell water to such entities; therefore, unless extenuating circumstances prevail, such contract shall be entered into with the understanding that such entities shall acquire the rights of the Board in the water storage facility by a future date agreeable to the Board and entity. The Board may lease such facilities to any agency or entity of government, corporation, organization or individual for recreational purposes or any other uses which will not impair the facilities' value for future water supply. Proceeds from the sale of stored water or sale or rental of such facilities shall be placed in the revolving fund.

1970, c. 591, § 21-11.9; 1972, c. 821; 1988, c. 891.

§ 10.1-646. Purchase price and terms of sales authorized by § 10.1-645.

When an entity, as the term is used in § 10.1-645, agrees to purchase a facility and the rights incident thereto resulting from the storing of additional water in feasible flood prevention sites or the strengthening of foundations and appurtenances of feasible flood prevention sites in which the Board has invested pursuant to § 10.1-638 B, the purchase price shall be the total expenditure from the revolving fund by the Board for such facility plus a surcharge of three percent annually on all funds expended for the facility, other than funds expended pursuant to § 10.1-638 C, from the date of expenditure to the date of purchase by the purchasing entity.

With the approval of the Board, the purchasing entity may finance the purchase price, or any portion thereof, of the facility under the terms and conditions of §§ 10.1-638 A and 10.1-643, and the provisions of §§ 10.1-643 and 10.1-644 shall apply, mutatis mutandis, to such financing. If a purchasing entity finances the purchase of a facility as hereinabove provided, such purchasing entity shall not be precluded from applying for a loan authorized by § 10.1-638 A to the limit imposed by that section to complete any facility purchased to store additional water.

1970, c. 591, § 21-11.10; 1972, c. 821; 1988, c. 891.

§ 10.1-647. Disposition of facilities financed under article when part of debt remains outstanding.

No facility financed from the revolving fund under the provisions of this article, in whole or in part, shall be sold by an entity when any portion of the debt owed to the revolving fund remains unpaid. However, if the purchaser is an entity having the taxing power, then such sale may be made even though all or a portion of the debt to the revolving fund remains unpaid, if the purchasing entity agrees to assume the obligation to repay the outstanding debt and all interest thereon. If such sale is approved by the Board, then the purchasing entity shall be solely liable for the obligations undertaken by the principal debtor, and the principal debtor shall be released therefrom.

1970, c. 591, § 21-11.12; 1988, c. 891.

§ 10.1-648. Acquisition of lands, easements, and rights-of-way.

A. The Board, in addition to the provisions of § 10.1-638, may use funds from the revolving fund to pay the cost of the purchase of needed lands, easements, and rights-of-way, or to share the costs thereof with soil and water conservation districts for soil and water conservation and flood control needs when the following conditions have been met:

1. The program of work for the project has been found by the Board to be feasible, practicable and will promote the health, safety, and general welfare of the people of the Commonwealth;

2. The soil and water conservation district or its cosponsors of the project have obtained a minimum of seventy-five percent of the necessary lands, easements, and rights-of-way in the project, or portion of a project (subwatershed) for which funds are requested prior to the use of funds for this purpose;

3. The district and its cosponsors, if any, have submitted a plat to the Board showing the lands, easements and rights-of-way previously acquired, as well as the remaining lands, easements and rights-of-way necessary to the project but not acquired. In addition, the Board may require any other information which it deems necessary. The district and cosponsors shall certify to the Board that funds are unobtainable from any other source to acquire the remaining land, easements, and rights-of-way necessary to the project, in whole or in part;

4. The funds to be used for lands, easements, and rights-of-way shall be granted to the district or cosponsor of the project in whose name the land, easement, or right-of-way shall be recorded.

B. No later than ten years from the purchase of lands and rights-of-way with the funds provided by this section for soil and water conservation and flood control needs, or upon the completion of the watershed project, or a portion of the project (subwatershed) and upon written demand of the owners, their heirs or assigns from whom such land and rights-of-way were acquired, such property shall be reconveyed by the district or cosponsor to the former owners, their heirs or assigns, upon repayment of the original purchase price, without interest, unless such lands and rights-of-way are granted or retained for public purposes as hereinafter provided. After ten years, and no later than twelve years after the purchase date of lands and rights-of-way with the funds provided by this section, unless such lands and rights-of-way are granted or retained for public purposes or reconveyed as provided above, it shall be the duty of the district or cosponsor, to sell the property purchased wholly or partially from the funds provided by this section. The Board shall specify the terms for any such sale. Upon the sale or reconveyance of such property, the district or cosponsor shall remit to the Board a pro rata share of the proceeds of such sale or repayment pursuant to a reconveyance, equal to the percentage of the total cost of the acquisition of such property from any allocation of funds made hereunder and all such remittances shall be deposited to the revolving fund. The district or cosponsor of the project in whose name the acquisition of the land or rights-of-way to be sold is recorded shall retain any easement or right-of-way to assure the continued operation, maintenance, inspection, and repair of the works of improvement constructed on the land to be sold. The district and cosponsor of a project, with the approval of the Board, may grant for public purposes fee title to lands and rights-of-way acquired under the provisions of this section to any political subdivision, including a cosponsor, an agency of the state or federal government, or a regional park authority.

1970, c. 591, § 21-11.14; 1988, c. 891.

§ 10.1-649. Sale to Board of property and rights-of-way acquired by condemnation.

For the purpose of § 10.1-638 B the Board is authorized to purchase property and rights-of-way condemned for maintaining, protecting, or providing supplies of water and for water storage purposes under §§ 15.2-1904, 15.2-1907, 15.2-5114, and 21-118 and the condemnor is authorized to sell any such property or rights-of-way to the Board.

1970, c. 591, § 21-11.15; 1988, c. 891; 2003, c. 940.