§ 62.1-216.1. Investigation by Governor of alleged defaults; withholding state funds from defaulting locality; pa...
Whenever it appears to the Governor from an affidavit filed with him by the Authority as the purchaser, holder, or credit enhancer of local obligations (regardless of the security therefor) issued by any county, city or town that the county, city or town has defaulted in its payment of the principal of or premium, if any, or interest on any of its outstanding local obligations purchased, held, or credit enhanced by the Authority, the Governor shall immediately make a summary investigation into the facts set forth in the affidavit. The Authority may, but shall not be required to, file such an affidavit unless the Authority has otherwise contracted to make such filing for the benefit of the holders of any of its bonds or the local obligations credit enhanced by it. The affidavit described in this section may be filed by a trustee to which the Authority has assigned the local obligations as security for bonds of the Authority under a resolution or trust indenture or otherwise.
If it is established to the satisfaction of the Governor that the county, city or town is in default in the payment of such local obligations or the interest on them, the Governor shall immediately make an order directing the Comptroller to withhold all further payment to the county, city or town of all funds, or of any part of them, appropriated and payable by the Commonwealth to the county, city or town for any and all purposes, until the default is cured. The Governor shall, while the default continues, direct in writing the payment of all sums withheld by the Comptroller, or as much of them as is necessary, to the Authority, so as to cure, or cure insofar as possible, the default as to the local obligations or interest on them.
The Governor shall, as soon as practicable, give notice of the default and of the availability of funds with the Comptroller in writing to the Authority. Any payment so made by the Comptroller to the Authority shall be credited as if made directly by the county, city or town and shall be charged by the Comptroller against the first appropriations otherwise payable to the county, city or town as if paid to the county, city or town. The Authority, at the time of payment or at the time of each payment shall receipt for the payment and deliver to the Comptroller all local obligations or other instruments or documents, in a form satisfactory to the Comptroller, evidencing the Authority's right to receive the amounts satisfied by the payment. The Comptroller shall report each payment made to the governing body of the defaulting county, city or town and deliver or send by registered mail to the governing body all local obligations, or other instruments or documents received by the Comptroller under the provisions of this section.
Nothing in this section shall be construed to create any obligation on the part of the Comptroller or the Commonwealth to make any payment on behalf of the defaulting county, city or town other than from funds appropriated and payable to the defaulting county, city or town.
(1998, c. 399; 2003, c. 561.)
Sections: Previous 62.1-210 62.1-211 62.1-212 62.1-213 62.1-214 62.1-215 62.1-216 62.1-216.1 62.1-217 62.1-218 62.1-219 62.1-220 62.1-221 62.1-222 62.1-223 NextLast modified: April 3, 2009