An Act to authorize the issuance of bonds, in an amount up to
$40,987,000 plus financing costs, pursuant to Article X, Section 9 (c) of the
Constitution of Virginia, for paying costs of acquiring, constructing, and
equipping revenue-producing capital projects at institutions of higher
education of the Commonwealth.
Approved April 8, 2016
Whereas, Article X, Section 9 (c) of the Constitution of
Virginia provides that the General Assembly may authorize the creation of debt
secured by a pledge of net revenues derived from rates, fees, or other charges
and the full faith and credit of the Commonwealth of Virginia, provided that
such debt is created for specific revenue-producing capital projects, including
their enlargement or improvement, at, among others, institutions of higher
education of the Commonwealth; and
Whereas, in accordance with Article X, Section 9 (c) of the
Constitution of Virginia, the Governor has certified in writing, filed with the
Auditor of Public Accounts, his opinion that the anticipated net revenues of
each of the capital projects identified below to be pledged to the payment of
the principal of and the interest on that portion of such debt issued for each
such project will be sufficient to meet such payments as the same become due
and to provide such reserves as may be required by law and that each of the
capital projects complies with the requirements of Article X, Section 9 (c) of
the Constitution of Virginia; now, therefore,
Be it enacted by the General Assembly of Virginia:
1. § 1. Title.
This act shall be known and may be cited as the
"Commonwealth of Virginia Institutions of Higher Education Bond Act of
§ 2. Authorization of bonds and bond anticipation notes.
The Treasury Board is hereby authorized, by and with the
consent of the Governor, to sell and issue, pursuant to Article X, Section 9
(c) of the Constitution of Virginia, at one time or from time to time, bonds of
the Commonwealth, to be designated "Commonwealth of Virginia Institutions
of Higher Education Bonds, Series ....." in an aggregate principal amount
not exceeding $40,987,000, plus amounts needed to fund issuance costs, reserve
funds, construction period interest, and other financing expenses. The Treasury
Board is further hereby authorized, by and with the consent of the Governor, to
borrow money in anticipation of the issuance of bonds by the issuance of bond
anticipation notes (BANs), including BANs issued as commercial paper. The
proceeds of such bonds and BANs, excluding amounts needed to fund issuance
costs, reserve funds, and other financing expenses, shall be used exclusively
for the purpose of providing funds, with any other available funds, for paying
all or a portion of the costs of acquiring, constructing, renovating,
enlarging, improving, and equipping revenue-producing capital projects at
institutions of higher education of the Commonwealth as follows:
Institution Project Title Amount
Norfolk State University Renovate and Upgrade
Richard Bland College Convert Former Humanities and
Social Science Building into
Student Housing $2,650,000
The College of William
and Mary in Virginia Renovate Dormitories $2,500,000
James Madison University Renovate Phillips Hall $26,600,000
§ 3. Application of proceeds.
The proceeds, including any premium, of bonds and BANs,
except the proceeds of (i) bonds the issuance of which has been anticipated by
BANs, (ii) refunding bonds, and (iii) refunding BANS, shall be deposited in a
special capital outlay fund in the state treasury and, together with the
investment income thereon, shall be disbursed by the State Treasurer for paying
costs of acquiring, constructing, renovating, enlarging, improving, and
equipping the authorized capital projects, including financing costs. The
proceeds of (a) bonds the issuance of which has been anticipated by BANs, (b)
refunding bonds, and (c) refunding BANs shall be used to pay such BANs,
refunded bonds, and refunded BANS.
§ 4. Details; sale of bonds and BANs.
Bonds and BANs shall be dated and may be made redeemable
before their maturity or maturities at such price or prices or within such
price parameters, all as may be determined by the Treasury Board, by and with
the consent of the Governor. Bonds and BANs shall be in such form, shall bear
interest at such rate or rates, either at fixed rates or at rates established
by formula or other method, and may contain such other provisions, all as
determined by the Treasury Board or, when authorized by the Treasury Board, the
State Treasurer. The principal of and premium, if any, and interest on bonds
and BANs shall be payable in lawful money of the United States of America.
Bonds and BANs may be certificated or uncertificated as determined by the
Treasury Board. The Treasury Board may contract for services of such
registrars, transfer agents, or other authenticating agents as it deems appropriate
to maintain a record of the persons entitled to the bonds and BANs. Bonds and
BANs issued in certificated form may be issued under a system of book entry for
recording the ownership and transfer of ownership of rights to receive payments
on the bonds and BANs. The Treasury Board shall fix the authorized denomination
or denominations of the bonds and the place or places of payment of
certificated bonds and BANs, which may be at the Office of the State Treasurer
or at any bank or trust company within or without the Commonwealth. Bonds shall
mature at such time or times not exceeding 30 years from their date or dates,
and BANs shall mature at such time or times not exceeding five years from their
date or dates.
The Treasury Board may sell bonds and BANs in such manner,
by competitive bidding, negotiated sale, or private placement and for such
price or within such price parameters as it may determine, by and with the
consent of the Governor, to be in the best interest of the Commonwealth.
In the discretion of the Treasury Board, bonds and BANs may
be issued at one time or from time to time and may be sold and issued at the
same time with other general obligation bonds and BANs, respectively, of the
Commonwealth authorized pursuant to Article X, Section 9 (a) (3), (b), and (c)
of the Constitution of Virginia, as separate issues or as a combined issue,
designated "Commonwealth of Virginia General Obligation Bonds Bond
Anticipation Notes, Series ....."
§ 5. Execution of bonds and BANs.
Certificated bonds and BANs shall be signed on behalf of
the Commonwealth by the Governor and by the State Treasurer, or shall bear
their facsimile signatures, and shall bear the lesser seal of the Commonwealth
or a facsimile thereof. If the bonds or BANs bear the facsimile signature of
the State Treasurer, they shall be signed by such administrative assistant as
the State Treasurer shall determine or by such registrar or paying agent as may
be designated to sign them by the Treasury Board. If any officer whose
signature or facsimile signature appears on any bonds or BANs ceases to be such
officer before delivery, such signature or facsimile signature shall
nevertheless be valid and sufficient for all purposes the same as if such
officer had remained in office until such delivery, and any bond or BAN may
bear the facsimile signature of, or may be signed by, such persons as at the
actual time of execution are the proper officers to sign such bond or BAN
although, at the date of such bond or BAN, such persons may not have been such officers.
§ 6. Sources for payment of expenses.
All expenses incurred under this act shall be paid from the
proceeds of bonds or BANs, from payments made by the institutions for which the
capital projects were authorized in § 2, or from any other available funds as
the Treasury Board shall determine.
§ 7. Revenues.
The institutions of higher education named in § 2 are
hereby authorized (i) to fix, revise, charge, and collect rates, fees, and
charges for or in connection with the use, occupancy, and services of each
capital project named in § 2 or the system of which such capital project is a
part and (ii) to pledge to the portion of the bonds or BANs issued for such
capital project the net revenues resulting from such rates, fees, and charges
and remaining after payment of the expenses of operating the project or system,
as the case may be. The institution is further authorized to create debt
service and sinking funds for the payments of the principal of and premium, if
any, and interest on the bonds and other reserves required by any agency of the
United States of America purchasing the bonds or any portion thereof.
§ 8. Investments and contracts.
A. Pending the application of the proceeds of the
bonds or BANs, including refunding bonds and BANs, to the purpose for which
they have been authorized and the application of funds set aside for the
purpose to the payment of bonds or BANs, they may be invested by the State
Treasurer in securities that are legal investments under the laws of the
Commonwealth for public funds and sinking funds, as the case may be. Whenever
the State Treasurer receives interest from the investment of the proceeds of
bonds or any BANs, such interest shall become a part of the principal of the
bonds or any BANs and shall be used in the same manner as required for
principal of the bonds or BANs.
B. The Commonwealth may enter into any contract or other
arrangement that is determined to be necessary or appropriate to place the
obligation or investment of the Commonwealth, as represented by bonds, BANs, or
investments, in whole or in part, on the interest rate, cash flow, or other
basis desired by the Commonwealth. Such contract or other arrangement may
include, without limitation, contracts commonly known as interest rate swap
agreements and futures or contracts providing for payments based on levels of,
or changes in, interest rates. These contracts or arrangements may be entered
into by the Commonwealth in connection with, or incidental to, entering into or
maintaining any (i) agreement that secures bonds or BANs or (ii) investment, or
contract providing for investment, otherwise authorized by law. These contracts
and arrangements may contain such payment, security, default, remedy, and other
terms and conditions as determined by the Commonwealth, after giving due
consideration to the creditworthiness of the counterparty or other obligated
party, including any rating by any nationally recognized rating agency, and any
other criteria as may be appropriate. The determinations referred to in this subsection
may be made by the Treasury Board or any public funds manager with professional
investment capabilities duly authorized by the Treasury Board to make such
C. Any money set aside and pledged to secure payments of
bonds, BANs, or any of the contracts entered into pursuant to this section may
be invested in accordance with subsection A and may be pledged to and used to
service any of the contracts or other arrangements entered into pursuant to
§ 9. Security for bonds and BANs.
The net revenues of the capital projects set forth in § 2
and the full faith and credit of the Commonwealth are hereby irrevocably
pledged for the payment of the principal of and the interest on bonds and BANs,
unless the Treasury Board, by and with the consent of the Governor, shall
provide otherwise, issued under this act. The proceeds of (i) bonds the
issuance of which has been anticipated by BANs, (ii) refunding bonds, and (iii)
refunding BANs are hereby irrevocably pledged for the payment of principal of
and interest and any premium on the BANS or bonds to be paid or redeemed
thereby. In the event the net revenues pledged to the payment of the bonds or
BANs are insufficient in any fiscal year for the timely payment of the
principal of and premium, if any, and interest on the bonds or BANs, where the
full faith and credit of the Commonwealth have been pledged, the General
Assembly shall appropriate a sum sufficient therefor or the Governor shall
direct payment therefor from the general fund revenues of the Commonwealth.
§ 10. Exemption of interest from tax.
The bonds and BANs issued under the provisions of this act,
their transfer, and the income therefrom, including any profit made on the sale
thereof, shall at all times be free and exempt from taxation by the
Commonwealth and by any county, city, or town or other political subdivision
thereof. The Treasury Board is authorized to take or refrain from taking any
and all actions and to covenant to such effect, and to require the
participating institutions to do and to covenant likewise, to the extent that,
in the judgment of the Treasury Board, it is appropriate in order that interest
on the bonds and BANs may be exempt from federal income tax. Alternatively,
interest on bonds and BANs may be made subject to inclusion in gross income of
the holders thereof for federal income tax purposes.
§ 11. Refunding bonds and BANs.
The Treasury Board is authorized, by and with the consent
of the Governor, to sell and issue, at one time or from time to time, refunding
bonds and BANs of the Commonwealth and to refund any or all of the bonds and
BANs, respectively, issued under this act or otherwise authorized pursuant to
Article X, Section 9 (c) of the Constitution of Virginia. Refunding bonds and
BANs may be issued in a principal amount up to the amount necessary to pay at
maturity or redeem the bonds and BANs to be refunded and pay all issuance costs
and other financing expenses of the refunding. Such refunding bonds and BANs
may be issued whether or not the obligations to be refunded are then subject to
§ 12. Defeasance.
Any bond or BAN for which cash or direct obligations of the
United States of America shall have been set aside in escrow with the State
Treasurer or a bank or trust company, within or without the Commonwealth, shall
be deemed no longer outstanding under the applicable authorizing instrument,
this act, and Article X, Section 9 (c) or (b), as the case may be, of the
Constitution of Virginia.
§ 13. Severability.
The provisions of this act, or the application thereof to
any person or circumstance, that are held invalid shall not affect the validity
of other provisions or applications of this act which can be given effect
without the invalid provisions or applications.
2. That an emergency exists and this act is in force from its