Code of Virginia

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Code of Virginia
Title 23.1. Institutions of Higher Education; Other Educational and Cultural Institutions
Chapter 10. Restructured Higher Education Financial and Administrative Operations Act
6/18/2021

§ 23.1-1015. Covered institutions; operational authority; financial operations; power to issue bonds, notes, or other obligations.

A. Notwithstanding the provisions of § 23.1-1119, a covered institution may (i) issue bonds, notes, or other obligations for any purpose that is consistent with its institutional mission, including to (a) finance or refinance any project, (b) appropriately manage operational cash flows, (c) provide for short-term financing, (d) refund bonds, notes, or other obligations issued by or on behalf of such institution, or otherwise, including bonds, notes, or other obligations or obligations not then subject to redemption, and (ii) guarantee, assume, or otherwise agree to pay, in whole or in part, indebtedness issued by such institution or any affiliated entity for managing operational cash flows or resulting in the acquisition or construction of facilities for the benefit of such institution or the refinancing thereof.

B. Nothing in this article shall preclude a covered institution from participation in any financing program or bond issue established and implemented by the Commonwealth or any agency of the Commonwealth, including (i) any financing program or bond issue under Article X, Section 9 (b) or 9 (c) of the Constitution of Virginia and (ii) any financing program or bond issue under Article X, Section 9 (d) of the Constitution of Virginia undertaken by the Treasury Board, the Virginia College Building Authority, or the Virginia Public Building Authority if such institution is otherwise eligible and approved to participate and is otherwise able to fulfill any requirements that may be imposed upon it by virtue of its participation.

C. Notwithstanding Article 8 (§ 2.2-2415 et seq.) of Chapter 24 of Title 2.2, Chapter 11 (§ 23.1-1100 et seq.), and § 23.1-2205, each covered institution may issue bonds, notes, or other obligations consistent with debt capacity and management policies and guidelines established by its governing board without (i) obtaining the consent of any legislative body, elected official, commission, board, bureau, political subdivision, or agency of the Commonwealth; (ii) any proceedings or conditions other than those specifically required by this article; (iii) the approval required by the provisions of Article 8 (§ 2.2-2415 et seq.) of Chapter 24 of Title 2.2; or (iv) any regulation or procedure, including a review or approval procedure, adopted pursuant to Chapter 11 (§ 23.1-1100 et seq.).

D. Each covered institution may issue such types of bonds, notes, or other obligations as it determines are appropriate and consistent with debt capacity and management policies and guidelines established by its governing board, including bonds, notes, or other obligations payable as to principal and interest from any one or more of the following sources: (i) its revenues generally; (ii) income and revenues derived from the operation, sale, or lease of a particular project, whether or not it is financed or refinanced from the proceeds of such bonds, notes, or other obligations; (iii) funds realized from the enforcement of security interests or other liens or obligations securing such bonds, notes, or other obligations; (iv) proceeds from the sale of bonds, notes, or other obligations; (v) payments under letters of credit, policies of municipal bond insurance, guarantees, or other credit enhancements; (vi) any reserve or sinking funds created to secure such payment; (vii) accounts receivable of such institution; or (viii) other available funds of such institution.

E. Any bonds, notes, or other obligations may be supported by any grant, contribution, or appropriation from a participating political subdivision, the covered institution, the Commonwealth, any political subdivision, agency, or instrumentality of the Commonwealth, any federal agency, or any unit, private corporation, partnership, association, or individual.

F. Bonds, notes, or other obligations of a covered institution are for an essential public and governmental purpose.

G. It is lawful for any bank or trust company within or outside the Commonwealth to serve as depository of the proceeds of bonds, notes, or other obligations or other revenues of a covered institution, furnish indemnifying bonds, notes, or other obligations, or pledge such securities as may be required by such institution, provided that any such deposits are collateralized in accordance with the Security for Public Deposits Act (§ 2.2-4400 et seq.) in the case of a bank or savings institution or Article 3 (§ 6.2-1047 et seq.) of Chapter 10 of Title 6.2 in the case of a trust company.

2005, cc. 933, 945, § 23-38.108; 2016, c. 588.

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