Virginia Law

A. The Treasury Board is designated as the paying agent of institutions for the purposes of this chapter and shall approve the terms and structure of bonds executed pursuant to this chapter.

B. Any institution may execute its bonds in an aggregate principal amount determined by its board, approved by the Governor, and approved by the Treasury Board pursuant to § 2.2-2416. Such aggregate principal amount may include any cost associated with the development and management of the project, legal or accounting expenses incurred by the institution in connection with the project for which such bonds are issued, and the cost of issuing the bonds, including printing, engraving, advertising, legal, and other similar expenses.

C. Bonds issued pursuant to this chapter shall:

1. Be subject to approval by the Governor and authorization by resolution of the board, and any such resolution may contain provisions, which shall be part of the contract with the bondholders, relating to:

a. Fixing, revising, charging, and collecting fees, rents, and charges for or in connection with the use, occupation, or services of the project or pledging such fees, rents, and charges and any increase in revenues derived from any existing facilities at such institution resulting from any increase in such fees, rents, or charges to the payment of the principal of and the interest on such bonds;

b. Fixing, revising, charging, and collecting fees, rents, and charges for or in connection with the use, occupation, or services of any existing facility at such institution and pledging such fees, rents, and charges to the payment of the principal of and the interest on such bonds;

c. Fixing, revising, charging, and collecting student building fees and other student fees from students enrolled at such institution and pledging all or part of such fees to the payment of the principal of and the interest on such bonds;

d. Pledging to the payment of the principal of and the interest on such bonds any moneys available for the use of such institution, including moneys appropriated to such institution from the general fund of the Commonwealth or from nongeneral funds that are not required by law or by previous binding contract to be devoted to some other purpose, without regard to the source of such moneys but subject to Treasury Board guidelines and approval pursuant to § 2.2-2416;

e. Paying the cost of operating and maintaining any project and any such existing facilities from any revenue source mentioned in subdivision a, b, c, or d, creating reserves for such purposes, and providing for the use and application of such reserves;

f. Creating sinking funds for the payment of the principal of and the interest on such bonds, creating reserves for such purposes, and providing for the use and application of such reserves;

g. Limiting the right of the institution to restrict and regulate the use, occupation, and services of the project and such other existing facilities or the services rendered in such project or other existing facilities;

h. Limiting the purposes to which the proceeds of sale of any issue of bonds may be applied;

i. Limiting the issuance of additional bonds;

j. Setting forth the procedure by which the terms of any contract with the bondholders may be amended or abrogated and the manner in which such bondholders may give consent to any such amendment or abrogation; and

k. Setting forth such other conditions precedent as may be required by the United States or any federal agency to obtain a direct grant or loan to erect or defray the cost of labor and material to erect any project from the United States or any federal agency, subject to the approval of the Governor;

2. Bear such date, mature at such time, bear interest at such rate not exceeding the rate specified in § 23.1-1112 payable at such times, be in such denomination, be in such form, either coupon or registered, carry such registration privilege, be executed in such manner, be payable in such medium of payment and at such place, and be subject to such terms of redemption, with or without premium, as the resolution of the board provides;

3. Be issued to finance only those projects approved by the General Assembly in the general appropriation act;

4. Be pledged pursuant to a resolution of the board and payable only from the revenue sources set forth in subdivisions 1 a, b, c, and d;

5. Not constitute an indebtedness of the institution, except to the extent of the collection of such revenues. Institutions are not liable to pay such bonds or the interest on such bonds from any other funds. No contract entered into by an institution pursuant to this chapter shall be construed to require the costs or expenses to operate and maintain a project for which bonds are issued and any other existing facilities to be paid out of any funds other than the revenues derived and pledged from the sources set forth in subdivisions 1 a, b, c, and d; and

6. Be fully negotiable within the meaning and for all the purposes set forth in Title 8.3A.

D. Bonds issued pursuant to this chapter may be:

1. Sold at public or private sale for such price or prices as the board determines and the Governor approves, provided that (i) the interest cost to maturity of the money received for any issue of such bonds shall not exceed the rate specified in § 23.1-1112; (ii) the General Assembly shall approve the issuance of bonds to finance projects; and (iii) biennially, on or before September 1 of each odd-numbered year, each institution shall submit to the Governor each proposed project and the estimated cost of each such project that the institution desires to have financed under the provisions of this chapter, and the Governor shall consider such projects and make his recommendation to the General Assembly in the budget submitted in accordance with the provisions of § 2.2-1508;

2. Issued to finance only those projects approved by the General Assembly in the general appropriation act, which projects need not be limited to the projects recommended by the Governor;

3. Issued to finance all or a portion of the cost of any project plus amounts to fund issuance costs, reserve funds, and capitalized interest for a period not to exceed one year following completion of the project; and

4. Issued for the purpose set forth in § 23.1-1102 or to carry out the powers conferred on the institution by § 23.1-1104.

E. Neither the Governor nor the members of the board nor any person executing bonds pursuant to this chapter are liable personally on the bonds or subject to any personal liability or accountability by reason of the issuance of such bonds.

F. Any institution may purchase with funds available for such purchase any bond that it has issued at a price not more than the sum of the principal amount and accrued interest. All bonds so purchased shall be cancelled unless purchased as an endowment fund investment. Nothing in this subsection shall be construed to apply to the redemption of bonds.

G. In any case in which an institution obtains a loan from the United States or any federal agency to erect any project that requires the establishment of a debt service reserve, the institution, with the consent of the Governor, may deposit securities in a separate collateral account in an amount equal to the required debt service reserve and pledge such securities to meet the debt service requirements if the revenues derived from any source set forth in subdivision C 1 a, b, c, or d and pledged for the payment of such loan become insufficient for such purpose. The face value of United States government securities and the market value of all other securities is the value of any securities so deposited. Nothing in this subsection shall be construed to prohibit repayment of any portion of such loan from income derived from the securities so deposited. No securities shall be deposited in any such collateral account unless such securities are purchased with funds whose use is in no way limited or restricted or are donated to such institution for the purpose of establishing such debt service reserve.

1933, p. 85, § 23-19; 1936-7, p. 28; 1946, p. 184; 1950, p. 366; 1954, c. 397; 1958, cc. 17, 486; 1959, Ex. Sess., c. 61; 1962, c. 373; 1964, c. 635; 1970, c. 609; 1990, cc. 54, 856; 1996, cc. 636, 656, 672, 689; 2016, c. 588.