Virginia Law

Article 3. Bonds.

The authority shall have power and is hereby authorized from time to time in its discretion to issue bonds for any of its purposes, including the payment of all or any part of the cost of any hospital project and the refunding of any bonds previously issued by it. Bonds may be issued under this chapter notwithstanding any debt or other limitation prescribed in any statute and without obtaining the consent of any locality, government or any commission, board, bureau or agency of any of the foregoing; and without any other proceedings or the happening of other conditions or things than those proceedings, conditions or things which are specifically required by this chapter.

Code 1950, § 32-261; 1973, c. 462, § 15.1-1581; 1979, c. 719; 1997, c. 587.

The principal and interest on such bonds shall be payable from such sources as the authority may determine, including (without limiting the generality of the foregoing) (i) its revenues generally, (ii) exclusively from the revenues and receipts of a particular hospital project, or (iii) exclusively from the revenues and receipts of certain designated hospital projects, whether they are financed in whole or in part from the proceeds of such bonds. The bonds may be additionally secured by a pledge of any grant or contribution from any locality or from any government or governmental authority.

Code 1950, § 32-262; 1973, c. 462, § 15.1-1582; 1979, c. 719; 1997, c. 587.

Neither the commissioners of the authority nor any person executing the bonds shall be liable personally on the bonds by reason of the issuance thereof.

Code 1950, § 32-263; 1979, c. 719, § 15.1-1583; 1997, c. 587.

The bonds and other obligations of the authority, and such bonds and obligations shall so state on their face, shall not be a debt of any city in which the authority is located or of the Commonwealth, and neither the Commonwealth nor any such city shall be liable thereon. In no event shall they be payable out of any funds or properties other than those of the authority. The bonds shall not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation of the laws of the Commonwealth.

Code 1950, § 32-264; 1979, c. 719, § 15.1-1584; 1997, c. 587.

The bonds of the authority shall be authorized by its resolution and shall be issued in one or more series and shall bear such date or dates, mature at such time or times, not exceeding sixty years from their respective dates, bear interest at such rate or rates payable at such time or times, be in such denominations (which may be made interchangeable), be in such form, either coupon or registered, carry such registration privileges, be executed in such manner, be payable in such medium of payment, at such place or places, and be subject to such terms of redemption, with or without premium, as such resolution or its trust indenture may provide.

Code 1950, § 32-265; 1973, c. 462, § 15.1-1585; 1979, c. 719; 1997, c. 587.

The bonds may be sold at public or private sale at such price or prices as the authority determines.

Code 1950, § 32-266; 1973, c. 462, § 15.1-1586; 1979, c. 719; 1997, c. 587.

Pending the authorization, preparation, execution or delivery of definitive bonds, the authority may issue interim certificates, or other temporary obligations, to the purchaser of such bonds. Such interim certificates, or other temporary obligations, shall be in such form, contain such terms, conditions and provisions, bear such date or dates, and evidence such agreements, relating to their discharge or payment or the delivery of definitive bonds as the authority may by resolution or trust indenture determine.

Code 1950, § 32-267; 1979, c. 719, § 15.1-1587; 1997, c. 587.

If any of the officers whose signatures appear on any bonds or coupons cease to be such officers before the delivery of the bonds, their signatures shall be valid and sufficient for all purposes as if they had remained in office until such delivery.

Code 1950, § 32-268; 1979, c. 719, § 15.1-1588; 1997, c. 587.

The authority shall have the power out of any funds available therefor to purchase any bonds issued by it. Bonds payable exclusively from the revenues of a designated project or projects shall only be purchased with the revenues available therefor. All bonds so purchased shall be canceled. This section shall not apply to the redemption of bonds.

Code 1950, § 32-269; 1973, c. 462, § 15.1-1589; 1979, c. 719; 1997, c. 587.

Any provision of any law to the contrary notwithstanding, any bonds, interim certificates, or other obligations issued pursuant to this chapter shall be fully negotiable.

Code 1950, § 32-270; 1979, c. 719, § 15.1-1590; 1997, c. 587.

In connection with the issuance of bonds or the incurring of any obligations and in order to secure the payment of such bonds or obligations, the authority shall have power:

1. To pledge by resolution, trust indenture, or other contract, all or any part of its rents, fees, or revenues.

2. To covenant to impose and maintain such schedule of fees and charges as will produce funds sufficient to pay operating costs and debt service.

3. To covenant with respect to limitations on its right to sell, lease or otherwise dispose of any hospital project or other property of the authority or any part thereof or with respect to limitations on its right to undertake additional hospital projects.

4. To covenant against pledging all or any part of its rents, fees and revenues to which its right then exists or the right to which may thereafter come into existence or against permitting or suffering any lien thereon.

5. To provide for the release of rents, fees, and revenues from any pledge and reserve rights and powers in, or the right to dispose of, property, the rents, fees and revenues from which are subject to a pledge.

6. To covenant as to the bonds to be issued pursuant to any resolution, trust indenture, or other instrument and as to the issuance of such bonds in escrow or otherwise, and as to the use and disposition of the proceeds thereof.

7. To covenant as to what other, or additional, debt may be incurred by it.

8. To provide for the terms, form, registration, exchange, execution and authentication of bonds.

9. To provide for the replacement of lost, destroyed, or mutilated bonds.

10. To covenant as to the use of any or all of its property, real or personal.

11. To create or authorize the creation of special funds in which there shall be segregated: (i) the proceeds of any loan or grant; (ii) all of the rents, fees and revenues of any hospital project or projects or parts thereof; (iii) any moneys held for the payment of the costs of operation and maintenance of any such hospital projects or as a reserve for the meeting of contingencies in the operation and maintenance thereof; (iv) any moneys held for the payment of the principal and interest on its bonds or the sums due under its leases or as a reserve for such payments; and (v) any moneys held for any other reserve or contingency; and to covenant as to the use and disposal of the moneys held in such funds.

12. To redeem the bonds and covenant for their redemption and provide the terms and conditions thereof.

13. To covenant against extending the time for the payment of its bonds or interest thereon, directly or indirectly, by any means or in any manner.

14. To prescribe the procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent thereto and the manner in which such consent may be given.

15. To covenant as to the maintenance of its property, the replacement thereof, the insurance to be carried thereon and the use and disposition of insurance moneys.

16. To vest in an obligee of the authority the right, in the event of the failure of the authority, to observe or perform any covenant on its part to be kept or performed, cure any such default and advance any moneys necessary for such purpose. The moneys so advanced may be made an additional obligation of the authority with such interest, security and priority as may be provided in any trust indenture, lease or contract of the authority with reference thereto.

17. To covenant and prescribe as to the events of default and terms and conditions upon which any or all of its bonds shall become or may be declared due before maturity and as to the terms and conditions upon which such declaration and its consequences may be waived.

18. To covenant as to the rights, liabilities, powers and duties arising upon the breach by it of any covenant, condition, or obligation.

19. To covenant to surrender possession of all or any part of any hospital project or other property of the authority, the revenues from which have been pledged, upon the happening of any event of default (as defined in the contract) and to vest in an obligee the right without judicial proceeding to take possession; to use, operate, manage and control such hospital project or other property or any part thereof; to collect and receive all rents, fees and revenues arising therefrom in the same manner as the authority itself might do; and to dispose of the moneys collected in accordance with the agreement of the authority with such obligee.

20. To vest in a trustee or trustees the right to enforce any covenant made to secure, to pay, or in relation to the bonds, to provide for the powers and duties of such trustee or trustees, to limit liabilities thereof and to provide the terms and conditions upon which the trustee or trustees or the holders of bonds or any proportion of them may enforce any such covenant.

21. To make covenants other than and in addition to the covenants herein expressly authorized, of like or different character.

22. To execute all instruments necessary or convenient in the exercise of the powers herein granted or in the performance of its covenants or duties, which may contain such covenants and provisions, in addition to those above specified, as the government or any purchaser of the bonds of the authority may reasonably require.

23. To make such covenants and to do any and all such acts and things as may be necessary or convenient or desirable in order to secure its bonds or, in the absolute discretion of the authority, tend to make the bonds more marketable, notwithstanding that such covenants, acts or things may not be enumerated herein. It is the intention hereof to give the authority power to do all things in the issuance of bonds and in the provisions for their security that are not inconsistent with the Constitution of Virginia.

Code 1950, § 32-271; 1973, c. 462, § 15.1-1591; 1979, c. 719; 1997, c. 587.

In the discretion of the authority, any bonds issued under the provisions of this chapter may be secured by a trust indenture by and between the authority and a corporate trustee or trustees, which may be any trust company or bank having the powers of a trust company within the Commonwealth. Such trust indenture or the resolution authorizing the issuance of such bonds may pledge or assign the fees, rents and other charges to be received or proceeds of or rights under any contract or contracts pledged. Such trust indenture or resolution may contain such provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law, including particularly the appointment of a receiver for any hospital project or other property of the authority from which the revenues have been pledged and such other provisions as have hereinabove been specifically authorized to be included in any trust indenture or resolution of the authority. Any bank or trust company incorporated under the laws of the Commonwealth acting as depository of the proceeds of bonds or of revenues or other moneys may furnish such indemnifying bonds or pledge such securities as may be required by the authority. Any such trust indenture or resolution may set forth the rights and remedies of the bondholders and of the trustee or trustees and may restrict individual rights of action by bondholders. In addition to the foregoing, any such trust indenture or resolution may contain such other provisions as the authority may deem reasonable and proper for the security of the bondholders. All expenses incurred in carrying out the provisions of such trust indenture or resolution may be treated as a part of the cost of the operation of a project.

Code 1950, § 32-271.1; 1973, c. 462, § 15.1-1592; 1979, c. 719; 1997, c. 587.

The authority is hereby authorized to fix, revise, charge and collect fees, rents and other charges for the use of any project and the facilities thereof. Such fees, rents and other charges shall be so fixed and adjusted as to provide, together with other revenues determined by the authority to be available, a fund sufficient to pay the cost of maintaining, repairing and operating the project, the principal of and interest on such bonds as they become due and payable and the amounts necessary to create and maintain reserves for such purposes and for other purposes of the authority. Such fees, rents and charges shall not be subject to supervision or regulation by any locality or by any commission, board, bureau or agency of any of the foregoing. The authority may provide in the resolution authorizing the issuance of such bonds, or in the trust indenture securing the same, for setting aside any part or all of the fees, rents and other charges received by it in a sinking or other similar fund which is hereby pledged to, and charged with, the payment of the principal of and the interest on such bonds, as they become due, and the redemption price or the purchase price of such bonds retired by call or purchase as therein provided. Such pledge shall be valid and binding from the time when the pledge is made. The fees, rents and charges so pledged and thereafter received by the authority shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the authority, irrespective of whether such parties have notice thereof. Neither the resolution nor trust indenture need be filed or recorded except in the records of the authority. The use and disposition of moneys to the credit of a sinking or other similar fund shall be subject to the provisions of such resolution or trust indenture. Except as may otherwise be provided in such resolution or trust indenture, the sinking or other similar fund shall be a fund for all such bonds without distinction or priority of one over another.

Code 1950, § 32-271.2; 1973, c. 462, § 15.1-1593; 1979, c. 719; 1997, c. 587.

All moneys received pursuant to the provisions of this chapter, whether as proceeds from the sale of bonds or as revenues, shall be deemed to be trust funds to be held and applied solely as provided in this chapter. Any officer with whom, or any bank or trust company with which, such moneys are deposited shall act as trustee of such moneys and shall hold and apply the same for the purposes hereof, subject to the provisions of this chapter and the resolution authorizing the issuance of such bonds or the trust indenture securing the same.

Code 1950, § 32-271.3; 1973, c. 462, § 15.1-1594; 1979, c. 719; 1997, c. 587.

Any holder of bonds issued under the provisions of this chapter, or of any of the coupons appertaining thereto, and the trustee under any trust indenture securing the same, except to the extent the rights herein given may be restricted by such trust indenture or any resolution authorizing the issuance of such bonds, may, either at law or in equity, by suit, action, injunction, mandamus or other proceedings, protect and enforce any and all rights under the laws of this Commonwealth or granted by this chapter or under such trust indenture or resolution and may enforce and compel the performance of all duties required by this chapter or by such trust indenture or resolution to be performed by the authority or by any officer, employee or agent thereof, including the fixing, charging and collection of fees, rents and other charges.

Code 1950, § 32-271.4; 1973, c. 462, § 15.1-1595; 1979, c. 719; 1997, c. 587.

The exercise of the powers granted by this chapter shall be in all respects for the benefit of the inhabitants of the Commonwealth and for the promotion of their safety, health, welfare, convenience and prosperity. The operation and maintenance of any hospital project which the authority is authorized to undertake will constitute the performance of an essential governmental function; therefore, the authority shall not be required to pay any taxes or assessments upon any hospital project acquired or constructed by it. The bonds issued under the provisions of this chapter, 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 any political subdivision thereof.

Code 1950, § 32-271.5; 1973, c. 462, § 15.1-1596; 1979, c. 719; 1997, c. 587.

Bonds issued by the authority under the provisions of this chapter are hereby made securities in which all public officers and public bodies of the Commonwealth and all its political subdivisions, all insurance companies, trust companies, banking associations, investment companies, executors, trustees and other fiduciaries may properly and legally invest funds, including capital in their control or belonging to them. Such bonds are hereby made securities which may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the Commonwealth for any purpose for which the deposit of bonds or obligations of the Commonwealth is now or may hereafter be authorized by law.

Code 1950, § 32-271.6; 1973, c. 462, § 15.1-1597; 1979, c. 719; 1997, c. 587.

The foregoing sections of this chapter shall be deemed to provide a complete, additional and alternative method for doing the things authorized thereby and shall be regarded as supplemental and additional to powers conferred by other laws; the issuance of revenue bonds and revenue refunding bonds under the provisions of this chapter need not comply with the requirements of any other laws applicable to the issuance of bonds. Except as otherwise expressly provided in this chapter, none of the powers granted to the authority under the provisions of this chapter shall be subject to the supervision or regulation or require the approval or consent of any locality or any commission, board, bureau or agency of any of the foregoing.

Code 1950, § 32-271.7; 1973, c. 462, § 15.1-1598; 1979, c. 719; 1997, c. 587.

This chapter, being necessary for the welfare of the Commonwealth and its inhabitants, shall be liberally construed to effect the purposes hereof.

Code 1950, § 32-271.8; 1973, c. 462, § 15.1-1599; 1979, c. 719; 1997, c. 587; 2015, c. 709.