CHAPTER 494

An Act to encourage, foster and facilitate the industrial and economic de-
velopment of the Commonwealth by promoting the education at institu-
tions of higher learning of residents of this State; and to this end to
create a political subdivision of the Commonwealth to be known as the
State Education Assistance Authority and to define its powers and
duties; to grant powers to the Authority to further the objectives of
the act; to provide that no debt of the Commonwealth or of any politi-
cal subdivision other than the Authority created by this act shall be
incurred by the acts and undertakings of the Authority; to authorize
all agencies, officers and employees of the Commonwealth and of its
political subdivisions to cooperate with and contribute property to the
Authority; to appropriate funds to the Authority; ana to proviae jor
matters in connection with the foregoing. (H 337]

Approved March 31, 1960

Be it enacted by the General Assembly of Virginia :

1. § 1. Definitions—As used in this act, the following words and terms
shall have the following meanings, unless the context shall indicate another
or different meaning or intent: ; .

(a) The word “Authority” shall mean The State Education Assist-
ance Authority created by this act, or if the Authority shall be abolished,
the board, body, commission or agency succeeding to the principal func-
tions thereof or on whom the powers given by this act to the Authority
shall be conferred by law.

(b) The word “obligations” shall mean those evidences of debt which
the Authority may buy, sell, endorse or guarantee under the provisions of
this act.

(c) The words “act” or “undertaking” shall mean the official act of
the Authority in connection with the acquisition or disposition of all or any
part of obligations or interest therein which the Authority is authorized to
buy or sell under § 2 of this act. ;

In order to facilitate the college education of residents of this
State and promote the industrial and economic development of the Common-
wealth, The State Education Assistance Authority (hereinafter created) is
hereby authorized and empowered to buy and sell obligations of students at
State-supported institutions of higher education representing loans made
to such students for the purpose of obtaining an education.

No act or undertaking of the Authority shall be deemed to constitute
a debt of the Commonwealth or of any political subdivision thereof or a
pledge of the faith and credit of the Commonwealth or of any such political
subdivision, but shall be payable solely from the funds of the Authority.
All such acts and undertakings shall contain on the face thereof a state-
ment to the effect that neither the Commonwealth nor the Authority shall
be obligated to pay the same or the interest thereon except from revenues
of the Authority and that neither the faith and credit nor the taxing power
of the Commonwealth or of any political subdivision thereof is pledged
to the payment of the principal of or the interest on such acts and under-
takings.

All expenses incurred in carrying out the provisions of this act shall
be payable solely from funds provided under the provisions of this act and
no liability or obligation shall be incurred by the Authority hereunder
beyond the extent to which moneys shall have been provided under the pro-
visions of this act.

§ 8. There is hereby created and constituted a political subdivision
of the Commonwealth to be known as “The State Education Assistance
Authority”. The exercise by the Authority of the powers conferred by this
act shall be deemed and held to be the performance of an essential govern-
mental function.

The Authority shall be governed by a board of directors consisting of
seven members, each of whom shall be appointed by the Governor. Two
of the first members of the board appointed by the Governor shall be ap-
pointed for terms of one year, two for terms of two years, two for terms
of three years, and one for a term of four years from the date of their
appointment; and thereafter the members of the board shall be appointed
for terms of four years. Vacancies in the membership of the board shall be
filled by appointment of the Governor for the unexpired portion of the
term. Members of the board shall be subject to removal from office in like
manner as are State, county, town and district officers under the provisions
of §§ 15-500 to 15-503 of the Code of Virginia, provided that the Hustings
Court of the City of Richmond shall have exclusive jurisdiction of all
proceedings for such removal. Immediately after such appointment, the
directors shall enter upon the performance of their duties. The board shall
annually elect one of its members as chairman and another as vice-
chairman, and shall also elect annually a secretary, or a secretary-treasurer,
who may or may not be a member of the board. The chairman, or in his
absence, the vice-chairman, shall preside at all meetings of the board. In
the absence of both the chairman and vice-chairman, the board shall
appoint a chairman pro tempore, who shall preside at such meetings. Four
directors shall constitute a quorum for the transaction of the business of
the Authority, and no vacancy in the membership of the board shall
impair the right of a quorum to exercise all the rights and perform all the
duties of the Authority. The members of the board shall be entitled to re-
imbursement for their expenses incurred in attendance upon the meetings
of the board or while otherwise engaged in the discharge of their duties.
Each member of the board shall also be paid the sum of twenty-five dollars
per day for each day or portion thereof during which he is engaged in the
performance of his duties. Such expenses and compensation shall be paid
out of the treasury of the Authority upon vouchers signed by the chairman
of the board or by such other person or persons as may be designated by
the board for the purpose.
§ 4. The Authority is hereby authorized and empowered:

(a) To fix and revise from time to time and charge and collect fees
for its acts and undertakings;
taki (b) To establish rules and regulations concerning its acts and under-
ings;
_ (c) To acquire, hold and dispose of personal property in the exercise
of its powers and the performance of its duties;
(d) To make and enter into all contracts and agreements necessary

or incidental to the performance of its duties and the execution of its
powers under this act;

(e) To employ, in its discretion, consultants, attorneys, accountants,
and financial experts, superintendents, managers and such other employees
and agents as may be necessary in its judgment, and to fix their compen-
sation to be payable from funds made available to the Authority by law;

(f) To receive and accept from any federal or private agency, cor-
poration, association or person grants to be expended in accomplishing
the objectives of the Authority, and to receive and accept from the Com-
monwealth, from any municipality, county or other political subdivision
thereof and from any other source aid or contributions of either money.
property, or other things of value, to be held, used and applied only for
the purposes for which such grants and contributions may be made;

(zg) To sue and to be sued; to have a seal and to alter the same at its
pleasure; and to make and from time to time amend and repeal by-laws
rules and regulations not inconsistent with law to carry into effect the
powers and purposes of the Authority;

(h) To do all other acts and things necessary or convenient to carryj
out the powers expressly granted in this act; provided, however, that noth.
ing in this act shall be construed to empower the Authority to engage ir
the business of banking or insurance.

§ 5. (a) Title to any property acquired by the Authority shall b
taken in the name of the Authority.

(b) The Commonwealth hereby consents, subject to the approval o:
the Governor, to the use of any other lands or property owned by th
Commonwealth, which are deemed by the Authority to be necessary fo!
its purposes.
(c) The Authority may establish such offices in State-owned or rented
structures as it deems appropriate for its purposes.

With the funds available to the Authority, for purposes other
than the payment of personnel and the lease or rental of offices or equip-
ment, the Authority may acquire from any bank or other lending institu-
tion of this State a contingent interest not exceeding eighty per centum
of any individual obligation; the total contingent interest of the Authority
on all such obligations shall not exceed at any one time a sum equal to
twelve and one-half times the total funds which the Authority can employ
to acquire such contingent interests. When the Authority acquires any
such contingent interest, it may require the payment to it of a portion of
the interest payable upon any such obligation. In each such acquisition,
the Authority shall provide that at such time as the obligation becomes
delinquent, the bank or other lending institution shall notify the Authority
forthwith and shall transfer forthwith to the Authority, by assignment
or otherwise, an interest in such obligation equal to the contingent interest
of the Authority therein. The bank or other lending institution and the
Authority shall forthwith take such steps as may be necessary to recover
the balance due upon any such obligation; any such recovery shall be
apportioned between the Authority and the bank or other lending institu-
tion as their respective interests may appear.

§ 7. The Authority shall prescribe the terms, conditions and limita-
tions upon which it will acquire a contingent or direct interest in any
obligation and such terms, conditions and limitations shall include, but
without limiting the generality hereof, the interest rate payable upon such
obligations, the maturities thereof, the terms for payment of principal
and interest, applicable life or other insurance which may be required in
connection with any such obligation and who shall pay the premiums
thereon, the safekeeping of assets pledged to secure any such undertak-
ing, and any and all matters in connection with the foregoing as will pro-
tect the assets of the Authority.

§ 8. The provisions of this act shall be liberally construed to the
end that its beneficial purposes may be effectuated.

§ 9. The appropriation made to the Authority under this act shall
be used exclusively for the purpose of acquiring contingent or vested rights
in obligations which it may acquire under this act.

§ 10. Each and every application and provision of this act is sever-

able and if any provision or application hereof is held invalid by a court
from which no appeal may be taken, the remaining provisions and appli-
cations of this act shall remain in full force and effect.
2. There is hereby appropriated to The State Education Assistance
Authority from Item 358 of the Appropriation Act of nineteen hundred
sixty for the second year of the biennium the sum of fifty thousand dollars.
The State Treasurer shall transfer such sums upon his books to the credit
of The State Education Assistance Authority to be available exclusively
for the acquisition of contingent or direct interests in obligations which
the Authority may acquire under this act.