CHAPTER 194

An Act to create the Virginia Public School Authority as a public body
corporate and a political subdivision and agency and instrumentality
of the Commonwealth; to prescribe the powers and duties thereof and
other matters pertaining thereto; to provide that the Authority shall
manage and administer all Literary Fund moneys and obligations
transferred to the Authority pursuant to law; to authorize the Au-
thority to purchase bonds issued by counties, cities and towns for
public schools under the provisions of the Public Finance Act of 1958;
to authorize the Authority to issue bonds secured by a pledge of bonds
so purchased and of principal and interest payments on Literary Fund
obligations so transferred to the Authority; to provide that bonds 1s-
sued by the Authority shall not constitute a debt of the Commonwealth
or a pledge of the faith or credit or taxing power of the Commonwealth
or of any political subdivision thereof; to authorize the taking of
action pursuant to the provisions of § 15-666.66 of the Code of Virginia;
to direct the payment by the Authority into the Literary Fund of
moneys avauable therefor; and to provide that bonds of the Authority
shall be exempt from all taxation within the State.

[H 466]
Approved March 7, 1962

ie it enacted by the General Assembly of Virginia:

§ 1. This Act shall be known and shall be cited as the “Virginia
Publis School Authority Act of 1962”.

§ 2. It is hereby found, determined and declared that the providing
of public schools by many ‘counties, cities and towns of the State is
hindered, impeded and delayed by the high financing costs resulting from
the sale of the bonds of such counties, cities and towns in the open market,
and it is desirable that a State agency be created as hereinafter provided,
authorized to purchase such bonds in order to serve public school purposes
by financing the construction of public schools at less cost, thereby
facilitating such construction.

§ 3. The Virginia Public School Authority, hereinafter referred to
as the Authority, is created as a public body corporate and as a political
subdivision and an agency and instrumentality of the Commonwealth of
Virginia, and as such shall have, and is hereby vested with the powers,
rights and duties hereinafter conferred in this Act.

§ 4. All powers, rights and duties conferred by this Act, or other
provisions of law, upon the Authority shall be exercised by the Board
of Commissioners of the Virginia Public School Authority established by
this Act and hereinafter referred to as the Board. The Board shall consist
of the State Treasurer, the State Comptroller, and five additional members
to be appointed by the Governor, subject to confirmation by the General
Assembly, who shall serve at the pleasure of the Governor for terms of
six years each, the initial appointments to be two members for terms of
six years, two members for terms of four years, and one member for
a term of two years, and subsequent appointments to be made for terms
of six years, except appointments to fill vacancies which shall be made
for the unexpired terms. The members of the Board of Commissioners,
with the exception of the Chairman, shall receive no salaries but shall be
paid their necessary travelling and other expenses incurred in attendance
upon meetings, or while otherwise engaged in the discharge of their
duties, and the sum of twenty-five dollars a day for each day or portion
thereof in which they are engaged in the performance of their duties
except, however, that the State Treasurer and the State Comptroller shall
not be entitled to the per diem compensation.

The Governor shall appoint one member of the Board as Chairman,
who shall be the chief executive officer of the Authority and who shall
receive such compensation as the Governor shall fix. Neither the State
Treasurer nor the State Comptroller shall be eligible to serve as Chairman.
The Chairman shall sign and execute all vouchers for the disbursement
of funds belonging to the Authority upon authorization by the Board. Five
members of the Board shall constitute a quorum for the transaction of all
business of the Authority. The Board shall elect one member of the Board
as Vice-Chairman, who shall exercise the powers of the Chairman when
so directed by the Chairman or the Board.

The Board may employ or retain such employees, agents, financial
advisers and attorneys as it may deem necessary and fix their compensation.

§ 5. The Authority shall manage and administer as hereinafter pro-
vided all moneys or obligations that may be set aside and transferred to it
from the principal of the Literary Fund by the General Assembly for
public school purposes pursuant to Section 134 of the Constitution of
Virginia.

6. The Authority is authorized to purchase, with any funds of the
Authority available for such purpose, at public or private sale and for such
price and on such terms as it shall determine, bonds or other obligations
issued by counties, cities and towns under the provisions of Chapter 640,
Acts of the General Assembly of 1958, known and cited as ‘‘Public Finance
Act of 1958,” and codified as Chapter 19.1 of Title 15 of the Code of
Virginia, as heretofore or hereafter amended or codified, solely for the
purpose of constructing, extending, repairing and equipping public schools
(such bonds being hereinafter sometimes called “local school bonds’’) ;
provided, however, that before the Authority shall purchase any local
school bonds there shall be filed in the records of the Authority a certificate
signed by the Chairman of the Board stating that, based upon the financial
data then available to him, he is of the opinion that such purchase will
result in a lower financing cost to the borrower than the sale of such
local school bonds in the open market, and such certificate shall be con-
clusive evidence of such lower financing cost. The Authority may pledge
to the payment of the interest on and the principal of any bonds of the
Authority all or any part of the local school bonds so purchased, including
payments of principal and interest thereon as they shall become due. The
Authority may also, subject to any such pledge, sell any such local school
bonds so purchased and apply the proceeds of such sale in the purchase
of other like local school bonds or for such purpose and in such manner
as shall be provided by any resolution authorizing the issuance of bonds
of the Authority, or the Authority may transfer such proceeds to the
Literary Fund.

§ 7. In order to provide funds for the purchase of local school bonds
as authorized by § 6 of this Act, the Board is hereby authorized to pro-
vide by resolution, at one time or from time to time, for the issuance of
bonds of the Authority in such amount or amounts as the Board shall
determine. Such bonds of the Authority shall be payable solely from funds
of the Authority, including, but without limitation, (i) payments of prin-
cipal of and interest on local school bonds purchased by the Authority,
(ii) the proceeds of the sale of any such local school bonds, (i111) payments
of principal of and interest on obligations transferred to the Authority
from the Literary Fund, (iv) the proceeds of the sale of any such obliga-
tions, and (v) any moneys transferred to the Authority from the Literary
Fund, as shall be provided by the resolution of the Board authorizing any
such bonds. Bonds of the Authority issued under the provisions of this
Act shall not be deemed to constitute a debt of the Commonwealth or a
pledge of the faith or credit of the Commonwealth and all bonds of the
Authority shall contain on the face thereof a statement to the effect that
neither the faith and credit nor the taxing power of the Commonwealth
or of any political subdivision thereof is, or shall be, pledged to the pay-
ment of the principal of or the interest on such bonds.

The bonds of each issue shall be dated, shall bear interest at such
rate or rates not exceeding five per centum per annum, shall mature at
such time or times, not exceeding thirty years from their date or dates,
as may be determined by the Board, and may be made redeemable before
maturity, at the option of the Board, at such price or prices and under
such terms and conditions as may be fixed by the Board prior to the issu-
ance of the bonds. The principal and interest of such bonds may be made
payable in any lawful medium. The Board shall determine the form of the
bonds, including any interest coupons to be attached thereto, and the
manner of execution of the bonds, and shall fix the denomination or
denominations of the bonds and the place or places of payment of prin-
cipal and interest thereof, which may be at the office of the State Treas-
urer or at any bank or trust company within or without the State. In case
any officer whose signature or a facsimile of whose signature shall appear
on any bonds or coupons shall cease to be such officer before the delivery
of such bonds such signature or such facsimile shall nevertheless be valid
and sufficient for all purposes the same as if he had remained in office
until such delivery. All bonds issued under the provisions of this Act shall
have and are hereby declared to have, as between successive holders, all
the qualities and incidents of negotiable instruments under the negotiable
instruments law of the State. The bonds may be issued in coupon or ir
registered form, or both, as the Board may determine, and provision may
be made for the registration of any coupon bonds as to principal alone
and also as to both principal and interest, and for the reconversion 0!
any bonds registered as to both principal and interest into coupon bonds
The Board may sell such bonds in such manner, either at public or at pri
vate sale, and for such price as it may determine to be for the best interests
of the Authority. The proceeds of such bonds shall be disbursed for the
purposes for which such bonds shall have been issued under such restric-
tions, if any, as the resolution authorizing the issuance of such bonds or
the trust indenture hereinafter mentioned may provide. Prior to the
preparation of definitive bonds, the Board may under like restrictions
issue temporary bonds, with or without coupons, exchangeable for defini-
tive bonds when such bonds shall have been executed and are available
for delivery. The Board may also provide for the replacement of any bond
which shall become mutilated or shall be destroyed or lost. Such bonds
may be issued without any other proceedings or the happening of any
other conditions or things than the proceedings, conditions, and things
which are specified and required by this Act.

§ 8. In the discretion of the Board any bonds issued under the pro-
visions of this Act may be secured by a trust indenture by and between
the Authority and a corporate trustee, which may be any trust company
or bank having the powers of a trust company within or without the
State. Such trust indenture or the resolution providing for the issuance
of such bonds may pledge or assign all or any part of the funds of the
Authority available for such purpose, including, but without limitation,
(1) payments of principal of and interest on local school bonds purchased
by the Authority, (ii) the proceeds of the sale of any such local school
bonds, (iii) payments of principal of and interest on obligations trans-
ferred to the Authority from the Literary Fund, (iv) the proceeds of the
sale of any such obligations, and (v) any moneys transferred to the
Authority from the Literary Fund. Such trust indenture or resolution
providing for the issuance of such bonds may provide for the creation and
maintenance of such reserves as the Board shall determine to be proper,
and may include covenants setting forth the duties of the Board in rela-
tion to the acquisition of any local school bonds, the substitution of any
local school bonds as security for payment of the bonds of the Authority,
and the collection of payments of principal and interest on any local
school bonds and on any obligations transferred to the Authority from
the Literary Fund. Such trust indenture or resolution may include provi-
sions requiring the Authority or the trustee under such trust indenture
or any depository to file a petition with the Governor and to take any and
all other action required under § 15-666.66 of the Code of Virginia to
secure payment of all sums necessary to cover any default as to any bonds
or the interest thereon held by the Authority or by such trustee or deposi-
tory to which said § 15-666.66 shall be applicable. Such trust indenture
or resolution may contain provisions respecting the custody, safeguarding
and application of all moneys and securities including local school bonds
purchased by the Authority and obligations transferred to the Authority
from the Literary Fund, and 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. It shall be lawful for
any bank or trust company incorporated under the laws of the State which
may act as depository of the proceeds of bonds or of any other funds or
obligations received on behalf of the Authority to furnish such indemnify-
ing bonds or to pledge such securities as may be required by the Board.
Any such trust indenture or resolution may contain such other provisions
as the Board may deem reasonable and proper for the security of the
bondholders. Any reference in this Act to a resolution of the Board shall
include any trust indenture authorized thereby.

§ 9. Any funds held by the Authority or by the trustee under any
trust indenture under the provisions of this Act may be invested and rein-
vested in securities that are legal investments under the laws of the Com-
monwealth for funds held by fiduciaries.
§ 10. On or before the tenth day of January in each year tne AuU-
thority shall set aside and pay into the Literary Fund an amount equal to
the excess of the principal and interest collected by the Authority in the
preceding year on account of obligations transferred to the Authority from
the Literary Fund over such portion of such principal and interest as shall
have been pledged by any trust indenture or resolution authorizing bonds
of the Authority.

§ 11. In order to enable the Authority to carry out the purposes for
which it is established the Authority is vested with the powers of a body
corporate including the power to sue and be sued, to make contracts, and
to adopt and use a common seal and to alter the same, and is authorized
and empowered :

(a) to collect, or to authorize the trustee under any trust indenture
securing any bonds of the Authority to collect, as the same shall become
due, the principal of and the interest on all obligations transferred to the
Authority from the Literary Fund;

(b) to collect, or to authorize the trustee under any trust indenture
securing any bonds of the Authority to collect, as the same shall become
due, the principal of and the interest on all local school bonds purchased
by the Authority ;

(c) to pay the compensation of the chief executive officer of the Au-
thority and all such employees, agents, financial advisers and attorneys as
may be employed by the Authority either from moneys received by the
Authority under the provisions of this Act or from appropriations made by
the General Assembly available for such purpose ;

(d) to issue bonds of the Authority as authorized by this Act, and to
refund any of such bonds;

(e) to adopt or alter or repeal any by-laws, rules or regulations as the
Authority may deem necessary or expedient; and

(f) to do any and all other acts and things necessary, appropriate or
incidental in carrying out the purposes of this Act.

§ 12. The bonds issued by the Authority 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 municipality, county, or any
other political subdivision thereof.

§ 18. All bonds issued by the Authority under the provisions of this

Act are hereby made securities in which all public officers and bodies of the
Commonwealth, and all counties, cities and towns, and municipal subdi-
visions, all insurance companies and associations, all savings banks and
savings institutions, including savings and loan associations, trust com-
panies, beneficial and benevolent associations, administrators, guardians
executors, trustees and other fiduciaries in the Commonwealth may prop:
erly and legally invest funds under their control.
_ . § 14, The Circuit Court of the City of Richmond shall have exclusive
jurisdiction of any suit brought in Virginia against the Authority, anc
process in such suit shall be served either on the State Comptroller or the
Chairman of the Board.

2. Anemergency exists and this act is in force from its passage.