Chap. 127.—-An ACT to amend and re-enact Sections 1, 2, 5, 6, 7, and 8, and to
repeal Sections 9, 11, 13, and 19, of Chapter 49 of the Acts of the Extra Session
of the General Assembly of 1933, relating to the issuance and sale of revenue
bonds by certain educational institutions. [H B 247]

Approved March 7, 1946

Be it enacted by the General Assembly of Virginia:

1. That sections nine, eleven, thirteen, and nineteen of chapter
forty-nine of the Acts of the Extra Session of the General Assembly of
nineteen hundred and thirty-three are hereby repealed, and sections one,
two, five, six, seven, and eight of said chapter of said Acts are hereby
amended and re-enacted so as to read as follows:

Section 1. The College of William and Mary in Virginia, at Wil-
liamsburg ; the Medical College of Virginia, at Richmond; the board of
visitors of the Virginia State School for Colored Deaf and Blind Chil-
dren, at Newport News; the State Teachers’ College, at Farmville: the
Mary Washington College of the University of Virginia, at Fredericks-
burg; the Madison College, at Harrisonburg; the Radford College,
Woman’s Division, Virginia Polytechnic Institute, at Radford; the rec-
tor and visitors of the University of Virginia, at Charlottesville; the Vir-
ginia Military Institute, at Lexington; the Virginia Polytechnic Insti-
tute, at Blacksburg; the Virginia School for the Blind, at Charlottes-
ville; the Virginia School for the Deaf and the Blind, at Staunton; and
the Virginia State College, at Petersburg, are hereby classified as edu-
cational institutions, and are declared to be public bodies and constituted
as governmental instrumentalities for the dissemination of education.
The powers of every such institution derived directly or indirectly from
this act shall be vested in and exercised by a majority of the members of
its board, and a majority of such board shall be a quorum for the trans-
action of any business authorized by this act.

Section 2. The following terms, wherever used or referred to in
this act, shall have the following meaning unless a different meaning
clearly appears from the context:

(a) The term “institution” shall mean any educational institution
referred to in section one hereof.

(b) The term “board” shall mean the board of visitors, board of
trustees, or other governing body, by whatever name known, of an in-
stitution.

(c) The term “bonds” shall mean any bonds, certificates of in-
debtedness or other obligations of an institution issued by an institution
pursuant to this act.

(d) The term “Governor” shall mean the Governor of the State of
Virginia.

(e) The term “project” shall mean any building or improvement in-
volving an outlay of a capital nature which may be required by or con-
venient for the purposes of an institution, including, without limitation of
the foregoing, administration, teaching, lecture and exhibition halls,
dormitories, dining halls, laundries, hospitals, infirmaries, and all lands
necessary for any project.

(f{) The term “to erect” or “erection” shall include building, con-
structing, reconstructing, erecting, extending, bettering, equipping, and
improving.

Section 5. The consent of the Governor being first had and ob-
tained, every institution shall have power and is hereby authorized and
empowered to acquire by purchase, gift, or otherwise, any project or to
erect the same, and in connection therewith to borrow money, and make,
issue, and sell its bonds as hereinafter provided, and to enter into and
perform all lawful contracts and agreements and do all lawful acts and
things necessary or proper, and further to make such lawful contracts
and agreements and do and perform all such lawful acts and things as
may be necessary, proper or advisable for the purpose of obtaining and/or
securing grants, loans and/or financial assistance of any kind or sort in
connection therewith under any act of Congress or of this State.

Section 6. (a) Every institution shall have power and is hereby
authorized and empowered from time to time to make and issue its bonds
in such aggregate principal amount as may be determined upon by its
board and approved by the Governor. Such aggregate principal amount
may include without limitation any engineering or inspection costs or
legal or accounting expenses incurred by the institution in connection
with the project for the erection of which such bonds are issued, and
the cost of issuance of the bonds, including printing, engraving, adver-
tising, legal and other similar expenses.
(b) Such bonds shall be authorized by resolution of the board,
approved by the Governor, and may be issued in one or more series,
shall bear such date or dates, mature at such time or times, bear interest
at such rate or rates not exceeding three per centum per annum pay-
able at such time or times, be in such denominations, 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, be subject to such terms of redemption, with or without premium,
as such resolution or resolutions may provide. Such bonds may be sold
at public or private sale for such price or prices as the board with the
approval of the Governor shall determine, provided that the interest cost
to maturity of the money received for any issue of such bonds shall not
exceed three per centum per annum.

(c) Such bonds may be issued for the corporate purpose or pur-
poses of the institution specified by section four hereof or to carry out
the powers conferred on the institution by section five hereof.

(d) Any resolution or resolutions authorizing such bonds may con-
tain a provision, which shall be a part of the contract with the holders of
such bonds, as to

(1) pledging any or all revenues of the institution derived directly
or indirectly from the project for the erection of which the bonds are
issued to secure the payment of such bonds, and the determination of the
revenues and receipts to be derived directly or indirectly from the project
for the erection of which the bonds are to be issued and the cost or ex-
penses of the operation and maintenance thereof ; )

(2) the operation and maintenance of the project ;

(3) the amount or amounts to be charged and collected as fees,
rents or charges for or in connection with the use, occupations, products
and/or services of the project or any services rendered therein, and the
amount to be raised in each year thereby in revenues of any kind and
the use and disposition of any or all such revenues ;

(4) the setting aside of reserves or sinking funds, and the regula-
tion and disposition thereof ;

(5) limitations on the right of the institution to restrict and regu-
late the use, occupation, products and/or services of the project, or the
services rendered therein ;

(6) limitations on the purpose to which the proceeds of sale of any
issue of bonds then or thereafter to be issued may be applied ;

(7) limitations on the issuance of additional bonds;

(8) the procedure, if any, by which the terms of any contract with
holders of such bonds 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;

(9) any other matter required by the United States of America or
any federal agency as a condition precedent to or a requirement in con-
nection with the obtaining of a direct grant or grants of money for or in
aid of the erection of any project, or to defray or partially to defray the
cost of labor and material employed in the erection of any project, or to
obtain a loan or loans of money for or in aid of the erection of any project
from the United States of America or any federal agency, provided such
other matter is approved by the Governor.

(e) The power and obligation of an institution to pay any bonds
issued under this act shall be limited. Such bonds shall be payable only
from the revenues and receipts derived directly or indirectly from the
project for the erection of which the bonds are issued. Such bonds shall
in no event constitute an indebtedness of the institution, excepting to the
extent of the collection of such revenues and receipts and such institu-
tion shall not be liable to pay such bonds or interest thereon from any
other funds; and no contract entered into by the institution pursuant to
sub-division (b) of this section six shall be construed to require the costs
or expenses of operation and maintenance of the project for the erection
of which the bonds are issued to be paid out of any funds other than the
revenues and receipts derived directly or indirectly from such project.
The revenues and receipts to be deemed as derived directly or indirectly
from the project for the erection of which the bonds are to be issued and
the costs and expenses of the operation and maintenance thereof shall be
determined by resolution of the board, approved by the Governor. In
making such determination the board must exclude all funds received or
receivable from the State. Any provision of the general laws to the
contrary notwithstanding, any bonds issued pursuant to the authority
of this act shall be fully negotiable within the meaning and for all the
purposes of chapter two hundred thirty-three of the Code of Virginia, as
amended.

' (f) Neither the Governor nor the members of the board nor any
person executing such bonds shall be liable personally on the bonds or be
sub) ect to any personal liability or accountability by reason of the issuance
thereot.

(g) The institution shall have power out of any funds available
therefor to purchase any bonds issued by it at a price not more than the
principal amount thereof and the accrued interest. All bonds so pur-
chased shall be cancelled unless purchased as an endowment fund in-
vestment. This paragraph shall not apply to the redemption of bonds.

Section 7. (a) The provisions of this section seven shall be appli-
cable to an issue of bonds only if the resolution or resolutions authorizing
such bonds shall provide in substance that the holders of such bonds are
entitled to all the benefits of and subject to the provisions of this section
seven.

(b) In the event that any institution shall default in the payment
of principal of or interest on any series of its bonds after the same shal]
become due, whether at maturity or upon call for redemption, and suck
detault shall continue for a period of thirty days, or in the event that suck
institution shall fail or refuse to comply with the provisions of this act
or shall default in any agreement made with the holders of its bonds o;
any series, the holders of twenty-five per centum in aggregate principa
amount of the bonds of such series then outstanding, by instrument or in-
struments filed with the Governor and proved or acknowledged in the
same manner as a deed to be recorded, may appoint a trustee to represen:
the holders of such series for the purposes herein provided.
(c) Such trustees may, and upon written request of the holders of
twenty-five per centum in principal amount of the bonds of such series
then outstanding shall, in his or its own name:

(1) By mandamus or other suit, action or proceeding at law or in
equity enforce all rights of the holders of bonds of such series, including
the right to require such institution and its board to collect fees, rents,
charges or other revenues adequate to carry out any agreement as to, or
pledge of, such revenues, and to require such institution and board to
carry out any other agreements with the holders of the bonds of such
series and to perform its and their duties under this act ;

(2) Bring suit upon such bonds ;

(3) By action or suit in equity, require such institution to account
as if it were the trustees of an express trust for the holders of such bonds;

(4) By action or suit in equity, enjoin any acts or things which may
be unlawful or in violation of the rights of the holders of such bonds.

(d) If the resolution or resolutions which authorize any bonds con-
tain the provision authorized by subdivision (a) of this section seven and
further provide in substance that any trustee appointed by the holders of
the bonds pursuant to this section seven shall have the powers provided
by this subdivision (d) of section seven, then any such trustee, whether
or not all such bonds have been declared due and payable, shall be en-
titled as of right to the appointment of a receiver who may enter and
take possession of any property of the institution any of the revenues
from which are pledged for the security of the bonds the holders of
which are represented by such trustee and operate and maintain the
same and collect and receive all fees, rents, charges and other revenues
thereafter arising therefrom in the same manner as the institution itself
might do and shall deposit all such moneys in a separate account and
apply the same in such manner as the court shall direct. In any suit,
action or proceeding by the trustee the fees, counsel fees and expenses
of the trustee and of the receiver, if any, shall constitute taxable costs and
disbursements and all costs and disbursements allowed by the court shall
be a first charge on any fees, rents, charges and other revenues of the
institution pledged for the security of the bonds.

(e) Said trustee shall, in addition to the foregoing, have and pos-
sess all of the powers necessary or appropriate for the exercise of any
functions specifically set forth herein or incident to the general repre-
sentation of the holders of bonds represented by such trustee in the
enforcement and protection of their rights.

Section 8. Every institution, upon the completion of the erection
by or for it of any project pursuant to this act and the acceptance thereof,
is hereby authorized and empowered, subject to and in accordance with
any contract with the holders of the bonds issued to finance the erection
of such project, to operate and maintain the same and to charge and col-
lect for or in connection with the use, occupation, products and/or serv-
ices of such project or any services rendered therein, such fees, rents and
charges as such board shall deem proper so that the project shall always
have sufficient receipts and revenues to provide for the payment of all
expenses of ‘operation and maintenance of the project in addition to the
discharge in due course of any liabilities and debts of the institution
incurred in connection with the project, and to do all such other acts and
things in connection with such operation and maintenance and the charg-
ing and collection of such fees, rents and charges as may be necessary,
proper or convenient to carry out the provisions of any contract with
such holders of its bonds which is authorized by this act. All moneys
derived from the sale of bonds and all such fees, rents and charges so
collected by such institution shall be paid into the State treasury, and
any sums of money so paid into the State treasury shall be set aside as
and constitute a special fund devoted solely to the payment of the princi-
pal of and the interest on the bonds of such institution and to the payment
of any costs, expenses or other charges of such institution in connection
with the acquisition, erection, lease, operation or maintenance of any
project from which such sums may be directly or indirectly derived, and
are hereby specifically appropriated for those purposes be paid out by the
State Treasurer on warrants of the Comptroller to be issued on vouchers
of the treasurer or other fiscal officer of the board of such institution.

2. Anetergency existing, this act shall be in force from its passage.