CHAPTER 17

AN ACT to amend and reenact § 23-19, as amended, of the Code of Vir-
ginia, relating to issuance of bonds and the incurring of certain oblt-
gations by certain educational institutions and the conditions for re-
payment thereof. S 26]

[

Approved February 7, 1958

Be it enacted by the General Assembly of Virginia:

1. That § 23-19, as amended, of the Code of Virginia be amended and
reenacted as follows:

§ 23-19. (a) Every institution shall have power and is hereby author-
ized and empowered from time to time to execute its bonds in such aggre-
gate principal amount as may be determined upon by its board and ap-
proved by the Governor. All such bonds shall be issued and sold through
the Treasury Board which is hereby designated the issuing, sales, and pay-
ing agent of such institutions under this chapter. 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, advertising,
legal and other similar expenses.

(b) Such bonds shall be authorized by resolution of the board, ap-
proved 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 four per centum per annum payable at such time or
times, be in such denominations, be in such form, either coupon or regis-
tered, 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 four per centum per
annum.

(c) Such bonds may be issued for the corporate purpose or purposes
of the institution specified by § 23-17 hereof or to carry out the powers con-
ferred on the institution by the preceding section hereof.

(d) Any resolution or resolutions authorizing such bonds may contain
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 expenses 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 dis-
position of any or all such revenues;

(4) The setting aside of reserves or sinking funds, and the regulation
and disposition thereof ;

(5) Limitations on the right of the institution to restrict and regulate
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; and

(9) Any other matter required by the United States of America or any
Federal agency as a condition precedent to or a requirement in connection
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 chapter 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 institution 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 subdivision (b) of this
section 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 direct-
ly 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 cost and expenses of the operation and
maintenance thereof shall be determined by resolution of the board, ap-
proved by the Governor. In making such determination the board must ex-
clude 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 chapter shall be fully negotiable within the meaning
and for all the purposes of Chapter 10 of Title 6.

(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
pubaeey to any personal liability or accountability by reason of the issuance

ereof.

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

(h) In any case in which an institution shall have obtained a loan for
or in aid of the erection of any project from the United States of America
or any Federal agency, which loan requires establishment of a debt service
reserve, the institution, with the consent of the Governor, may deposit se-
curities in a separate collateral account in an amount equal to the required
debt service reserve, which securities shall be pledged to meet the debt ser-
vice requirements only if the pledged revenues from the project become in-
sufficient for such purpose. The face value of United States Government
securities and the market value of all other securities shall be deemed to be
the value of any securities so deposited. Nothing herein shall be construed
as permitting 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 the same shall have been purchased with funds,
the use of which is in no wise limited or restricted.