CHAPTER 373

n Act to amend and reenact §§ 23-19 as amended, and 23-21, 23-22 and
23-26 of the Code of Virginia, relating to the issuance of bonds and
the incurring of certain obligations by certain educational institutions
and the conditions for repayment thereof.
[S 235]

Approved March 30, 1962

Be it enacted by the General Assembly of Virginia:

1. That §§ 23-19 as amended, and 23-21, 23-22 and 23-26 of the Code
of Virginia, be amended and reenacted as follows:

§ 23-19. (a) Every institution shall have power and is hereby au-
thorized and empowered from time to time to execute its bonds in such
aggregate principal amount as may be determined upon by its board and
approved by the Governor. All such bonds shall be issued and sold
through the Treasury Board which is hereby designated the issuing, sales,
and paying 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 institu-
tion 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 six per centum per annum payable 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 six 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
conferred on the institution by the preceding section 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 and receipts of the institution de-
rived directly or indirectly from the project for the erection of which the
bonds are issued and from any other existing facilities of the institution
of the type described in subdivision (e) of § 23-15 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 from such other existing facilities of the
institution and the cost or expenses of the operation and maintenance
thereof, provided that the revenues and receipts of the institution so
pledged derived directly or indirectly from any other existing facilities
of the institution shall be derived from increases in such revenues and
receipts resulting from any increase in fees, rents or charges for or in
connection with the use, occupation, products and/or services of such other
existing facilities or any services rendered therein;

(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 and such other existing facilities 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 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 and such other
existing facilities 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 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 chapter shall be limited. Such bonds shall be payable
only from the revenues and receipts * pledged therefor pursuant to a
resolution adopted under subdivision (d) of this section. 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 sub-
division (b) of this section shall be construed to require the costs or ex-
penses of operation and maintenance of the project for the erection of
which the bonds are issued and of such other existing facilities to be paid
out of any funds other than the revenues and receipts derived directly;
or indirectly from such project and such other existing facilities. The
revenues and receipts to be deemed as derived directly or indirectly from
* such project * and such other existing facilities and the costs and ex-
penses of the operation and maintenance thereof shall be determined by the
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 not-
withstanding, 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 subject to any personal liability or accountability by reason of the
issuance thereof.

(g) The institution shall have power out of any funds available
therefor to purchase any honds 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.

(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 the establishment of
a debt service reserve, the institution, with the consent of the Governor,
may deposit securities in a separate collateral account in an amount
equal to the required debt service reserve, which securities shall be pledged
to meet the debt service requirements only if the pledged revenues from
the project and any pledged revenues from other existing facilities of the
institution become insufficient for such purpose. The face value of United
States government securities and the market value of all other securi-
ties shall be deemed to be the value of any securities so deposited. Nothing
herein shall be construed as prohibiting repayment of any portion of
such loan from income derived from the securities so deposited. No securi-
ties shall be deposited in any such collateral account unless the same
shall have been purchased with funds, the use of which is in nowise limited
or restricted or shall have been donated to such institution for the pur-
pose of establishing such debt service reserve.

§ 23-21. Every institution, upon the completion of the erection by
or for it of any project pursuant to this chapter and the acceptance
thereof, is hereby authorized and empowered, subject to and in accord-
ance 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 collect for or in connection with the use, occupation, products
and/or services of such project and of any other existing facilities of
the institution the revenucs and receipts of which are pledged either in
whole or in part to the payment of such bonds or any services rendered
therein, such fees, rents and charges as such board shall deem proper
so that * there shall always be sufficient receipts and revenues to pro-
vide for the payment of all expenses of operation and maintenance of
the project and of such other existing facilities in addition to the dis-
charge in due course of any liabilities and debts of the institution incurred
in connection with the project and such other existing facilities and to do
all such other acts and things in connection with such operation and
maintenance and the charging 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 cf its bonds which is authorized by
this chapter. 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 principal of and the interest on the bonds of such in-
stitution and to the payment of any costs, expenses or other charges of
such institution in connection with the acquisition, erection, lease, op-
eration or maintenance of any project and any such other existing facili-
ties from which such sums may be directly or indirectly derived, and are
hereby specifically appropriated for those purposes to 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 in-
stitution.

§ 23-22. The board of every institution shall keep and preserve com-
plete and accurate accounts of all sums of money received and disbursed
in connection with the acquisition, erection, lease, operation and main-
tenance of any project and any such other existing facilities including
without limitation a complete and accurate record of all amounts charged
and collected as fees, rents and charges in connection with such project
and such other existing facilities and all sums disbursed for the payment
of the principal of or interest on or other debt service with respect to
any bonds issued pursuant to the authority of this chapter and such
annual portion of the fees, rents or charges as shall not be required to
discharge in due course any obligation, liability or debt of the institu-
tion incurred in connection with the project or such other existing facili-
ties shall be paid into the State treasury, as provided in § 23-21. The
board shall prepare and transmit to the Governor, at such times as he
shall require, complete and accurate reports as to the state of such ac-
counts and records, together with such information as the Governor may
require with respect thereto.

§ 23-26. The State of Virginia does pledge to and agree with the
holders of the bonds issued by any institution that the State will not
limit or alter the rights hereby vested in such institution to establish and
collect such fees, rents and charges for or in connection with the use,
occupation, products and/or services of any project or any other existing
facilities of the institution the revenues and receipts of which are pledged
either in whole or in part to the payment of such bonds as may be con-
venient or necessary to produce sufficient revenues to meet the expense
of maintenance and operation of * such project and such other existing
facilities and to fulfill the terms of any agreements made with the holders
of the bonds or in any way to impair the rights and remedies of such
holders, until the bonds, together with interest thereon, with interest
on any unpaid installments of interest, and all costs and expenses in
connection with any action or proceedings by or on behalf of such hold-
ers are fully met and discharged.

An emergency exists, and this act is in force from its passage.