                                 CODE OF VIRGINIA

BONDS GENERALLY (§ 23.1-1106)

A. The Treasury Board is designated as the paying agent of institutions for the
purposes of this chapter and shall approve the terms and structure of bonds
executed pursuant to this chapter.

B. Any institution may execute its bonds in an aggregate principal amount
determined by its board, approved by the Governor, and approved by the Treasury
Board pursuant to &#xA7; 2.2-2416. Such aggregate principal amount may include
any cost associated with the development and management of the project, legal or
accounting expenses incurred by the institution in connection with the project
for which such bonds are issued, and the cost of issuing the bonds, including
printing, engraving, advertising, legal, and other similar expenses.

C. Bonds issued pursuant to this chapter shall:

   1. Be subject to approval by the Governor and authorization by resolution of
   the board, and any such resolution may contain provisions, which shall be part
   of the contract with the bondholders, relating to:
   				a. Fixing, revising, charging, and collecting fees, rents, and charges for
   or in connection with the use, occupation, or services of the project or
   pledging such fees, rents, and charges and any increase in revenues derived
   from any existing facilities at such institution resulting from any increase
   in such fees, rents, or charges to the payment of the principal of and the
   interest on such bonds;
   				b. Fixing, revising, charging, and collecting fees, rents, and charges for
   or in connection with the use, occupation, or services of any existing
   facility at such institution and pledging such fees, rents, and charges to the
   payment of the principal of and the interest on such bonds;
   				c. Fixing, revising, charging, and collecting student building fees and
   other student fees from students enrolled at such institution and pledging all
   or part of such fees to the payment of the principal of and the interest on
   such bonds;
   				d. Pledging to the payment of the principal of and the interest on such
   bonds any moneys available for the use of such institution, including moneys
   appropriated to such institution from the general fund of the Commonwealth or
   from nongeneral funds that are not required by law or by previous binding
   contract to be devoted to some other purpose, without regard to the source of
   such moneys but subject to Treasury Board guidelines and approval pursuant to
   &#xA7; 2.2-2416;
   				e. Paying the cost of operating and maintaining any project and any such
   existing facilities from any revenue source mentioned in subdivision a, b, c,
   or d, creating reserves for such purposes, and providing for the use and
   application of such reserves;
   				f. Creating sinking funds for the payment of the principal of and the
   interest on such bonds, creating reserves for such purposes, and providing for
   the use and application of such reserves;
   				g. Limiting the right of the institution to restrict and regulate the use,
   occupation, and services of the project and such other existing facilities or
   the services rendered in such project or other existing facilities;
   				h. Limiting the purposes to which the proceeds of sale of any issue of
   bonds may be applied;
   				i. Limiting the issuance of additional bonds;
   				j. Setting forth the procedure by which the terms of any contract with the
   bondholders may be amended or abrogated and the manner in which such
   bondholders may give consent to any such amendment or abrogation; and
   				k. Setting forth such other conditions precedent as may be required by the
   United States or any federal agency to obtain a direct grant or loan to erect
   or defray the cost of labor and material to erect any project from the United
   States or any federal agency, subject to the approval of the Governor;

   2. Bear such date, mature at such time, bear interest at such rate not
   exceeding the rate specified in &#xA7; 23.1-1112 payable at such times, be in
   such denomination, be in such form, either coupon or registered, carry such
   registration privilege, be executed in such manner, be payable in such medium
   of payment and at such place, and be subject to such terms of redemption, with
   or without premium, as the resolution of the board provides;

   3. Be issued to finance only those projects approved by the General Assembly
   in the general appropriation act;

   4. Be pledged pursuant to a resolution of the board and payable only from the
   revenue sources set forth in subdivisions 1 a, b, c, and d;

   5. Not constitute an indebtedness of the institution, except to the extent of
   the collection of such revenues. Institutions are not liable to pay such bonds
   or the interest on such bonds from any other funds. No contract entered into
   by an institution pursuant to this chapter shall be construed to require the
   costs or expenses to operate and maintain a project for which bonds are issued
   and any other existing facilities to be paid out of any funds other than the
   revenues derived and pledged from the sources set forth in subdivisions 1 a,
   b, c, and d; and

   6. Be fully negotiable within the meaning and for all the purposes set forth
   in Title 8.3A.

D. Bonds issued pursuant to this chapter may be:

   1. Sold at public or private sale for such price or prices as the board
   determines and the Governor approves, provided that (i) the interest cost to
   maturity of the money received for any issue of such bonds shall not exceed
   the rate specified in &#xA7; 23.1-1112; (ii) the General Assembly shall
   approve the issuance of bonds to finance projects; and (iii) biennially, on or
   before September 1 of each odd-numbered year, each institution shall submit to
   the Governor each proposed project and the estimated cost of each such project
   that the institution desires to have financed under the provisions of this
   chapter, and the Governor shall consider such projects and make his
   recommendation to the General Assembly in the budget submitted in accordance
   with the provisions of &#xA7; 2.2-1508;

   2. Issued to finance only those projects approved by the General Assembly in
   the general appropriation act, which projects need not be limited to the
   projects recommended by the Governor;

   3. Issued to finance all or a portion of the cost of any project plus amounts
   to fund issuance costs, reserve funds, and capitalized interest for a period
   not to exceed one year following completion of the project; and

   4. Issued for the purpose set forth in &#xA7; 23.1-1102 or to carry out the
   powers conferred on the institution by &#xA7; 23.1-1104.

E. Neither the Governor nor the members of the board nor any person executing
bonds pursuant to this chapter are liable personally on the bonds or subject to
any personal liability or accountability by reason of the issuance of such
bonds.

F. Any institution may purchase with funds available for such purchase any bond
that it has issued at a price not more than the sum of the principal amount and
accrued interest. All bonds so purchased shall be cancelled unless purchased as
an endowment fund investment. Nothing in this subsection shall be construed to
apply to the redemption of bonds.

G. In any case in which an institution obtains a loan from the United States or
any federal agency to erect any project that 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 and pledge such securities to meet the debt
service requirements if the revenues derived from any source set forth in
subdivision C 1 a, b, c, or d and pledged for the payment of such loan become
insufficient for such purpose. The face value of United States government
securities and the market value of all other securities is the value of any
securities so deposited. Nothing in this subsection shall be construed to
prohibit 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 such securities are purchased with funds whose use is in no way
limited or restricted or are donated to such institution for the purpose of
establishing such debt service reserve.

HISTORY: 1933, p. 85, § 23-19; 1936-7, p. 28; 1946, p. 184; 1950, p. 366; 1954,
c. 397; 1958, cc. 17, 486; 1959, Ex. Sess., c. 61; 1962, c. 373; 1964, c. 635;
1970, c. 609; 1990, cc. 54, 856; 1996, cc. 636, 656, 672, 689; 2016, c. 588.