                                 CODE OF VIRGINIA

BOND ISSUES; CONTESTING VALIDITY OF BONDS (§ 15.2-6409)

A. An authority may at any time and from time to time issue bonds for any valid
purpose, including the establishment of reserves and the payment of interest. In
this chapter, &#8220;bonds&#8221; includes notes of any kind, interim
certificates, refunding bonds, or any other evidence of obligation.

B. The bonds of any issue shall be payable solely from the property or receipts
of the authority, including, but not limited to:

   1. Taxes, rents, fees, charges, or other revenues payable to the authority;

   2. Payments by financial institutions, insurance companies, or others pursuant
   to letters or lines of credit, policies of insurance, or purchase agreements;

   3. Investment earnings from funds or accounts maintained pursuant to a bond
   resolution or trust agreement; and

   4. Proceeds of refunding bonds.

C. Bonds shall be authorized by resolution of an authority and may be secured by
a trust agreement by and between the authority and a corporate trustee or
trustees, which may be any trust company or bank having the powers of a trust
company within or without the Commonwealth. The bonds shall:

   1. Be issued at, above, or below par value, for cash or other valuable
   consideration, and mature at a time or times, whether as serial bonds or as
   term bonds or both, not exceeding forty years from their respective dates of
   issue;

   2. Bear interest at the fixed or variable rate or rates determined by the
   method provided in the resolution or trust agreement;

   3. Be payable at a time or times, in the denominations and form, and carry the
   registration and privileges as to conversion and for the replacement of
   mutilated, lost, or destroyed bonds as the resolution or trust agreement may
   provide;

   4. Be payable in lawful money of the United States at a designated place;

   5. Be subject to the terms of purchase, payment, redemption, refunding, or
   refinancing that the resolution or trust agreement provides;

   6. Be executed by the manual or facsimile signatures of the officers of the
   authority designated by the authority, which signatures shall be valid at
   delivery even for one who has ceased to hold office; and

   7. Be sold in the manner and upon the terms determined by the authority
   including private (negotiated) sale.

D. Any resolution or trust agreement may contain provisions which shall be a
part of the contract with the holders of the bonds as to:

   1. Pledging, assigning, or directing the use, investment, or disposition of
   receipts of the authority or proceeds or benefits of any contract and
   conveying or otherwise securing any property rights;

   2. Setting aside loan funding deposits, debt service reserves, capitalized
   interest accounts, cost of issuance accounts and sinking funds, and the
   regulation, investment, and disposition thereof;

   3. Limiting the purpose to which, or the investments in which, the proceeds of
   the sale of any issue of bonds may be applied and restrictions to investments
   of revenues or bond proceeds in government obligations for which principal and
   interest are unconditionally guaranteed by the United States of America;

   4. Limiting the issuance of additional bonds and the terms upon which
   additional bonds may be issued and secured and may rank on a parity with, or
   be subordinate or superior to, other bonds;

   5. Refunding or refinancing outstanding bonds;

   6. Providing a procedure, if any, by which the terms of any contract with
   bondholders may be altered or amended and the amount of bonds the holders of
   which must consent thereto, and the manner in which consent shall be given;

   7. Defining the acts or omissions which shall constitute a default in the
   duties of the authority to bondholders and providing the rights of or remedies
   for such holders in the event of a default which may include provisions
   restricting individual right of action by bondholders;

   8. Providing for guarantees, pledges of property, letters of credit, or other
   security, or insurance for the benefit of the bondholders; and

   9. Addressing any other matter relating to the bonds which the authority
   determines appropriate.

E. No member of an authority, member of a board, or any person executing the
bonds on behalf of an authority shall be liable personally for the bonds or
subject to any personal liability by reason of the issuance of the bonds.

F. An authority may enter into agreements with agents, banks, insurers, or
others for the purpose of enhancing the marketability of, or as security for,
its bonds.

G. A pledge by an authority of revenues as security for an issue of bonds shall
be valid and binding from the time the pledge is made.
			The revenues pledged shall immediately be subject to the lien of the pledge
without any physical delivery or further act, and the lien of any pledge shall
be valid and binding against any person having any claim of any kind in tort,
contract or otherwise against an authority, irrespective of whether the person
has notice.
			No resolution, trust agreement or financing statement, continuation
statement, or other instrument adopted or entered into by an authority need be
filed or recorded in any public record other than the records of the authority
in order to perfect the lien against third persons, regardless of any contrary
provision of public general or local law.

H. Except to the extent restricted by an applicable resolution or trust
agreement, any holder of bonds issued under this chapter or a trustee acting
under a trust agreement entered into under this chapter, may, by any suitable
form of legal proceedings, protect and enforce any rights granted under the laws
of Virginia or by any applicable resolution or trust agreement.

I. An authority may issue bonds to refund any of its bonds then outstanding,
including the payment of any redemption premium and any interest accrued or to
accrue to the earliest or any subsequent date of redemption, purchase or
maturity of the bonds. Refunding bonds may be issued for the public purposes of
realizing savings in the effective costs of debt service, directly or through a
debt restructuring, for alleviating impending or actual default and may be
issued in one or more series in an amount in excess of that of the bonds to be
refunded.

J. For a period of thirty days after the date of the filing with the circuit
court having jurisdiction over any of the political subdivisions that are
members of the authority and in which the facility or any portion thereof being
financed is located a certified copy of the initial resolution of the authority
authorizing the issuance of bonds, any person in interest may contest the
validity of the bonds, the rates, rents, fees and other charges for the services
and facilities furnished by, for the use of, or in connection with, the facility
or any portion thereof being financed, the pledge of revenues pledged to payment
of the bonds, any provisions that may be recited in any resolution, trust
agreement, indenture or other instrument authorizing the issuance of bonds, or
any matter contained in, provided for or done or to be done pursuant to the
foregoing. If such contest is not given within the thirty-day period, the
authority to issue bonds, the validity of any other provision contained in the
resolution, trust agreement, indenture or other instrument, and all proceedings
in connection with the authorization and the issuance of the bonds shall be
conclusively presumed to have been legally taken and no court shall have
authority to inquire into such matters and no such contest shall thereafter be
instituted.
			Upon the delivery of any bonds reciting that they are issued pursuant to this
chapter and a resolution or resolutions adopted under this chapter, the bonds
shall be conclusively presumed to be fully authorized by all the laws of the
Commonwealth and to have been sold, executed and delivered by the authority in
conformity with such laws, and the validity of the bonds shall not be questioned
by a party plaintiff, a party defendant, the authority, or any other interested
party in any court, anything in this chapter or in any other statutes to the
contrary notwithstanding.

HISTORY: 1997, cc. 276, 587, § 15.1-1719; 2002, c. 691.