                                 CODE OF VIRGINIA

TRANSFER OF EXISTING HOSPITAL FACILITIES (§ 23.1-2412)

A. The University may lease, convey, or otherwise transfer to the Authority any
or all assets and liabilities appearing on the balance sheet of MCV Hospitals
and any or all of the hospital facilities, except real estate that may be leased
to the Authority for a term not to exceed 99 years, upon such terms as may be
approved by the University.

B. Any transfer of hospital facilities pursuant to subsection A is conditioned
upon the existence of a binding agreement between the University and the
Authority:

   1. That requires the Authority to assume, directly or indirectly, hospital
   obligations that are directly relating to the hospital facilities or any part
   of the hospital facilities that are transferred, including rentals as provided
   in subsection C or a combination of rentals and other obligations in the case
   of a lease of hospital facilities;

   2. That provides that, effective on the transfer date, the Authority shall
   assume responsibility for, defend, indemnify, and hold harmless the University
   and its officers and directors with respect to:
   				a. All liabilities and duties of the University pursuant to contracts,
   agreements, and leases for commodities, services, and supplies used by MCV
   Hospitals, including property leases;
   				b. All claims relating to the employment relationship between employees of
   the Authority and the University on and after the transfer date;
   				c. All claims for breach of contract resulting from the Authority&#8217;s
   action or failure to act on and after the transfer date;
   				d. All claims relating to the Authority&#8217;s errors and omissions,
   including medical malpractice, directors&#8217; and officers&#8217; liability,
   workers&#8217; compensation, automobile liability, premises liability,
   completed operations liability, and products liability resulting from the
   Authority&#8217;s action or failure to act on and after the transfer date; and

   3. By which the Authority shall accept and agree to abide by provisions that
   ensure the continued support of the education, research, patient care, and
   public service missions of MCV Hospitals, including:
   				a. A requirement that the Authority continue to provide emergency and
   inpatient indigent care services on the MCV campus of the University in
   locations including downtown Richmond; and
   				b. A requirement that the Authority continue to act as the primary
   teaching facility for the Virginia Commonwealth University School of Medicine
   and the Health Sciences Schools of the University.

C. Any lease of hospital facilities from the University to the Authority may
include a provision that requires the Authority to pay the University a rental
payment for the hospital facilities that are leased. For those hospital
facilities for which rent is paid, the rent shall be at least equal to the
greater of:

   1. The debt service accruing during the term of the lease on all outstanding
   bonds issued for the purpose of financing the acquisition, construction, or
   improvement of the hospital facilities on which rent is paid; or

   2. A nominal amount determined by the parties to be necessary to prevent the
   lease from being unenforceable because of a lack of consideration.

D. Any lease of hospital facilities shall include a provision that requires the
Authority to continue to support the education, research, patient care, and
public service missions of MCV Hospitals, including:

   1. A requirement that the Authority continue to provide emergency and
   inpatient indigent care services on the MCV campus of the University in
   locations including downtown Richmond; and

   2. A requirement that the Authority continue to act as the primary teaching
   facility for the Health Sciences Schools of the University.

E. All other agencies and officers of the Commonwealth shall take such actions
as may be necessary or desirable in the judgment of the University to permit
such conveyance and the full use and enjoyment of the hospital facilities,
including the transfer of property of any type held in the name of the
Commonwealth or an instrumentality or agency of the Commonwealth but used by the
University in the operation of the hospital facilities.

F. The Authority may pay to or on behalf of the University some or all of the
costs of the hospital facilities. The University may apply some or all of such
proceeds to the payment or defeasance of its obligations issued to finance the
hospital facilities, and the Authority may issue its bonds to finance or
refinance such payment.

G. Funds held by or for the University or any of its predecessors or divisions,
including funds held by the University Foundation or the MCV Foundation for the
benefit of MCV Hospitals or any of its predecessors for use in operating,
maintaining, or constructing hospital facilities, providing medical and health
sciences education, or conducting medical or related research may be
transferred, in whole or in part, to the Authority if the University or any
foundation determines that the transfer is consistent with the intended use of
the funds. The University may direct in writing that all or part of the money or
property representing its beneficial interest under a will, trust agreement, or
other donative instrument be distributed to the Authority if the University
determines that such direction furthers any of the original purposes of the
will, trust agreement, or other instrument. Such a direction shall not be
considered a waiver, disclaimer, renunciation, assignment, or disposition of the
beneficial interest by the University. A fiduciary&#8217;s distribution to the
Authority pursuant to such a written direction from the University is a
distribution to the University for all purposes relating to the donative
instrument, and the fiduciary has no liability for distributing any money or
property to the Authority pursuant to such a direction. Nothing in this section
shall deprive any court of its jurisdiction to determine whether such a
distribution is appropriate under its cy pres powers or otherwise.

H. The Authority shall not operate any hospital pursuant to this section prior
to execution of the lease and agreement required by this section and such other
agreements as may be necessary or convenient in the University&#8217;s judgment
to provide for the transfer of the operations of the hospital facilities to the
Authority, unless and to the extent that the University approves otherwise.

I. The University may assign and the Authority may accept the rights and assume
the obligations under any contract or other agreement of any type relating to
financing or operating the hospital facilities. Upon evidence that such
assignment and acceptance has been made, all agencies and instrumentalities of
the Commonwealth shall consent to such assignment and accept the substitution of
the Authority for the University as a party to such agreement to the extent that
the University&#8217;s obligations under such agreement relate to the ownership,
operation, or financing of the hospital facilities. Indebtedness previously
incurred by the Commonwealth, the Virginia Public Building Authority, the
Virginia College Building Authority, and any other agency or instrumentality of
the Commonwealth to finance the hospital facilities may continue to remain
outstanding after the transfer and assignment of such agreement by the
University to the Authority.

J. The transfer of the hospital facilities from the University to the Authority
does not require a certificate of public need pursuant to Article 1.1 (&#xA7;
32.1-102.1 et seq.) of Chapter 4 of Title 32.1. All licenses, permits,
certificates of public need, or other authorizations of the Commonwealth, any
agency of the Commonwealth, or any locality held by the University in connection
with the ownership or operation of the hospital facilities are transferred
without further action to the Authority to the extent that the Authority
undertakes the activity permitted by such authorizations. All agencies and
officers of the Commonwealth and all localities shall confirm such transfer by
the issuance of new or amended licenses, permits, certificates of public need,
or other authorizations upon the request of the University and the Authority.

K. If for any reason the Authority cannot replace the University as a party to
any agreement in connection with the financing, ownership, or operation of the
hospital facilities, the Authority and the University may require the Authority
to act as agent for the University in carrying out its obligations under such
agreement or receiving the benefits under such agreement, or both.

HISTORY: 1996, cc. 905, 1046, §§ 23-50.16:17, 23-50.16:20, 23-50.16:21,
23-50.16:22, 23-50.16:23; 2016, c. 588.