                                 CODE OF VIRGINIA

METHOD OF REIMBURSEMENT; INVOLVEMENT OF THE TREASURY BOARD (§ 53.1-82.2)

A. Reimbursements by the Commonwealth to localities or regional jail authorities
for a portion of the capital costs of a jail project, made pursuant to §§
53.1-80, 53.1-81, 53.1-82, or § 53.1-95.19 may be effected by one of the
following methods:

   1. In one lump sum payment to be made upon completion of the project, for
   minor renovation projects, or two equal lump sum payments, one such payment to
   be made upon certification that the construction, enlargement or renovation is
   fifty percent complete and the second such payment to be made upon completion
   of the project, such payments to be paid by the State Treasurer out of funds
   appropriated to the Department of Corrections;

   2. Over a specified period of time through a contractual agreement entered
   into by the Treasury Board and approved by the Governor, on behalf of the
   Commonwealth, and the locality, localities or regional authority or other
   combination of localities undertaking a jail project, such payments to be paid
   by the State Treasurer out of funds appropriated to the Treasury Board; or

   3. In one lump sum payment to be made upon completion of the project by the
   Virginia Public Building Authority pursuant to &#xA7; 2.2-2263, including the
   Commonwealth&#8217;s share of the interest costs expended by the locality or
   regional jail authority for financing such project during the period from
   fifty percent completion of construction to final completion of construction.

B. The General Assembly shall have the sole authority to determine whether
reimbursement will be made pursuant to subdivision A 1, A 2, or A 3. The
Department of Planning and Budget, after consulting with the Treasury Board,
shall evaluate all proposed jail projects and make recommendations to the
Governor regarding the method of reimbursement for inclusion in his biennial
budget.

C. Any contract for reimbursement over a specified period of time entered into
pursuant to subdivision A 2 shall include the following:

   1. The Commonwealth shall reimburse a portion of financing costs as provided
   in subsection E below;

   2. The Commonwealth&#8217;s reimbursement payments shall be subject to
   appropriation;

   3. In the event that the jail project is financed through an issuance of
   securities, the Commonwealth&#8217;s reimbursement payments shall be
   calculated using the coupon interest rates received by the locality or jail
   authority at the time the securities for the project are sold and shall be
   made pursuant to a schedule to be set forth in the contract;

   4. In the event that a jail project is financed through an issuance of
   securities, and coupon interest rates are not available due to the structure
   of the securities, the Treasury Board is authorized to make such adjustments
   as are necessary and reasonable to calculate the Commonwealth&#8217;s
   payments;

   5. In the event that the jail project is financed through a method other than
   the issuance of securities, the Commonwealth&#8217;s payment shall include
   interest payments based on an interest rate assumption equal to the prevailing
   AA rate for tax-exempt bonds issued by the Commonwealth or agencies thereof,
   or the actual rate achieved, whichever is lower, and the schedule for the
   Commonwealth&#8217;s reimbursement payments shall be set forth in the
   contract; and

   6. Such other terms and conditions as are necessary to specify the structure
   of the Commonwealth&#8217;s participation in project financing and as may be
   required by guidelines established by the Treasury Board.
   				Reimbursement to localities pursuant to this section shall be available
   without regard to the security level of the facility constructed, enlarged or
   renovated, provided such facility satisfies applicable standards established
   by the Board pursuant to &#xA7; 53.1-68.

D. For purposes of this article, &#8220;capital costs&#8221; includes, but is
not limited to, actual construction costs, costs of land acquisition, if the
land purchased is used exclusively for siting a jail facility, architectural and
engineering fees, and fixed equipment. &#8220;Capital costs&#8221; does not
include administrative costs nor a financial advisor&#8217;s, an investment
banker&#8217;s, or attorneys&#8217; fees incurred by local governments or,
except in the case of minimum security facilities, loose equipment or
furnishings.

E. For purposes of this article, &#8220;financing costs&#8221; means the total
of all costs incurred by the locality, localities or regional authority or other
combination of localities as are deemed reasonable and necessary by the Treasury
Board to execute the financing of the Commonwealth&#8217;s payment of capital
costs and to fund such funds and accounts as the Treasury Board determines to be
reasonable and necessary.

HISTORY: 1993, cc. 387, 787; 1995, c. 305; 1996, c. 835.