HB594: Educational Facilities Bond Act of 2008; created.

HOUSE BILL NO. 594
Offered January 9, 2008
Prefiled January 8, 2008
A Bill authorizing the issuance of Commonwealth of Virginia General Obligation Bonds in an amount not exceeding $1,525,492,000 for the purpose of financing the costs of capital projects for educational facilities; authorizing the Treasury Board, by and with the consent of the Governor, to fix the details of the bonds and to provide for the sale of the bonds; authorizing the Treasury Board, by and with the consent of the Governor, to borrow money in anticipation of the issuance of the bonds; authorizing the issuance of refunding bonds, by and with the consent of the Governor; providing for the pledge of the full faith and credit of the Commonwealth for the payment of such obligations; providing that the interest income on such obligations shall be exempt from all taxation by the Commonwealth and any political subdivision thereof; and providing that the Commonwealth of Virginia Educational Facilities Bond Act of 2008 shall not become effective and that no bonds shall be issued hereunder unless the Commonwealth of Virginia Educational Facilities Bond Act of 2008 shall be approved by a majority of the qualified voters of the Commonwealth voting thereon at an election, as required by Article X, Section 9(b) of the Constitution of Virginia.
Patron-- Hamilton

Committee Referral Pending

Be it enacted by the General Assembly of Virginia:

1.§ 1.  Title.

This Act shall be known and may be cited as the “Commonwealth of Virginia Educational Facilities Bond Act of 2008.”

§ 2.  Authorization of Bonds and BANs.  The provisions of this Act shall be subject to a favorable vote of a majority of the qualified voters voting on this Act at the November 4, 2008 general election as hereinafter provided. Thereafter, the Treasury Board is hereby authorized, by and with the consent of the Governor, to sell and issue, at one time or from time to time, bonds of the Commonwealth, to be designated “Commonwealth of Virginia General Obligation Bonds, Series....” in an aggregate principal amount not exceeding $1,525,492,000. The Treasury Board is further authorized, by and with the consent of the Governor, to borrow money in anticipation of the issuance of the bonds by the issuance of bond anticipation notes (“BANs”), including BANs issued as commercial paper. 

§ 3.  Purpose; Projects.  The proceeds of the bonds and BANs, excluding amounts needed to pay issuance costs and other financing expenses, shall be used as provided in § 4 hereof for capital projects for educational facilities as follows:

Educational Facility          Project Description              Amount College of William and Mary   Construct/Replace Cooling                                Plant & Utility Improve-                                ments Phase II             $11,745,000 College of William and Mary   Construct Integrated                                Science Center, Phase III   35,000,000 University of Virginia        Construct Information                                Technology Engineering                                Building                    37,921,000 University of Virginia        Renovate New Cabell Hall     77,600,000 Virginia Tech                 Construct Medical School                                and Research Institute      59,000,000 Virginia Tech                 Renovate Davidson Hall       30,124,000 Virginia Tech                 Construct Sciences Building                                Laboratory I                28,758,000 Virginia Tech Extension       Construct Human and Agricul-                                tural Biosciences Building                                I                           28,293,000 Virginia Military Institute   Improve Military and Leader-                                ship Field Training Grounds                                Phase I                     15,119,000 Virginia Military Institute   Renovate Science Building    16,330,000 Virginia Military Institute   Renovate Post Hospital        4,137,000 Virginia State University     Renovate/Expand Hunter                                McDaniel Hall               22,345,000 Virginia State University     Construct Multipurpose                                Center                      50,625,000 Norfolk State University      Construct New Nursing and                                General Classroom Building  34,069,000 Longwood University           Renovate and Expand Bedford                                Hall                        29,499,000 Longwood University           Construct University Techno-                                logy Center                 19,871,000 Longwood University           Renovation of Heating Plant                                Facility                     7,067,000 University of Mary            Construct Dahlgreen Campus  Washington                                                23,000,000 University of Mary            Construct Jepson Science  Washington                    Center Addition              7,053,000 James Madison University      Construct Biotechnology/                                Centennial Hall             44,809,000 James Madison University      Renovate/Expand Duke Hall    43,472,000 Radford University            Construct New Computational                                Sciences Building           36,235,000 Old Dominion University       Construct New Student                                Success Facilities          11,131,000 Old Dominion University       Establish a Consolidated                                Arts Complex                19,151,000 Old Dominion University       Construct a Systems Research                                and Academic Building       18,147,000 Old Dominion University       Renovate and Construct Child                                Development Centers          9,789,000 Old Dominion University       Renovate the Education                                Building                     9,984,000 Old Dominion University       Renovate Spong and Rollins                                Hall                        19,076,000 Virginia Commonwealth         Construct New School of  University                    Medicine, Phase I           59,000,000 Virginia Commonwealth         Construct General Classroom  University                    Building                    41,042,000 Virginia Commonwealth         Renovate Massey Cancer  University                    Laboratory Support           5,913,000 Richard Bland College         Construct Science and Tech-                                nology Center               19,000,000 Christopher Newport           Construct Integrated Science  Center                        Center                      76,972,000 University of Virginia at     Construct New Library  Wise                                                      41,710,000 George Mason University       Renovate Science and Tech-                                nology II                   49,679,000 George Mason University       Construct Krasnow Addition,                                Phase II                     5,644,000 George Mason University       Construct Campus Library                                Addition, Phase I           50,291,000 Virginia Community College    Construct New Science and  System                        Technology Building,                                Virginia Western            22,717,000 Virginia Community College    Renovate Academic Classrooms  System                        and Administrative Building,                                Rappahannock                10,564,000 Virginia Community College    Construct Phase III Academic  System                        Building, Woodbridge Campus,                                Northern Virginia           38,222,000 Virginia Community College    Renovate Dalton Cantrell  System                        Hall, Mountain Empire       11,208,000 Virginia Community College    Renovate Phase I Facility,  System                        Downtown Campus, J. Sargeant                                Reynolds                    10,820,000 Virginia Community College    Construct Academic Services  System                        Building, Germanna          23,286,000 Virginia Community College    Construct Academic Building,  System                        Chesapeake Campus,                                 Tidewater                  20,573,000 Virginia Community College    Construct Higher Education  System                        Center, Loudoun Campus,                                Northern Virginia           14,263,000 Virginia Community College    Construct Workforce Develop-  System                        ment Center, Piedmont                                Virginia                     6,854,000 Virginia Community Colllege   Renovate Hampton III Build-  System                        ing, Thomas Nelson           8,033,000 Virginia Community College    Renovate Building B, J.  System                        Sargeant Reynolds-Parham Road                                Campus                       4,704,000 Virginia Community College    Renovate Bird and Nicholas  System                        Halls, John Tyler-Chester                                Campus                      16,054,000 Virginia Community College    Construct Learning Resources  System                        Building, Southside                                Virginia                    11,448,000 Virginia Community College    Construct Learning Resources  System                        Building, Virginia Beach                                Campus, Tidewater           36,891,000 Virginia Community College    Replace HVAC, New River  System                                                     1,439,000 Virginia Community College    Upgrade Electrical Systems,  System                        Wytheville                   2,566,000 Virginia Community College    Upgrade Major Mechanical  System                        Systems, Paul D. Camp        3,442,000 Virginia Community College    Renovate Phase I Academic  System                        and Administration Building,                                Eastern Shore                9,287,000 Virginia Community College    Renovate Russell Hall, System                         Southwest Virginia           9,645,000 Virginia Community College    Renovate Library and Learning  System                        Resource Center, Virginia                                Highlands                    2,365,000 Virginia Community College    Construct Workforce Develop-  System                        ment Center, Woodbridge                                Campus, Northern Virginia   23,668,000 Virginia Community College    Construct New Location for  System                        Trucking Program, Portsmouth                                Campus, Tidewater            8,440,000 Virginia Community College    Construct Workforce Solutions  System                        & Academic Training Center,                                Fauquier, Lord Fairfax      13,937,000 Virginia Community College    Construct Occupational Pro-  System                        gram Building, Culinary Arts                                Career Studies Certification                                Program, Central Virginia    1,448,000 Virginia Community College    Construct Motorsports/  System                        Workforce Development                                Center, Patrick Henry        8,715,000 Virginia Community College    Renovate Engineering and  System                        Industrial Technology                                Building, Danville           6,332,000 Virginia Community College    Construct Classroom and  System                        Administration Building,                                Blue Ridge                   5,616,000 Virginia Community College    Renovate Warren and Scott  System                        Halls, Dabney S. Lancaster   6,339,000 Virginia Institute of Marine  Replace Eastern Shore  Science                       Seawater Laboratory          4,182,000 Virginia Institute of Marine  Control Shoreline Erosion  Science                                                    1,200,000 Eastern Virginia Medical      Construct Instructional and  School                        Research Medical Facility   59,000,000 Frontier Culture Museum       Construct Early American                                Industry Exhibit             1,407,000 Science Museum of Virginia    Construct Belmont Bay                                Science Center              20,000,000 Science Museum of Virginia    Construct Danville Science                                Center Planetarium &                                Theater                      2,226,000 Grand Total                                            $1,525,492,000

The General Assembly hereby finds and determines that the estimated useful life of the capital projects described above is in excess of twenty-one years.

The Governor or the Governor’s designee shall designate the amount of the proceeds of the bonds and BANs allocated to any other capital project included herein.  No allocation to a capital project may be increased until it has been demonstrated to the satisfaction of the Governor or the Governor’s designee that (a) the cost of the capital project has been reduced to the extent reasonable, (b) the capital project has not been expanded or enhanced beyond that originally approved, and (c) the capital project is suitable and adequate for the scope originally intended.  No increase in the amount allocated to any capital project shall constitute an authorization for the issuance of bonds in an amount in excess of the aggregate amount authorized hereunder.

§ 4.  Application of Proceeds.

Proceeds (including any premium) of the bonds and any BANs (except the proceeds of (i) bonds the issuance of which has been anticipated by BANs, (ii) refunding bonds and (iii) refunding BANs) shall be deposited by the State Treasurer in a special capital outlay fund in the State Treasury and shall be disbursed only for the purpose for which the bonds or any BANs have been issued.  In the event that the proceeds of the bonds or BANs exceed the cost of the projects as allocated in § 3, the Treasury Board shall cause such excess proceeds to be applied to the retirement of bonds or BANs.  The proceeds of (i) bonds the issuance of which has been anticipated by BANs, (ii) refunding bonds and (iii) refunding BANs and any funds provided by the General Assembly, or available from any other source, for the purpose, shall be used to pay such BANs, refunded bonds and refunded BANs.

The proceeds of the bonds and any refunding bonds or BANs are hereby appropriated for disbursement from the State Treasury for the current biennium pursuant to Article X, Section 7 of the Constitution of Virginia, and § 2.2-1819 of the Code of Virginia.  The general conditions and general provisions of the general appropriation act enacted pursuant to Chapter 15, Title 2.2 (2.2-1500 et seq.) of the Code of Virginia, in effect from time to time, and all of the terms and conditions contained therein shall apply to the capital projects listed in § 3.  The Governor or his designee is hereby authorized to increase the appropriation for any project listed in § 3 by the amount of the proceeds of donations, gifts, grants or other nongeneral funds paid into the state treasury in excess of such appropriation.

§ 5.  Details, sale of bonds and BANs.

The bonds shall be dated, shall mature at such time or times not exceeding twenty-one years from their date or dates and may be made redeemable before their maturity or maturities at such price or prices or within such price parameters, all as may be determined by the Treasury Board, by and with the consent of the Governor.  The principal of the bonds shall be amortized, by payment into a sinking fund or otherwise, in annual installments.  The first annual installment of principal of the bonds shall become due not later than one-tenth of the term of the bonds, and no installment of principal of the bonds shall be more than twice the smallest previous installment.  Any such sinking fund shall not be appropriated for any other purpose.

The bonds shall be in such form, shall bear interest at such rate or rates, either at fixed rates or at rates established by formula or other method, and may contain such other provisions, all as the Treasury Board or the State Treasurer, when authorized by the Treasury Board, may determine.  The principal of and premium, if any, and interest on the bonds and BANs shall be payable in lawful money of the United States of America.  Bonds and BANs may be certificated or uncertificated as determined by the Treasury Board.  The Treasury Board may contract for services of such registrars, transfer agents, or other authenticating agents as it deems appropriate to maintain a record of the persons entitled to the bonds and BANs.  Bonds and BANs may be issued under a system of book entry for recording the ownership and transfer of ownership of rights to receive payments on the bonds and BANs.  The Treasury Board shall fix the denomination or denominations of the bonds and the place or places of payment of principal, premium, if any, and interest, which may be at the office of the State Treasurer or at any one or more banks or trust companies within or without the Commonwealth.

The Treasury Board may sell the bonds and any BANs in such manner, either by competitive bidding, negotiated sale or private placement, and for such price as it may determine, by and with the consent of the Governor, to be in the interest of the Commonwealth.

At  the discretion of the Treasury Board, bonds and BANs may be issued at one time or in part from time to time and may be issued and sold at the same time with other general obligation bonds and bond anticipation notes, respectively, of the Commonwealth authorized pursuant to Article X, Section 9(a)(3), (b) or (c) of the Constitution of Virginia, either as separate issues, as a combined issue designated “Commonwealth of Virginia General Obligation Bonds/Bond Anticipation Notes, Series 20....,” or as a combination of both. The bonds and BANs shall be signed on behalf of the Commonwealth by the Governor and by the State Treasurer, or shall bear their facsimile signatures, and shall bear the lesser seal of the Commonwealth or a facsimile thereof.  In the event that the bonds or BANs bear the facsimile signature of the State Treasurer, they shall be signed by such administrative assistant as the State Treasurer shall determine or by such registrar or paying agent as may be designated to sign them by the Treasury Board.  If any officer whose signature or facsimile signature shall appear on any bonds or BANs shall cease to be such officer before the delivery, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery, and any bond or BAN may bear the facsimile signature of, or may be signed by, such persons as at the actual time of the execution are the proper officers to sign such bond or BAN although, at the date of such bond or BAN, such persons may not have been such officers.

§ 6.  Refunding.

The Treasury Board is hereby authorized, by and with the consent of the Governor, to sell and issue, at one time or from time to time, refunding bonds and BANs of the Commonwealth, to refund any or all of the bonds and BANs, respectively, issued under this Act or otherwise pursuant to Article X, Section 9(b), Constitution of Virginia. Refunding bonds and BANs may be issued in a principal amount up to the amount necessary to pay at maturity or redeem the bonds and BANs to be refunded and pay all issuance costs and other financing expenses of the refunding.  Such refunding bonds and BANs may be issued whether or not the bonds or BANs to be refunded are then subject to redemption.  Any escrow or trust fund established with the proceeds from the sale of refunding bonds shall be irrevocably pledged to the payment of the bonds to be refunded, and shall be used solely to pay such bonds or BANs at maturity or upon redemption or for the purchase of not less than all of the bonds or BANs to be refunded.  Any such escrow or trust fund shall constitute a special fund for the payment of such refunded bonds or BANs, and such refunded bonds or BANs, to the extent of amounts, including the maturity amounts of investments, set aside for the payment thereof in such escrow or trust fund, shall not be included for the purposes of determining any limitations upon the amount of bonded indebtedness of the Commonwealth that may be incurred pursuant to Article X, Section 9(b), the Constitution of Virginia.  The Treasury Board may, however, direct that the interest received from the investment of the proceeds of the bonds or any BANs be transferred to the general fund of the State Treasury.

§ 7.  Investments and Contracts.

A.  Pending the application of the proceeds of the bonds or BANs (including refunding bonds and BANs) to the purpose for which they have been authorized and the application of funds set aside for the purpose to the payment of bonds or BANs, they may be invested by the State Treasurer in securities that are legal investments under the laws of the Commonwealth for public funds and sinking funds, as the case may be.  Whenever the State Treasurer receives interest from the investment of the proceeds of bonds or any BANs, such interest shall become a part of the principal of the bonds or any BANs and shall be used in the same manner as required for principal of the bonds or BANs.

B. The Commonwealth may enter into any contract or other arrangement that is determined to be necessary or appropriate to place the obligation or investment of the Commonwealth, as represented by bonds, BANs or investments, in whole or in part, on the interest rate, cash flow or other basis desired by the Commonwealth.  Such contract or other arrangement may include without limitation, contracts commonly known as interest rate swap agreements, and futures or contracts providing for payments based on levels of, or changes in, interest rates.  These contracts or arrangements may be entered into by the Commonwealth in connection with, or incidental to, entering into, or maintaining any (i) agreement which secures bonds or BANs or (ii) investment, or contract providing for investment, otherwise authorized by law.  These contracts and arrangements may contain such payment, security, default, remedy, and other terms and conditions as determined by the Commonwealth, after giving due consideration to the creditworthiness of the counterparty or other obligated party, including any rating by any nationally recognized rating agency, and any other criteria as may be appropriate. The determinations referred to in this paragraph may be made by the Treasury Board or any public funds manager with professional investment capabilities duly authorized by the Treasury Board to make such determinations.

C.  Any money set aside and pledged to secure payments of bonds, BANs or any of the contracts entered into pursuant to this section may be invested in accordance with paragraph A. of this section and may be pledged to and used to service any of the contracts or other arrangements entered into pursuant to paragraph B. of this section.

§ 8.  Security for bonds and BANs.

The full faith and credit of the Commonwealth are hereby irrevocably pledged for the payment of the principal of and the interest on bonds and (unless the Treasury Board, by and with the consent of the Governor, shall provide otherwise) BANs issued under this Act.  The proceeds of (i) bonds the issuance of which has been anticipated by BANs, (ii) refunding bonds and (iii) refunding BANs are hereby irrevocably pledged for the payment of principal of and interest and any premium on such bonds or BANs to be refunded thereby.  In addition, the Treasury Board may pledge the full faith and credit of the Commonwealth for the payment of the principal of and interest on any BANs.  If sufficient funds are not appropriated in the general appropriations act for any fiscal year for the timely payment of the principal of and the interest on the bonds, any refunding bonds or any BANs where the full faith and credit of the Commonwealth has been pledged, there shall be set apart by direction of the Governor, from the first general fund revenues received during such fiscal year and thereafter, a sum sufficient to pay such principal and interest.

§ 9.  Expenses.

All expenses incurred under this Act shall be paid from the proceeds of the bonds or any refunding bonds or and BANs or from any other available funds as the Treasury Board shall determine.

§ 10.  Exemption of interest from tax.

The bonds and BANs issued under the provisions of this Act, their transfer, and the income therefrom, including any profit made on the sale thereof, shall at all times be exempt from taxation by the Commonwealth and by any political subdivision thereof.  The interest on the bonds and any refunding bonds or BANs may be subject to inclusion in gross income of the holders thereof for federal income tax purposes.

§ 11.  Referendum.

The question of the effectiveness of this Act and the authorization of the bonds shall be submitted to the qualified voters of the Commonwealth at the general election to be held on Tuesday, November 4, 2008.  The referendum shall be supervised and held, notice thereof given, ballots prepared, returns made and certified, votes canvassed and results ascertained and made known, as provided by law. The ballots to be used at the election shall pose the question in substantially the following form:

QUESTION:  Shall Chapter ___, Acts of the General Assembly of 2008, authorizing the issuance of general obligation bonds of the Commonwealth of Virginia in the maximum amount of $1,525,492,000 pursuant to Article X, Section 9(b) of the Constitution of Virginia for capital projects for educational facilities, take effect?

The State Board of Elections shall cause to be sent to the electoral boards of each county and city sufficient copies of the full text of this Act and the question contained herein for the officers of election to post in each polling place on election day.  The State Board of Elections shall without delay make out and transmit to the Governor and to the Treasury Board an official certified copy of the report of the whole number of votes cast at the election for and against the Act. 

If a majority of those voting thereon shall vote in favor of this Act, this Act shall take effect and the bonds may be issued as hereinabove provided.  If a majority of those voting thereon shall vote against this Act, this Act shall not take effect and the bonds shall not be issued.

The expenses incurred in conducting this election shall be defrayed as in the case of election of members of the General Assembly.

§ 12.  Severability.

The provisions of this Act or the application thereof to any person or circumstance which are held invalid shall not affect the validity of other provisions or applications of this Act which can be given effect without the invalid provisions or applications.