22.1-168 - Security for payment and bonds; provisions of trust indenture or resolution of Board. - Virginia Statutes

§ 22.1-168. Security for payment and bonds; provisions of trust indenture orresolution of Board.

In the discretion of the Board of Commissioners any bonds issued under theprovisions of this chapter may be secured by a trust indenture by and betweenthe Authority and a corporate trustee, which may be any trust company or bankhaving the powers of a trust company within or without the Commonwealth. Suchtrust indenture or the resolution providing for the issuance of such bondsmay pledge or assign all or any part of the funds of the Authority availablefor such purpose including, but without limitation, all or any combination ofthe following sources: (i) payments of principal of and interest on localschool bonds purchased by the Authority, (ii) the proceeds of the sale of anysuch local school bonds, (iii) payments of principal of and interest onobligations transferred to the Authority from the Literary Fund, (iv) theproceeds of the sale of any such obligations, (v) any moneys transferred tothe Authority from the Literary Fund, (vi) payments of principal of andinterest on loans made to local school boards, and (vii) any funds authorizedby the General Assembly for such purpose from the Literary Fund or otherwiseappropriated by the General Assembly. Such trust indenture or resolutionproviding for the issuance of such bonds may provide for the creation andmaintenance of such reserves as the Board of Commissioners shall determine tobe proper and may include covenants setting forth the duties of the Board ofCommissioners in relation to the acquisition of any local school bonds, thesubstitution of any local school bonds as security for payment of the bondsof the Authority, the collection of payments of principal and interest on (i)any local school bonds, (ii) on any obligations transferred to the Authorityfrom the Literary Fund, and (iii) on any loans made to local school boards.Such trust indenture or resolution may include provisions requiring theAuthority or the trustee under such trust indenture or any depository to filea petition with the Governor and to take any and all other action requiredunder § 15.2-2659 to secure payment of all sums necessary to cover anydefault as to any bonds or the interest thereon held by the Authority or bysuch trustee or depository to which § 15.2-2659 shall be applicable. Suchtrust indenture or resolution may contain provisions respecting the custody,safeguarding and application of all moneys and securities including localschool bonds purchased by the Authority and obligations transferred to theAuthority from the Literary Fund and may contain such provisions forprotecting and enforcing the rights and remedies of the bondholders as may bereasonable and proper and not in violation of law. It shall be lawful forany bank or trust company incorporated under the laws of the Commonwealthwhich may act as depository of the proceeds of bonds or of any other funds orobligations received on behalf of the Authority to furnish such indemnifyingbonds or to pledge such securities as may be required by the Board ofCommissioners. Any such trust indenture or resolution may contain such otherprovisions as the Board may deem reasonable and proper for the security ofthe bondholders. Any reference in this chapter to a resolution of the Boardof Commissioners shall include any trust indenture authorized thereby.

(Code 1950, § 22-29.8; 1962, c. 194; 1972, c. 745; 1980, c. 559; 1990, c.909.)