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2001 SESSION
014347768Be it enacted by the General Assembly of Virginia:
1. That § 23-77.4 of the Code of Virginia is amended and reenacted as follows:
§ 23-77.4. Medical center management.
A. The General Assembly recognizes and finds that the economic viability of the
University of Virginia Medical Center, hereafter referred to as the Medical Center,
together with the requirement for its specialized management and operation, and the need
of the Medical Center to participate in cooperative arrangements reflective of
changes in health care delivery, as set forth in § 23-77.3, are dependent upon
the ability of the management of the Medical Center to make and implement promptly
decisions necessary to conduct the affairs of the Medical Center in an
efficient, competitive manner. The General Assembly also recognizes and finds
that it is critical to, and in the best interests of, the Commonwealth that the
University continue to fulfill its mission of providing quality medical and
health sciences education and related research and, through the presence of its
Medical Center, continue to provide for the care, treatment, health-related
services, and education activities associated with Virginia patients, including
indigent and medically indigent patients. Because the The General Assembly
finds that the ability of the University to fulfill this mission is highly dependent upon revenues
derived from providing health care through its Medical Center, and because the
General Assembly also finds that the ability of the Medical Center to continue
to be a reliable source of such revenues is heavily dependent upon its ability to
compete with other providers of health care whichthat are not subject to the
requirements of law applicable to agencies of the Commonwealth,. Therefore,
the University is hereby authorized to implement the following modifications to the management and operation of the affairs
of the Medical Center in order to enhance its economic viability:.
1. Capital projects. a. For any Medical Center capital project entirely funded
by a nongeneral fund appropriation made by the General Assembly, all post-appropriation review, approval,
administrative, and policy and procedure functions performed by the Department
of General Services, the Division of Engineering and Buildings, the Department
of Planning and Budget and any other agency that supports the functions
performed by these departments are hereby delegated to the University, subject
to the following stipulations and conditions: (i) the Board of Visitors shall
develop and implement an appropriate system of policies, procedures, reviews
and approvals for Medical Center capital projects to which this subdivision
applies; (ii) the system so adopted shall provide for the review and approval
of any Medical Center capital project to which this subdivision applies in
order to ensure that, except as provided in clause (iii), the cost of any such
capital project does not exceed the sum appropriated therefor and that the
project otherwise complies with all requirements of the Code of Virginia
regarding capital projects, excluding only the post-appropriation review,
approval, administrative, and policy and procedure functions performed by the
Department of General Services, the Division of Engineering and Buildings, the
Department of Planning and Budget and any other agency that supports the
functions performed by these departments; (iii) the Board of Visitors may,
during any fiscal year, approve a transfer of up to a total of fifteen percent
of the total nongeneral fund appropriation for the Medical Center in order to
supplement funds appropriated for a capital project or capital projects of the
Medical Center, provided that the Board of Visitors finds that the transfer is
necessary to effectuate the original intention of the General Assembly in
making the appropriation for the capital project or projects in question; (iv)
the University shall report to the Department of General Services on the status
of any such capital project prior to commencement of construction of, and at
the time of acceptance of, any such capital project; and (v) the University
shall ensure that Building Officials and Code Administrators (BOCA) Code and
fire safety inspections of any such project are conducted and that such
projects are inspected by the State Fire Marshal or his designee prior to
certification for building occupancy by the University's assistant state
building official to whom such inspection responsibility has been delegated
pursuant to § 36-98.1. Nothing in this section shall be deemed to relieve the
University of any reporting requirement pursuant to §§ 2.1-403 and 2.1-404.
Notwithstanding the foregoing, the terms and structure of any financing of any capital
project to which this subdivision applies shall be approved pursuant to §
2.1-179.
b. No capital project to which this subdivision applies shall be materially
increased in size or materially changed in scope beyond the plans and justifications which
were the basis for the project's appropriation unless: (ia) the Governor
determines that such increase in size or change in scope is necessary due to an
emergency or (iib) the General Assembly approves the increase or change in
a subsequent appropriation for the project. After construction of any such
capital project has commenced, no such increase or change may be made during
construction unless the conditions in (ia) or (iib) have been satisfied.
2. Leases of property.a. The University shall be exempt from the provisions of
§ 2.1-504.2 and from any rules, regulations and guidelines of the Division
of Engineering and Buildings in relation to leases of real property which it
enters into on behalf of the Medical Center and, pursuant to policies and
procedures adopted by the Board of Visitors, may enter into such leases subject
to the following conditions: (i) the lease must be an operating lease and not a
capital lease as defined in guidelines established by the Secretary of Finance
and Generally Accepted Accounting Principles (GAAP); (ii) the University's
decision to enter into such a lease shall be based upon cost, demonstrated
need, and compliance with guidelines adopted by the Board of Visitors which
direct that competition be sought to the maximum practical degree, that all
costs of occupancy be considered, and that the use of the space to be leased
actually is necessary and is efficiently planned; (iii) the form of the lease
is approved by the Special Assistant Attorney General representing the
University; (iv) the lease otherwise meets all requirements of law; (v) the
leased property is certified for occupancy by the building official of the
political subdivision in which the leased property is located; and (vi) upon
entering such leases and upon any subsequent amendment of such leases, the
University shall provide copies of all lease documents and any attachments
thereto to the Department of General Services.
b. Notwithstanding the provisions of §§ 2.1-511 and 23-4.1, but subject to
policies and procedures adopted by the Board of Visitors, the University may
lease, for a purpose consistent with the mission of the Medical Center and for
a term not to exceed fifty years, property in the possession or control of the
Medical Center.
c. Notwithstanding the foregoing, the terms and structure of any financing
arrangements secured by capital leases or other similar lease financing agreements shall
be approved pursuant to § 2.1-179.
3. Procurement of goods, services and construction. Contracts awarded by the
University in compliance with this section, on behalf of the Medical Center,
for the procurement of goods, services, including professional services, and
construction, shall be exempt from (i) the Virginia Public Procurement Act (§
11-35 et seq.), except as provided below; (ii) Article 3 (§ 2.1-435 et seq.) of
Chapter 32 of Title 2.1; and (iii) Article 5 (§ 2.1-480 et seq.) of Chapter 32
of Title 2.1 regarding the review and approval of contracts for the construction of
Medical Center capital projects; however, the provisions of this paragraph may
not be implemented by the University until such time as the Board of Visitors
has adopted guidelines generally applicable to the procurement of goods,
services and construction by the Medical Center or by the University on behalf
of the Medical Center. Such guidelines shall be based upon competitive
principles and shall in each instance seek competition to the maximum practical
degree. The guidelines shall implement a system of competitive negotiation for
professional services; shall prohibit discrimination because of race, religion,
color, sex, or national origin of the bidder or offeror in the solicitation or
award of contracts; may take into account in all cases the dollar amount of the
intended procurement, the term of the anticipated contract, and the likely
extent of competition; may implement a prequalification procedure for
contractors or products; may include provisions for cooperative procurement
arrangements with private health or educational institutions, or with public
agencies or institutions of the several states, territories of the United
States or the District of Columbia; shall incorporate the prompt payment
principles of §§ 11-62.10 and 11-62.11; and may implement provisions of law.
The following sections of the Virginia Public Procurement Act shall continue to apply to
procurements by the Medical Center or by the University on behalf of the
Medical Center: §§ 11-49, 11-51, 11-52 (which section shall not be construed to
require compliance with the prequalification application procedures of
subsection B of § 11-46), 11-54, 11-56 through 11-61, and 11-72 through 11-80.
B. Imputed interest earned on the investment of moneys derived from nongeneral operating cash balances, including but not limited to, balances derived from patient care revenues, shall be credited each month to the University of Virginia Medical Center account within the Department of the Treasury by the Comptroller.
2. That to phase in the cost to the Commonwealth of crediting imputed interest earned on the investment of moneys derived from nongeneral operating cash balances, including patient care revenues, by the University of Virginia Medical Center, pursuant to subsection B of § 23-77.4, the University of Virginia Medical Center shall make the following deposits into the general fund from interest income earned on such nongeneral operating cash balances, as follows: $4,400,000 on or before June 30, 2002; $2,200,000 on or before June 30, 2003; and $1,100,000 on or before June 30, 2004.