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1994 SESSION
LD0856358Patrons--Mims, Cantor, Abbitt, Albo, Almand, Armstrong, Barlow, Behm, Bennett, Bloxom, Brickley, Callahan, Christian, Clement, Cohen, Connally, Cooper, Copeland, Cox, Cranwell, Crittenden, Croshaw, Crouch, Cunningham, Darner, Davies, DeBoer, Deeds, Diamonstein, Dillard, Dudley, Fisher, Forbes, Giesen, Grayson, Hall, Hamilton, Hargrove, Harris, Heilig, Howell, Hull, Ingram, Jackson, Johnson, Jones, D.C., Jones, J.C., Katzen, Keating, Kidd, Kilgore, Marshall, Martin, May, Mayer, McClure, McDonnell, Melvin, Miller, Moore, Morgan, Moss, Nelms, Newman, O'Brien, Orrock, Parrish, Phillips, Plum, Puller, Purkey, Putney, Reid, Reynolds, Rhodes, Robinson, Rollison, Ruff, Scott, Sherwood, Shuler, Spruill, Stump, Tata, Thomas, Van Yahres, Wagner, Wardrup, Watkins, Way, Wilkins and Woodrum; Senators: Barry, Bell, Benedetti, Calhoun, Chichester, Colgan, Cross, Earley, Hawkins, Holland, C.A., Holland, E.M., Holland, R.J., Houck, Howell, Lambert, Marsh, Marye, Maxwell, Miller, K.G., Norment, Potts, Quayle, Reasor, Robb, Russell, Saslaw, Stolle, Stosch, Trumbo, Waddell and Woods
Be it enacted by the General Assembly of Virginia:
1. That §§ 2.1-1.5, 2.1-1.6, 2.1-41.2, 9-6.25.3, 11-35, and 58.1-322 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding in Title 23 a chapter numbered 4.9, consisting of sections numbered 23-38.75 through 23-38.88, as follows:
§ 2.1-1.5. Entities not subject to standard nomenclature.
The following entities are not subject to the provisions of § 2.1-1.2 due to the unique characteristics or enabling legislation of the entities:
Richmond Eye and Ear Hospital Authority.
Small Business Financing Authority.
State Education Assistance Authority.
Virginia Agriculture Development Authority.
Virginia College Building Authority.
Virginia Education Loan Authority.
Virginia Housing Development Authority.
Virginia Innovative Technology Authority.
Virginia Port Authority.
Virginia Public Building Authority.
Virginia Public School Authority.
Virginia Resources Authority.
Virginia Student Assistance Authorities.
Board of Commissioners, Virginia Agriculture Development Authority.
Board of Commissioners, Virginia Port Authority.
Board of Directors, Richmond Eye and Ear Hospital Authority.
Board of Directors, Small Business Financing Authority.
Board of Directors, Virginia Student Assistance Authorities.
Board of Directors, Virginia Innovative Technology Authority.
Board of Directors, Virginia Resources Authority.
Board of Regents, Gunston Hall Plantation.
Board of Regents, James Monroe Memorial Law Office and Library.
Board of Trustees, Family and Children's Trust Fund.
Board of Trustees, Frontier Culture Museum of Virginia.
Board of Trustees, Jamestown-Yorktown Foundation.
Board of Trustees, Miller School of Albemarle.
Board of Trustees, Rural Virginia Development Foundation.
Board of Trustees, The Science Museum of Virginia.
Board of Trustees, Virginia Museum of Fine Arts.
Board of Trustees, Virginia Museum of Natural History.
Board of Trustees, Virginia Outdoor Foundation.
Board of the Virginia Higher Education Tuition Trust Fund.
Board of Visitors, Christopher Newport University.
Board of Visitors, The College of William and Mary in Virginia.
Board of Visitors, George Mason University.
Board of Visitors, Gunston Hall Plantation.
Board of Visitors, James Madison University.
Board of Visitors, Longwood College.
Board of Visitors, Mary Washington College.
Board of Visitors to Mount Vernon.
Board of Visitors, Norfolk State University.
Board of Visitors, Old Dominion University.
Board of Visitors, Radford University.
Board of Visitors, University of Virginia.
Board of Visitors, Virginia Commonwealth University.
Board of Visitors, Virginia Military Institute.
Board of Visitors, Virginia Polytechnic Institute and State University.
Board of Visitors, Virginia State University.
Governing Board, Virginia College Building Authority.
Governing Board, Virginia Public School Authority.
Library Board, Virginia State Library and Archives.
State Board for Community Colleges, Virginia Community College System.
Alexandria Historical Restoration and Preservation Commission.
Chesapeake Bay Bridge and Tunnel Commission.
Hampton Roads Sanitation District Commission.
Chesapeake Bay Bridge and Tunnel District.
Hampton Roads Sanitation District.
Christopher Newport University.
College of William and Mary in Virginia.
Frontier Culture Museum of Virginia.
George Mason University.
James Madison University.
Jamestown-Yorktown Foundation.
Longwood College.
Mary Washington College.
Miller School of Albemarle.
Norfolk State University.
Old Dominion University.
Radford University.
The Science Museum of Virginia.
University of Virginia.
Virginia Commonwealth University.
Virginia Community College System.
Virginia Military Institute.
Virginia Museum of Fine Arts.
Virginia Polytechnic Institute and State University.
Virginia State Library and Archives.
Virginia State University.
Chippokes Plantation Farm Foundation.
Rural Virginia Development Foundation.
Virginia Conservation and Recreation Foundation.
Virginia Historic Preservation Foundation.
Virginia Outdoor Foundation.
Virginia Museum of Natural History.
Gunston Hall Plantation.
Virginia Retirement System.
§ 2.1-1.6. State boards.
A. There shall be, in addition to such others as may be established by law, the following permanent collegial bodies affiliated with a state agency within the executive branch:
Accountancy, Board for
Aging, Advisory Board on the
Agriculture and Consumer Services, Board of
Air Pollution, State Advisory Board on
Alcoholic Beverage Control Board, Virginia
Apple Board, Virginia State
Appomattox State Scenic River Advisory Board
Aquaculture Advisory Board
Architects, Professional Engineers, Land Surveyors and Landscape Architects, State Board for
Art and Architectural Review Board
Athletic Board, Virginia
Auctioneers Board
Audiology and Speech-Language Pathology, Board of
Aviation Board, Virginia
Barbers, Board for
Branch Pilots, Board for
Bright Flue-Cured Tobacco Board, Virginia
Building Code Technical Review Board, State
Catoctin Creek State Scenic River Advisory Board
Cattle Industry Board, Virginia
Cave Board
Certified Seed Board, State
Chesapeake Bay Local Assistance Board
Chickahominy State Scenic River Advisory Board
Child Abuse and Neglect, Advisory Board on
Chippokes Plantation Farm Foundation, Board of Trustees
Clinch Scenic River Advisory Board
Coal Research and Development Advisory Board, Virginia
Coal Surface Mining Reclamation Fund Advisory Board
Conservation and Development of Public Beaches, Board on
Conservation and Recreation, Board of
Contractors, Board for
Corn Board, Virginia
Correctional Education, Board of
Corrections, State Board of
Cosmetology, Board for
Criminal Justice Services Board
Dark-Fired Tobacco Board, Virginia
Deaf and Hard-of-Hearing, Advisory Board for the Department for the
Dentistry, Board of
Education, State Board of
Egg Board, Virginia
Emergency Medical Services Advisory Board
Employment Agency Advisory Board
Farmers Market Board, Virginia
Film Office Advisory Board
Fire Services Board, Virginia
Forensic Science Advisory Board
Forestry, Board of
Funeral Directors and Embalmers, Board of
Game and Inland Fisheries, Board of
Geology, Board for
Goose Creek Scenic River Advisory Board
Health Planning Board, Virginia
Health Professions, Board of
Health, State Board of
Hearing Aid Specialists, Board for
Hemophilia Advisory Board
Historic Resources, Board of
Housing and Community Development, Board of
Industrial Development Services Advisory Board
Insurance Advisory Board, State
Irish Potato Board, Virginia
Laboratory Services Advisory Board
Marine Products Board, Virginia
Medical Advisory Board, Department of Motor Vehicles
Medical Board of the Virginia Retirement System
Medicare and Medicaid, Advisory Board on
Medicine, Board of
Mental Health, Mental Retardation and Substance Abuse Services Board, State
Migrant and Seasonal Farmworkers Board
Military Affairs, Board of
Mines, Minerals and Energy, Board of Examiners in the Department of
Minority Business Enterprise, Interdepartmental Board of the Department of
Motor Vehicle Dealers' Advisory Board
Networking Users Advisory Board, State
Nottoway State Scenic River Advisory Board
Nursing, Board of
Nursing Home Administrators, Board of
Occupational Therapy, Advisory Board on
Oil and Gas Conservation Board, Virginia
Opticians, Board for
Optometry, Board of
Peanut Board, Virginia
Personnel Advisory Board
Pesticide Control Board
Pharmacy, Board of
(Delayed effective date - See Editor's note) Physical Fitness and Sports, Virginia Board on
Physical Therapy to the Board of Medicine, Advisory Board on
Plant Pollination Advisory Board
Polygraph Examiners Advisory Board
Pork Industry Board, Virginia
Poultry Products Board, Virginia
Private College Advisory Board
Private Security Services Advisory Board
Professional and Occupational Regulation, Board for
Professional Counselors, Board of
Professional Soil Scientists, Board for
Psychiatric Advisory Board
Psychology, Board of
Public Buildings Board, Virginia
Public Telecommunications Board, Virginia
Radiation Advisory Board
Real Estate Appraiser Board
Real Estate Board
Reciprocity Board, Department of Motor Vehicles
Recreational Fishing Advisory Board, Virginia
Recreation Specialists, Board of
Reforestation Board
Rehabilitative Services, Board of
Respiratory Therapy, Advisory Board on
Retirement System Review Board
Rockfish State Scenic River Advisory Board
Safety and Health Codes Board
Seed Potato Board
Sewage Handling and Disposal Appeal Review Board, State Health Department
Shenandoah State Scenic River Advisory Board
Small Business Advisory Board
Small Business Environmental Compliance Advisory Board
Small Grains Board, Virginia
Social Services, Board of
Social Work, Board of
Soil and Water Conservation Board, Virginia
Soybean Board, Virginia
State Air Pollution Control Board
Substance Abuse Certification Board
Surface Mining Review, Board of
Sweet Potato Board, Virginia
Teacher Education and Licensure, Advisory Board on
Tourism and Travel Services Advisory Board
Toxic Substances Advisory Board
Transportation Board, Commonwealth
Transportation Safety, Board of
Treasury Board, The, Department of the Treasury
Veterans' Affairs, Board on
Veterinary Medicine, Board of
Virginia Board for Asbestos Licensing
Virginia Employment Commission, State Advisory Board for the
Virginia Higher Education Tuition Trust Fund, Board of the
(Delayed effective date - See Editor's note) Virginia Horse Industry Board
Virginia Manufactured Housing Board
Virginia Mine Safety Board
Virginia Retirement System, Board of Trustees
Virginia Waste Management Board
Visually Handicapped, Virginia Board for the
Voluntary Formulary Board, Virginia
War Memorial Foundation, Virginia, Board of Trustees
Waste Management Facility Operators, Board for
Water Resources Research Center Statewide Advisory Board, Virginia
Waterworks and Wastewater Works Operators, Board for
Well Review Board, Virginia
Youth and Family Services, State Board of.
B. Notwithstanding the definition for "board" as provided in § 2.1-1.2, the following entities shall be referred to as boards:
Compensation Board
State Board of Elections
State Water Control Board
Virginia Parole Board
Virginia Veterans Care Center Board of Trustees.
§ 2.1-41.2. Appointment of agency heads; chief of staff.
Notwithstanding any provision of law to the contrary, the Governor shall
appoint the administrative head of each agency of the executive branch of
state government except the following: the Executive Director of the Virginia
Port Authority, the Director of the State Council of Higher Education for
Virginia, the Executive Director of the Department of Game and Inland
Fisheries, the Executive Director of the Jamestown-Yorktown Foundation
and, the Director of the Virginia Retirement System,
and the Executive Director of the Virginia Higher Education Tuition Trust
Fund. However, the manner of selection of those heads of agencies
chosen by election as of January 1, 1976, or as set forth in the Constitution
of Virginia shall continue without change. Each administrative head and
Secretary appointed by the Governor pursuant to this section shall be subject
to confirmation by the General Assembly, shall have such professional
qualifications as may be prescribed by law, and shall serve at the pleasure
of the Governor. The chief of staff who may be appointed by the Governor
pursuant to § 2.1-38 shall be confirmed by a majority of the members of each
house of the General Assembly. For the purpose of this section, "agency"
shall include all administrative units established by law or by executive
order which are not arms of the legislative or judicial branches of
government, which are not educational institutions as classified under §§
9-84, 22.1-346, 23-14, and 23-252, which are not regional planning districts,
regional transportation authorities or districts, or regional sanitation
districts and which are not assigned by law to other departments or agencies,
not including assignments to secretaries under Chapter 5.1 (§ 2.1-51.7 et
seq.) of this title.
§ 9-6.25:3. Supervisory boards.
There shall be, in addition to such others as may be designated in accordance with § 9-6.25, the following supervisory boards:
Alcoholic Beverage Control Board
Board for Branch Pilots
Board of Commissioners, Virginia Port Authority
Board of Game and Inland Fisheries
Board of Regents, Gunston Hall Plantation
Board of Regents, James Monroe Memorial Law Office and Library
Board of Trustees, Chippokes Plantation Farm Foundation
Board of Trustees, Frontier Culture Museum of Virginia
Board of Trustees, Jamestown-Yorktown Foundation
Board of Trustees, the Science Museum of Virginia
Board of Trustees, Virginia Museum of Fine Arts
Board of Trustees, Virginia Retirement System
Board of Trustees, Virginia Veterans Care Center
Board of Trustees, Virginia War Memorial Foundation
Board of the Virginia Higher Education Tuition Trust Fund
Board of Visitors, Christopher Newport University
Board of Visitors, George Mason University
Board of Visitors, James Madison University
Board of Visitors, Longwood College
Board of Visitors, Mary Washington College
Board of Visitors, Norfolk State University
Board of Visitors, Old Dominion University
Board of Visitors, Radford University
Board of Visitors, The College of William and Mary in Virginia
Board of Visitors, University of Virginia
Board of Visitors, Virginia Commonwealth University
Board of Visitors, Virginia Military Institute
Board of Visitors, Virginia Polytechnic Institute and State University
Board of Visitors, Virginia State University
Commonwealth's Attorneys' Services Council
Compensation Board
Governing Board, Virginia College Building Authority
Governing Board, Virginia Public School Authority
State Board for Community Colleges, Virginia Community College System
State Board of Education
State Certified Seed Board
State Council of Higher Education for Virginia
Virginia Agricultural Council
Virginia Bright Flue-Cured Tobacco Board
Virginia Board for People with Disabilities
Virginia Cattle Industry Board
Virginia Corn Board
Virginia Dark-Fired Tobacco Board
Virginia Egg Board
Virginia Horse Industry Board
Virginia Marine Products Board
Virginia Peanut Board
Virginia Pork Industry Board
Virginia Soybean Board
Virginia State Apple Board
Virginia Sweet Potato Board.
§ 11-35. Title; purpose; applicability.
A. This chapter may be cited as the Virginia Public Procurement Act.
B. The purpose of this chapter is to enunciate the public policies pertaining to governmental procurement from nongovernmental sources.
C. The provisions of this chapter, however, shall not apply, except as stipulated in the provisions of §§ 11-41.1, 11-49, 11-51, 11-54, 11-56 through 11-61 and 11-72 through 11-80, to any town with a population of less than 3,500 as determined by the last official United States census.
D. Except to the extent adopted by such governing body, the provisions of this chapter also shall not apply, except as stipulated in subsection E, to any county, city or town whose governing body adopts by ordinance or resolution alternative policies and procedures which are based on competitive principles and which are generally applicable to procurement of goods and services by such governing body and the agencies thereof. This exemption shall be applicable only so long as such policies and procedures, or other policies and procedures meeting the requirements of this section, remain in effect in such county, city or town.
Except to the extent adopted by such school board, the provisions of this chapter shall not apply, except as stipulated in subsection E, to any school division whose school board adopts by policy or regulation alternative policies and procedures which are based on competitive principles and which are generally applicable to procurement of goods and services by such school board. This exemption shall be applicable only so long as such policies and procedures, or other policies or procedures meeting the requirements of this section, remain in effect in such school division. This provision shall not exempt any school division from any centralized purchasing ordinance duly adopted by a local governing body.
E. Notwithstanding the exemptions set forth in subsection D, the provisions of §§ 11-41 C, 11-41.1, 11-49, 11-51, 11-54, 11-56 through 11-61 and 11-72 through 11-80 shall apply to all counties, cities and school divisions, and to all towns having a population greater than 3,500 in the Commonwealth. The method for procurement of professional services set forth in subdivision 3 a of § 11-37 in the definition of competitive negotiation shall also apply to all counties, cities and school divisions, and to all towns having a population greater than 3,500, where the cost of the professional service is expected to exceed $20,000.
F. The provisions of this chapter shall not apply to those contracts entered into prior to January 1, 1983, which shall continue to be governed by the laws in effect at the time those contracts were executed.
G. To the end that public bodies in the Commonwealth obtain high quality goods and services at reasonable cost, that all procurement procedures be conducted in a fair and impartial manner with avoidance of any impropriety or appearance of impropriety, that all qualified vendors have access to public business and that no offeror be arbitrarily or capriciously excluded, it is the intent of the General Assembly that competition be sought to the maximum feasible degree, that individual public bodies enjoy broad flexibility in fashioning details of such competition, that the rules governing contract awards be made clear in advance of the competition, that specifications reflect the procurement needs of the purchasing body rather than being drawn to favor a particular vendor, and that purchaser and vendor freely exchange information concerning what is sought to be procured and what is offered.
H. Notwithstanding the foregoing provisions of this section, the selection
of services by the Virginia Retirement System and the Board of the
Virginia Higher Education Tuition Trust Fund related to the management,
purchase or sale of authorized investments, including but not limited to
actuarial services, shall be governed by the standards set forth in §
51.1-116§ 51.1-116 and 23-38.80, respectively, and shall not
be subject to the provisions of this chapter.
I. The provisions of this chapter shall apply to procurement of any construction or planning and design services for construction by a Virginia not-for-profit corporation or organization not otherwise specifically exempted when the planning, design or construction is funded by state appropriations greater than $10,000 unless the Virginia not-for-profit corporation or organization is obligated to conform to procurement procedures which are established by federal statutes or regulations, whether or not those federal procedures are in conformance with the provisions of this chapter.
§ 23-38.75. Definitions.
As used in this chapter, unless the context requires a different meaning:
"Board" means the Board of the Virginia Higher Education Tuition Trust Fund.
"Fund" means the Virginia Higher Education Tuition Trust Fund.
"Prepaid tuition contract" means the contract entered into by the Board and a purchaser pursuant to this chapter for the advance payment of undergraduate tuition at a fixed, guaranteed level by the purchaser for a qualified beneficiary to attend any two- or four-year public institution of higher education in the Commonwealth to which the qualified beneficiary is admitted.
"Purchaser" means a person who makes or is obligated to make advance payments in accordance with a prepaid tuition contract.
"Qualified beneficiary" or "beneficiary" means a resident of the Commonwealth, determined by the Board, who may apply advance tuition payments to undergraduate tuition as set forth in this chapter.
"Tuition" means the quarter, semester, or term charges imposed by any two- or four-year public institution of higher education in the Commonwealth and all mandatory fees required as a condition of enrollment of all students.
§ 23-38.76. Virginia Higher Education Tuition Trust Fund established; governing board; terms.
A. To enhance the accessibility and affordability of higher education for all citizens of the Commonwealth, there is hereby established in the state treasury a special nonreverting fund known as the Virginia Higher Education Tuition Trust Fund. The Fund shall consist of payments received pursuant to prepaid tuition contracts made pursuant to this chapter, bequests, endowments or grants from the United States government, its agencies and instrumentalities, and any other available sources of funds, public or private. Any moneys remaining in the Fund at the end of a biennium shall not revert to the general fund but shall remain in the Fund. Interest and income earned from the investment of such funds shall remain in the Fund and be credited to it.
B. The Fund shall be administered by an eight-member Board, as follows: the Director of the State Council of Higher Education for Virginia or his designee; the Chancellor of the Virginia Community College System or his designee; the State Treasurer or his designee; the State Comptroller or his designee; and four citizens, to be appointed by the Governor, with significant experience in finance, accounting, and investment management. No person holding a full-time position of employment with the Commonwealth, any county or municipality, any institution of higher education, or any agency, instrumentality, or subdivision of the foregoing shall be eligible for appointment to the Board.
Of the citizen members to be appointed in 1992, two shall be appointed for four-year terms, and two shall be appointed for two- and three-year terms, respectively. Thereafter, all appointments shall be for terms of four years, except that appointments to fill vacancies shall be for the unexpired terms. No person shall be appointed to serve for or during more than two successive four-year terms, but after the expiration of a term of three years or less, or after the expiration of the remainder of a term to which appointed to fill a vacancy, two additional terms may be served by such member if appointed thereto. Should a noncitizen member cease to hold his public office, the vacancy shall be filled for the remainder of the term by his successor.
C. Members of the Board shall receive no compensation, but shall be reimbursed for actual expenses incurred in the performance of their duties. The Board shall elect from its membership a chairman, vice chairman, and a treasurer for each calendar year. A majority of the members of the Board shall constitute a quorum.
§ 23-38.77. Powers and duties of Board.
The Board shall administer the Fund established by this chapter and shall develop and implement a program for the prepayment of undergraduate tuition at a fixed, guaranteed level for application at a two- or four-year public institution of higher education in the Commonwealth. In addition, the Board shall have the power and duty to:
1. Invest moneys in the Fund in any instruments, obligations, securities, or property deemed appropriate by the Board;
2. Develop requirements, procedures, and guidelines regarding prepaid tuition contracts, including, but not limited to, residency requirements; the number of participants in the Fund; the termination, withdrawal, or transfer of payments under a prepaid tuition contract; time limitations for the use of tuition benefits; and payment schedules;
3. Enter into contractual agreements, including contracts for legal, actuarial, financial, and consulting services;
4. Procure insurance against any loss in connection with the Fund's property, assets, or activities and indemnifying Board members from personal loss or accountability from liability arising from any action or inaction as a Board member;
5. Make arrangements with two- and four-year public institutions in the Commonwealth to fulfill obligations under prepaid tuition contracts, including, but not limited to, payment from the Fund of the then actual in-state undergraduate tuition cost on behalf of a qualified beneficiary to the institution in which the beneficiary is admitted and enrolled;
6. Apply for, accept, and expend gifts, grants, or donations from public or private sources to enable it to carry out its objectives; and
7. Promulgate regulations and procedures and to perform any act or function consistent with the purposes of this chapter.
§ 23-38.78. Board actions not a debt of Commonwealth.
No act or undertaking of the Board shall be deemed to constitute a debt of the Commonwealth or any political subdivision thereof, or a pledge of the full faith and credit of the Commonwealth or of any political subdivision, but shall be payable solely from the Fund.
§ 23-38.79. Executive director; staff support.
The Board shall employ an executive director, who shall be authorized to employ such staff as necessary to enable the Board to perform its duties as set forth in this chapter, and an actuary to serve as its technical advisor. The Board is authorized to determine the duties and to fix the salaries and compensation of such staff from such funds as may be appropriated or received.
§ 23-38.80. Standard of care; investment and administration of Fund.
A. In acquiring, investing, reinvesting, exchanging, retaining, selling, and managing property for the benefit of the Fund, the Board shall act as trustee and shall exercise the judgment of care under the circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but to the permanent disposition of funds, considering the probable income as well as the probable safety of their capital. If the annual accounting and audit required by § 23-38.85 reveal that there are insufficient funds to ensure the actuarial soundness of the Fund, the Board shall be authorized to adjust the terms of subsequent prepaid tuition contracts or arrange refunds for current purchasers to ensure actuarial soundness.
B. The assets of the Fund shall be preserved, invested, and expended solely pursuant to and for the purposes of this chapter and shall not be loaned or otherwise transferred or used by the Commonwealth for any other purpose. Within the standard prescribed in subsection A of this section, the Board is authorized to acquire and retain every kind of property and every kind of investment, specifically including but not limited to (i) debentures and other corporate obligations of foreign or domestic corporations; (ii) common or preferred stocks traded on foreign or domestic stock exchanges, limited to sixty percent of total trust fund investments based on cost; (iii) not less than all of the stock of a corporation organized by the Board under the laws of the Commonwealth for the purposes of acquiring and retaining real property that the Board is authorized under this chapter to acquire and retain; and (iv) securities of any open-end or closed-end management type investment company or investment trust registered under the federal Investment Company Act of 1940, as amended, which persons of prudence, discretion, and intelligence acquire or retain for their own account. Within the limitations of the foregoing standard, the Board may retain property properly acquired, without time limitation and without regard to its suitability for original purchase. This section shall not be construed to prohibit the investment of the Fund, by purchase or otherwise, in bonds, notes, or other obligations of the Commonwealth or its agencies and instrumentalities.
C. The selection of services related to the management, purchase, or sale of authorized investments, including but not limited to actuarial services, shall be governed by the foregoing standard and shall not be subject to the provisions of the Virginia Public Procurement Act (§ 11-35 et seq.).
§ 23-38.81. Prepaid tuition contracts; terms; termination; etc.
A. Each prepaid tuition contract made pursuant to this chapter shall include the following terms and provisions:
1. The amount of payment or payments and the number of payments required from a purchaser on behalf of a qualified beneficiary;
2. The terms and conditions under which purchasers shall remit payments, including the dates of such payments;
3. Provisions for late payment charges, defaults, withdrawals, refunds, and any penalties;
4. The name and date of birth of the qualified beneficiary on whose behalf the contract is made;
5. Terms and conditions for a substitution for the qualified beneficiary originally named;
6. Terms and conditions for termination of the contract, including any refunds and the name of the person or persons entitled to terminate the contract;
7. The time period during which the qualified beneficiary must claim benefits from the Fund;
8. The number of credit hours or quarters, semesters, or terms contracted for by the purchaser;
9. Provisions for the application of tuition prepayments at nonpublic or out-of-state institutions of higher education;
10. All other rights and obligations of the purchaser and the trust; and
11. Any other terms and conditions which the Board deems necessary or appropriate.
B. All prepaid tuition contracts shall specifically provide that, if after a specified period of time the contract has not been terminated nor the qualified beneficiary's rights exercised, the Board, after making reasonable effort to contact the purchaser and the qualified beneficiary or their agents, shall retain the amounts otherwise payable under the contract and the rights of the purchaser and the qualified beneficiary shall be terminated.
§ 23-38.82. Federal taxation and securities rulings required.
No prepaid tuition contract shall be made until the Internal Revenue Service has issued a favorable ruling or opinion that (i) the purchaser will not be deemed to be actually or constructively in receipt of income until tuition payments are made by the Board pursuant to a tuition payment contract and (ii) assets of the Fund, including earnings accrued, are exempt from federal income taxation. If an unfavorable ruling or opinion is issued, the Board shall present a report to the Governor and the General Assembly outlining recommendations for the modification and continuance of the Fund. The Board shall also solicit responses to ruling requests from the Securities and Exchange Commission regarding the application of federal laws to the Fund prior to making any prepaid tuition contract.
§ 23-38.83. Fund property tax exempt.
The assets of the Fund and its income shall be exempt from state and local taxation.
§ 23-38.84. Deduction of certain payments from taxable income.
Pursuant to § 58.1-322, a purchaser may deduct from taxable income payments made under a:
1. Prepaid tuition contract; and
2. Contract with a private sector investment manager approved by the Board as equivalent to a prepaid tuition contract and meeting other criteria as established by the Board.
§ 23-38.85. Annual report.
The Board shall submit an annual statement of the receipts, disbursements, and current investments of the Fund for the preceding year to the Governor and the General Assembly. The report shall set forth a complete operating and financial statement covering the operation of the Fund during the year. The Board shall cause an audit of the Fund and its assets and accounts to be made at least once a year by a certified public accountant, and the cost thereof shall be treated as a cost of operation.
§ 23-38.86. Forms of accounts and records; audit of same.
The accounts and records of the Board showing the receipt and disbursement of funds from whatever source derived shall be in such form as the Auditor of Public Accounts prescribes, provided that such accounts shall correspond as nearly as possible to the accounts and records for such matters maintained by corporate enterprises. The accounts and records of the Board shall be subject to audit by the Auditor of Public Accounts on an annual basis and the costs of such audit services shall be borne by the Board.
§ 23-38.87. Admission to institutions not guaranteed.
Nothing in this chapter nor in any prepaid tuition contract shall be construed as a promise or guarantee by the Board or the Commonwealth of any admission, continued enrollment, or graduation at any public two- or four-year institution of higher education in the Commonwealth.
Nothing in this chapter or in any prepaid tuition contract entered into pursuant to this chapter shall be construed as a promise or guarantee that the beneficiary's cost of tuition at an institution of higher education other than a public institution of higher education will be covered in full by the proceeds of the beneficiary's tuition credits.
§ 23-38.88. Payroll deductions.
The Commonwealth and its agencies and municipalities and any employer in the Commonwealth are authorized to agree, by contract or otherwise, to remit payments on behalf of an employee toward prepaid tuition contracts through payroll deductions.
§ 58.1-322. Virginia taxable income of residents.
A. The Virginia taxable income of a resident individual means his federal adjusted gross income for the taxable year, which excludes combat pay for certain members of the Armed Forces of the United States as provided in § 112 of the Internal Revenue Code, as amended, and with the modifications specified in this section.
B. To the extent excluded from federal adjusted gross income, there shall be added:
1. Interest, less related expenses to the extent not deducted in determining federal income, on obligations of any state other than Virginia, or of a political subdivision of any such other state unless created by compact or agreement to which Virginia is a party;
2. Interest or dividends, less related expenses to the extent not deducted in determining federal taxable income, on obligations or securities of any authority, commission or instrumentality of the United States, which the laws of the United States exempt from federal income tax but not from state income taxes;
3. Unrelated business taxable income as defined by § 512 of the Internal Revenue Code;
4. The amount of a lump sum distribution from a qualified retirement plan, less the minimum distribution allowance and any amount excludable for federal income tax purposes which is excluded from federal adjusted gross income solely by virtue of an individual's election to use the averaging provisions under § 402 of the Internal Revenue Code;
5 through 7. [Repealed.]
8. (Applicable for taxable years beginning on and after January 1, 1990, and before January 1, 1994.) For taxable years beginning on and after January 1, 1990, and before January 1, 1994, any amount of self-employment tax deduction under § 164 (f) of the Internal Revenue Code.
9. The amount required to be included in income for the purpose of computing the partial tax on an accumulation distribution pursuant to § 667 of the Internal Revenue Code.
C. To the extent included in federal adjusted gross income, there shall be subtracted:
1. Interest or dividends on obligations of the United States and on obligations or securities of any authority, commission or instrumentality of the United States to the extent exempt from state income taxes under the laws of the United States including, but not limited to, stocks, bonds, treasury bills, and treasury notes, but not including interest on refunds of federal taxes, interest on equipment purchase contracts, or interest on other normal business transactions.
2. Interest on obligations of this Commonwealth or of any political subdivision or instrumentality of this Commonwealth.
3. [Repealed.]
4. Benefits received under Title II of the Social Security Act and other benefits subject to federal income taxation solely pursuant to § 86 of the Internal Revenue Code.
4a. A deduction equal to the amount used in computing the federal credit allowed under § 22 of the Internal Revenue Code by a retiree under age sixty-five who qualified for such retirement on the basis of permanent and total disability and who is a qualified individual as defined in § 22 (b) (2) of the Internal Revenue Code; however, any person who claims a subtraction under subdivision 5 of subsection D of this section may not also claim a deduction under this subdivision.
5. The amount of any refund or credit for overpayment of income taxes imposed by the Commonwealth or any other taxing jurisdiction.
6. The amount of wages or salaries eligible for the federal Targeted Jobs Credit which was not deducted for federal purposes on account of the provisions of § 280 C (a) of the Internal Revenue Code.
7. Any amount included therein which is foreign source income as defined in § 58.1-302.
8. For taxable years beginning after December 31, 1983, the available portion of total excess cost recovery as defined in former § 58.1-323 B and for taxable years beginning after December 31, 1987, the excess cost recovery amount specified in § 58.1-323.1 B.
9. [Expired.]
10. Any amount included therein less than $600 from a prize awarded by the State Lottery Department.
11. The wages or salaries received by any person for active and inactive service in the National Guard of the Commonwealth of Virginia, not to exceed the amount of income derived from thirty-nine calendar days of such service or $3,000, whichever amount is less; however, only those persons in the ranks of O3 and below shall be entitled to the deductions specified herein.
12. Amounts received by an individual, not to exceed $1,000 in any taxable year, as a reward for information provided to a law-enforcement official or agency, or to a nonprofit corporation created exclusively to assist such law-enforcement official or agency, in the apprehension and conviction of perpetrators of crimes. This provision shall not apply to the following: an individual who is an employee of, or under contract with, a law-enforcement agency, a victim or the perpetrator of the crime for which the reward was paid, or any person who is compensated for the investigation of crimes or accidents.
13. [Repealed.]
14. (Expires for taxable years beginning on and after January 1, 1999.) The amount of any qualified agricultural contribution as determined in § 58.1-322.2.
15. [Repealed.]
16. (Applicable for taxable years beginning on and after January 1, 1992, and before January 1, 1994.) The amounts of self-employment tax required to be added in computing Virginia taxable income for taxable years beginning on and after January 1, 1990, but before January 1, 1994, pursuant to subdivision B 8 of this section, as follows:
1. For taxable years beginning on and after January 1, 1994, and before January 1, 1995, the amount of self-employment tax added to federal adjusted gross income in taxable years beginning on and after January 1, 1990, and before January 1, 1991;
2. For taxable years beginning on and after January 1, 1995, and before January 1, 1996, the amount of self-employment tax added to federal adjusted gross income in taxable years beginning on and after January 1, 1991, and before January 1, 1992;
3. For taxable years beginning on and after January 1, 1996, and before January 1, 1997, the amount of self-employment tax added to federal adjusted gross income in taxable years beginning on and after January 1, 1992, and before January 1, 1993;
4. For taxable years beginning on and after January 1, 1997, and before January 1, 1998, the amount of self-employment tax added to federal adjusted gross income in taxable years beginning on and after January 1, 1993, and before January 1, 1994, and any amount of self-employment tax required to be added back for taxable years beginning on and after January 1, 1990, and before January 1, 1994, which was not subtracted in those taxable years.
17. (For applicability and expiration date - See Editor's note.) The first $250 of interest income earned from a financial institution that has at least one office in the Commonwealth.
D. In computing Virginia taxable income there shall be deducted from federal adjusted gross income:
1. a. The amount allowable for itemized deductions for federal income tax purposes where the taxpayer has elected for the taxable year to itemize deductions on his federal return, but reduced by the amount of income taxes imposed by the Commonwealth or any other taxing jurisdiction and deducted on such federal return and increased by an amount which, when added to the amount deducted under § 170 of the Internal Revenue Code for mileage, results in a mileage deduction at the state level for such purposes at a rate of eighteen cents per mile; or
b. Two thousand dollars for taxable years beginning January 1, 1987, through December 31, 1987; $2,700 for taxable years beginning January 1, 1988, through December 31, 1988; and $5,000 for married persons (one-half of such amounts in the case of a married individual filing a separate return); and $3,000 for single individuals for taxable years beginning on and after January 1, 1989; provided that the taxpayer has not itemized deductions for the taxable year on his federal income tax return. For purposes of this section, any person who may be claimed as a dependent on another taxpayer's return for the taxable year may compute the deduction only with respect to earned income.
2. a. A deduction in the amount of $700 for taxable years beginning January 1, 1987, through December 31, 1987, and $800 for taxable years beginning on and after January 1, 1988, for each personal exemption allowable to the taxpayer for federal income tax purposes. For taxable years beginning on and after January 1, 1987, each blind or aged taxpayer as defined under § 63 (f) of the Internal Revenue Code shall be entitled to an additional personal exemption.
b. An additional deduction of $200 for taxable years beginning January 1, 1987 through December 31, 1987, for each blind or aged taxpayer as defined under § 63 (f) of the Internal Revenue Code. The additional deduction for blind or aged taxpayers allowed under this subdivision and the additional personal exemption allowed to blind or aged taxpayers under subdivision 2 a of this subsection shall be allowable regardless of whether the taxpayer itemizes deductions for the taxable year for federal income tax purposes.
3. A deduction equal to the amount of employment-related expenses upon which the federal credit is based under § 21 of the Internal Revenue Code for expenses for household and dependent care services necessary for gainful employment.
4. An additional $1,000 deduction for each child residing for the entire taxable year in a home under permanent foster care placement as defined in Chapter 10 (§ 63.1-195 et seq.) of Title 63.1, provided the taxpayer can also claim the child as a personal exemption under § 151 of the Internal Revenue Code.
5. Effective for all taxable years beginning on and after January 1, 1991, a deduction in the amount of $12,000 for taxpayers age sixty-five or older, or $6,000 for taxpayers age sixty-two through sixty-four, less any amount received pursuant to the (i) Social Security Act or (ii) Railroad Retirement Act and treated for federal income tax purposes as equivalent to social security. Beginning in taxable year 1992, the $12,000 and $6,000 deduction amounts shall be indexed annually in each taxable year by an amount equivalent to the most recent percentage increase in the social security wage base.
6. Payments made under a prepaid tuition contract pursuant to Chapter 4.9 (§ 23-38.75 et seq.) of Title 23.
E. There shall be added to or subtracted from federal adjusted gross income (as the case may be) the individual's share, as beneficiary of an estate or trust, of the Virginia fiduciary adjustment determined under § 58.1-361.
F. There shall be added or subtracted, as the case may be, the amounts provided in § 58.1-315 as transitional modifications.