Chap. 267.—An ACT to authorize the issuance of refunding bonds by cities and
towns; to prescribe a mode of procedure therefor; to provide for the pay-
ment of such bonds; to validate all bonds so refunded; to prescribe various
details pertinent to the subject matter of this act; to provide that any such
city or town may avail itself of the provisions of the Act of Congress relat-
ing to bankruptcy and municipal debt readjustment; and to declare an
emergency. [H B 243]

Approved March 25, 1936

1. Be it enacted by the General Assembly of Virginia, as
follows:

Section 1. Notwithstanding any other or different provisions of
any other statute or act, or town or city charter, any city or town,
by and through its city or town council, or other governing body,
for and in behalf of the city or town, may in manner and subject to
the limitations contained herein issue its bonds for the purpose of
refunding bonds of such city or town which have become, or are
becoming due, and for the discharge of which there are, or will be,
when the bonds mature, no funds or insufficient funds available, and
in like manner may issue refunding bonds for the purpose of refund-
ing one or more issues of outstanding bonds or parts thereof not due
when such outstanding bonds are callable before maturity or are to
be presented for payment before maturity through the exercise of
provisions for optional redemption or by agreement with the holders
thereof, and when such refunding bonds can be issued bearing the
same or a lesser rate of interest than the bonds to be refunded, but
in no event shall refunding bonds be issued under the provisions of
this act bearing more than six per centum interest per annum.

Section 2. Refunding bonds issued hereunder shall be authorized
by the city or town council or other governing body of the city or
town.

Section 3. Upon determining to issue such refunding bonds, the
city or town council, or other governing body of said city or town,
as the case may be, shall by resolution authorize the issuance of
such bonds in an amount not exceeding the principal amount of the
bonds to be refunded, less all available sinking funds, and shall therein
prescribe the date, rate of interest, place or places of payment, and
other details pertinent to such refunding bonds. Said resolution
shall also provide that such bonds mature serially or otherwise in
not to exceed forty (40) years from the date thereof. All refunding
bonds shall be of the denomination of one hundred dollars ($100.00)
or some multiple thereof. Such refunding bonds may be made optionable
for redemption prior to maturity if such option is reserved in said
resolution and on the face of the bonds.

Section 4. Bonds issued hereunder may, if the resolution of the
governing body authorizing same so provides, be negotiable. The
resolution authorizing the issuance of such bonds shall be published
once in a newspaper having general circulation in the city or town
and during the period of thirty days immediately following such
publication any person desiring to attack the legality of such refund-
ing bonds may institute appropriate litigation for such purpose.

Section 5. Bonds issued under the provisions of this act shall be
coupon bonds but may be made registerable as to principal. All
bonds authorized by the city or town council or other governing
body of the city or town shall be signed by the mayor of such city
or town, and attested by the clerk of the council or other governing
body, under the seal thereof. Interest coupons shall be executed by the
facsimile signatures of said officials. Delivery of any bonds or coupons
so executed at any time thereafter shall be valid, although before the
date of delivery the person signing such bonds or coupons shall have
ceased to hold office.

Section 6. It shall be the duty of the city or town council or of
such other governing body as may hereafter be charged with the
duty of levying taxes in the city or town, at or before the time of
issuing bonds hereunder to provide for the imposition and collection
annually of a tax in addition to all other taxes on property subject
to local taxation and not exempt from the levy of taxes formerly
levied for the payment of the bonds refunded, sufficient in amount to
pay the interest on such bonds and the principal thereof as the same
respectively become due, notwithstanding any tax rate limitations
which would otherwise be applicable to the levy of such taxes. Such
tax shall be levied and collected by the same officers, at the same
time and in the same manner as general taxes of the political sub-
division. Refunding bonds issued hereunder shall be of the same
status as to primary obligor as are the bonds refunded thereby, and
for the payment thereof taxes shall be levied on the territory of the
same political subdivision which was subject to the levy of taxes for
the bonds refunded thereby, it being the intention hereof that no
change in the nature of the obligation shall be effected by reason of
the refunding thereof.

The governing body authorizing the issuance of refunding bonds
hereunder is hereby granted full discretion in determining the amount
of additional taxes which it shall be necessary to levy in order to
provide a reasonable margin for anticipated delinquencies in collec-
tions, and such governing body may in the proceedings authorizing
the bonds agree to levy taxes in such amounts or with surplus levies
computed in such manner as it may deem advisable. Provisions may
also be made in such proceedings for the pledge of taxes then delin-
quent or thereafter to become delinquent, to the payment of the
principal of or interest on the refunding bonds, and may provide that
the proceeds of all such delinquent taxes shall be so used as such
proceeds are collected and become available for such purpose.

Section 7. The city or town council, or other governing body, as
the case may be, may sell bonds authorized hereunder or any part
thereof, and collect the proceeds, or may cause such bonds to be
delivered to the holder or holders of the bonds to be refunded in
exchange therefor. In case the refunding bonds are sold the govern-
ing body shall deposit or cause to be deposited the proceeds arising
from the sale thereof, in such bank or banks within or without the
city or town as such governing body may choose to designate and
upon such terms as may be agreed upon. Such funds shall be held
by said bank or banks solely for the payment of the bonds authorized
to be refunded as said bonds are presented for payment, and shall be
secured in the manner provided in the next section hereof for
securing funds collected for the payment of refunding bonds,

Section 8. All money collected for the payment of refunding
bonds issued hereunder, whether from the proceeds of taxes levied
for such purpose or from the proceeds of delinquent taxes pledged
for such purpose, shall be deposited in a solvent bank or banks either
within or without the city or town, and shall be secured either by a
surety bond or bonds given the governing body for the protection
of said deposit written by some solvent surety or fidelity company
authorized to do business in the State of Virginia, or by the deposit
of collateral security acceptable to the governing body of not less in
amount than the deposit so secured; provided that nothing in this
section shall be construed to repeal or modify the laws of Virginia
now or hereafter existing with respect to the deposit of city or town
funds, and that the provisions of this section shall be construed as
an additional or supplementary requirement for the security of such
funds. In lieu of retaining such sinking funds on deposit as in this
section provided, the governing body may invest all or part of such
funds in bonds of the United States of America or the Common-
wealth of Virginia, or in refunding bonds of the city or town for the
payment of which said sinking funds have been accumulated.

Section 9. Provision may be made in the proceedings authoriz-
ing the refunding bonds pursuant to which the refunding bonds may
be purchased in the open market, pursuant to tenders from time to
time when there is available in the sinking fund for the payment of
such bonds a surplus in an amount or amounts to be fixed in such
proceedings.

Section 10. The issuance of refunding bonds hereunder for the
retirement of bonds which are now or may hereafter be entitled to
participate in funds donated by the Commonwealth of Virginia, or
funds receivable from any source other than local taxes levied for
such purpose, shall not be construed to deprive such bonds from the
right to continue to participate in the distribution of such funds and
the refunding bonds after their issuance shall enjoy all such rights
as would have been enjoyed by the bonds refunded.

Section 11. Where bonds are authorized to be refunded here-
under and part of any issue so refunded is held by the city or town
in a sinking fund or other fund, the governing body authorizing the
refunding bonds is empowered in its discretion to provide either that
the part of the outstanding issue held in such fund or funds shall be
cancelled at the time other bonds of the issue are refunded or that
the part of the issue held in such fund or funds shall be refunded in
the same manner as other bonds of the issue not so held are refunded.

Section 12. The town council or other governing body, as the
case may be, is hereby authorized to pay all expenses reasonably
incurred in connection with the authorization and issuance of the
refunding bonds and is authorized to appoint or retain a fiscal agent
for the purpose of assisting it in the refunding transaction and assist-
ing it in obtaining the surrender of its outstanding bonds and is
authorized to pay such fee to such fiscal agent as it may consider
proper.

Section 13. In order to facilitate the carrying out of the pro-
visions of this act, all bonds now outstanding and refunded here-
under are hereby validated and legalized, and are found and declared
to be the valid and legally binding obligations of such city or towns
despite any irregularity which may have occurred in the authoriza-
tion or issuance of said bonds, provided that this section shall not
apply to any bonds, the legality of which is now involved in pending
litigation; and provided further, that this validating provision shall
not apply to any bonds which have been outstanding less than eight
years (including, where bonds have been refunded, the joint life of
the refunded and refunding bonds) nor to any bonds, however long
outstanding, unless the issue of which they form a part has been
continuously recognized by the payment of some interest on part of
said issue in nineteen hundred and thirty-five, and each of the pre-
ceding seven years; and provided further, that no bonds shall be
deemed to be validated under the provisions of this section unless and
until a resolution specifically recognizing the validity thereof shall be
adopted by the governing body after the effective date of this act.

Section 14. This act shall without reference to any other act of the
General Assembly be full authority for the issuance, sale or exchange
of bonds authorized hereunder, and no order, resolution, or proceed-
ing in respect of the issuance of such bonds shall be necessary except
as is required by this act, nor shall the approval of the authorization,
sale or exchange of bonds hereunder be required by any official,
court, board or body, except as expressly required herein. No publi-
cation of any notice, order, resolution or proceeding relating to the
issuance of such refunding bonds not herein required, shall be
necessary nor shall the authorization or issuance of such bonds be
subject to referendum.

Section 15. If any section, clause or provision in this act con-
tained, or any part thereof, shall hereafter be declared by any court
of competent jurisdiction to be invalid or unenforceable for any
reason the remainer of said act shall not be affected thereby but shall
remain in full force and effect, it being hereby expressly found and
declared that each section, clause and provision hereof is severable from
all remaining sections, clauses and provisions herein contained.

2. An emergency existing by reason of existing and impending
defaults in the payment of outstanding bonds of certain of the cities
and towns of the Commonwealth, resulting in the impairment of the
credit of such cities and towns and of the Commonwealth of Virginia,
this act shall be in force and shall take effect from and after its
passage.