Chap. 346.—An ACT to authorize counties, districts, cities and towns to issue
bonds for the purpose of funding floating indebtedness; to prescribe how such
bonds may be issued, and the terms thereof as to interest and time to run;
to provide how such bonds may be sold or disposed of and how the proceeds
shall be applied; to provide for the levying of taxes for the payment of such
bonds; and to validate the principal of such bonds and the interest thereon
and also the floating indebtedness to be funded. [H B 357]

Approved March 27, 1936

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

Section 1. Any county by and through its board of supervisors,
either for and in behalf of the county or for and in behalf of any road
district or magisterial distrct therein, and any county by and through
its county school board and board of supervisors as hereinafter pro-
vided, either for and in behalf of the county or for and in behalf of any
school district or magisterial district therein, and any city or town by
and through its city council or board of city commissioners or other
governing body as hereinafter provided, may in manner and subject to
the limitations contained herein issue its bonds or the bonds of such
district or districts, or the bonds of such cities or towns, for the pur-
pose of funding the outstanding floating indebtedness of any nature
whatsoever whether evidenced in writing or not outstanding against
such counties, magisterial districts, school districts, road districts, cities
or towns, which was incurred on or prior to January first, nineteen
hundred and thirty-six, and for which no funds or insufficient funds
are available to make payment at time of authorizing issuance of the
funding bonds in accordance with this act; but in no event shall fund-
ing bonds be issued under the provisions of this act bearing more than
six per cent interest per annum.

Section 2. Funding bonds issued hereunder for the purpose of
funding floating indebtedness originally issued or incurred for county,
road district, or magisterial district purposes shall be authorized by
the board of supervisors of the county. Bonds issued hereunder to fund
indebtedness originally issued or accrued for school purposes shall be
authorized by the county school board, provided that before such
funding bonds may be issued, the proceedings of the school board
(except those pertaining solely to the sale of the funding bonds), must
be confirmed and ratified by the board of supervisors. Bonds issued
hereunder to fund indebtedness originally issued and created by cities
and towns shall be authorized by the city council or board of city com-
missioners or other governing body as the case may be.

Section 3. Upon determining to issue such funding bonds, the
board of supervisors, the county school board, or the city council or
board of city commissioners or other governing body, as the case may
be, shall by resolution authorize the issuance of such bonds in an
amount not exceeding the principal amount of the floating indebtedness
to be funded, less all funds which may be available for payment there-
of, and shall therein prescribe the date, rate of interest, place or places
of payment, and other details pertinent to such funding bonds. Said
resolution shall also provide that such bonds mature serially or other-
wise in not to exceed thirty (30) years from the date thereof. All
funding bonds shall be of the denomination of one hundred dollars
($100) or some multiple thereof. Such funding bonds may be made
optional 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 shall have all of the qualities of
negotiable paper under the law merchant and shall not be invalid for
any irregularity or defect in the proceedings for the issuance and sale
thereof, and shall be incontestable in the hands of bona fide holders
thereof for value, except as hereinafter provided. The resolution
authorizing the issuance of such bonds shall be published once in a
newspaper having a general circulation in the county or in the city in
which the bonds are issued and during the period of thirty days im-
mediately following such publication any person desiring to attack the
legality of such funding bonds may institute appropriate litigation for
such purpose. If no such litigation be instituted within such thirty
day period, the said funding bonds shall be conclusively presumed to
be valid, and no litigation attacking or questioning the legality of such
bonds, or the levy of taxes sufficient for the payment thereof may
thereafter be instituted in any court in the Commonwealth of Virginia.

Section 5. Bonds issued under the provisions of this act shall be
coupon bonds but may be registerable as to principal. All bonds
authorized by the board of supervisors shall be signed by the chairman
of such board and attested by the clerk under the seal thereof. Bonds
issued by the county school board shall be signed by the chairman and
attested by the clerk under the seal thereof. All bonds issued by cities
and towns—shall be signed by the mayor and attested by the city clerk
(or the town clerk as the case may be) under the seal of the city or
town. 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 board of supervisors, or of
such boards, city councils or boards of city commissioners or other
governing body as may hereafter be charged with the duty of levying
taxes in the county, city or town, at or before the time of issuing
bonds hereunder to provide for the imposition and collection annually
of a tax in excess of all other taxes on property subject to local taxa-
tion 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 subdivision.

The governing body authorizing the issuance of funding bonds
hereunder is hereby granted full discretion in determining the amounts
of surplus taxes which it shall be necessary to levy in order to provide
a reasonable margin for anticipated delinquencies in collections, 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. »

Section 7. The board of supervisors, the county school board, or
the city council or board of city commissioners or other governing
body, as the case may be, may sell bonds authorized hereunder or any
part thereof, and collect the proceeds; and the governing body shall
deposit or cause to be deposited the proceeds arising from the sale
thereof, in such bank or banks within or without the county, 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 floating indebtedness authorized
to be funded as said indebtedness is presented for payment, and shall
be secured in the manner provided in the next section hereof for secur-
ing funds collected for the payment of refunding bonds.

Section 8. All moneys collected for the payment of floating indebt-
edness issued hereunder, from the proceeds of taxes levied for such
purpose, shall be deposited in a solvent bank or banks either within or
without the county, city or town and shall be secured either by a surety
bond or bonds given the governing authority or body for the protec-
tion 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 not less in
amount than the deposit so secured; provided, that nothing in this
section or the preceding section shall be construed to repeal or modify
the laws of Virginia now or hereafter existing with respect to the
deposit of county or city 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
Commonwealth of Virginia, or in funding bonds of the county or
political subdivision for the payment of which said sinking funds have
been accumulated.

Section 9. Provision may be made in the proceedings authorizing
funding bonds pursuant to which the funding 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 board of supervisors or the county school board
or the city or town council, or board of city or town commissioners 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 funding bonds and is authorized to appoint or
retain a fiscal agent for the purpose and of assisting it in the funding
transaction, and is authorized to pay such fee to such fiscal agent as
it may consider proper.

Section 11. In order to facilitate the carrying out of the provisions
of this act, all floating indebtedness now outstanding and to be retired
hereunder is hereby validated and confirmed and legalized, and is found
and declared to be valid and legally binding obligations of such county,
magisterial district, school district or road district, city or town, as the
case may be, despite any irregularity which may have occurred in the
authorization or issuance of said floating indebtedness provided that
this section shall not apply to any floating indebtedness the legality of
which is now involved in pending litigation,

Section 12. This act shall without reference to any other act of the
General Assembly be full authority for the issuance and sale of bonds
authorized hereunder, and no order, resolution or proceeding 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 and
issuance of bonds hereunder be required by an official, court, board,
or body except as expressly required herein. No publication of any
notice, order, resolution or proceeding relating to the issuance of such
order, resolution or proceeding relating to the issuance of such funding
bonds not herein required, shall be necessary nor shall the authoriza-
tion or issuance of such bonds be subject to referendum.

Section 13. Issuance and delivery of bonds under authority of this
act on and after January first, nineteen hundred and thirty-eight, is
hereby prohibited.

Section 14. If any section, clause or provision in this act contained,
or any part thereof, shall hereafter be declared by any court of com-
petent jurisdiction to be invalid or unenforcable for any reason, the
remainder of said act shall not be affected thereby but shal] remain in
full force and effect, it being hereby expressly found and declared that
each section, clause and provision herein is severable from all remain-
ing sections, clauses and provisions herein contained.

2. All acts or parts of acts in conflict herewith, except the pro-
visions contained in the charters of the several cities and towns of
this State, are hereby repealed.