Chap. 86.—An ACT to authorize the issuance of refunding bonds by counties,
magisterial districts and school districts; to prescribe a mode of procedure
therefor; to provide for the payment of such bonds; to validate all bonds so
refunded ; to prescribe various details pertinent to the subject matter of this
act; and to declare an emergency. [S B 20]

Approved February 28, 1936

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

Section 1. That any county by and through its board of super-
visors, either for and in behalf of the county or for and in behalf of
any road district or magisterial district therein, and any county, by
and through its county school board and board of supervisors as
hereinafter provided, either for and in behalf of the county or for
and in behalf of any school district or magisterial district therein,
may in manner and subject to the limitations contained herein issue
its bonds or the bonds of such district or districts, for the purpose
of refunding the bonds of such county or of such district or districts
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 refunding one or more issues of outstanding
bonds or parts thereof not due when such outstanding bonds are call-
able 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 for the purpose of
refunding bonds originally issued for other than school purposes
shall be authorized by the board of supervisors of the county. Bonds
issued hereunder to refund bonds originally issued for school pur-
poses shall be authorized by the county school board, provided that
before such refunding bonds may be issued, the proceedings of the
school board (except those pertaining solely to the sale of the
refunding bonds, if said refunding bonds are to be sold) must be
confirmed and ratified by the board of supervisors.

Section 3. Upon determining to issue such refunding bonds, the
board of supervisors or county school board, 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 denomina-
tion of one hundred dollars or some multiple thereof. Such refund-
ing 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 may, if the resolution of the
governing body authorizing same so provide, be negotiable. The
resolution authorizing the issuance of such bonds shall be published
once in a newspaper having a general circulation in the county and
during the period of thirty days immediately following such publica-
tion any persons desiring to attack the legality of such refunding
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 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.
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 as may hereafter be charged with the duty of levying
taxes in the county, 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 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 subdivision. 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, whether the county as a whole or a lesser sub-
division thereof, 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
amounts of surplus 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. Provision may
also be made in such proceedings for the pledge of taxes then
delinquent or thereafter to become delinquent, to the payment of
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 board of supervisors or the county school board,
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
county 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 secur-
ing 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 county, 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 author-
ized 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 shall be construed to repeal or modify the laws of Virginia
now or hereafter existing with respect to the deposit of county 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 county or political
subdivision 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 any part of any issue so refunded is held by the county or by
the political subdivision in a sinking fund or other fund, the govern-
ing body authorizing the refunding bonds is empowered in its dis-
cretion 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 board of supervisors or the county school board,
as the case may be, is hereby authorized to pay all expenses reason-
ably 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
assisting 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 hereunder
are hereby validated and legalized, and are found and declared to be
the valid and legally binding obligations of such county, magisterial
district, school district or road district, as the case may be, despite
any irregularity which may have occurred in the authorization 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
preceding seven years; and provided further, that no bonds shall be
deemed to be validated under the provision 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
proceeding in respect of the issuance of such bonds shall be neces-
sary 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 publication 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 remainder 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. All acts or parts of acts in conflict herewith are hereby repealed.

3. An emergency existing by reason of existing and impending
defaults in the payment of outstanding bonds of certain of the coun-
ties and political subdivisions of the Commonwealth of Virginia
herein authorized to be refunded, resulting in the impairment of the
credit of such counties and political subdivisions and of the Common-
wealth of Virginia, this act shall be in force and shall take effect
from and after its passage.