CHAPTER 577

AN ACT providing for the incorporation as bodies corporate and
politic of “Authorities” for counties and municipalities; pre-
scribing the rights, powers and duties of such Authorities; au-
thorizing such Authorities to acquire, construct, reconstruct,
improve and extend water systems, sewer systems, sewage dis-
posal systems, and garbage and refuse collection and disposal
systems, and prescribing the jurisdiction of the State Water
Control Board in connection therewith; authorizing the issu-
ance of revenue bonds of such Authorities, payable solely from
earnings, to pay the cost of such systems; providing that no
debt of any such county or municipality shall be incurred in
the exercise of any of the powers granted by this act; provia-
ing for the collection of rates, fees and charges for the payment
of such revenue bonds and for the cost of maintaining, repair-
ing and operating such systems; providing for the execution
of trust agreements to secure the payment of such bonds with-
out mortgaging or encumbering such systems; authorizing the
issuance of revenue refunding bonds; and exempting such sys-
tems, such revenue bonds and the income therefrom from tazra-
tion.
[S 332]

Approved April 11, 1950

Be it enacted by the General Assembly of Virginia:

§ 1. Short Title—This act shall be known and may be cited
as the “Virginia Water and Sewer Authorities Act”.

§ 2. Definitions—As used in this act, the following words
and terms shall have the following meanings unless the context
shall indicate another meaning or intent:

(a) The word “Authority” shall mean an Authority created
under the provisions of § 3 of this act or, if any such Authority
shall be abolished, the board, body, or commission succeeding to
the principal functions thereof or to whom the powers giv
this act to such Authority shall be given by law.

(b) The word “county” shall mean any county in the Common-
wealth of Virginia.

(c) The word “municipality” shall mean any city or town in-
corporated under the laws of the Commonwealth of Virginia.

(d) The word “unit” shall mean any department, institution
or commission of the Commonwealth of Virginia and any public
corporate instrumentality thereof, and any district, and shall in-
clude counties and municipalities,

(e) The term “political subdivision” shall mean a county or
municipality. .

(f) The term “governing body” shall mean in the case of a
county the board of supervisors and in the case of a municipality
the board, commission, council or other body by whatever name it
may be known, in which the general legislative powers of the
municipality are vested.

(g) The term “water system” shall mean all plants, systems,
facilities or properties used or useful or having the present capa-
city for future use in connection with the supply or distribution of
water, and any integral part thereof, including water supply sys-
tems, water distribution systems, reservoirs, wells, intakes, mains,
laterals, pumping stations, standpipes, filtration plants, purifica-
tion plants, hydrants, meters, valves and equipment, appurte-
nances, and all properties, rights, easements and franchises relat-
ing thereto and deemed necessary or convenient by the Authority
for the operation thereof.

(h) The term “sewer system” or “sewerage system” means
pipe lines or conduits, pumping stations, and force mains, and all
other constructions, devices, and appliances appurtenant thereto,
used for conducting sewage, industrial wastes or other wastes to a
point of ultimate disposal.

(i) The term “sewage” means the water carried wastes created
in and carried, or to be carried, away from residences, hotels,
schools, hospitals, industrial establishments, commercial establish-
ments or any other private or public building, together with such
surface or ground water and household and industrial wastes as
may be present.

(j) The term “sewage disposal system” means any system,
Plant, disposal field, lagoon, pumping station, constructed drainage
ditch or surface water intercepting ditch, incinerator, area devoted
to Sanitary land fills, or other works not specifically mentioned
herein, installed for the purpose of treating, neutralizing, stabiliz-
Ing or disposing of sewage, industrial waste or other wastes.

(k) The term “garbage and refuse collection and disposal Sys-
tem” means garbage, ashes and refuse daily accumulated in, and
collected or carried away from, residences, hotels, schools, hospitals,

en by
industrial establishments, commercial establishments or any other
private or public building; trucks, conveyances, plants, incinera-
tors, structures and real or personal property necessary for final
disposal of such wastes.

(1) The word “improvements” shall mean such repairs, replace-
ments, additions, extensions and betterments of and to a water
system, a sewer system, a sewage disposal system, or a garbage
and refuse collection and disposal system, as are deemed necessary
by the Authority to place or to maintain such system in proper
condition for the safe, efficient and economic operation thereof or
to meet requirements for service in areas which may be served by
the Authority and in which no existing service is being rendered.

(m) The term “cost of improvements” shall mean the cost of
constructing improvements as hereinabove defined and shal] em-
brace the cost of all labor and material, the cost of all lands, prop-
erty, rights, easements, franchises, and permits acquired which are
deemed necessary for such construction, interest during any period
of disuse during such construction, the cost of all machinery and
equipment, financing charges, cost of engineering and legal ex-
penses, plans, specifications, and such other expenses as may be
necessary or incident to such construction.

(n) The word “cost” as applied to a water system, a sewer
system, a sewage disposal system, or a garbage and refuse collec-
tion and disposal system, shall include the purchase price of any
such system or the cost of acquiring all of the capital stock of the
corporation owning such system and the amount to be paid to
discharge all of its obligations in order to vest title to the system
or any part thereof in the Authority, the cost of improvements, the
cost of all lands, properties, rights, easements, franchises, and
permits acquired, the cost of all machinery and equipment, financ-
ing charges, interest prior to and during construction and for one
year after completion of construction, cost of engineering and legal
services, plans, specifications, surveys, estimates of cost and of
revenues, other expenses necessary or incident to the determining
of the feasibility or practicability of any such acquisition, improve-
ment, or construction, administrative expenses, and such other
expenses as may be necessary or incident to the financing herein
authorized, to the acquisition, improvement, construction of a water
system, a sewer system, a sewage disposal system, or a garbage and
refuse collection and disposal system, and the placing of the same
in operation by the Authority. Any obligation or expense incurred
by the Authority prior to the issuance of revenue bonds under the
provisions of this act for engineering studies and for estimates of
cost and of revenues and for other technical or professional services
which may be utilized in the acquisition, improvement or construc-
tion of such system, may be regarded as a part of the cost of such
svstem.
(o) The term “Federal agency” shall mean and include the
United States of America, any department or bureau thereof, the
Federal Works Agency, the Reconstruction Finance Corporation,
and any other agency or instrumentality of the United States of
America heretofore established or which may be established or
created hereafter.

(p) The word “owner” shall include all individuals, incorpo-
rated companies, copartnerships, societies or associations, and any
Federal agency or unit of the Commonwealth having any title or
interest in any water system, or sewer system, or sewage disposal
system, or a garbage and refuse collection and disposal system, or
the services or facilities to be rendered thereby.

§ 3. Creation of Authorities.

A. The governing body of a political subdivision may, by ordi-
nance or resolution, or the governing bodies of two or more political
subdivisions may by concurrent ordinances or resolutions, signify
their intention to create a water authority, a sewer authority, a
sewage disposal authority, or a garbage and refuse collection and
disposal authority, or any combination or parts thereof under an
appropriate name and title, containing the word “Authority”,
which shall be a public body politic and corporate.

B. Each such ordinance or resolution shall include articles of
incorporation which shall set forth:

(a) The name of the “Authority” and address of its principal
office.

(b) The name of each incorporating political subdivision, to-
gether with the names, addresses and terms of office of the first
members of the board of said Authority.

(c) The purpose or purposes for which the Authority is to be
created together with, in so far as practicable, preliminary esti-
mates of capital costs, and initia] rates for services of proposed
projects as certified by responsible engineers.

C. The governing body of each participating political sub-
division shall cause to be published at least one time in a news-
paper of general circulation in such political subdivision, a copy of
such ordinance or resolution together with a notice stating that
on a day certain, not less than ten days after publication of said
notice, a public hearing will be held on such ordinance or resolu-
tion. If at such hearing, in the judgment of the governing body
of the participating political subdivision, substantial opposition by
prospective users of the proposed services is heard, they may at their
discretion call for a referendum on the question of undertaking the
project or projects named in such ordinance or resolution to be
held on a date specified in a resolution of such governing body not
Jess than thirty nor more than sixty days from the date of adop-
tion of the resolution. The referendum shall be initiated by reso-
lution of the governing body directed to the election officials of the
county or city and the same shall conform to the provisions of
§ 24-141 of the Code of 1950. Where two or more political sub-
divisions are participating in the formation of such Authority the
referendum, if any be ordered, shall be held on the same date in all
such subdivisions so participating. In any event if ten per centum
of the qualified voters .in such subdivision or in any sanitary dis-
trict therein file a petition with the governing body at the hearing
calling for a referendum such governing body shall order a referen-
dum as herein provided.

D. On or before the day specified in said notice, the governing
bodies of the participating political subdivisions shall cause to be
filed with the State Corporation Commission, articles of incorpora-
tion together with proof of publication of the notice as aforesaid.

E. If the State Corporation Commission finds that the ordi-
nances or resolutions and the articles of incorporation conform to
law and estimated costs and rates for services of proposed projects
are fair and equitable, a certificate of incorporation or charter
shall forthwith, but not prior to the day specified in said notice
for public hearing or referendum, be issued, and thereupon such
Authority shall be conclusively deemed to have been lawfully and
properly created and established and authorized to exercise its
powers under this act.

F. Having specified the initial purpose or purposes and.‘or
project to be undertaken by the Authority, the governing bodies of
any of the political subdivisions organizing such Authority may,
from time to time by subsequent ordinance or resolution, after
public hearing, and with or without referendum specify further
projects to be undertaken by the Authority, and no other projects
shall be undertaken by the Authority than those so specified. If the
governing bodies of the political subdivisions organizing the
Authority fail to specify any project or projects to be undertaken,
then the Authority shall be deemed to have all the powers granted
by this act.

Whenever an Authority has been incorporated by two or more
political subdivisions, any one or more of such political subdivi-
sions may withdraw therefrom, and any political subdivision not
having joined in the original incorporation may join in the
Authority, but no political subdivision shall be permitted to with-
draw from any Authority after any obligation has been incurred
by the Authority.

Any political subdivision wishing to withdraw from or to be-
come a member of an existing Authority shall signify its desire by
resolution or ordinances. If the Authority shall by resolution
express its consent to such withdrawal or joining, the governing
bodies of the withdrawing or joining political subdivision shall
cause a notice of its resolution or ordinance to be published at
least one time in a newspaper of general circulation in such politi-
cal subdivision. Such notice shall contain a brief statement of the
substance of the resolution or ordinance, making reference to this
act, and shall state that on a day certain, not less than ten days
after publication of the notice, an application to withdraw from,
or to become a member of the Authority as the case may be, will be
filed with the State Corporation Commission.

On or before the day specified in the notice the governing body
or governing bodies shall file such application with the State
Corporation Commission, together with proof of publication of the
notice hereby required. In the case of a political subdivision seek-
ing to become a member of the Authority, the application shall set
forth all of the information required in the case of original incor-
poration in so far as it applies to the incoming political subdivi-
sion, including the name and address and term of office of the first
member of the board of the Authority from the incoming political
subdivision. The application in all cases shall be executed by the
proper officers of the withdrawing or incoming political subdivision
under its official seal, and shall be joined in by the proper officers
of the governing body of the Authority, and in the case of a politi-
cal subdivision seeking to become a member of the Authority also
by the proper officers of each of the political subdivisions that are
then members of the Authority, pursuant to resolutions by the
governing bodies of such political subdivisions.

If the State Corporation Commission finds that the applica-
tion conforms to law it shall, forthwith, but not prior to the day
specified in the notice endorse approval thereon, and when all
proper fees and charges have been paid, shall file the same and
issue a certificate of withdrawal, or a certificate of joinder, as the
case may be, to which shall be attached a copy of the approved
application. The withdrawal or joining shall become effective upon
the issuing of such certificate.

§ 4. Members of Authority.—The powers of each Authority
created hereunder shall be exercised by five members, or not less
than one member from each participating political subdivision,
selected in the manner and for the terms provided by the ordinance
or resolution or concurrent ordinances or resolutions creating
the Authority, which shall name the first members and their re-
spective terms of office. No member shall be appointed for a term
of more than four years. When one or more additional political
subdivisions join an existing Authority, each of such joining politi-
cal subdivisions shall have one member on the board. The first of
such members shall be appointed immediately upon the admission
of the political subdivision into the Authority for a full term of
years equal to that fixed for the other members of the board. No
member of the board shall be appointed for a term longer than
four years. The members of the Authority shall elect one of their
number chairman of the Authority, and shall elect a Secretary and
a Treasurer who need not be members of the Authority. The offices
of Secretary and Treasurer may be combined. A majority of mem-
bers of the Authority shall constitute a quorum and the vote of a
majority of members shall be necessary for any action taken by the
Authority. No vacancy in the membership of the Authority shall
impair the right of a quorum to exercise all the rights and perform
all the duties of the Authority. The political subdivision or sub-
divisions by action of whose governing body or governing bodies
an Authority shall have been created hereunder may by the ordi-
nance or resolution or concurrent ordinances or resolutions creat-
ing the Authority, or by subsequent ordinance or resolution or
concurrent ordinances or resolutions, provide for the payment. of
compensation to the members of the Authority and for the reim-
bursement to each member of the Authority of the amount of his
actual expenses necessarily incurred in the performance of his
duties.

§ 5. Powers of Authority—Each Authority created hereunder
shall be deemed to be an instrumentality exercising public and es-
sential governmental functions to provide for the public health and
welfare, and each such Authority is hereby authorized and em-
powered :

(a) To have existence for a term of fifty years as a corpora-
tion ;

(b) To adopt by-laws for the regulation of its affairs and the
conduct of its business;

(c) To adopt an Official seal and alter the same at pleasure;

(d) To maintain an office at such place or places as it may
designate ;

(e) To sue and be sued;

(f) To acquire, purchase, lease as lessee, construct, reconstruct,
improve, extend, operate and maintain any water system, or sewer
system, or sewage disposal system, or a garbage and refuse collec-
tion and disposal system or any combination of such systems with-
in or partly within and partly without one or more of the political
subdivision or subdivisions by action of whose governing body or
governing bodies the Authority was created, and to acquire by gift,
purchase or the exercise of the right of eminent domain lands or
rights in land or water rights in connection therewith; and to sell,
lease as lessor, transfer or dispose of any property or interest
therein at any time acquired by it; provided, however, that the
provisions of § 25-233 of the Code of Virginia, 1950, shall apply as
to any property owned by a corporation possessing the power of
eminent domain that may be sought to be taken by condemnation
under the provisions of this act, and, provided further, that no
property or any interest or estate therein owned by any county,
city, town or other political subdivision of the State shall be ac-
quired by the exercise of the power of eminent domain without the
consent of the governing body of such county, city, town or politi-
cal subdivision.

(g) To issue revenue bonds of the Authority, such bonds to be
payable solely from revenues to pay all or a part of the cost of a
water system, sewer system, or sewage disposal system, or a garb-
age and refuse collection and disposal system, or any combination
of such systems ;

(h) To combine any water system, sewer system, sewage dis-
posal system, or garbage and refuse collection and disposal system
as a single system for the purpose of operation and financing;

(i) To fix, charge and collect rates, fees and charges for the
use of or for the services furnished by any system operated by the
Authority ;

(j) To enter into contracts with the Federal Government, the
Commonwealth of Virginia, or any agency or instrumentality there-
of, or with any unit, private corporation, copartnership, associa-
tion, or individual providing for or relating to the furnishing of
services and facilities of any water system, sewer system, sewage
disposal system, or garbage and refuse collection and disposal sys-
tem of the Authority or in connection with the services and facili-
ties rendered by any such system owned or controlled by the Fed-
eral Government or this Commonwealth, any agency or instru-
mentality thereof, and unit, private corporation, copartnership,
association or individual ;

(k) To contract with any municipality, county, corporation,
individual or any public Authority or unit of this or any adjoining
state, on such terms as the said Authority shall deem proper, for
the construction and operation of any project which is partly in
this Commonwealth and partly in such adjoining state;

(1) To make and enter into all contracts or agreements, as the
Authority may determine, which are necessary or incidental to the
performance of its duties and to the execution of the powers
granted by this act, including contracts with any Federal agency
or with any unit, on such terms and conditions as the Authority
may approve, relating to (1) the use by such agency or by such
unit or the inhabitants thereof of any water system, sewer system,
sewage disposal system, or garbage and refuse collection and dis-
posal system acquired or constructed by the Authority under this
act, or the services therefrom or the facilities thereof, or (2) the
use by the Authority of the services or facilities of any water sys-
tem, sewer system, sewage disposal system, or garbage and refuse
collection and disposal system owned or operated by an owner
other than the Authority. Any such contract shall be subject to
such provisions, limitations or conditions as may be contained in
the resolution of the Authority authorizing revenue bonds of the
Authority or the provisions of any trust agreement securing such
bonds. Any such contract may provide for the collecting of fees,
rates or charges for the services and facilities rendered to a unit
or to the inhabitants thereof, by such unit or by its agents or by
the agents of the Authority, and for the enforcement of delinquent
charges for such services and facilities. The provisions of any
such contract and of any ordinance or resolution of the governing
body of a unit enacted pursuant thereto shall be irrepealable so
long as any of the revenue bonds issued under the authority of this
act shall be outstanding and unpaid, and the provisions of any
such contract, and of any ordinance or resolution enacted pursuant
thereto shall be and be deemed to be for the benefit of such bond-
holders. The aggregate of any fees, rates or charges which shall be
required to be collected pursuant to any such contract or any ordi-
nance or resolution enacted thereunder shall be sufficient to pay
all obligations which may be assumed by the other contracting
party ;

(m) To enter upon, use, occupy, and dig up any street, road,
highway or private or public lands necessary to be entered upon,
used or occupied in connection with the acquisition, construction
or improvement, maintenance or operation of a water system, sewer
system, sewage disposal system, or garbage and refuse collection
and disposal system, subject, however, to such reasonable local
police regulation as may be established by the governing body of
any unit having jurisdiction in the particular respect. The govern-
ing body of any unit, notwithstanding any contrary provision of
law, is hereby authorized and empowered to transfer jurisdiction
over, to lease, lend, grant or convey, to the Authority upon the
request of the Authority, upon such terms and conditions as the gov-
erning body of such unit may agree with the Authority as reasonable
and fair, such real or personal property as may be necessary or de-
sirable in connection with the acquisition, construction, improve-
ment, operation or maintenance of a water system, sewer system,
sewage disposal system or garbage and refuse collection and dis-
posal system by the Authority including public roads and other
property already devoted to public use. The Commonwealth of Vir-
ginia hereby consents to the use of all lands above or under water
and owned or controlled by it which are necessary for the construc-
tion, improvement, operation or maintenance of any such system;
- except that the use of any portion between the right of way limits
of any primary or secondary highway in this State shall be subject
to the approval of the State Highway Commissioner; and

(n) In the event of any annexation by a municipality not a
member of the Authority of lands, areas, or territory served by the
Authority, to continue to do, business, exercise its jurisdiction over
its properties and facilities in and, upon or over such lands, areas
or territory as long as any bonds or indebtedness remain outstand-
ing or unpaid, or any contracts or other obligations remain in
force,
§ 6. No Competitive Authority.

A. None of the powers granted by this act shall be exercised
in the construction, improvement, maintenance, extension or opera-
tion of any project or projects which in whole or in part shall
duplicate or compete with existing utilities, public or private,
serving substantially the same purposes. The municipality or muni-
cipalities, county or counties organizing such an Authority may,
in the resolution or ordinance signfying their intention so to do,
or from time to time by subsequent resolution or ordinance,
specify the project or projects to be undertaken by the said Au-
thority, and no other projects shall be undertaken by the said
Authority than those so specified. If the municipal or county au-
thorities organizing an Authority fail to specify the project or
projects to be undertaken, then the Authority shall be deemed to
have all the powers granted by this act.

B. No governing body which shall have created an Authority
under the provisions of this act shall thereafter create any other
Authority serving the whole or any part of the same area. No
governing body which shall have joined with any other governing
body or governing bodies in the creation of an Authority under
the provisions of this act shall thereafter create or join in the
creation of any other Authority unless such other governing body
or governing bodies shall consent thereto by ordinance or resolu-
tion.

-§ 7. Revenue Bonds.—An Authority created under the provi-
sions of this act is hereby authorized to provide by resolution, at
one time or from time to time, for the issuance of revenue bonds
of the Authority for the purpose of paying the whole or any part
of the cost of any water system, sewer system, sewage disposal
system, or garbage and refuse collection and disposal system, or
any combination of any thereof. The principal of and the interest
on such bonds shall be payable solely from the funds herein pro-
vided for such payment. The bonds of each issue shall be dated,
shall bear interest at such rate or rates not exceeding five per
centum per annum, shall mature at such time or times not exceed-
ing forty years from their date or dates, as may be determined
by the Authority, and may be made redeemable before maturity,
at the option of the Authority, at such price or prices and under
such terms and conditions as may be fixed by the Authority prior
to the issuance of the bonds. The Authority shall determine the
form of the bonds, including any interest coupons to be attached
thereto, and the manner of execution of the bonds, and shall fix
the denomination or denominations of the bonds and the place or
places of payment of principal and interest, which may be at any
bank or trust company within or without the Commonwealth. In
case any officer whose signature or a facsimile of whose signature
shall appear on any bonds or coupons shall cease to be such officer
before the delivery of such bonds, such signature or such facsimile
shall nevertheless be valid and sufficient for all purposes the same
as if he had remained in office until such delivery. All revenue
bonds issued under the provisions of this act shall have and are
hereby declared to have, as between successive holders, all the
qualities and incidents of negotiable instruments under the negoti-
able instruments law of the Commonwealth. The bonds may be
issued in coupon or in registered form, or both, as the Authority
may determine, and provision may be made for the registration of
any coupon bonds as to principal alone and also as to both prin-
cipal and interest, and for the reconversion into coupon bonds of
any bonds registered as to both principal and interest. The issu-
ance of such bonds shall not be subject to any limitations or con-
ditions contained in any other law, and the Authority may sell
such bonds in such manner, either at public or at private sale,
and for such price, as it may determine to be for the best interests
of the Authority and the political subdivisions to be served thereby,
but no such sale shall be made at a price so low as to require the
payment of interest on the money received therefor at more than
five per centum per annum, computed with relation to the absolute
maturity of the bonds in accordance with standard tables of bond
values, excluding, however, from such computation the amount of
any premium to be paid on the redemption of any bonds prior to
maturity.

The proceeds of such bonds shall be used solely for the payinent
of the cost of the system or systems on account of which sueh bonds
are issued and shall be disbursed in such manner and under such
restrictions, if any, as the Authority nay provide in the authorizing
resolution or in any trust agreement. If the proceeds of such bonds,
by error of estimates or otherwise, shall be less than such cost,
additional bonds may in like manner be issued to provide the
amount of such deficit, and, unless otherwise provided in the
authorizing resolution or in the trust agreement securing the same,
shall be deemed to be of the same issue and shall be entitled
to payment from the same fund without preference or priority of
the bonds first issued for the same purpose. If the proceeds of the
bonds of any issue shall exceed the amount required for the purpose
for which such bonds shall have been issued, the surplus shall be
deposited to the credit of the sinking fund for such bonds.

Prior to the preparation of definitive bonds, the Authority may,
under like restrictions, issue interim receipts or temporary bonds,
with or without coupons, exchangeable for definitive bonds when
such bonds have been executed and are available for delivery. The
Authority may also provide for the replacement of any bonds
which shall become mutilated or be destroyed or lost. Bonds may
be issued under the provisions of this act without obtaining the
approval or consent of any department, division, commission, board,
bureau or agency of the Commonwealth, and without any other
proceeding or the happening of any other condition or thing than
those proceedings, conditions or things which are specifically
required by this act.

The resolution providing for the issuance of revenue bonds of
the Authority, and any trust agreement securing such bonds, may
contain such limitations upon the issuance of additional revenue
bonds as the Authority may deem proper, and such additional
revenue bonds shall be issued under such restrictions and limita-
tions as may be prescribed by such resolution or trust agreement.

§ 8. Bonds not Debts of Commonwealth or Participating
Political Subdivision.—Revenue bonds issued under the provisions of
this act shall not be deemed to constitute a pledge of the faith and
credit of the Commonwealth or of any political subdivision thereof.
All such bonds shall contain a statement on their face substantially
to the effect that neither the faith and credit of the Commonwealth
nor the faith and credit of any county, city, town or other sub-
division of the Commonwealth are pledged to the payment of the
principal of or the interest on such bonds. The issuance of revenue
bonds under the provisions of this act shall not directly or indirectly
or contingently obligate the Commonwealth or any county, city,
town or other subdivision of the State to levy any taxes whatever
therefor or to make any appropriation for their payment except
from the funds pledged under the provisions of this act.

§ 9. Exemption from Taxation.—No Authority shall be re-
quired to pay any taxes or assessments upon any water or sewer
system, sewage disposal system, or garbage and refuse collection
and disposal system acquired or constructed by it under the pro-
visions of this act or upon the income therefrom, and the bonds
issued under the provisions of this act, their transfer and the in-
come therefrom (including any profit made on the sale thereof)
shall at all times be free from taxation within the Commonwealth.

§ 10. Trust Agreement.—In the discretion of the Authority,
any revenue bonds issued under the provisions of this act may be
secured by a trust agreement by and between the Authority and a
corporate trustee, which may be any trust company or bank having
the powers of a trust company within or without the Common-
wealth. The resolution authorizing the issuance of the bonds or
the trust agreement may pledge or assign the revenues to be re-
ceived, but shall not convey or mortgage any water system, sewage
disposal system, sewer system, or garbage and refuse collection and
disposal system or any part thereof, and may contain such pro-
visions for protecting and enforcing the rights and remedies of the
bondholders as may be reasonable and proper and not in violation
of law, including covenants setting forth the duties of the Authority
in relation to the acquisition, construction, improvement, mainte-
nance, operation, repair and insurance of the system or systems
on account of which such bonds are issued and provisions for the
custody, safeguarding and application of all moneys and for the
employment of consulting engineers in connection with such con-
struction, reconstruction, or operation. Such resolution or trust
agreement may set forth the rights and remedies of the bond-
holders, and may restrict the individual right of action by bond-
holders as is customary in trust agreements or trust indentures
securing bonds or debentures of corporations. In addition to the
foregoing, such resolution or trust agreement may contain such
other provisions as the Authority may deem reasonable and proper
for the security of the bondholders. Except as in this act other-
wise provided, the Authority may provide for the payment of the
proceeds of the sale of the bonds and its revenues to such officer,
board or depositary as it may designate for the custody thereof,
and for the method of disbursement thereof, with such safeguards
and restrictions as it may determine. All expenses incurred in
carrying out the provisions of such resolution or trust agreement
may be treated as a part of the cost of operation.

§ 11. Rates and Charges.—The Authority is hereby authorized
to fix and revise from time to time rates, fees and other charges
for the use of and for the services furnished or to be furnished by
any water system, sewer system, sewage disposal system, or garbage
and refuse collection and disposal system owned, operated or main-
tained bv the Authority and on account of which the Authority
shall have issued revenue bonds as authorized by this act. Such
rates, fees and charges shall be so fixed and revised as to provide
funds, with other funds available for such purposes, sufficient at all
times (a) to pay the cost of maintaining, repairing and operating
the system or systems on account of which such bonds are issued,
including reserves for such purposes and for replacement and depre-
ciation and necessary extensions, (b) to pay the principal of and
the interest on the revenue bonds as the same shall become due
and reserves therefor, and (c) to provide a margin of safety for
making such payments. The Authority shall charge and collect
the rates, fees and charges so fixed or revised and such rates, fees
and charges shall be subject to the jurisdiction of the State Corpo-
ration Commission and to any applicable regulation of the State
Corporation Commission or law appertaining thereto.

The rates for water, including fire protection, and sewer service,
including disposal, respectively, shall be sufficient to cover the
expenses necessary or properly attributable to the furnishing of the
class of services for which charges are made; provided, however,
that the Authority may fix rates and charges for the services and
facilities of its water system sufficient to pay all or any part of the
cost of operating and maintaining its sewer system, including dis-
posal, and all or any part of the principal of or the interest upon
revenue bonds issued on account of such sewer and/or disposal
system, and to pledge any surplus revenues of its water system,
subject to prior pledges thereof, for such purposes. Rates, fees and
charges for the services of a sewer and/or disposal system shall be
just and equitable, and may be based or computed either upon
the quantity of water used or upon the number and size of sewer
connections or upon the number and kind of plumbing fixtures in
use in the premises connected with the sewer system or upon the
number or average number of persons residing or working in or
otherwise connected with such premises or upon the type or char-
acter of such premises or upon any other factor affecting the use of
the facilities furnished or upon any combination of the foregoing
factors. Charges for services to premises, including services to
manufacturing and industrial plants, obtaining all or a part of
their water supply from sources other than a public water system
may be determined by gauging or metering or in any other manner
approved by the Authority.

No sewer, sewage disposal, or garbage and refuse collection
and disposal rates, fees or charges shall be fixed under the fore-
going provisions of this section until after a public hearing at
which all of the users of such facilities and owners, tenants or
occupants of property served or to be served thereby and all others
interested shall have, an opportunity to be heard concerning the
proposed rates, fees and charges. After the adoption by the
Authority of a resolution setting forth the preliminary schedule or
schedules fixing and classifying such rates, fees and charges, notice
of such public hearing, setting forth the proposed schedule or
schedules of rates, fees and charges, shall be given by one publica-
tion in a newspaper having a general.circulation in the area to be
served by such systems or in a newspaper published in the munici-
pality in which the Authority has its principal office, at least ten
days before the date fixed in such notice for the hearing, which may
be adjourned from time to time. After such hearing such prelimi-
nary schedule or schedules, either as originally adopted or as
modified or amended, shall be adopted and put into effect. A copy
of the schedule or schedules of such rates, fees and charges finally
fixed in such resolution shall be kept on file in the office of the
clerk or secretary of the governing body of each political sub-
division in which such systems or any part thereof is located, and
shall be open to inspection by all parties interested. The rates,
fees or charges so fixed for any class of users or property served
shall be extended to cover any additional properties thereafter
served which fall within the same class, without the necessity of any
hearing or notice. Any change or rev ision of such rates, fees or
charges may be made in the same manner as such rates, fees or
charges were originally established as hereinabove provided, but
if such change or revision be made substantially pro rata as to all
classes of service no hearing or notice shall be required.
§ 12. Connections.—Upon the acquisition or construction. of
any sewer system under the provisions of this act, the owner,
tenant, or occupant of each lot or parcel of land which abuts upon
a street or other public way containing a sanitary sewer which is
a part of or which is served or may be served by such sewer system
and upon which lot or parcel a building shall have been constructed
for residential, commercial or industrial use, shall, if so required
by the rules and regulations or a resolution of the Authority, with
concurrence of such local government, municipality, or county that
may be involved, connect such building with such sanitary sewer,
and shall cease to use any other method for the disposal of sewage,
sewage waste or other polluting matter. All such connections
shall be made in accordance with rules and regulations which shall
be adopted from time to time by the Authority, which rules and
regulations may provide for a charge for making any such connec-
tion in such reasonable amount as the Authority may fix and
establish.

§ 13. Enforcement of Charges.—Any resolution or trust agree-
ment providing for the issuance of revenue bonds under the pro-
visions of this act may include any or all of the following provisions,
and may require the Authority to adopt such resolutions or to
take such other lawful action as shall be necessary to effectuate
such provisions, and the Authority is hereby authorized to adopt
such resolutions and to take such other action:

_-(a) That the Authority may require the owner, tenant or
occupant of each lot or parcel of land who is obligated to pay
rates, fees or charges for the use of or for the services furnished
by any system acquired or constructed by the Authority under the
provisions of this act to make a reasonable deposit with the Au-
thority in advance to insure the payment of such rates, fees or
charges and to be subject to application to the payment thereof
if and when delinquent.

(b) That if any rates, fees or charges for the use of and for
the services furnished by any system aequired or constructed by
the Authority under the provisions of this act shall not be paid
within thirty days after the same shall become due and payable,
the Authority may at the expiration of such thirty day period
disconnect the premises from the water and/or sewer system, or
otherwise suspend services and the Authority may proceed to re-
cover the amount of any such delinquent rates, fees or charges,
with interest, in a civil action.

(c) That if any rates, fees or charges for the use and services
of any sewer system acquired or constructed by the Authority
under the provisions of this act shall not be paid within thirty
days after the same shall become due and payable, the owner,
tenant or occupant of such premises shall cease to dispose of sew-
age or industrial wastes originating from or on such premises by
discharge thereof directly or indirectly into the sewer system until
such rates, fees or charges with interest, shall be paid; that if such
owner, tenant or occupant shall not cease such disposal at the
expiration of such thirty day period it shall be the duty of any
political subdivision, district, private corporation, board, body or
person supplying water to or selling water for use on such prem-
ises to cease supplying water to or selling water for use on such
premises within five days after the receipt of notice of such de-
linquency from the Authority; and that if such political subdivi-
sion, district, private corporation, board, body or person shall not,
at the expiration of such five day period, cease supplying water to
or selling water for use on such premises, then the Authority may
shut off the supply of water to such premises.

(d) The water supply to or for any person, or for use on real
estate of any person, shall not be shut off or stopped under the
provisions of this section, if the State Health Commissioner, upon
application of the local board of health or health officer of the
county, city or town wherein such water is supplied or such real
estate is located, shall have found and shall certify to the author-
ities charged with the responsibility of ceasing to supply or sell
such water, or to shut off the supply of such water, that ceasing
to supply or shutting off such water supply will endanger the
health of such person and the health of others in such county, city
or town.

Lien for Charges.—(i) There shall be a lien upon real estate
for the amount of any fees, rents or other charges by an Authority
to the owner or lessee or tenant of such real estate for the use and
services Of any system of the Authority by or in connection with
such real estate from and after the time when such fees, rents or
charges are due and payable, and for the interest which may ac-
erue thereon. Such lien shall be superior to the interest of any
owner, lessee or tenant of such real estate.

(ii) Such lien shall not bind or affect a subsequent bona fide
purchaser of such real estate for valuable consideration without
actual notice of such len, until and except from the time that the
amount of such fees, rents and charges are entered in a register or
registers furnished for such purpose by and at the expense of the
Authority and kept in the office where deeds may be recorded in
the political subdivision wherein the real estate or a part thereof
is located. It shall be the duty of the clerk in whose office deeds
may be recorded to keep and preserve and hold available for public
inspection any such register which may be delivered to him by the
Authority and to cause entries to be made and indexed therein
from time to time upon certification by the Authority for which he
shall be entitled to a fee of five cents per entry to be paid by the
Authority and added to the amount of the lien.
(iii) Such lien on any real estate may be discharged by the
payment to the Authority of the total amount of such lien, and
the interest which may accrue to the date of such payment, and it
shall be the duty of the Authority to deliver a certificate thereof to
the person paying the same, and upon presentation thereof, the
clerk having the record of such lien shall mark the entry of such
lien satisfied without further fee.

§ 14. Trust Funds.—All moneys received pursuant to the
authority of this act shall be deemed to be trust funds, to be held
and applied solely as provided in this act. The resolution or trust
agreement providing for the issuance of revenue bonds of the
Authority shall provide that any officer to whom, or any bank,
trust company or other fiscal agent to which, such moneys shall be
paid shall act as trustee of such moneys and shall hold and apply
the same for the purposes hereof, subject to such regulations as
such resolution or trust agreement may provide.

§ 15. Remedies.—Any holder of revenue bonds issued by an
Authority under the provisions of this act or of any of the coupons
appertaining thereto, except to the extent the rights herein given
may be restricted by the resolution or trust agreement providing
for the issuance of such bonds, may, either at law or in equity,
by suit, mandamus or other proceeding, protect and enforce any
and all rights under the laws of Virginia or granted hereunder or
under such resolution or trust agreement, and may enforce and
compel the performance of all duties required by this act or by
such resolution or trust agreement to be performed by the Author-
ity or by any officer thereof, including the fixing, charging and
collecting of rates, fees and charges for the use of or for the serv-
ices furnished by any water or sewer system.

§ 16. Refunding Bonds.—Each Authority created hereunder
is hereby authorized to provide by resolution for the issuance of
revenue refunding bonds of the Authority for the purpose of re-
funding any revenue bonds then outstanding and issued under the
provisions of this act. Each such Authority is further authorized
to provide by resolution for the issuance of a single issue of reve-
nue bonds of the Authority for the combined purposes of (1) paying
the cost of any water, sewer system, or disposal system, or any
combination of any thereof, or the improvement, extension, addi-
tion or reconstruction thereof, and (2) refunding revenue bonds
of the Authority which shall theretofore have been issued under
the provisions of this act and shall then be outstanding and which
shall then have matured or be subject to redemption or can be ac-
quired for retirement. The issuance of such bonds, the maturities
and other details thereof, the rights and remedies of the holders
thereof, and the rights, powers, privileges, duties and obligations of
the Authority with respect to the same, shall be governed by the
foregoing provisions of this act in so far as the same may be
applicable.

§ 17. Investment in Bonds.—Any bonds issued pursuant to
the authority of this act are hereby made securities in which all
public officers and bodies of the Commonwealth and all political
subdivisions thereof, all insurance companies and associations, all
savings banks and savings institutions, including savings and loan
associations, in the State, may properly and legally invest funds
in their control.

§ 18. Jurisdiction of Water Control Board.—Any Authority
created under the provisions of this act shall be and is hereby
declared to be an “Owner” as such word is defined in the State
Water Control Law and any Authority so created shall be subject
in all respects to the jurisdiction of the State Water Control
Board under the provisions of the State Water Control Law. No
Authority created under the provisions of this act shall so operate
any water system, sewer system, sewage disposal system or garbage
and refuse disposal system which in its operation results in the
discharge of “sewage”, “industrial wastes” or “other wastes”, as
such terms are defined in the State Water Control Law, which
would flow or be discharged into any “State waters” as defined in
the State Water Control Law and thereby cause a pollution of the
same unless such Authority shall first provide proper and adequate
treatment of such “sewage”, “industrial waste” or “other wastes”
approved by the State Water Control Board so that if and when
flowing or discharged into the State waters the effluence thereof
shall not be detrimental to the public health or to animal or
aquatic life or prevent the use of water for domestic, industrial
or recreational purposes. When in the opinion of the State Water
Control Board the discharge of such wastes is not detrimental to
the public health or to animal or acquatic life or to the use of the
water for domestic, industrial or recreational purposes, the State
Water Control Board shall grant a certificate for the discharge of
such wastes into the State Waters, but the Board shall not issue
a certificate authorizing the discharge of such wastes untreated
into any State Waters deemed by the Board to be clean. The pro-
cedure governing the issuance of a certificate to any Authority shall
be the same as is provided for the issuance of a certificate under
the provisions of § 62-25 of the Code of Virginia. The State Water
Control Board shall have the same authority over or with respect
to any Authority created under the provisions of this act or to any
certificate issued to such Authority by the Board as it does in the
case of any person defined as an “Owner” under the State Water
Control Law; and any such Authority shall have the same rights
of review of and appeal from any rule, regulation, order or require-
ment issued by the Board or any revocation of a certificate by the
Board as is the case with any other party aggrieved by any action
of the Board under the provisions of the State Water Control Law.

§ 19. Miscellaneous.—Each county, municipality and other
public body is hereby authorized and empowered:

(a) to convey or lease to any Authority created hereunder,
with or without consideration, any water system or any facilities
for the collection, treatment or disposal of sewage or any right or
interest in such facilities or any property appertaining thereto,
upon such terms and conditions as the governing body thereof shall
determine to be for the best interests of such county, municipality
or other public body;

(b) to contract with any Authority created hereunder for the
collection, treatment or disposal of sewage or industrial waste; and

(c) to contract with any Authority created hereunder for shut-
ting off the the supply of water furnished by any water system
owned or operated by such county, municipality or other public
body or under its jurisdiction or control to any premises connected
with any sewer system of the Authority in the event that the
owner, tenant, or occupant of such premises shall fail to pay any
rates, fees or charges for the use of or for the services furnished
by such sewer system within the time or times specified in such
contract.

§ 20. Act Complete.—This act shall constitute full and com-
plete authority, without regard to the provisions of any other law,
for the doing of the acts and things herein authorized, and shall
be liberally construed to effect the purposes hereof.

§ 21. Severability—The provisions of this act are severable,
and it is the intention to confer the whole or any part of the
powers herein provided for, and if any of the provisions of this
act shall be held unconstitutional by any court of competent juris-
diction, the decision of such court shall not affect or impair any
of the remaining provisions of this act. It is hereby declared to be
the legislative intent that this act would have been adopted had
such unconstitutional provision not been included therein.