Chap. 26.—An ACT to enable counties, cities and towns to secure the benefits of
an act of the Congress of the United States of America, approved June 16,
1933, known as the National Industrial Recovery Act, and any acts amenda-
tory thereof and any acts supplemental thereto and revisions thereof, and any
further act. of the Congress of the United States of America delegating
powers to undertake any purpose or purposes in aid of the financing of which
the President of the United States or any other Federal agency is now or
hereafter authorized and empowered, through the Federal Emergency Admin-
istrator of Public Works or through such other agencies as may be desig-
nated or created, to make grants or loans; delegating powers to contract
debts, borrow money and issue bonds therefor; prescribing the mode of pro-
cedure for, and regulating the issuance of such bonds, and providing for the
payment thereof; authorizing agreements with the holders of such bonds and
providing for the remedies of such holders; and repealing inconsistent pro-
visions of all laws general or special of the Commonwealth. [H. B. 45]

Approved September 7, 1933

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

1. The following terms wherever used or referred to in this act
shall have the following meaning unless a different meaning clearly
appears from the context: *o
(a) The term “project” shall mean the undertaking by counties,
cities or towns of any purpose or purposes not specifically prohibited
by the Constitution of the Commonwealth, in aid of the financing of
which the President of the United States or any other Federal agency
is now or hereafter authorized and empowered, through the Federal
Emergency Administrator of Public Works, or through such other
agencies as may be designated or created to make grants or loans.

(b) The term “governing body” shall mean the board of super-
visors, board of county commissioners, council or other local legislative
body, board, commission, or other legislative authority having charge
of the finances of any county, city or town, and where the separate
concurrence or approval of two or more sets of such authorities is now
required by law for the making of appropriations, to the extent so re-
quired “governing body” shall mean and include both or all of them.

(c) The term “bonds” shall mean bonds, interim certificates, or
other obligations issued by the governing body of any county, city or
town.

(d) The term “law” shall mean any act or statute general or special
of this State and shall include, without being limited to, the charter of
any city or town.

(e) The term “National Industrial Recovery Act’ shall mean the

act of the Congress of the United States of America, approved June
sixteenth, nineteen hundred and thirty-three, entitled an act to en-
courage national industrial recovery, to foster fair competition, and to
provide for the construction of certain useful public works, and for
other purposes, and any acts amendatory thereof and any acts supple-
mental thereto, and revisions thereof, and any further act of the Con-
gress of the United States of America to encourage public works, to
reduce unemployment and thereby to assist in the national recovery and
promote the public welfare.
- (f) The térm “Federal agency” shall mean the President of the
United States, the Federal Emergency Administrator of Public Works,
or such other.agencies as may be designated or created to make grants
or loans pursuant to the National Industrial Recovery Act.

(g) The term “resolution” shall mean an act of the governing body
of any county, city or town which, (1) must be reduced to writing, (2)
must be adopted by a majority of all the members of such governing
body, and where the separate concurrence or approval of more than
one branch of such governing body is required by law for the making of
appropriations, by a majority of all the members of each branch of
such governing body, and (3) may be finally adopted at the meeting at
which it is introduced.

2. The cities and towns of this Commonwealth shall have power and
are hereby authorized:

(a) To:accept from any Federal agency grants for or in aid of
any project.| (se 2
. (b) To-contract:debts for any project, to borrow money for any
project, and to issue its negotiable bonds to finance any project; and to
provide for the rights of the holders of such bonds and to secure the
same as hereinafter further provided.

(c) To levy fees, rents, tolls or other charges for the use of or in
connection with any project, subject to and in accordance with such
agreements with holders of bonds as may be made as hereinafter pro-
vided.

(d) To assess, levy and collect unlimited ad valorem taxes on all
property subject to taxation, to pay the bonds, and interest thereon,
issued to finance any project, subject to and in accordance with such
agreements with holders of bonds as may be made as hereinafter pro-
vided.

(e) To acquire by purchase, gift or the exercise of the power of
eminent domain and to hold and dispose of, any real or personal prop-
erty, or interest therein, in connection with any project, subject to
mortgages or other liens or otherwise, and to lease either to or from
any Federal agency any real or personal property, or interest therein,
with or without the privilege of purchase.

({) To acquire by purchase, gift or by the exercise of the power
of eminent domain and to construct, reconstruct, replace, repair, operate,
maintain, embellish, develop, better or improve any project; and to
perform any such acts and to do any such things under, through, or by
means of its own officers, agents and employees, or by contracts with
private corporations, firms or individuals.

(g) To make such contracts and execute such instruments con-
taining such terms, provisions and conditions as in the discretion of the
governing body of such county, city or town may be necessary, proper
or advisable for the purpose of obtaining or securing grants, loans or
other financial assistance from any Federal agency pursuant to the Na-
tional Industrial Recovery Act; and to make such other, further or
different contracts and execute all instruments necessary or convenient
in or for the furtherance of any project.

(h) To enter on any lands, waters and premises for the purpose ot
making surveys, soundings and examinations in or for the furtherance
of any project.

(i) To do all things necessary or convenient to carry out the powers
expressly given in this act and to carry out any project.

3. The governing body of any city or town shall have power and is
hereby authorized from time to time to issue its negotiable bonds for
the purpose of financing any project. Said bonds shall be authorized
by resolution of the governing body and shall be issued in one or more
series, shall bear such date or dates, mature at such time or times, not
exceeding forty years from their respective dates, bear interest at such
rate or rates, not exceeding six per centum (6%) per annum, payable
at such time, be in such denomination, be in such form, either coupon
or registered, carry such registration privileges, be executed in such
manner, be payable in such medium of payment, at such place or places,
and be subject to such terms of redemption, with or without premium,
_as such resolution or subsequent resolutions may provide. The bonds
may be sold at public or private sale, for such price or prices, as the
governing body shall determine, provided that the interest cost to ma-
turity of the money received for any issue of bonds shall not exceed
six per centum (6%) per annum.

4. The counties of this Commonwealth shall have all the powers
granted by section two of this act to cities and towns of this Common-
wealth, excepting that no county shall have power to contract a debt for
any project, to borrow money for any project, or issue its negotiable
bonds to finance any project, unless the qualified voters of such county
shall approve by a majority vote of the qualified voters voting in an
election the contracting of the debt, the borrowing of the money and the
issuance of the bonds. Whenever the governing body of any county
shall determine by resolution that it is advisable to contract a debt for
any project, borrow money for any project and issue negotiable bonds
of the county to finance any project, such resolution shall be certified
to the judge of the circuit court of said county who shall thereupon
make an order requiring the judges of election on the day fixed in his
order, not less than ten nor more than thirty days from the date of such
order, to open a poll and take the sense of the qualified voters of the
county on the question of contracting the debt, borrowing the money and
issuing the bonds for such project. The regular election officers of said
county, at the time designated in such order authorizing such vote, shall
open the polls at the various voting places in said county and shall con-
duct such election in such manner as is provided by law for other
elections. At such election each qualified voter who shall approve con-
tracting the debt, borrowing the money, and issuing the bonds for such
project, shall deposit a ticket or ballot on which shall be written or
printed the words “For the Project” and each qualified voter who shall
disapprove contracting the debt, borrowing the money, and issuing the
bonds for such project, shall deposit a ticket or ballot on which shall be
written or printed the words “Against the Project.” The votes shall be
counted, returns made and canvassed, as in other special elections, and
the results certified by the commissioners of election to the said circuit
court. If it shall appear by the report of the commissioners of election
that a majority of the qualified voters of the county voting on the
question approve contracting the debt, borrowing the money and is-
suing the bonds for such project, the circuit court shall forthwith enter
an order authorizing the governing body of the county to proceed to
carry out the wishes of the voters. The governing body of any county,
upon such proceedings being had and not otherwise, shall thereupon
have, with reference to contracting the debt, borrowing the money, and
issuing the bonds for such project, so approved, all the powers granted
by this act to.the governing bodies of cities and towns to contract debts
for any project, to borrow money for any project, and to issue negotia-
ble bonds to finance any project. The tenor of such bonds and all mat-
ters relating thereto shall be determined by resolution or resolutions of
the governing body of any county and such governing body shall have all
the powers with reference to bonds of the county which are conferred
1933] ACTS OF ASSEMBLY 51

upon the governing bodies of cities and towns by section three of this
act with reference to bonds of cities and towns.

5. Any resolution or resolutions of the governing body of any city
or town authorizing any bonds, or any resolution or resolutions of the
governing body of any county determining that it is advisable to con-
tract a debt for any project, borrow money for any project, and issue
negotiable bonds of the county to finance any project, or determining
the tenor of such bonds or other matters relating thereto, or any subse-
quent resolution or resolutions of the governing body of any county,
city, or town, may contain provisions which shall be a part of the con-
tract with the holders of the bonds as to:

(a) The payment of the principal of and interest on such bonds ex-
clusively from the fees, rents, tolls or other charges or revenues or re-
ceipts of the project; and the pledging of such fees, rents, tolls, charges,
revenues and receipts of the project to secure payment thereof, and the
pledging or not pledging of the full faith and credit of the county, city
or town;

(b) The payment of principal of and interest on such bonds irom
unlimited ad valorem taxes on all property subject to taxation, and the
pledging of the full faith and credit of the county, city or town to secure
the payment thereof ;

(b-1) The payment of the principal of and interest on such bonds
may be secured by any deed of trust, mortgage, conditional sales con-
tract, chattel mortgage, or any other known form of securities, on the
project ;

(c) The payment of the principal of and interest on such bonds
from any one or more of the foregoing sources of funds, or any com-
bination thereof, and the pledging of any one or more of the foregoing
sources of funds or any combination thereof to secure the payment of
the bonds, and interest thereon ;

(d) The fees, rents, tolls, charges, taxes and other revenues or re-
ceipts of the project and the amounts to be raised in each year thereby,
and the use and disposition of such fees, rents, tolls, charges, taxes and
other revenues and receipts of the project;

(e) The setting aside of reserves or sinking funds and the regula-
tion and disposition thereof ; ,
- (£) Limitations on the right of the county, city or town to restrict
and regulate the use of the project; |

(g) Limitations on the purpose to which the proceeds of sale of any
issue of bonds then or thereafter to be issued may be applied ;

(h) Limitations on issuance of additional bonds ; .

(i) The procedure, if any, by which the terms of any contract with
bondholders may be amended or abrogated, the amount of bonds the
holders of which must consent thereto, and the manner in which such
consent may be given; :

(j) Conferring upon the bondholders the following remedies:

In the event that any county, city or town shall default in the pay-
ment of principal of or interest on any of the bonds after the same shall
become due, and such default shall continue for a period of thirty days,
or in the event that any county, city or town shall fail or refuse to
comply with the provisions of this act, or shall default in any agree-
ment made with the holders of the bonds, the holders of twenty-five
per centum in aggregate principal amount of the bonds then outstanding,
by instrument or instruments filed with the Secretary of the Common-
wealth and acknowledged by them before an officer authorized by the
laws of this State to take acknowledgements of deeds, may appoint a
trustee to represent the bondholders for the purposes herein provided.
Such trustee may, and upon written request of the holders of twenty-five
per centum in aggregate principal amount of the bonds then outstanding,
shall, in his or its own name

(1) By mandamus, or other suit, action or proceeding at law or
in equity, enforce all rights of the bondholders and require the county,
city or town, and the governing body thereof, to carry out any agree-
ment with the bondholders, and to perform its and their duties under
this act; .

(2) Bring suit upon the bonds;

(3) By action or suit in equity, enjoin any acts or things which may
be unlawful or in violation of the rights of the bondholders ;

(4) Declare all bonds due and payable, and if all defaults shall be
made can then, with the consent of the holders of twenty-five per
centum of the principal amount of the bonds then outstanding, annul
such declaration and its consequences; provided, however, that before
declaring the principal of all bonds due and payable, the trustee shall
first give thirty days’ notice in writing to the county, city or town by
filing said notice in the office of the clerk of the county or the mayor of
the city or town.

In any suit, action or proceeding by the trustee, the fees, counsel
fees, and expenses of the trustee shall constitute taxable disbursements,
and all costs and disbursements allowed by the court shall be a first
charge on any fees, rents, tolls, or other charges, taxes, or other revenues
and receipts derived from, levied for, or obtained in connection with
the project. Said trustee shall in addition to the powers granted in
this section, of this act, have and possess all of the powers necessary
or appropriate for the exercise of any functions specifically set forth
herein, or incident to the general representation of the bondholders
represented by such trustee, in the enforcement and protection of their
rights.

(5) Any other matter required by any Federal agency as a condition
precedent to the obtaining of a direct grant or grants of moneys for or
in aid of any project, or to defray or partially to defray the cost of the
labor and materials employed upon any project, or to obtain a loan or
loans of moneys for or in aid of any project, from any Federal agency.

6G. Any city or town shall have the power, in addition to, and as
supplemental to, any other powers conferred by this act to authorize the
contracting of a debt, the borrowing of money, and the issuance of
bonds for any project, by an ordinance enacted in accordance with sec-
tion one hundred and twenty-three of the Constitution of Virginia; and
to submit the question of the issuance of such bonds to the qualified
voters of such city or town at the general election next succeeding the
enactment of such ordinance, or at a special election held for that pur-
pose, in the manner or mode of procedure prescribed by chapter one
hundred and twenty-two of the Code of Virginia, as amended, for the
holding of such an election on the question of the issuance of bonds for
any specific undertaking from which the city or town may derive a
revenue. If the qualified voters shall at such election approve con-
tracting the debt, borrowing the money, and issuing the bonds, the gov-
erning body of such city or town shall thereupon authorize and issue
such bonds in accordance with the provisions of this act applicable to the
authorization and issuance of bonds by cities and towns.

7. All proceeds received from the sale of the bonds of any county,
city or town issued under this act, and all fees, rents, tolls, charges,
revenues or other receipts derived from any project, and any moneys
received from any Federal agency shall be paid to the treasurer or other
financial officer of the county, city or town, who shall not commingle
said moneys with any other moneys. Said moneys shall be deposited in
a separate bank account or accounts in the name of the county, city or
town. The governing body of any county, city or town may by reso-
lution, provide that all deposits of such fees, rents, tolls, charges,
revenues or other receipts derived from any project, and any moneys
received from any Federal agency shall, if required by any contract
made with any Federal agency be secured by obligations of the United
States or of the Commonwealth of Virginia of a market value equal at
all times to the amount of such deposits and all banks and trust com-
panies are authorized to give such security for such deposits; and the
governing body of any county, city or town be, and the same is hereby,
authorized to enter into any contract with any Federal agency con-
taining such requirement. In lieu of any such contractual requirement
such deposits shall be secured as now provided by law.

8. The bonds are hereby made securities in which all public officers
and bodies of this State and all counties, cities and towns and municipal
subdivisions, all insurance companies and associations, all savings banks
and savings institutions, including savings and loan associations, trust
companies, beneficial and benevolent associations, administrators,
guardians, executors, trustees and other fiduciaries in the State may
properly and legally invest funds under their control.

9, Pending the preparation, execution and delivery of the definitive
bonds, interim certificates or other obligations may be issued by any
county, city, or town to the purchaser of such bonds. Such interim
certificates or obligations shall be in such form and contain such terms,
conditions and provisions as the governing body of the county, city or
town issuing the same may determine. Any provision of any law to the
contrary notwithstanding, any bonds, interim certificates or other obli-
gations issued pursuant to this act shall be fully negotiable within the
meaning and for all the purposes of chapter two hundred and thirty-
three of the Code of Virginia, as amended. In determining the cost of
any project to be financed under this act, the following items may be
charged as a part of the cost of such project, and be financed by the
issuance of bonds under this act: (a) engineering and inspection costs,
accounting and legal expenses, in which may be included a reasonable
proportion of the compensation and the engineering and legal expenses
of any county, city or town; (b) the cost of issuance of the bonds, in-
cluding printing, advertising, accounting, legal and other similar ex-
penses.

10. The authorization and issuance of the bonds under this act shall
not be dependent on or affected in any way by proceedings taken, con-
tracts made, acts performed or done in connection with, or in further-
ance of, any project undertaken by the county, city or town authorizing
and issuing the bonds. |

10-a. In the event that any city or town shall hereafter annex any
land in or upon which improvements have been made under the pro-
visions of this act and paid for, in whole or in part, by funds obtained
from or expended by the United States of America under the National
Industrial Recovery Act, and the tax rate upon the land annexed shall be
increased during the period of five years, or less, after such annexation,
under the provisions of section twenty-nine hundred and fifty-eight of
the Code of Virginia (1919), as amended, then such city or town shall
be relieved of the burden and the necessity of setting ‘apart a sum equal
to twelve per centum of the assessed value at the time of annexation of
the land so annexed, and expending the same upon public improve-
ments in the said annexed area, as provided by said section twenty-nine
hundred and fifty-eight, to the extent of the amount of money which
was obtained from or expended by the government of the United States
of America under the aforesaid National Industrial Recovery Act, and
expended in and for the benefit of the annexed territory in public im-
provements, prior to annexation, less depreciation of such improvements
calculated from the date of construction to the date of such annexation,
provided that such city or town, at the time of the obtaining of such
funds from the government of the United States under the aforesaid
National Industrial Recovery Act, became the lessee of such public
improvements and obligated itself to repay such funds so obtained from
the government of the United States, out of net revenues accruing to
such city or town from the use by persons living in such territory, of
such public improvements.

11. It is the purpose of this act to enable counties, cities, and towns
to secure the benefits of the National Industrial Recovery Act, to en-
courage public works, to reduce unemployment and thereby to assist in
the national recovery and promote.the public welfare, and to these ends
counties, cities and towns shall have power to do all things necessary or
convenient to carry out said purpose in addition to the express powers
conferred in this act; this act is remedial in nature and the powers
hereby granted shall be liberally construed.

12. In so far as the provisions of this act are inconsistent with the
provisions of any other law, the provisions of this act shall be con-
trolling. The powers conferred by this act shall be in addition and sup-
plemental to the powers conferred by any other law; and bonds, interim
certificates or other obligations, may be issued hereunder for any project
notwithstanding that other law, may provide for the issuance of bonds
for like purposes and without regard to the requirements, restrictions
or other provisions contained in any other law, and except as provided
as to counties in section four, and as to cities and towns in section one
hundred and twenty-seven of the Constitution of Virginia, without re-
gard to any requirement for the approval by vote of the qualified voters
of any county, city or town, of the contracting of a debt, the borrowing
of money or the authorizing or issuing of bonds or other obligations.
Bonds may be issued under this act notwithstanding any debt or other
limitation prescribed by any other law, and the mode and method of
procedure for the issuance of bonds under this act need not conform
to the provisions of any other law.

13. If any section, clause or provision of this act shall be unconsti-
tutional or be ineffective in whole or in part, to the extent that it 1s not
unconstitutional or ineffective it shall be valid and effective and no other
section, clause or provision shall on account thereof be deemed invalid
or ineffective.

14. Except as may be otherwise provided in any contract theretofore
entered into by any county, city or town with any Federal agency, no
county, city or town shall undertake any project, contract any debt, bor-
row any money or issue any bonds pursuant to this act on and after two
years and six months from the day on which this act becomes effective.

Provided, however, that in the cities of Roanoke and Danville no
money shall be borrowed and no bonds issued and no indebtedness 1n-
curred hereunder until and unless the proposal so to do shall have been
submitted to the qualified voters of such city at a special election and
approved by a majority of the qualified voters who vote in said special
election. Said special election shall be ordered by the Corporation Court
of such city upon request of the city council and shall be held according
to the general laws applying to special elections.

15. An emergency existing, this act shall be in force from its passage.