Chap. 37.—An ACT to amend and re-enact section 350 of the Tax Code of Vir-
ginia, as heretofore amended, relating to the receipt and disbursement of
money paid to county treasurers for the accounts of the Commonwealth and
the counties. [H. B. 26]

Approved September 11, 1933

1. Be it enacted by the General Assembly of Virginia, That section
three hundred and fifty of the Tax Code of Virginia as heretofore
amended be amended and re-enacted so as to read as follows:

Section 350. All money payable to and received by a county treas-
urer pursuant to law shall be deposited, paid out, and disbursed by him
in the manner hereinafter provided.

(a) All money received by a county treasurer for the account of
either the Commonwealth or the treasurer’s county, except such amount
thereof as shall be necessary for the payment in cash of orders or
warrants lawfully drawn upon the treasurer and matured lawful bonds,
notes, or obligations of the treasurer’s county, for the payment of
which funds are available, shall be deposited by the treasurer as prompt-
ly as practical after its receipt in such bank or banks as is, or are,
authorized by this section to act as depository or depositories therefor.
All deposits made pursuant to this provision shall be made in the name
of the treasurer’s county.

(b) For the purposes hereinafter indicated, there is hereby created
for each county of the Commonwealth a county finance board, which
shall consist of the chairman of the board of supervisors, the treasurer,
and a citizen of the county of proven integrity and business ability.
The chairman of the board of supervisors and the county treasurer
shall be ex-officio members of the county finance board and the citizen
member thereof shall be appointed by the circuit court of the county
or by the judge thereof in vacation. The first citizen member of the
county finance board shall be appointed for a term to expire December
thirty-first, nineteen hundred and thirty-three. Thereafter the term oi
the appointment of such member shall be four years, but the circuit
court of the county, or the judge thereof in vacation, in his discretion,
may remove for cause any such member and appoint some other quali-
fied citizen of the county in his stead for the unexpired portion of his
term.

The chairman of the board of supervisors shall be the chairman of
the county finance board and the clerk of the board of supervisors shall
be ex-officio clerk thereof. Said board shall meet at such times and
at such places as the chairman or a majority of the members of said
board may appoint, and the clerk shall record the activities and pro-
ceedings of said board in a suitable record book which shall be pro-
vided for the purpose by the board of supervisors.

(c) The depository or depositories for the money received by a
county treasurer shall be selected by the county treasurer and approved
by the county finance board, and said board shall have and hereby is
granted authority to withdraw its approval of any depository if in its
judgment the protection and safety of the money held by such depository
requires such action; and if and when such action is taken with respect
to any depository the treasurer shall forthwith withdraw from such
depository all money on deposit therewith and deposit the same with an
approved depository.

(d) No money received by a county treasurer shall be deposited
with any depository of the treasurer’s county selected and approved as
provided in sub-section (c) hereof until such depository shall have
given bond with the same conditions as those required for bonds given
by State depositories who elect to give bond to protect money deposited
with them by the State Treasurer pursuant to the provisions of section
twenty-one hundred and fifty-eight of the Code of Virginia, as amended,
or until such depository shall have pledged and deposited in the manner
and to the extent hereinafter provided and for the protection of the
money deposited with it pursuant to the provisions of this section:
(1) securities of the character required to protect deposits made by
the State Treasurer pursuant to the provisions of section twenty-one
hundred and fifty-eight of the Code of Virginia, as amended; (2) se-
curities of the character described in section fifty-four hundred and
1933] ' ACTS OF ASSEMBLY 65

thirty-one of the Code of Virginia, as amended, except those described
in sub-section seventh thereof, and/or (3) legally issued short-term
notes or other obligations of any county or municipality of this Com-
monwealth, (4) provided, however, that-.all securities offered by a
depository. shall have the approval of the county finance board; and
provided, further, that any such depository, in lieu of complying with
the preceding part of this sub-section (d), may, by its boards of di-
rectors, adopt a resolution before such public funds are deposited there-
in, to the effect that, in the event of the insolvency or failure of such
depository, such public funds hereafter deposited therein shall, in the
distribution of the assets of such depository, be paid in full before any
other depositors shall be paid deposits hereafter made in such deposi-
tory, and the adoption of such resolution shall be deemed to constitute
a binding obligation on the part of such depository; but at no time
shall such public funds be on deposit in any such depository availing
itself of the provisions of this proviso to an amount in excess of sixty
per centum of the capital and surplus of such depository unless and
until such excess be secured and provided by the provisions of this sub-
section (d) which precedes this proviso. ,

(e) All securities pledged by any depository to protect money de-
posited with it under the provisions of this section shall be deposited in
escrow with some bank or trust company. in this Commonwealth, other
than the depository, which shall be acceptable to and approved by the
depository and the county finance board and shall be accompanied by
powers of attorney authorizing such bank or trust company, in event
of any default by the depository, to deliver said securities to the county
finance board and empowering such board to sell, transfer, and deliver
all or any part of such securities in such manner as it may elect for
the satisfaction of any claim that may arise from such default.

({) The amount of bond given or the value of securities pledged
by any depository as aforesaid shall at all times be at least equal in
amount to the amount of money on deposit with the depository, less
such amount thereof as shall be insured by the Federal Deposit In-
surance Corporation, a corporation created by an act of the Congress
of the United States, approved June sixteenth, nineteen hundred and
thirty-three, and known as the banking act of nineteen hundred and
thirty-three. For the purpose of this sub-section, the various classes of
securities which may be pledged to secure money deposited under the
provisions of this section shall be valued as follows:

(1) Those securities described in section twenty-one hundred and
fitty-eight of the Code of Virginia and those described in subsections
first, second, third, and fourth, of section fifty-four hundred and thirty-
one of the Code of Virginia shall be valued at market value.

(2) Those securities described in subsections fifth, eighth, ninth,
and tenth of section fifty-four hundred and thirty-one of the Code of
Virginia shall be valued at eighty per cent of market value. .

(3) The short-term notes or other obligations of the counties and
municipalities of this Commonwealth described in subsection (d) here-
of shall be valued at eighty per cent of par, provided, however, that
when any county’s obligations of this character are pledged and de-
posited to secure money deposited by or on behalf of the same county,
such obligations may be valued at par. :

(4) The securities described in subsection sixth of section fifty-four
hundred and thirty-one of the Code of Virginia shall be valued at two-
thirds of the face amount thereof; provided, however, that in no case
shall the allowable value of securities of the class referred to in this
subsection be greater than twenty-five per cent of the aggregate value
of all securities, including those referred to in this subsection, pledged
and deposited in such case.

(g) No treasurer or executive officer of any depository shall per-

mit the amount of money on deposit with any depository at any time
pursuant to the provisions of this section to exceed the amount of bond
given or the value, computed as hereinbefore provided, of the securities
pledged and deposited to secure such money, plus the amount insured
by the said Federal Deposit Insurance Corporation.
— (h) At the end of each month each county treasurer shall report
to the county finance board the amount of money on deposit with each
depository and the character and value of the security held to protect
the same.

(i) Each depository of each county shall, in the discretion of the
county finance board, pay interest on money deposited under the pro-
visions of this section, the rate of such interest to be agreed upon be-
tween the treasurer and the depository and approved by the county
finance board.

(j) Money deposited under the provisions of this section shall be
disbursed only upon checks signed by the county treasurer and drawn
in payment of lawfully issued and properly drawn orders or warrants
and lawfully issued, properly drawn, and matured bonds, notes, or
other obligations of the county, for the payment of which funds are
available; provided, however, that this subsection shall not be construed
as preventing any county treasurer from transferring, by check, money
from one approved depository to another, or from settling with the
Commonwealth, without an order from the board of supervisors of
his county, for State revenues and/or other items collected and remit-
table by him to the Treasurer of the Commonwealth, or from paying
to the Treasurer of the Commonwealth, without an order from the
board of supervisors of his county, any amount or amounts pursuant
to provisions of law; provided, also, however, that any board of super-
visors desiring to do so may require the checks issued pursuant to the
provisions of this subsection to be countersigned and appoint such per-
son or persons as it may desire for the purpose; provided, further,
however, that this subsection shall not be construed as imposing upon
any depository any obligation to determine whether any check issued
pursuant to the provisions of this subsection was issued for any pur-
pose or purposes other than those specified herein or as imposing any
liability upon any such depository for paying any check so issued.
(k) After this section becomes effective, no county treasurer shall
be held liable for any loss of public money, deposited as provided by
this section due to the default, failure, or insolvency of a depository ;
provided, however, the board of supervisors of. any county at any
regular or special meeting thereof, may by resolution adopted by a
majority of their elected members suspend the operation of this act for
a period of not exceeding three months from time this act becomes
a law.