Chap. 145.—An ACT to provide for the supervision, regulation, restriction and
control of the issuance of stocks, stock certificates, bonds, notes, evidences of
indebtedness, evidences of interest and ownership, and other securities by per-
sons, firms, associations and corporations, including trustees, receivers, and
lessees thereof, engaged in business in Virginia as public utilities, to prescribe
the functions, powers and duties of the State Corporation Commission in
connection therewith, to impose certain fees, and to prescribe penalties for
violations of the provisions of this act. [fH B 282]

Approved March 24, 1934

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

1. (a) The term “commission” when used in this act shall mean
the State Corporation Commission of the Commonwealth of Virginia.

(b) The term “public service company” shall mean every person,
firm, corporation or association, or their lessees, trustees or receivers,
other than a municipal corporation, now or hereafter engaged in business
in this State as a public utility and subject to regulation as to rates and
service by the State Corporation Commission: provided, that the term
shall not include and this act shall not include common carrier railroad
companies, the issuance of stocks and securities of which are under
regulation by the Interstate Commerce Commission.

2. The power of public service companies to issue stocks and stock
certificates or other evidence of interest or ownership, and bonds, notes
and other evidences of indebtedness and to create liens on their property
situated within this State is a special privilege, the right of supervision,
regulation, restriction, and control of which is and shall continue to
be vested in the State, and such power shall be exercised as provided
by law and under such rules and regulations as the commission may
prescribe.

3. A public service company may issue stocks and stock certificates
or other evidence of interest or ownership, and bonds, notes and other
evidences of indebtedness payable at periods of twelve months or more
after the date thereof, for the following purposes and no others; namely,
for the acquisition of property (including stocks, stock certificates or
other evidences of interest or ownership, and bonds, notes and other
evidences of indebtedness of other persons, firms, associations or cor-
porations when the acquisition thereof has been approved and authorized
by the commission), or for the construction, completion, extension or
improvement of its facilities or for the improvement or maintenance of
its service, or for the discharge or lawful refunding of its obligations,
or for the reimbursement of moneys actually expended from income or
from any other moneys in the treasury of the public service company
not secured by or obtained from the issue of stocks or stock certificates
or other evidence of interest or ownership or bonds, notes or other evi-
dences of indebtedness payable at periods of twelve months, or more,
after the date thereof, of such public service company for any of the
aforesaid purposes except maintenance of service, in cases where the
applicant shall have kept its accounts and vouchers for such expendi-
tures in such manner as to enable the commission to ascertain the
amount of moneys so expended and the purposes for which such ex-
penditures were made.

4. No public service company shall henceforth assume any obliga-
tion or liability as guarantor, indorser, surety or otherwise in respect
to the securities of any other person, firm, association or corporation,
when such securities are payable at periods of twelve months, or more,
after the date thereof, without having first secured from the commission
an order authorizing it so to do.

5. Application for an order authorizing the issue of such stocks and
stock certificates or other evidence of interest or ownership, and bonds,
notes or other evidences of indebtedness as provided in section three
or the assumption of the obligation or liabilities of any other person,
firm, association or corporation as provided in section four shall be
made to the commission stating the amount, character, terms and pur-
poses of the stock, stock certificates or other evidence of interest or
ownership, and bonds, notes and other evidences of indebtedness to be
issued or assumed, and stating such other pertinent details as the
commission may require.

When such an application is filed with the commission it shall con-
sider and pass upon the same within fifteen days, and where the applica-
tion sets forth that such securities are to be issued or such obligations
or liabilities are to be assumed for any purpose set forth in section
three of this act, and the commission so finds it shall approve the
application and issue the order applied for, unless the commission
shall find for reasons stated by it, that the issuance of such securities
or the assumption of such obligations or liabilities is not reasonably
necessary to carry out one or more of the purposes set forth in the
application. The commission may by its order grant permission for
any such issuance or assumption in the amount or on the terms applied
for, or in a less amount, or on different terms, or not at all, and may
include in its order such terms and conditions fairly relating to the
matter of such issuance or assumption as it may deem reasonable or
necessary. Whenever the commission refuses, in whole or in part,

an application, or grants an application with modifications, to issue
securities or assume obligations or liabilities, it shall state specifically
its reasons so that such refusal or modifications may be reviewed
judicially on appeal. If at the end of fifteen days after the filing of
such an application, or at the end of any extension or extensions of
that time, which may have been ordered by the commission, no order
of disapproval is entered, the application shall be deemed in fact and
law to have been approved, and an order shall be issued by the com-
mission authorizing the issuance of the securities or the assumption of
the obligations or liabilities as applied for and such securities may be
issued or such obligations or liabilities assumed accordingly. Provided,
that the commission may extend the original fifteen day period not to
exceed an additional thirty days unless the commission shall conclude
that forty-five days is not a sufficient time in which fully to investigate
and determine whether said certificate shall be issued, when it shall
by written order extend the time for a specified reasonable period, and
in such order set forth the reasons for such extension, which order shall
be viewed in law as a final order for purposes of appeal, and upon
appeal the court shall approve or decrease the period specified in the
order.

To enable it to determine whether it will issue such order, the
commission may hold a hearing and may make such additional inquiry
or investigation, and examine such witnesses, books, papers, documents
and contracts, and require the filing of such data as it may deem of
assistance.

If a commission or other agency or agencies is empowered by an-
other state to regulate and control the amount and character of securi-
ties to be issued by any public service company within such other state,
then the commission shall have the power to agree with such other com-
mission or other agency or agencies of such other state on the issuance
of stocks or stock certificates or other evidence of interest or ownership,
and bonds, notes or other evidences of indebtedness by a public service
company owning or operating a public utility both in such state and in
this State, and shall have the power to approve such issue jointly with
such commission or other agency or agencies and to issue a joint certifi-
cate of such approval: provided, however, that no such joint approval
shall be required in order to express the consent to and approval of
such issue by the Commonwealth of Virginia if said issue is separately
approved by the commission.

The public service company making the application may have the
decision or order of the commission reviewed, on appeal, to the Supreme
Court of Appeals in the same manner and by the same procedure as
any other order, action, or decision of the commission, when the public
service company shall deem such decision or order to be in any respect
or manner improper, unjust or unreasonable.

6. No public service company shall, without the consent of the com-
mission, apply the issue of any stock or stock certificate or other
evidence of interest or ownership, or bond, note or other evidence of

indebtedness, or any part thereof, or any proceeds thereof, to any
purpose not specified in the commission’s order, or to any purpose
specified in the commission’s order in excess of the amount authorized
for such purpose, or issue or dispose of the same on any terms less
favorable than those specified in such order or any modification thereof.

7. The provisions of this act shall not apply to the sale or other dis-
position of any stock or stock certificate or other evidence of interest
or ownership, or bond, note or other evidence of indebtedness, which
may be held in the treasury of a public service company if title thereto,
or possession by pledge thereof, shall have at some previous time once
lawfully passed from such public utility company, nor to the issuance
of bonds, notes or other evidences of indebtedness, payable at a period
of less than twelve months, nor to the pledging or replacing of stocks,
trust certificates, bonds, or other evidences of indebtedness to secure
such bonds, notes, or evidences of indebtedness, payable at periods of
less than twelve months, but if such bonds, notes, or other evidences of
indebtedness shall, in whole or in part, directly or indirectly, be refunded
by any issue of bonds, notes, or other evidences of indebtedness running
for twelve months or more then the said mentioned provisions with
regard to certificates of public convenience and applications therefor
shall apply to such refunding.

8. The commission shall have no power to authorize the capitalization
of any franchise or permit whatsoever or the right to own, operate or
enjoy any such franchise or permit, in excess of the amount (exclusive
of any tax or annual charge) actually paid to the State or to a political
subdivision thereof as the consideration for the grant of such franchise,
permit or right; nor shall any contract for consolidation or lease be
capitalized, nor shall any public service company hereafter issue any
bonds, notes or other evidences of indebtedness against or as a lien
upon any contract for consolidation or merger.

9, The commission shall have the power to require public service
companies to account for the disposition of the proceeds of all sales
of stock and stock certificates or other evidence of interest or owner-
ship, and bonds, notes and other evidences of indebtedness, in such form
and detail as it may deem advisable, and to establish such rules and regu-
lations as it may deem reasonable and necessary to insure the disposi-
tion of such proceeds for the purpose or purposes specified in its
order.

10. Any stock, or stock certificate or other evidence of interest or
ownership, and, except as otherwise provided by section seven of this
act, any bond, note or other evidence of indebtedness, of a public
service company, and every assumption of obligation or liability as a
guarantor, indorser, surety or otherwise in respect to the securities of
any other person, firm, association or corporation, when such securities
are payable at periods of twelve months, or more, after the date thereof,
shall be void if issued or assumed without an order of the commission
authorizing the same, or if issued or assumed contrary in any substantial
respect to any term or condition of such order as issued, or as modified

prior to such issuance or assumption; but no such issuance or assump-
tion, if made in accordance in every substantial respect with all terms
and conditions of such order as issued or as modified prior to such
issuance or assumption, shall be rendered void because of failure to
comply with any provision of this act relating to procedure or other
matters preceding the entry of such order.

11. This act shall apply to every stock or stock certificate or other
evidence of interest or ownership, and, except as otherwise provided
by section seven of this act, every bond, note or other evidence of
indebtedness, of a public service company, which may be issued, and
to every obligation or liability as guarantor, indorser, surety or other-
wise in respect of the securities of any other person, firm, association
or corporation, when such securities are payable at periods of twelve
months or more after the date thereof, which may be assumed, after
this act takes effect, notwithstanding the fact that any preparatory
steps, whether by the issuance or amendment of a certificate of in-
corporation, or by the action of the board of directors, or the stock-
holders or otherwise, may have been previously taken.

12. (a) Every public service company which, directly or indirectly,
issues or causes to be issued, any stock or stock certificate or other
evidence of interest or ownership, or bond, note or other evidence of
indebtedness, in non-conformity with the order of the commission
authorizing the same, or contrary to the provisions of this act, or which
applies the proceeds from the sale thereof, or any part thereof, to any
purpose other than the purpose or purposes specified in the commission's
order, as herein provided or to any purpose specified in the commission’s
order in excess of the amount in said order authorized for such pur-
pose shall be subject, in a proceeding before the commission under
rule to show cause, to a penalty of not more than one thousand dollars
for each offense. Every violation of any such order, rule, direction,
demand or requirement of the commission, or of any provision of this
act, shall be a separate and distinct offense and in case of continuing
violation every day’s continuance thereof shall be deemed to be a sepa-
rate and distinct offense. The commission shall also have jurisdiction,
in a proceeding under section six of the securities law, to issue a cease
and desist order enjoining any further or threatened violation of the
provisions of this act.

(b) The act, omission or failure of any officer, agent or employee
of any public service company acting within the scope of his official
duties or employment, shall in every case be deemed to be the act,
omission or failure of such public service company.

13. Every officer, agent or employee of a public service company,
and every other person who knowingly authorizes, directs, aids in, issues
or executes, or causes to be issued or executed, any stock or stock
certificates or other evidence of interest or ownership, or bond, note
or other evidence of indebtedness, in non-conformity with the order
of the commission authorizing the same, or contrary to the provisions
of this act, or who, in any proceedings before the commission, know-

ingly makes any false statement or representation or, with knowledge
of its falsity, files or causes to be filed with the commission any false
statement or representation which said statement or representation so
made, filed or caused to be filed may tend in any way to influence the
commission to make an order authorizing the issuance of any stock
or stock certificate or other evidence of interest or ownership, or any bond,
note, or other evidence of indebtedness, or which results in procuring
from the commission the making of any such order, or who, with knowl-
edge that any false statement or representation was made to the commis-
sion in any proceedings tending in any way to influence the commission
to make such order, issues or executes or originally negotiates, or causes
to be issued, executed or originally negotiated any such stock or stock
certificate or other evidence of interest or ownership, or bond, note or
other evidence of indebtedness, or who, directly or indirectly, knowingly
applies, or causes or assists to be applied the proceeds or any part thereof,
from the sale of any stock or stock certificate or other evidence of interest
or ownership, or bond, note or other evidence of indebtedness, to any
purpose not specified in the commission’s order or to any purpose speci-
fied in the commission’s order in excess of the amount authorized for
such purpose, or who, with knowledge that any stock or stock certificate
or other evidence of interest or ownership, or bond, note or other evi-
dence of indebtedness, has been issued or executed in violation of any
of the provisions of this act, originally negotiates the same, or causes
the same to be originally negotiated, shall be guilty of a misdemeanor.

14. No provision of this act, and no deed or act done or performed
under or in connection therewith, shall be held or construed to obligate
the Commonwealth of Virginia to pay or guarantee, in any manner
whatsoever, any stock or stock certificate or other evidence of interest
or ownership, or bond, note or other evidence of indebtedness, author-
ized, issued or executed under the provisions of this act, nor shall any
approval given under this act involve, or be construed or represented
as involving, an expression of opinion on the part of the commission
as to value, and if any person and/or corporation who or which shall
make directly or by implication any statement or representation to the
contrary, shall be guilty of a misdemeanor.

15. Nothing contained in this act shall be construed so as to relieve
any public service company from the duty of complying with the pro-
visions of section one hundred and sixty-seven of the Constitution and
section thirty-seven hundred and eighty-eight of the code of nineteen
hundred and nineteen when applicable.

16. Upon the filing of application for the approval of any issue of
securities or the making of any loan under the provisions of this act,
a filing fee in the same amount as that now or hereafter required by
the securities law shall be paid, and upon the approval or validation of
any such issue of securities or upon the approval or validation of the
making of any such loan, and as a condition precedent to the entry of
the order of approval or validation, there shall be paid an additional
fee calculated upon the par value in case of par securities, and upon the
proposed selling price in the case of no par securities, and the amoun
of the loan as approved or validated in the case of a loan, correspondin;
to the amount chargeable under similar circumstances under the securitie
law, and subject, as in the case of the securities law, to credit by th
amount of such filing fee, and limited, as to any one issue of securitie
so approved and validated, whether to be issued at once or from tim
to time, in the same amount as now or hereafter prescribed in the se.
curities law, and there shall be paid, in case of an application for ad-
ditional issue of any securities previously approved or validated, or fot
an additional loan between the same parties, previously approved ot
validated, or for approval of a renewal, in whole or in part, of any loar
previously approved and validated, another filing fee in the amount
now or hereafter prescribed in the securities law in all cases in which
the maximum fee has been paid upon the approval or validation of the
same securities or a loan between the same parties, but in cases in which
the maximum fee has not already been paid on the same securities, or
on a loan between the same parties which has not been repaid in full,
no additional filing fee shall be payable, but there shall be paid an ad-
ditional per centum until the maximum prescribed by the securities law
shall have been paid. Filing fee shall in no case be returnable, but ad-
ditional fees which have been placed in hand tentatively shall be returned,
n whole or in part, should the application for approval or validation of
in issue of securities or of a loan be withdrawn or be not approved in
whole or in part. No licensed salesmen shall be necessary in case of
orders of approval or validation of securities under the provision of this
ict.

The terms “securities” and “loan” as used in this section of this
ct, shall be construed to embrace and include each and every obligation,
vritten or otherwise, the issuance of, or entry into which, is required
o be approved or validated by this act.

17. If any section or provision of this act shall be adjudged to be
nvalid or unconstitutional, such adjudication shall not affect the validity
f the act as a whole or any section, provision or part thereof not ad-
udged to be invalid or unconstitutional.

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

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