Chap. 20.—An ACT to amend and re-enact Sections 8, 9 and 10 of “An Act
relating to public service companies, providing for additional supervision
and regulation of their relations and practices with affiliated interests, and
declaring an emergency”, approved March 29, 1934, and add several sections,

with certain readjustments as to numerical designations of certain sections,
so as to extend and clarify the jurisdiction of the Commission, to extend
supervision and regulation, under certain conditions, to declaration and pay-
ment of common or equity dividends, to prescribe certain procedure, to pro-
vide for penalties, to be imposed by the State Corporation Commission, for
violations of. the law, under certain circumstances, and to make certain viola-
ticns of the provisions of the law misdemeanors. [S B 80]

Approved February 24, 1938

1. Be it enacted by the General Assembly of Virginia, That sec-
Hons eight, nine and ten of chapter three hundred and sixty-six, Acts
of General Assembly, nineteen hundred and thirty-four, approved and
effective March twenty-ninth, nineteen hundred and thirty-four, re-
lating to public service companies, providing for additional supervision
and regulation of their relations and practices with affiliated interests,
and declaring an emergency, be, and they hereby are, amended and
re-enacted, that several sections be added and that there be readjust-
ments of numerical designation, so that the act from the beginning
of section eight to the end thereof will read as follows:

Section 8. No public service company shall henceforth make,
extend, or renew any loan of money to any affiliated interest or as-
sume, extend, or renew any obligation or liability whatsoever of any
affiliated interest, whether as guarantor, endorser, surety or otherwise,
unless the Commission shall first have approved such loan or assump-
tion, or the extension or renewal of such loan, obligation, or liability,
as being not inconsistent with the public interest, and then only upon
the terms and conditions set forth in the order of the Commission
approving such transaction. This section shall not be construed so
as to invalidate or impair any such loan, obligation, or liability law-
fully made, extended or renewed, or assumed, extended or renewed,
and entered into prior to March twenty-ninth, nineteen hundred and
thirty-four, the effective date of the act of which this act is amenda-
tory.

Section 9. The Commission may, of its own motion, whenever
facts of record in any department of the Commission or within its
knowledge appear to justify it in so doing, or upon complaint by the
Commonwealth, and after reasonable notice. and opportunity to be
heard, and upon hearing and consideration, either formal or informal,
issue a summary order prohibiting the public service company from
declaring and/or paying any dividend on any common or equity stock
in any case in which such dividend or any part thereof would be
payable to an affiliated interest as defined in this law, and such sum-
mary order may, in case of emergency, be issued under like circum-
stances as preliminary injunctions are issued by the courts of equity
of this State, and in either case the said summary order so issued
may thereafter be made permanent, or be modified, or be vacated
after stich investigation and hearing as may be proper to satisfy the
requirements of due process of law, and the jurisdiction of the Com:
mission under this section of this law shall be based upon considerations
of public interest, and the summary order herein provided for shal
be issued only upon finding that the declaration or payment of any
dividends be found, as a matter of fact, inconsistent with the public
interest on account of probability of disabling the public service com-
pany to continue to adequately perform its public duties, or that there
1s a purpose on the part of such affiliated interest, or affiliated interests,
to gain unjust advantage or profit to the probable detriment of the
public service company, bondholders, other classes of stockholders,
and/or any others having rights in the premises, provided, however,
that nothing herein shall affect any declaration or payment of any
such dividends declared or paid before the effective date of this act,
nor shall anything herein be construed as requiring such public service
company to apply to the Commission or to obtain its approval before
declaration or payment of any such dividends.

Section 10. In every case wherein the approval of the Commis-
sion is required of any contract, arrangement, loan, extension or re-
newal thereof, assumption of obligation or liability, renewal or exten-
sion thereof, or any transaction or act, an application or petition, duly
executed and verified by such public service company and by each
and every corporation, partnership, association or person. constituting
an affiliated interest as defined in this law, who are parties to such
transaction or act, shall be presented to and filed with the Commission
which, upon hearing, either formal or informal, as may be determined
by the Commission, may, in addition to passing upon the propriety of
the proposed transaction or act subject to approval under this law,
pass upon all questions of jurisdiction of the Commission, upon whether
any party or parties are, as a matter of fact and law, affiliated interest
or interests within the definition therein, and require, as a condition
precedent to an approval or action upon the proposed transaction
or transactions, act or acts, any other corporation, partnership, as-
sociation or person which it appears to the Commission, prima facie.
is or might be an affiliated interest, to join, or to be joined, as a party
to the proceeding, and the Commission may, in its discretion, impose
any condition as to obtaining a license to transact business in Vir-
ginia on the part of any foreign corporation which it appears would
be; in violation of the Foreign Corporation Law by the performance
of the proposed transaction or act on the part of such foreign corpor-
ation, or to submit to the jurisdiction of the Commission under section
thirty-eight hundred and forty-eight of the Code or otherwise for
determination of such question, whenever the public interest and the
due enforcement of this law and of other laws under the jurisdiction
of the Commission appear to require such course.

Section 11. Every public service company entering into, partici-
pating in or acting under any contract or arrangement, required by
this law to be approved by the Commission, before obtaining such
approval, or making any loan, extension or renewal thereof, or as-
suming any obligation or liability, or extension or renewal of any
such obligation or liability, required by this law to be approved by the
Commission, before obtaining such approval, or making any declaration
or payment of any dividends after entry of a summary order, either
temporary or permanent, prohibiting such declaration or payment in
accordance with the provisions of this law, or otherwise violating any
provision of this law, or violating any valid order of the Commission
entered in pursuance thereof; shall be subject to a fine, to be imposed
in a proceeding before the State Corporation Commission instituted
for the purpose of determining whether there is any liability hereunder,
of not less than ten dollars and not in excess of five hundred dollars,
together with costs of the proceeding as adjudged by the Commission
and as taxed by the Clerk of the Commission according to law, and
every day of any such violation which, in its nature, is continuing,
may be deemed a separate offense.

Every public service company and every affiliated interest partici-
pating in any contract, arrangement, loan, or assumption, declaration
or payment of dividends, or doing any other act, in violation of this
law, or in violation of any valid order of the Commission thereunder,
and every officer, director, or employee of any such public service
company or of any such affiliated interest, knowingly authorizing,
directing, aiding in or executing or causing to be executed, any such
contract or arrangement, loan or assumption, declaration or payment
or dividends, in violation of this law, or in violation of any valid order
of the Commission thereunder, shall be guilty of a misdemeanor, and
such liability for a misdemeanor shall be in addition and cumulative
to any liability for the imposition of fine or penalty as hereinbefore
provided in this section.

Section 12. Any public service company or affiliated interest ot
any other interested corporation, partnership, association or person, of
the Commonwealth, deeming any decision or order of the Commission.
rendered or entered under the provisions of this law, and being final
in its general character with respect to any such company, interest,
corporation, partnership, association, person, or the Commonwealth.
to be in any respect or manner improper, unjust or unreasonable, may
appeal the same to the Supreme Court of Appeals in the same man-
ner and by the same procedure as now provided by law for review
of any other decision or order of the Commission.

Section 13. The Commission is empowered to promulgate sucl
rules and regulations as it may deem necessary or proper to carr)
out the provisions of this law.

Section 14. If any part of this law be held to be unconstitutiona
or void, such decision shall not affect the validity of the remaining
parts thereof.

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

passage.