Chap. 212.—An ACT to amend and re-enact Section 350 of the Tax Code of Vir-

inia, as heretofore amended, relating to county finance board and depositories

or county funds. [H B 220]
Approved March 16, 1940

1. Beit enacted by the General Assembly of Virginia, That sec-
tion 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
treasurer 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
promptly 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 exofficio 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. Provided that in any
county adjoining any county having a population of more than five
hundred per square mile there is hereby created a county finance
board, which shall consist of the chairman of the board of supervisors,
the treasurer, the commonwealth’s attorney and a citizen of the county
of proven integrity and business ability. The chairman of the board of
supervisors, the county treasurer and the commonwealth’s attorney
in such county 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 of 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 qualified 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
proceedings of said board in a suitable record book which shall be
provided 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 ap-
proved 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 required 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 subsection (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; (first) 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; (second) securities of the character described in section
fifty-four hundred and thirty-one of the Code of Virginia, as amended,
except those described in subsection seventh thereof, and/or (third)
legally issued short-term notes or other obligations of any county or
municipality of this Commonwealth; 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 subsection (d), may,
by its board of directors, adopt a resolution before such public funds
are deposited therein, 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 depository, and the adoption of such resolution shall be
deemed to constitute a binding obligation on the part of such deposi-
tory; 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 de-
pository unless and until such excess be secured and provided by the
provisions of this subsection (d) which precedes this proviso.

(e) All securities pledged by any depository to protect money
deposited 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 accom-
panied 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.

(f) 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 subsection, the various classes
of securities which may be pledged to secure money deposited under
the provisions of this section shall be valued as follows:

First. Those securities described in section twenty-one hundred
and fifty-eight of the Code of Virginia and those described in sub-
sections first, second, third, and fourth, of section fifty-four hundred
and thirty-one of the Code of Virginia shall be valued at market value.

Second. 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.

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

Fourth. 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 re-
ferred 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 i in such case.

(gz) Ne o treasurer or executive officer of any depository shall permit
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 securi-
ties 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
provisions of this section, the rate of such interest to be agreed upon
between 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 con-
strued 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 times collected and re-
mittable by him to the treasurer of the Commonwealth, or from pay-
ing 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
supervisors desiring to do so may require the checks issued pursuant
to the provisions of this subsection to be countersigned and appoint
such person or persons as it may desire for the purpose; provided,
further, however, that this subsection shall not be construed as im-
posing upon any depository any obligation to determine whether any
check issued pursuant to the provisions of this subsection was issued
for any purpose or purposes other than those specified herein or as
imposing any liability upon any such depository for paying any check
so issued; provided, further, that the treasurer may, with the ap-
proval of the board of supervisors, by resolution entered of record on
the minute book of the board, designate one of his deputies who shall
have authority to sign any such checks whenever the necessity there-
for shall arise by reason of the sickness or unavoidable absence of the
treasurer, or his disability to sign such checks for any other reason.

(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 the time this act
becomes a law.