Virginia Law

Article 6. Judicial Determination of Validity of Bonds.

The provisions of this article apply to all suits, actions and proceedings of whatever nature involving the validity of bonds of any locality or other political subdivision, agency or instrumentality of the Commonwealth or of any locality, whether the bonds are to be issued following an election on the question of their issuance or without necessity of an election. These provisions supersede all other acts and statutes on the subject and are controlling in all cases, notwithstanding the provisions of any other law or charter to the contrary.

Code 1950, § 15-666.54; 1958, c. 640; 1962, c. 623, § 15.1-213; 1991, c. 668, § 15.1-227.52; 1997, c. 587; 2003, c. 570.

The governing body of any locality or other political subdivision, agency or instrumentality of the Commonwealth or of any locality proposing to issue bonds may bring at any time a proceeding in any court of the county or city having general jurisdiction and in which the issuer is located to establish the validity of the bonds, the legality of all proceedings taken in connection with the authorization or issuance of the bonds, the validity of the tax or other means provided for the payment of the bonds, and the validity of all pledges of revenues and of all covenants and provisions which constitute a part of the contract between the issuer and the owners of the bonds. The proceeding shall be brought by filing a motion for judgment describing the bonds and the proceedings taken in connection with their issuance and alleging that the bonds when issued shall be valid and legal obligations of the issuer. In the motion for judgment the taxpayers, property owners and citizens of the jurisdiction where the issuer is located, including nonresidents owning property in or subject to taxation by it, and all other persons interested in or affected in any way by the issuance of the bonds shall be made parties defendant.

Code 1950, § 15-666.55; 1958, c. 640; 1962, c. 623, § 15.1-214; 1991, c. 668, § 15.1-227.53; 1997, c. 587; 2003, c. 570.

Upon the filing of the motion for judgment the court shall fix the time and place for hearing the proceeding and shall enter an order requiring the publication of the motion for judgment or a summary of it approved by the court, together with the order setting forth the time and place of the hearing, twice in a newspaper published or having general circulation in the jurisdiction where the issuer is located, with the first notice appearing no more than 28 days before and the second notice appearing no less than seven days before the date fixed for the hearing.

By the publication of the motion for judgment or summary and the order, all taxpayers, property owners and citizens of the jurisdiction where the issuer is located, including nonresidents owning property in or subject to taxation by it, and all other persons having or claiming any right, title or interest in any property or funds affected in any way by the issuance of the bonds, or having or claiming to have any right or interest in the subject matter of the motion for judgment, shall be considered parties defendant in the proceedings, and the court shall have jurisdiction of them the same as if each of them were named individually as a defendant in the motion for judgment and personally served with process.

Code 1950, § 15-666.56; 1958, c. 640; 1962, c. 623, § 15.1-215; 1991, c. 668, § 15.1-227.54; 1997, c. 587; 2024, cc. 225, 242.

Any person, corporation, or association desiring to contest the issuance of any bonds pursuant to the provisions of this chapter, or any other law, general or special, shall proceed by filing a motion for judgment within thirty days after the filing of the resolution or ordinance authorizing the issuance of the bonds with the circuit court having jurisdiction over the issuer, or in contesting the validity of a petition for or the results of a referendum, within thirty days after the date that the result of the election for the issuance of the bonds is certified, in the court having jurisdiction as provided in § 15.2-2651. For bonds which are not authorized pursuant to a referendum, or for which the authorizing resolution or ordinance is not required to be filed with the circuit court, the contestant shall proceed by filing a motion for judgment within thirty days after the adoption of the authorizing resolution or ordinance. Upon the filing of a motion for judgment, the court shall fix a time and place for hearing the proceeding and shall enter an order requiring the publication of the motion for judgment or a summary of it approved by the court, together with the order setting forth the time and place of the hearing, twice in a newspaper published or having general circulation in the jurisdiction where the issuer is located, with the first notice appearing no more than 28 days before and the second notice appearing no less than seven days before the date fixed for the hearing. In addition to such publication, the plaintiff shall secure personal service on at least one member of the governing body of the issuer.

Code 1950, § 15-666.57; 1958, c. 640; 1962, c. 623, § 15.1-216; 1979, c. 184; 1991, c. 668, § 15.1-227.55; 1994, c. 714; 1997, c. 587; 2023, cc. 506, 507; 2024, cc. 225, 242.

Any party defendant may reply to the motion for judgment within ten days after its second publication as required by §§ 15.2-2652 and 15.2-2653 but not thereafter. Any property owner, taxpayer, citizen or other person in interest may become a party to the proceedings by pleading to the motion for judgment on or before the time set for hearing as provided by § 15.2-2652 or § 15.2-2653, or such earlier time as may be specified in the order of the court, or thereafter by intervention upon leave of the court. At the time and place designated in the order for the hearing as provided for in § 15.2-2652 or § 15.2-2653, the judge shall proceed to hear and determine all questions of law and fact in the proceeding and may make such orders as to the proceeding and such adjournments as will enable the judge properly to try and determine the proceeding and to render a final decree with the least possible delay. The proceeding shall take precedence over all other business of the court.

Code 1950, § 15-666.58; 1958, c. 640; 1962, c. 623, § 15.1-217; 1991, c. 668, § 15.1-227.56; 1997, c. 587.

Upon motion of the plaintiff or the issuer, the court in which the first proceeding to invalidate or sustain the bonds was instituted may enjoin the commencement by any person, corporation, or association of any other action or proceeding involving the validity of the bonds or any matter recited in the motion for judgment. The court may order a joint hearing before it of all issues then pending in any actions or proceedings in any court in the Commonwealth, may order all such actions or proceedings consolidated with the validation proceeding pending before it, and may make such orders as may be necessary or proper to effect consolidation and as may tend to avoid unnecessary costs or delays. Such orders shall not be appealable.

Code 1950, § 15-666.59; 1958, c. 640; 1962, c. 623, § 15.1-218; 1991, c. 668, § 15.1-227.57; 1997, c. 587.

An appeal from the final judgment of the circuit court in a bond validation proceeding may be taken to the Court of Appeals. No appeal shall be allowed unless a notice of appeal is filed in the circuit court within 15 days after the date on which the final judgment of the court is entered and unless the appealing party's opening brief is filed with the Court of Appeals within 30 days after the date on which the final judgment of the court is entered. When a notice of appeal is timely and properly filed with the clerk of the circuit court, the clerk shall certify and transmit the record to the Clerk of the Court of Appeals within 30 days after the date on which the final judgment of the circuit court is entered and the Court of Appeals shall give the appeal an expedited review. Failure of the clerk to comply with this requirement shall not affect the jurisdiction of the Court of Appeals to consider the appeal.

Code 1950, § 15-666.60; 1958, c. 640; 1962, c. 623, § 15.1-219; 1991, c. 668, § 15.1-227.58; 1997, c. 587; 2003, c. 679; 2021, Sp. Sess. I, c. 489.

In the event the decree of the court validates the bonds and no appeal is taken within the time prescribed in § 15.2-2656, or if an appeal is taken and the decree of the court is affirmed, the decree shall be forever binding and conclusive as to the validity of the bonds, the validity of the tax or other means provided for the payment of the bonds, and the validity of all pledges of revenues and of all covenants and provisions contained in any ordinance, resolution, trust agreement, indenture, or other instrument authorizing or providing for the issuance of the bonds, the legality of proceedings taken in connection with the issuance of the bonds, and all matters adjudicated and all objections presented or which might have been presented in the proceeding, and shall constitute a permanent injunction against the institution by any person of any action or proceeding contesting the validity of the bonds or any other matter adjudicated or which might have been called in question in such proceedings.

Code 1950, § 15-666.61; 1958, c. 640; 1962, c. 623, § 15.1-220; 1991, c. 668, § 15.1-227.59; 1997, c. 587.

No court in which a proceeding to invalidate or sustain bonds is brought shall invalidate the bonds unless it finds substantial defects, material errors, and omissions in the bond issue. Matters of form shall be disregarded.

Code 1950, § 15-666.62; 1958, c. 640; 1962, c. 623, § 15.1-221; 1991, c. 668, § 15.1-227.60; 1997, c. 587.