Virginia Law

The term "public service company" when used in this chapter 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 Commonwealth as a public utility and subject to regulation as to rates and service by the State Corporation Commission under the provisions of Chapter 10 (§ 56-232 et seq.) of this title; however, the term shall not include and the provisions of this chapter shall not be deemed to refer to common carrier railroad companies, the issuance of the stocks and securities of which are under regulation by the Interstate Commerce Commission.

The term "total capitalization" as used in § 56-65.1 shall mean total common stockholders' equity (common stock, additional paid-in capital and retained earnings), preferred stock, and total debt (long- and short-term debt) as shown on the utility's books.

The terms "securities" and "loan" as used in §§ 56-68 and 56-75 shall include every obligation, written or otherwise, the issuance of, or entry into, which is required to be approved or validated by this chapter.

1934, p. 221; Michie Code 1942, §§ 4073(1), 4073(16); 1984, c. 721; 1987, c. 479.

The power of public service companies to issue stocks and stock certificates or other evidences of interest or ownership, and bonds, notes and other evidences of indebtedness and to create liens on their property situated within this Commonwealth is a special privilege, the right of supervision, regulation, restriction, and control of which is and shall continue to be vested in the Commonwealth; and such power shall be exercised as provided by law and under such rules and regulations as the Commission may prescribe; provided that this section shall not apply to obligations incurred for purchase of machinery or equipment where such obligations are secured by conditional sales contracts.

1934, p. 221; Michie Code 1942, § 4073(2); 1958, c. 11.

A. This chapter shall apply to every stock or stock certificate or other evidence of interest or ownership, and, except as otherwise provided by § 56-65, 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, endorser, surety or otherwise 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 or may have been assumed after March 24, 1934, notwithstanding the fact that any preparatory steps, whether by the issuance or amendment of a certificate of incorporation, or by the action of the board of directors, or the stockholders or otherwise, may have been taken prior to such date.

B. Notwithstanding subsection A, this chapter shall not apply to any stock or stock certificate or other evidence of interest or ownership, or any bond, note or other evidence of indebtedness of a (i) public service company that operates under an alternative form of regulation approved by the Commission pursuant to § 56-235.5, unless the Commission rescinds such exemption as hereafter authorized, or (ii) competitive telephone company as defined in § 56-54.2, provided such securities are issued for lawful purposes pursuant to § 56-58. Any public service company exempt from this chapter shall instead provide notice to the Commission of the issuance of any stock or stock certificate or other evidence of interest or ownership, or, except as otherwise provided by §§ 56-65 and 56-65.1, any bond, note or other evidence of indebtedness, within ninety days of issuance. The Commission may rescind the exemption from this chapter provided by this subsection to any public service company that operates under an alternative form of regulation approved by the Commission pursuant to § 56-235.5 if the Commission finds, after notice and an opportunity for a hearing, that such exemption is not in the public interest.

1934, p. 225; Michie Code 1942, § 4073(11); 2001, c. 347; 2014, cc. 340, 376.

A public service company may issue stocks and stock certificates or other evidences 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:

(1) 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 corporations when the acquisition thereof has been approved and authorized by the Commission);

(2) For the construction, completion, extension or improvement of its facilities;

(3) For the improvement or maintenance of its service;

(4) For the discharge or lawful refunding of its obligations; or

(5) 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 its stocks or stock certificates or other evidences of interest or ownership of bonds, notes or other evidences of indebtedness payable at periods of twelve months or more after the date thereof, for any of the aforesaid purposes except maintenance of service in cases where the applicant shall have kept its accounts and vouchers for such expenditures in such manner as to enable the Commission to ascertain the amount of moneys so expended and the purposes for which such expenditures were made.

1934, p. 221; Michie Code 1942, § 4073(3).

No public service company shall henceforth assume any obligation or liability as guarantor, endorser, 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.

1934, p. 222; Michie Code 1942, § 4073(4).

An application for an order authorizing the issue of such stocks and stock certificates or other evidences of interest or ownership, and bonds, notes or other evidences of indebtedness for any purpose described in § 56-58 or the assumption of the obligations or liabilities of any other person, firm, association or corporation as provided in § 56-59 shall be made to the Commission stating the amount, character, terms and purposes of the stocks, stock certificates or other evidences 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.

1934, p. 222; Michie Code 1942, § 4073(5).

When an application is filed with the Commission under § 56-60 it shall consider and pass upon the same within twenty-five days, and when the application sets forth that such securities are to be issued or such obligations or liabilities are to be assumed for any purpose set forth in § 56-58, 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 to issue securities or assume obligations or liabilities, or grants such an application with modifications, it shall state specifically its reasons so that such refusal or modifications may be reviewed judicially on appeal. If at the end of twenty-five 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 Commission 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. But the Commission may extend the original twenty-five-day period not to exceed an additional thirty days unless the Commission shall conclude that fifty-five days is not a sufficient time in which fully to investigate and determine whether such certificate shall be issued, in which event 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.

1934, p. 222; Michie Code 1942, § 4073(5); 1980, c. 246.

If a commission or other agency or agencies is empowered by another state to regulate and control the amount and character of securities to be issued by any public service company within such other state, then the Commission shall have the power to agree with such other commission or other agency or agencies of such other state on the issuance of stocks or stock certificates or other evidences 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 Commonwealth, and shall have the power to approve such issue jointly with such commission or other agency or agencies and to issue a joint certificate 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 such issue is separately approved by the Commission.

1934, p. 223; Michie Code 1942, § 4073(5).

The public service company making any application under § 56-60 may have the decision or order of the Commission reviewed on appeal to the Supreme Court 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.

1934, p. 223; Michie Code 1942, § 4073(5).

Repealed by Acts 1975, c. 500.

The provisions of this chapter shall not apply to the sale or other disposition 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 aforesaid mentioned provisions with regard to certificates of public convenience and applications therefor shall apply to such refunding.

1934, p. 224; Michie Code 1942, § 4073(7).

Notwithstanding the provisions of §§ 56-57 and 56-65, the provisions of this chapter shall apply to the issuance of any note or notes by any public service company which has total capitalization, including securities having a maturity date of less than twelve months from the time of issue, of five million dollars or more, unless such note or notes together with all other outstanding notes and drafts of a maturity of less than twelve months on which such utility is primarily or secondarily liable, aggregates not more than twelve percent of the total capitalization of such utility.

1952, c. 148; 1976, c. 408; 1987, c. 479; 1995, c. 137.

Repealed by Acts 1976, c. 408.

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 Commonwealth or to a political subdivision thereof as the consideration for the grant of such franchise, permit or right. No contract for consolidation shall be capitalized, and no public service company hereafter shall issue any bonds, notes or other evidences of indebtedness against or as a lien upon any contract for consolidation or merger.

1934, p. 224; Michie Code 1942, § 4073(8); 1987, c. 204.

Any stock, or stock certificate or other evidence of interest or ownership, and, except as otherwise provided by § 56-65, any bond, note or other evidence of indebtedness, of a public service company, and every assumption of obligation or liability as a guarantor, endorser, 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 assumption, 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 chapter relating to procedure or other matters preceding the entry of such order.

1934, p. 224; Michie Code 1942, § 4073(10).

Securities of a public service company, and assumptions by a public service company of obligations or liabilities in respect of the securities of another person, firm, association or corporation, issued or assumed pursuant to an authorizing order of the Commission and valid at the time of their issuance or assumption, shall not cease to be valid because such order is subsequently suspended, vacated, superseded or reversed.

1977, c. 631.

No licensed salesman shall be necessary in case of orders of approval or validation of securities under the provisions of this chapter.

1934, p. 227; Michie Code 1942, § 4073(16).

No public service company shall, without the consent of the Commission, apply the proceeds of 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, 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.

1934, p. 223; Michie Code 1942, § 4073(6).

The Commission shall have the power to require public service companies to account for the disposition of the proceeds of all sales of stocks and stock certificates or other evidences of interest or ownership, and bonds, notes, and other evidences of indebtedness, in such form and detail as it may deem advisable, and to establish such rules and regulations as it may deem reasonable and necessary to insure the disposition of such proceeds for the purpose or purposes specified in its order.

1934, p. 224; Michie Code 1942, § 4073(9).

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, otherwise than in conformity with the order of the Commission authorizing the same, or contrary to the provisions of this chapter, 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 provided in this chapter, or to any purpose specified in such order in excess of the amount in such order authorized for such purpose, shall be subject, in a proceeding before the Commission under rule to show cause, to a penalty of not more than $1,000 for each offense. Every violation of any such order, rule, direction, demand or requirement of the Commission, or of any provision of this chapter, shall be a separate and distinct offense and in case of continuing violation every day's continuance thereof shall be deemed to be a separate and distinct offense. The Commission shall also have jurisdiction, in a proceeding under § 13.1-519, to issue a cease and desist order enjoining any further or threatened violation of the provisions of this chapter.

1934, p. 225; Michie Code 1942, § 4073(12).

For the purposes of this chapter 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.

1934, p. 225; Michie Code 1942, § 4073(12).

Every officer, agent or employee of a public service company, and every other person (1) who knowingly authorizes, directs, aids in, issues or executes, or causes to be issued or executed, any stock or stock certificate or other evidence of interest or ownership, or bond, note or other evidence of indebtedness, otherwise than in conformity with the order of the Commission authorizing the same, or contrary to the provisions of this chapter; or (2) who, in any proceedings before the Commission, knowingly 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 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 (3) who, with knowledge that any false statement or representation was made to the Commission 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 (4) 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 specified in the Commission's order in excess of the amount authorized for such purpose; or (5) who, with knowledge that any stock or stock certificate or other evidence of interest or ownership, or bond, note or other evidence of indebtedness, has been issued or executed in violation of any of the provisions of this chapter, originally negotiates the same, or causes the same to be originally negotiated, shall be guilty of a misdemeanor.

1934, p. 225; Michie Code 1942, § 4073(13).

No provision of this chapter, 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, authorized, issued or executed under the provisions of this chapter, nor shall any approval given under this chapter involve, or be construed or represented as involving, an expression of opinion on the part of the Commission as to value, and any person who shall make, directly or by implication, any statement or representation to the contrary shall be guilty of a misdemeanor.

1934, p. 226; Michie Code 1942, § 4073(14).

Upon the filing of an application for the approval of any issue of securities or the making of any loan under the provisions of this chapter, a filing fee in the amount of $25 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 equal to one tenth of one percent of the proposed selling price of the securities and the amount of the loan, subject to credit by the amount of such filing fee, and limited, as to any one issue of securities, whether issued at once or from time to time, and as to any one loan to the amount of $250.

A public service company may seek approval in one application of more than one issue of securities and more than one loan. In that event, the filing fee shall be twenty-five dollars, and the additional fees shall be computed as if all the issues and loans were one issue or one loan.

A public service company that has paid filing fees and additional fees aggregating $250 on account of the approval of loans from the United States may apply for the approval of further loans from the United States on payment of a filing fee and without payment of additional fees.

A filing fee shall in no case be returnable, but additional fees paid in advance of approval shall be returned, in whole or in part, should the application be withdrawn or modified or disapproved in whole or in part.

1934, p. 226; Michie Code 1942, § 4073(16); 1956, c. 429.