                                 CODE OF VIRGINIA

GOVERNING BOARD OF MULTISTATE ENTITIES OPERATING CERTAIN SEWAGE TREATMENT
FACILITIES; ARBITRATION OF ISSUES; CONDEMNATION OF FACILITIES (§ 56-264.2)

A. As used in this section, &#8220;multistate entity&#8221; means any
corporation, company, political subdivision, association, or other legal entity,
without regard to whether such entity is a public utility or public service
company, that engages in the provision of sewerage service to persons residing
in the Commonwealth and to persons residing in an adjacent state and that
operates a sewage treatment facility with a capacity of not less than five
million gallons per day that is located in the Commonwealth, the construction or
expansion of which treatment facility was financed primarily through the
Virginia Revolving Loan Fund or a successor loan fund program administered by
the Virginia Resources Authority or Department of Environmental Quality.

B. Notwithstanding any contrary provision of law, all powers of a multistate
entity shall be exercised by or under the authority of, and all business and
affairs of the multistate entity shall be managed under the direction of, a
governing board, which may be titled a board of directors, board of trustees, or
similar appellation. The governing board shall be comprised of (i) two members
residing in the Commonwealth for each locality of the Commonwealth wherein the
multistate entity provides sewage treatment services and (ii) a number of
members residing in the adjacent state that is equal to the number of members
residing in the Commonwealth. The governing body of each locality of the
Commonwealth wherein the multistate entity provides sewerage services shall
appoint two individuals to the board, which individuals need not be residents of
such locality. The terms of members of the board residing in the Commonwealth
shall expire one year following their appointment; however, despite the
expiration of such a member&#8217;s term, the member shall continue to serve
until his successor is elected and qualifies. Unless the articles of
incorporation, bylaws, charter, or other organic document of the multistate
entity requires a greater number for the transaction of particular business, a
quorum of the governing board shall consist of a majority of the number of
members prescribed by this subsection. If a quorum is present when a vote of the
governing board is taken, the affirmative vote of a majority of members present
is the act of the governing board unless the articles of incorporation, bylaws,
charter, or other organic document of the multistate entity requires the vote of
a greater number of members. Except as provided in this section, the provisions
of the articles of incorporation, bylaws, charter, or other organic document of
a multistate entity in effect prior to July 1, 2006, shall continue to apply
with respect to the method of appointing the board members residing in the
adjacent state and the duration of their terms, and to other matters relating to
the governing board of such multistate entity, except that no amendment to the
articles of incorporation, bylaws, charter, or other organic document of the
multistate entity that contravenes any provision of this section shall be
effective.

C. Upon the filing of a petition by not fewer than one-half of the members of
the governing board of a multistate entity requesting the Commission to
arbitrate an issue pertaining to the management of the business and affairs of
the multistate entity that requires the affirmative vote of the members, upon
which issue the governing board is deadlocked, the Commission shall commence a
proceeding to arbitrate the issue. The multistate entity and the nonpetitioning
members of the governing board shall be parties to the proceeding. With the
petition for arbitration, the petitioners shall provide all relevant
documentation concerning the issue on which it is alleged that the board is
deadlocked and the positions of the petitioners and the other members of the
governing board with respect to the issue. The Commission shall conduct the
arbitration proceeding in accordance with its Rules of Practice and Procedure
(5VAC5-20-10 et seq.). The Commission&#8217;s consideration shall be limited to
the issue in the petition. The Commission shall proceed promptly with the
hearing and determination of the issue in controversy. The final order of the
Commission shall be final and binding on the multistate entity and the governing
board, unless notice of appeal to the Supreme Court is filed in the office of
the Clerk of the Commission within 30 days after entry of the order appealed
from, in the manner provided in the rules of the Supreme Court of Virginia. If
the Commission incurs additional costs in conducting such an arbitration
proceeding that cannot be recovered through the maximum levy authorized pursuant
to &#xA7; 58.1-2660, the unrecoverable portion of the costs of the arbitration
proceedings shall be assessed against the multistate entity.

D. If the articles of incorporation, bylaws, charter, or other organic document
of a multistate entity in existence on July 1, 2006, does not comply with the
requirements of subsection B by January 1, 2008, then the locality in the
Commonwealth wherein the sewage treatment facility is located shall be
authorized to acquire, by exercise of the power of eminent domain if the
governing body of the locality deems it appropriate, the sewage treatment
facility operated by the multistate entity, without regard to whether such
entity is the owner of the sewage treatment facility, and any related pipelines,
easements, and other property related to the provision of sewerage services that
is located within the locality, for the purpose of providing sewerage services
to persons residing within the Commonwealth and the Bluestone Watershed.

HISTORY: 2006, cc. 576, 591.