                                 CODE OF VIRGINIA

DEFEASANCE OF INDEBTEDNESS; RIGHTS OF OWNERS (§ 15.2-2623)

The governing body of any locality is authorized to provide by resolution or
ordinance for the defeasance of any bonds of the locality now or hereafter
outstanding, to the extent that the defeasance of such bonds is not otherwise
provided for in the resolution, ordinance, indenture or other document governing
the issuance of such bonds. Bonds to be defeased pursuant to this section shall
be deemed defeased and no longer outstanding when there has been established
with a bank or trust company designated by the locality an escrow or sinking
fund consisting of cash and noncallable obligations of, or unconditionally
guaranteed by, the United States of America or noncallable obligations of, or
unconditionally guaranteed by, the Commonwealth in an amount which together with
interest to be earned on such obligations will be sufficient to pay all bonds to
be defeased either at maturity or upon redemption; however, if such bonds are to
be defeased either at maturity or upon redemption, notice of the redemption of
such bonds shall have been duly given or irrevocable instructions to redeem such
bonds shall have been given by the locality.
		Any escrow fund established pursuant to this section shall be irrevocably
pledged to the payment of the bonds to be defeased and shall be used solely to
pay such bonds at maturity or upon earlier redemption. It is the intent that any
escrow fund established pursuant to this section shall constitute a special fund
for the payment of the defeased bonds and that the defeased bonds shall not be
included for the purpose of determining any limitation upon the amount of
indebtedness of the locality which is imposed by law.
		The owners of any outstanding bonds to be defeased shall be divested of all
rights and security relating to the bonds, except the right to payment due to
principal, premium, if any, and interest, which shall be paid solely from the
escrow fund.

HISTORY: 1994, c. 714, § 15.1-227.24:1; 1997, c. 587.