                                 CODE OF VIRGINIA

APPOINTMENT OF RECEIVER; PENALTY (§ 56-265.13:6.1)

A. The Commission may, either upon petition of two-thirds of the affected
customers or upon petition of its staff or upon a petition of the Board of
Health, appoint a receiver to operate a small water or sewer utility which is
unable or unwilling to provide adequate service to its customers. The utility
shall be deemed to be unable or unwilling to provide adequate service if the
Commission finds, after notice to the utility and the Department of Health and
hearing, that:

   1. The utility has failed to supply water or sewer service to a majority of
   the consumers for five days or more during the preceding three months for
   reasons within the control of the water and sewer utility; or

   2. The Department of Health has certified that the utility has not met
   Department standards regarding the provision of an adequate quality and
   quantity of public drinking water and the Department of Health has found that
   the utility is unwilling to take action to meet these standards; or

   3. The utility is grossly mismanaged; or

   4. The utility has failed to comply with an order of the Commission to provide
   adequate service to the customers.
   				Upon appointment, the receiver shall take possession of the assets of the
   utility and operate them in the best interests of the customers. Control of
   and responsibility for the utility shall remain in the receiver until the
   utility can, in the best interests of customers, be returned to the original
   owners, transferred to new owners, or liquidated, whichever the Commission may
   determine to be in the public interest.

B. The provisions of &#xA7;&#xA7; 8.01-583 through 8.01-590 shall apply mutatis
mutandis. The receiver shall be empowered to make application to the Commission
for temporary and permanent rate increases and changes in the utility&#8217;s
rules and regulations.

C. If the Commission determines that the utility&#8217;s actions that caused it
to be placed under the control and responsibility of the receiver, under this
section, were due to intentional misappropriation or wrongful diversion of the
assets or income of such utility or to other willful misconduct by any director,
officer, or manager of the utility, it may require such director, officer, or
manager to make restitution to the utility. In addition to the foregoing, any
such director, officer, manager, or affiliate that commits such misappropriation
or wrongful diversion or fails, neglects, or refuses to obey an order, rule,
direction, or requirement of the Commission to make restitution to the utility
shall be subject to a civil penalty of no more than $500 for each offense, and
each day of such conduct shall constitute a separate offense.

HISTORY: 1994, c. 311.