Va. Code Ann. tit. 56, ch. 4

in effect

Va. Code Ann. § 56-76 Definitions

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 and, subject to the conditions specified therein, such companies as specified by the Commission pursuant to subsection C of § 56-77 ; however, the term shall not include and the provisions of this chapter shall not be deemed to refer to transportation companies subject directly or indirectly to the control of the Interstate Commerce Commission. The term "affiliated interest" when used in this chapter shall mean and include the following: 1. Every corporation, partnership, association, or person owning or holding directly or indirectly ten percent or more of the voting securities of any public service company engaged in any intrastate business in this Commonwealth. 2. Every corporation, partnership, association, or person, other than those specified in subdivision 1 hereof, in any chain of successive ownership of ten percent or more of voting securities, the chain beginning with the holder or holders of the voting securities of such public service company. 3. Every corporation, partnership, association, or person ten percent or more of whose voting securities are owned by any person, corporation, partnership, or association owning ten percent or more of the voting securities of such public service company or by any person, corporation, association, or partnership in any such chain of successive ownership of ten percent or more of voting securities. 4. Every corporation, partnership, association, or person with which such public service company has a management or service contract. 5. Every corporation in which two or more of the corporate directors are common to those of such public service company, or which is managed or supervised by the same individual, group or corporation. 6. Every corporation or person which the Commission may determine as a matter of fact after investigation and hearing is actually exercising any substantial influence over the policies and actions of such public service company even though such influence is not based upon stockholding, stockholders, directors or officers to the extent specified in this section. 7. Every person or corporation which the Commission may determine as a matter of fact after investigation and hearing is actually exercising such substantial influence over the policies and action of such public service company in conjunction with one or more other corporations or persons with which or whom they are so connected or related by ownership or blood relationship or by action in concert that when taken together they are affiliated with such public service company within the meaning of this section even though no one of them alone is so affiliated. But no such person or corporation shall be considered as affiliated within the meaning of this section if such person or corporation shall not have had transactions or dealings other than the holding of stock and the receipt of dividends thereon with such public service company during the two-year period next preceding. 1934, p. 743; Michie Code 1942, § 3774(b); 1984, c. 721; 1987, c. 385; 1996, c. 19 .

Va. Code Ann. § 56-77 Certain contracts must be approved by the Commission

A. No contract or arrangement providing for the furnishing of management, supervisory, construction, engineering, accounting, legal, financial, or similar services, and no contract or arrangement for the purchase, sale, lease or exchange of any property, right or thing, other than those above enumerated, or for the purchase or sale of treasury bonds or treasury capital stock made or entered into between a public service company and any affiliated interest shall be valid or effective unless and until it shall have been filed with and approved by the Commission. The Commission shall, after the filing of such a contract or arrangement, approve or disapprove the contract or arrangement within sixty days. The sixty-day period may be extended by Commission order for an additional period not to exceed thirty days. The contract or arrangement shall be deemed approved if the Commission fails to act within sixty days or any extended period ordered by the Commission. It shall be the duty of every public service company to file with the Commission a verified copy of any such contract or arrangement, regardless of the amount involved, and the general rule herein referred to shall remain in full force and effect as to all other public service companies. B. The Commission may, in its discretion and upon petition of the public service company or upon the Commission's own action, choose to exempt a public service company from all or any part of the requirements imposed by subsection A if the Commission determines that such an exemption is in the public interest. In addition to exemptions for individual public service companies, the Commission may adopt rules implementing exemptions from all or any part of the requirements imposed by subsection A. The Commission may revoke any exemptions granted under this subsection if it finds that such action is in the public interest. C. Notwithstanding the provisions of § 56-481.2 , the Commission, after giving notice and an opportunity for a hearing, may, in its discretion, require any company certificated to provide, and engaged in the provision of, local exchange telephone service to meet the requirements of subsection A. 1934, p. 744; Michie Code 1942, § 3774c; 1996, c. 19 ; 1998, c. 707 .

Va. Code Ann. § 56-78 Exclusion from accounts of payments to affiliated companies

In any proceeding, whether upon the Commission's own motion or upon complaint, involving the rates or practices of any public service company, the Commission may exclude in whole or in part from the accounts of such public service company any payment or compensation to an affiliated interest for any services rendered or property or service furnished, as above described, under existing contracts or arrangements with such affiliated interest, if it shall appear and be established upon investigation that such payment or compensation or such contract or arrangement is not consistent with the public interest. In such proceeding any payment or compensation may be disapproved or disallowed by the Commission, in whole or in part, unless satisfactory proof is submitted to the Commission of the cost to the affiliated interest rendering the service or furnishing the property or service above described. 1934, p. 744; Michie Code 1942, § 3774d.

Va. Code Ann. § 56-79 Proof of costs in cases of payment to affiliated companies

No proof shall be satisfactory, within the meaning of the foregoing sections, unless it includes the original (or verified copies) of the relevant cost records and other relevant accounts of the affiliated interest, or such abstract thereof or summary taken therefrom, as the Commission may deem adequate, properly identified and duly authenticated; provided, however, that the Commission may, where reasonable, approve or disapprove such contracts or arrangements without the submission of such cost records or accounts. 1934, p. 745; Michie Code 1942, § 3774e.

Va. Code Ann. § 56-80 Continuing supervisory control over terms and conditions of contracts

The Commission shall have continuing supervisory control over the terms and conditions of such contracts and arrangements as are herein described so far as necessary to protect and promote the public interest. The Commission shall have the same jurisdiction over the modification or amendment of contracts or arrangements herein described as it has over such original contracts or arrangements. The fact that the Commission shall have approved entry into any such contract or arrangement shall not preclude disallowance or disapproval of payments made pursuant thereto in the future, if upon actual experience under such contract or arrangement, it appears that the payments provided for, or made, were, or are, unreasonable. Every order of the Commission approving any such contract or arrangement shall be expressly conditioned upon the reserved power of the Commission to revise and amend the terms and conditions thereof, if, when and as necessary to protect and promote the public interest. 1934, p. 745; Michie Code 1942, § 3774f.

Va. Code Ann. § 56-81 Summary order prohibiting treatment of payments as operating expenses, etc

Whenever the Commission shall find upon investigation (1) that any public service company is giving effect to any contract or arrangement of the character described in § 56-77 , entered into after March 29, 1934, when such contract or arrangement shall not have been filed with the Commission as required by this chapter, or (2) that any public service company is making payment to an affiliated interest, although such payments have been disallowed and disapproved by the Commission under this chapter or in a proceeding involving the public service company's rates or practices, the Commission may, in the former case, and shall, in the latter case, issue a summary order prohibiting the public service company from treating any payments made under the terms of such contract or arrangement or any payments so disallowed and disapproved as operating expenses or as capital expenditures for rate or valuation purposes, unless and until such payments shall have received the approval of the Commission. 1934, p. 745; Michie Code 1942, §§ 3774g, 3774h.

Va. Code Ann. § 56-82 Approval of loans to affiliates, etc

No public service company shall henceforth make, extend or renew any loan of money to any affiliated interest or assume, extend or renew any obligation or liability whatsoever of any affiliated interest, whether as guarantor, endorser, surety or otherwise, unless the Commission shall first have approved such loan or assumption, or the extension or renewal of such loan, obligation, or liability, as being not inconsistent with the public interest, and then only upon such terms and conditions as may be set forth in the order of the Commission approving such transaction. The Commission shall, after the filing of such a loan, obligation, or liability, approve or disapprove the loan, obligation, or liability within sixty days. The sixty-day period may be extended by Commission order for an additional period not to exceed thirty days. The loan, obligation, or liability shall be deemed approved if the Commission fails to act within sixty days or any extended period ordered by the Commission. This section shall not be construed so as to invalidate or impair any such loan, obligation, or liability lawfully made, extended or renewed, or assumed, extended or renewed, and entered into prior to March 29, 1934. 1934, p. 745; 1938, p. 21; Michie Code 1942, § 3774i; 1998, c. 707 .

Va. Code Ann. § 56-83 Summary order prohibiting payment of dividends to affiliates

The Commission may, of its own motion, whenever facts of record in any department of the Commission or within its knowledge appear to justify it in so doing, or upon complaint by the Commonwealth, and after reasonable notice, and opportunity to be heard, and upon hearing and consideration, either formal or informal, issue a summary order prohibiting any public service company from declaring or paying any dividend on any common or equity stock in any case in which such dividend or any part thereof would be payable to an affiliated interest as defined in § 56-76 , and such summary order may, in case of emergency, be issued under like circumstances as preliminary injunctions are issued by the courts of equity of this Commonwealth, and in either case such summary order so issued may thereafter be made permanent, or be modified, or be vacated, after such investigation and hearing as may be proper to satisfy the requirements of due process of law. The jurisdiction of the Commission under this section shall be based upon considerations of public interest, and the summary order herein provided for shall be issued only upon a finding that the declaration or payment of any dividends is, as a matter of fact, inconsistent with the public interest on account of the probability of disabling the public service company from continuing to perform adequately its public duties, or that there is a purpose on the part of such affiliated interest to gain unjust advantage or profit to the probable detriment of the public service company, bondholders, other classes of stockholders, or any others having rights in the premises. 1938, p. 21; Michie Code 1942, § 3774i1.

Va. Code Ann. § 56-84 Application or petition by public service company and affiliates; hearing; action of Commission; conditions imposed on foreign corporations

In every case wherein the approval of the Commission is required of any contract, arrangement, loan, extension or renewal thereof, assumption of obligation or liability, renewal or extension thereof, or any transaction or act, an application or petition, duly executed and verified by any such public service company and by each and every corporation, partnership, association or person constituting an affiliated interest, who are parties to such transaction or act, shall be presented to and filed with the Commission which, upon hearing, either formal or informal, as may be determined by the Commission, may, in addition to passing upon the propriety of the proposed transaction or act subject to approval under this chapter, pass upon all questions of jurisdiction of the Commission and upon whether any party is, as a matter of fact and law, an affiliated interest. And in any such proceeding the Commission may require, as a condition precedent to an approval or action upon the proposed transaction or act, any other corporation, partnership, association or person which it appears to the Commission, prima facie, is or might be an affiliated interest, to join, or to be joined, as a party to the proceeding. And the Commission may, in its discretion, impose any condition as to obtaining a license to transact business in Virginia on the part of any foreign corporation which it appears would contravene any provision of Article 17 (§ 13.1-757 et seq.) of Chapter 9 of Title 13.1 by the performance of the proposed transaction or act or may require any such foreign corporation to submit to the jurisdiction of the Commission under § 13.1-759 or otherwise for a determination of such question, whenever the public interest and the due enforcement of this chapter and of other laws under the jurisdiction of the Commission appear to require such course. 1938, p. 22; Michie Code 1942, § 3774i2.

Va. Code Ann. § 56-85 Offenses

Every public service company (1) entering into, participating in or acting under any contract or arrangement, required by this chapter to be approved by the Commission, before obtaining such approval, or (2) making any loan, extension or renewal thereof, or assuming any obligation or liability, or extension or renewal of any such obligation or liability, required by this chapter to be approved by the Commission, before obtaining such approval, or (3) making any declaration or payment of any dividends after entry of a summary order, either temporary or permanent, prohibiting such declaration or payment in accordance with the provisions of this chapter, or (4) otherwise violating any provision of this chapter, or of any valid order of the Commission entered in pursuance thereof, shall be subject to a fine, to be imposed in a proceeding before the Commission instituted for the purpose of determining whether there is any liability hereunder, of not less than $10 and not in excess of $500, together with the costs of the proceeding as adjudged by the Commission and as taxed by the clerk of the Commission according to law; and every day of any such violation which, in its nature, is continuing, may be deemed a separate offense. Every public service company and every affiliated interest participating in any contract, arrangement, loan, or assumption, declaration or payment of dividends, or doing any other act, in violation of this chapter, or in violation of any valid order of the Commission hereunder, and every officer, director, or employee of any such public service company or of any such affiliated interest, knowingly authorizing, directing, aiding in or executing or causing to be executed, any such contract or arrangement, loan or assumption, declaration or payment of dividends, in violation of this chapter, or in violation of any valid order of the Commission hereunder, shall be guilty of a misdemeanor, and such liability for a misdemeanor shall be in addition and cumulative to any liability for the imposition of a fine or penalty as hereinbefore provided in this section. 1938, p. 22; Michie Code 1942, § 3774i3.

Va. Code Ann. § 56-86 Appeal from decisions of Commission under chapter

Any public service company or affiliated interest or any other interested corporation, partnership, association or person, or the Commonwealth, deeming any decision or order of the Commission, rendered or entered under the provisions of this chapter, and being final in its general character with respect to any such company, interest, corporation, partnership, association, person, or the Commonwealth, to be in any respect or manner improper, unjust or unreasonable, may appeal the same to the Supreme Court in the same manner and by the same procedure as provided by law for review of any other decision or order of the Commission. 1934, p. 746; 1938, p. 23; Michie Code 1942, § 3774j.

Va. Code Ann. § 56-87 Rules of Commission to carry out chapter

The Commission is empowered to promulgate such rules and regulations as it may deem necessary or proper to carry out the provisions of this chapter. 1934, p. 746; 1938, p. 23; Michie Code 1942, § 3774k.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://law.lis.virginia.gov/vacode/title56/chapter4/Fetched: 10/16/2026