Virginia § 15.2-2623 - Defeasance of indebtedness; rights of owners
Full text of Virginia Code of Virginia § 15.2-2623 — Defeasance of indebtedness; rights of owners, with citation guidance and answers to common questions.
§ 15.2-2623. Defeasance of indebtedness; rights of owners
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.
1994, c. 714, § 15.1-227.24:1; 1997, c. 587.
Source: official Virginia text · Last verified 2026-08-27
Frequently Asked Questions About Virginia § 15.2-2623
What does Code of Virginia § 15.2-2623 cover?
Section 15.2-2623 ("Defeasance of indebtedness; rights of owners") is part of the Code of Virginia, the codified statutory law of Virginia. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Virginia § 15.2-2623?
A common citation format is "Code of Virginia § 15.2-2623" (Virginia). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Virginia law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Virginia official source linked on this page or consult a licensed Virginia attorney.
How does Virginia § 15.2-2623 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Virginia can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in Virginia.