Can a Virginia housing authority, IDA, or other political subdivision pay an employee's legal defense costs in a civil or criminal case arising from their job?

Plain-English summary

Dickenson County belongs to several political subdivisions of the Commonwealth, including the Virginia Coalfield Economic Development Authority, that have their own boards, employees, and operations. Board members, officers, and employees of those authorities sometimes face civil or criminal lawsuits over actions taken on the authority's behalf. The County Attorney asked the AG whether the authority itself could pay the employee's legal defense costs.

The AG said yes, and walked through the statutory history to explain why.

The current statute. Va. Code § 15.2-1520 authorizes "a locality, or political subdivision of such locality" to employ counsel to defend itself, any of its members, officers, employees, trustees, or board/commission members "in any legal proceeding" arising from their actions in furtherance of their duties.

The 1997 recodification puzzle. Before 1997 the predecessor statute, former § 15.1-19.2, said "any county, city, town, or political subdivision." Title 15.1 was recodified into Title 15.2 in 1997, and the phrase became "a locality, or political subdivision of such locality." Was the change substantive (limiting the authority only to subdivisions that are themselves subdivisions of a locality, rather than of the Commonwealth)? Or just stylistic?

The AG reached the no-substantive-change answer by walking through three sources of evidence:

1. The Code Commission drafting note. The Commission's report on the recodification of former § 15.1-19.2 explicitly said "[n]o substantive change in the law." The Newberry Station Homeowners Ass'n decision (2013) had recently confirmed that the Virginia Supreme Court treats those drafting notes as persuasive authority.
2. The Waldrop presumption. "[T]here is a presumption that a recodified statute does not make substantive changes in the former statute unless a contrary intent plainly appears in the recodified statute." Nothing in the recodified text plainly suggests a substantive shift.
3. Prior interpretations. Beckett v. Board of Supervisors of Accomack County (1988) held under former § 15.1-19.2 that a Board could reimburse the County Administrator for legal expenses incurred defending criminal charges arising from official duties. A 1993 AG opinion concluded that the former statute authorized a redevelopment and housing authority to employ counsel for an employee. Same answer should follow under the recodified statute.

The "political subdivision" question. The AG further analyzed what "political subdivision" means in Virginia law. Political subdivisions are independent bodies created by the legislature to exercise some portion of state sovereignty; they have their own consultants, attorneys, accountants, and employees; their debts are not state debts. The Code references various political subdivisions of localities (e.g., § 15.2-962, § 15.2-1518), but no provision actually creates a structure where a locality establishes a political subdivision of itself that isn't also a political subdivision of the Commonwealth. The opinion clarifies that the language "political subdivision of such locality" in § 15.2-1520 refers to political subdivisions of the Commonwealth that are voluntarily established by a locality pursuant to enabling statutes (like an industrial development authority or housing authority).

A footnote distinguishes a related point: § 15.2-1520 allows the locality to pay for the legal expenses of subdivisions affiliated with the locality. So Dickenson County could pay legal costs incurred by an employee of the public service authority Dickenson County belongs to, but not for similar costs incurred by employees of a public service authority in Northern Virginia.

An important narrow point. The opinion makes clear the question is about authority, not about scope of liability or right to a defense. § 15.2-1520 is permissive: a political subdivision may pay legal defense costs. It is not required to. Boards still exercise discretion about whether a given situation qualifies and whether public payment is appropriate.

Currency note

This opinion was issued in 2013. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Section 15.2-1520 and the surrounding political subdivision statutes have been amended several times. Localities and authorities should verify current text before adopting an indemnification or defense-cost reimbursement policy.

Common questions

Does this give a public employee a right to a legal defense?
No. The statute is permissive; it gives the political subdivision authority to pay if it chooses. The employee does not have a right to compel payment.

What if the employee is later convicted or found liable?
The statute does not address payback obligations. Best practice is to put a written reimbursement agreement in place, conditional on the outcome.

Can defense costs cover both civil and criminal matters?
Yes. The statute says "any legal proceeding," and the Beckett decision involved criminal charges. The key is that the proceeding must arise from the employee's actions in furtherance of official duties.

What if the employee's actions were outside their job description?
Then § 15.2-1520 likely does not apply. The defense-cost authority is tied to acts "in furtherance of their duties." Personal conduct or actions outside the scope of official authority would not qualify.

Which political subdivisions are covered?
The opinion identifies industrial development authorities (§ 15.2-4903), public service authorities (§ 15.2-5102), redevelopment and housing authorities (§§ 36-4, 36-40), and economic development authorities (e.g., Virginia Coalfield Economic Development Authority, § 15.2-6000). The list is illustrative, not exhaustive.

What about community development authorities (CDAs)?
The Short Pump decision (2001) held that CDAs are not "political subdivisions" because no statute designates them as such. So § 15.2-1520 would not apply to a CDA in the absence of statutory designation.

Can a regional partnership pay defense costs?
A 2011 AG opinion concluded that regional partnerships are not political subdivisions. So they would not have § 15.2-1520 authority.

Can the locality pay defense costs for an employee of a non-affiliated political subdivision?
The footnote in the opinion says no. The "political subdivision of such locality" phrase limits the locality's payment authority to subdivisions affiliated with it.

What about elected officials of the locality itself?
Covered. The statute lists "any member" of the governing body, plus officers, employees, and appointed board/commission members. Mayors, supervisors, council members are all included.

Background and statutory framework

• Va. Code § 15.2-1520: current authority for localities and affiliated political subdivisions to retain counsel for defendants.
• Former Va. Code § 15.1-19.2 (repealed 1997): predecessor statute with substantively identical language.
• Va. Code § 15.2-1518: parallel authority for paying judgments against officials.
• Va. Code § 15.2-2701: defines "political subdivision" for purposes of Chapter 27 (with a narrower scope).
• Va. Code § 15.2-4903 (IDAs), § 15.2-5102 (PSAs), §§ 36-4 and 36-40 (housing authorities), § 15.2-6000 (Virginia Coalfield Economic Development Authority): enabling statutes for various political subdivisions.
• Waldrop presumption: recodified statutes are presumed not to change substantive law unless a contrary intent plainly appears.
• Newberry Station (2013): Code Commission drafting notes are persuasive authority on recodification intent.

The interpretive moves:

• Compare current § 15.2-1520 to former § 15.1-19.2.
• Apply the Waldrop no-substantive-change presumption.
• Treat the Code Commission's "no substantive change" note as persuasive (per Newberry Station).
• Read "political subdivision" as referring to political subdivisions of the Commonwealth.
• Limit the payment authority to subdivisions affiliated with the paying locality.

Citations

• Va. Code § 15.2-1520
• Beckett v. Board of Supervisors of Accomack County, 234 Va. 614, 363 S.E.2d 918 (1988)
• Newberry Station Homeowners Ass'n. v. Bd. of Spvrs., 285 Va. 604, 740 S.E.2d 548 (2013)
• Short Pump Town Ctr. Cmty. Dev. Auth. v. Hahn, 262 Va. 733, 554 S.E.2d 441 (2001)
• Waldrop v. Commonwealth, 255 Va. 210, 495 S.E.2d 822 (1998)
• 1993 Op. Va. Att'y Gen. 70
• 2002 Op. Va. Att'y Gen. 281
• 2003 Op. Va. Att'y Gen. 52
• 2011 Op. Va. Att'y Gen. 154

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2013/13-087_Mullins.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II
Attorney General

900 East Main Street
Richmond, Virginia 23219
804-786-2071
FAX 804-786-1991
Virginia Relay Services
800-828-1120
7-1-1

October 11, 2013

Stephen W. Mullins, Esquire
County Attorney, County of Dickenson
Post Office Box 250
Castlewood, Virginia 23219

Dear Mr. Mullins:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented

You ask whether a political subdivision of the Commonwealth may pay the legal defense costs of an employee when such costs are incurred because of the employee's actions in furtherance of his or her duties when serving the political subdivision.

Response

It is my opinion that, pursuant to § 2.2-1520 of the Code of Virginia, a political subdivision of the Commonwealth is authorized to pay for the legal defense costs of an employee when such costs are incurred because of the employee's actions in furtherance of his or her duties when serving the political subdivision.

Background

You note that the General Assembly has empowered localities such as Dickenson County to create, either by themselves or in conjunction with other localities, political subdivisions to accomplish certain designated tasks, such as economic development, industrial development, public services provision, and housing. Such entities are designated as political subdivisions of the Commonwealth of Virginia, rather than a political subdivision of the creating locality or localities. As examples, you cite to §§ 36-4 and 36-40 (redevelopment and housing authorities), § 15.2-4903(A) (industrial development authorities), § 15.2-5102(A) (public service authorities), and § 15.2-6000 (Virginia Coalfield Economic Development Authority, to which Dickenson County belongs). You further note that each of these political subdivisions has its own governing body and employees, separate from the governing body and employees of the creating locality or localities. You indicate that, from time to time, board members, officers, and employees of these political subdivisions may face legal action whether civil or criminal on account of their actions taken in furtherance of their duties for the political subdivision. Such circumstances raise the question of whether a political subdivision may pay the legal defense costs incurred by board members, officers, and employees as a result of these legal actions.

Applicable Law and Discussion

Regarding payment of legal defense costs incurred by employees of political subdivisions, § 15.2-1520 provides, in relevant part, as follows:

Notwithstanding any provision of law to the contrary, general or special, a locality, or political subdivision of such locality may employ the county, city or town attorney, or the attorney for the Commonwealth, if there be no county, city or town attorney, or other counsel approved by the governing body to defend it, or any member thereof, or any officer of the locality, or political subdivision or employee thereof, or any trustee or member of any board or commission appointed by the governing body in any legal proceeding to which the governing body, or any member thereof, or any of the foregoing named persons may be a defendant, when such proceeding is instituted against it, or them by virtue of any actions in furtherance of their duties in serving the locality or political subdivision as its governing body or as members thereof or the duties or service of any officer or employee of the locality or political subdivision or any trustee or any member of any board or commission appointed by the governing body.[1]

This statute is a recodified version of former § 15.1-19.2, which, prior to its repeal in 1997, provided in relevant part as follows:

Notwithstanding any other provision of law, the governing body of any county, city, town, or political subdivision may employ the city attorney, the town attorney, or the attorney for the Commonwealth, if there be no city attorney or town attorney, or other counsel approved by such governing body to defend it, or any member thereof, or any officer of such county, city, town, or political subdivision or employee thereof, or any trustee or member of any board or commission appointed by the governing body in any legal proceeding to which such governing body, or any member thereof, or any of the foregoing named persons may be a defendant, when such proceeding is instituted against it, or by them by virtue of any actions in furtherance of their duties in serving such county, city, town or political subdivision as its governing body or as members thereof or the duties or service of any officer or employee of such county, city, town or political subdivision or any trustee or any member of any board or commission appointed by such governing body.[2]

For purposes of your inquiry, a comparison of these two statutes raises the question of whether the General Assembly intended a substantive change in the law when it substituted the phrase "a locality, or political subdivision of such locality" for the phrase "any county, city, town, or political subdivision." In other words, the question is whether, by effecting this change, whether the General Assembly intended to limit the power to pay for legal defense costs of employees to only political subdivisions of a locality, as opposed to political subdivisions in general. For the reasons outlined below, it is my opinion that the General Assembly did not intend such a substantive change in the law.

First, the available legislative history pertaining to the recodification of former § 15.1-19.2 to current § 15.2-1520 does not support the existence of such a substantive change. As noted in a prior Attorney General opinion, "[i]n 1997, the Virginia Code Commission recommended recodification of Title 15.1, which had not been recodified since 1962, to resolve confusion caused by conflicting and outdated provisions, and to reorganize and simplify existing statutes into a more user-friendly Title 15.2."[3] Regarding former § 15.1-19.2, the Virginia Code Commission's drafting note indicates that the recodification made "[n]o substantive change in the law."[4] Moreover, "there is a presumption that a recodified statute does not make substantive changes in the former statute unless a contrary intent plainly appears in the recodified statute."[5] Nothing in the recodified statute clearly suggests an intent to make a substantive change, particularly given the Virginia Code Commission's Report.[6]

Because it appears that the General Assembly did not intend a substantive change to former § 15.1-19.2, previous interpretations of that statute may be utilized for guidance. In Beckett v. Board of Supervisors of Accomack County,[7] the Supreme Court held that, under former § 15.1-19.2, the Board of Supervisors was authorized to reimburse the County Administrator for legal expenses incurred when he defended himself against criminal charges arising from his official duties performed on the County's behalf. In addition, a prior Attorney General opinion determined that former § 15.1-19.2 authorized a local redevelopment and housing authority to employ counsel to defend an employee, or to ratify an employee's appointment of counsel under the principles of agency if the authority finds that the employee acted on behalf of the governing body when he appointed counsel.[8] Based on the foregoing legislative history reflecting no substantive change to former § 15.1-19.2, the analysis set forth in Beckett and in the prior Attorney General opinion applies equally to your question.

Second, under Virginia law, the term "political subdivision" is understood as referring to a political subdivision of the Commonwealth. Previous Attorney General opinions have described political subdivisions as follows:

A political subdivision is created by the legislature to exercise some portion of the state's sovereignty in regard to one or more specific governmental functions. It is independent from other governmental bodies, in that it may act to exercise those powers conferred on it by law without seeking the approval of a superior authority. It employs its own consultants, attorneys, accountants and other employees whose salaries are fixed by the political subdivision, and it often incurs debts which are not debts of the Commonwealth but are debts of the political subdivision.[9]

While the Code of Virginia contains references to political subdivisions of a locality, including the reference in § 15.2-1520,[10] I am unaware of any provision of Virginia law that allows a locality to create a political subdivision of itself where such an entity would not be considered a political subdivision of the Commonwealth.[11] Instead, political subdivisions are created either directly by statute,[12] or by the actions of one or more localities pursuant to authority granted by enabling statutes.[13] In order for an entity established by a locality to be considered a political subdivision, that entity must first be designated as such by statute.[14] Moreover, the term "political subdivision" in § 15.2-1520 is not specifically defined.[15] Therefore, I conclude that the language of § 15.2-1520 allowing political subdivisions to pay certain legal defense costs of employees refers to political subdivisions of the Commonwealth such as those voluntarily established by a locality pursuant to authority granted by enabling statutes.

Conclusion

Accordingly, it is my view that, pursuant to § 15.2-1520 of the Code of Virginia, a political subdivision of the Commonwealth is authorized to pay for the legal defense costs of an employee when such costs are incurred because of the employee's actions in furtherance of his or her duties when serving the political subdivision.

With kindest regards, I am

Kenneth T. Cuccinelli, II
Attorney General

[1] Va. Code Ann. § 15.2-1520 (2012) (emphasis added).

[2] Va. Code Ann. § 15.1-19.2 (1989) (repealed 1997) (emphasis added).

[3] 2003 Op. Va. Att'y Gen. 52, n.8 (citing 5 H. & S. Docs., Report of the Virginia Code Commission on the Recodification of Title 15.1 of the Code of Virginia, S. Doc. No. 5, at i (1997)).

[4] 5 H. & S. Docs., Report of the Virginia Code Commission on the Recodification of Title 15.1 of the Code of Virginia, S. Doc. No. 5, at 380-81 (1997).

[5] Waldrop v. Commonwealth, 255 Va. 210, 214, 495 S.E.2d 822, 825 (1998) (citations omitted).

[6] The Virginia Supreme Court recently cited to the drafting notes of the Virginia Code Commission's Report as authority regarding the recodification of former Title 15.1, stating: "The Commission's report on the recodification is the impetus of the underlying legislation at issue here. The General Assembly expressly instructed the Commission 'to study Title 15.1' and report back a revision of the title. Senate J. Res. 2, 1994 Acts, at 2600. The General Assembly then enacted into law the proposals contained in the report with few amendments, and no amendments at all to the recommended language of the provision that is now codified as Code § 15.2-852(A). We therefore accept the report's drafting note as persuasive authority that the General Assembly did not intend to effectuate a substantive change to the definition of 'financial or business interest' with the 1997 recodification." Newberry Station Homeowners Ass'n. v. Bd. of Spvrs., 285 Va. 604, 617, 740 S.E.2d 548, 555 (2013).

[7] 234 Va. 614, 363 S.E.2d 918 (1988).

[8] 1993 Op. Va. Att'y Gen. 70, 73 (citations omitted).

[9] 2011 Op. Va. Att'y Gen. 154, 155 (quoting 2002 Op. Va. Att'y Gen. 281, 283).

[10] See, e.g., Va. Code Ann. §§ 15.2-962 (2012) and 15.2-1518 (2012).

[11] Given both context and the drafting note, the reference to "political subdivision of such locality" would appear to limit the political subdivisions for which the locality may pay legal fees to those affiliated with the locality. Thus, for example, Dickenson County may pay legal costs incurred by an employee of the public service authority with which it is affiliated, but may not pay for the legal expenses incurred by employees of a similar public service authority that was created to serve the citizens of Northern Virginia or Tidewater.

[12] See, e.g., § 15.2-6000 (2012) (establishing the Virginia Coalfield Economic Development Authority).

[13] See, e.g., Va. Code Ann. §§ 36-4 (2011) (enabling activation of a redevelopment and housing authority in a locality when approved by referendum), 36-40 (2011) (enabling the creation of regional housing authorities).

[14] See Short Pump Town Ctr. Cmty. Dev. Auth. v. Hahn, 262 Va. 733, 745-46, 554 S.E.2d 441, 447 (2001) ("[I]n the absence of any statutory designation of community development authorities as 'political subdivisions,' we conclude that the [Short Pump Community Development Authority] is not such an entity."); 2011 Op. Va. Att'y Gen. 154, 156 ("The fact that the General Assembly did not designate regional partnerships as political subdivisions provides a strong indication that they do not qualify as political subdivisions, particularly when the General Assembly ordinarily provides for such a designation.").

[15] Compare Va. Code Ann. Title 15.2, Chapter 15 with Title 15.2, Chapter 27, § 15.2-2701 (the latter providing, "For the purposes of [Chapter 27], 'political subdivision' means any county, city or town, school board, Transportation District Commission, or any other local governmental authority or local agency or public service corporation owned, operated or controlled by a locality or local government authority, with power to enter into contractual undertakings.").