2006 Code of Virginia § 26-40 - In what securities fiduciaries may invest

26-40. In what securities fiduciaries may invest.

For purposes of 36-55.44 and 62.1-221 only, the following investmentsshall be considered lawful investments and shall be conclusively presumed tohave been prudent:

(1) Obligations of the Commonwealth. - Stocks, bonds, notes, and otherevidences of indebtedness of the Commonwealth of Virginia, and thoseunconditionally guaranteed as to the payment of principal and interest by theCommonwealth of Virginia.

(2) Obligations of the United States, etc. - Stocks, bonds, treasury notesand other evidences of indebtedness of the United States, including theguaranteed portion of any loan guaranteed by the Small BusinessAdministration, an agency of the United States government, and thoseunconditionally guaranteed as to the payment of principal and interest by theUnited States; and bonds of the District of Columbia, and bonds and notes ofthe Federal National Mortgage Association and the Federal Home Loan Banks,and bonds, debentures or other similar obligations of federal land banks,federal intermediate credit banks, or banks of cooperatives, issued pursuantto acts of Congress, and obligations issued by the United States PostalService when the principal and interest thereon guaranteed by the governmentof the United States. The evidences of indebtedness enumerated by thisparagraph may be held directly or in the form of repurchase agreementscollateralized by such debt securities or in the form of securities of anyopen-end or closed-end management type investment company or investment trustregistered under the Investment Company Act of 1940, provided that theportfolio of such investment company or investment trust is limited to suchevidences of indebtedness or repurchase agreements collateralized by suchdebt securities, or securities of other such investment companies orinvestment trusts whose portfolios are so restricted.

(3) Obligations of other states. - Stocks, bonds, notes and other evidencesof indebtedness of any state of the United States upon which there is nodefault and upon which there has been no default for more than ninety days;provided, that within the twenty fiscal years next preceding the making ofsuch investment, such state has not been in default for more than ninety daysin the payment of any part of principal or interest of any debt authorized bythe legislature of such state to be contracted.

(4) Obligations of Virginia counties, cities, etc. - Stocks, bonds, notes andother evidences of indebtedness of any county, city, town, district,authority or other public body in the Commonwealth of Virginia upon whichthere is no default; provided, that if the principal and interest be payablefrom revenues or tolls and the project has not been completed, or ifcompleted, has not established an operating record of net earnings availablefor payment of principal and interest equal to estimated requirements forthat purpose according to the terms of the issue, the standards of judgmentand care required in Article 2 ( 26-45.3 et seq.), without reference to thissection, shall apply.

In any case in which an authority, having an established record of netearnings available for payment of principal and interest equal to estimatedrequirements for that purpose according to the terms of the issue, issuesadditional evidences of indebtedness for the purposes of acquiring orconstructing additional facilities of the same general character that it isthen operating, such additional evidences of indebtedness shall be governedfully by the provisions of this section without limitation.

(5) Obligations of cities, counties, etc., of other states. - Legallyauthorized stocks, bonds, notes and other evidences of indebtedness of anycity, county, town or district situated in any one of the states of theUnited States upon which there is no default and upon which there has been nodefault for more than ninety days; provided, that (a) within the twentyfiscal years next preceding the making of such investment, such city, county,town or district has not been in default for more than ninety days in thepayment of any part of principal or interest of any stock, bond, note orother evidence of indebtedness issued by it; (b) such city, county, town ordistrict shall have been in continuous existence for at least twenty years;(c) such city, county, town or district has a population, as shown by thefederal census next preceding the making of such investment, of not less than25,000 inhabitants; (d) the stocks, bonds, notes or other evidences ofindebtedness in which such investment is made are the direct legalobligations of the city, county, town or district issuing the same; (e) thecity, county, town or district has power to levy taxes on the taxable realproperty therein for the payment of such obligations without limitation ofrate or amount; and (f) the net indebtedness of such city, county, town ordistrict (including the issue in which such investment is made), afterdeducting the amount of its bonds issued for self-sustaining publicutilities, does not exceed ten percent of the value of the taxable propertyin such city, county, town or district, to be ascertained by the valuation ofsuch property therein for the assessment of taxes next preceding the makingof such investment.

(5a) Obligations subject to repurchase. - Investments set forth in the firstfive paragraphs of this statute may also be made subject to the obligation orright of the seller to repurchase these on a specific date.

(6) Bonds secured on real estate. - Bonds and negotiable notes directlysecured by a first lien on improved real estate or farm property in theCommonwealth of Virginia, or in any state contiguous to the Commonwealth ofVirginia within a fifty-mile area from the borders of the Commonwealth ofVirginia, not to exceed eighty percent of the fair market value of such realestate, including any improvements thereon at the time of making suchinvestment, as ascertained by an appraisal thereof made by two reputablepersons who are not interested in whether or not such investment is made.

(7) Bonds secured on city property in Fifth Federal Reserve District. - Bondsand negotiable notes directly secured by a first lien on improved real estatesituated in any incorporated city in any of the states of the United Stateswhich lie wholly or in part within the Fifth Federal Reserve District of theUnited States as constituted on June 18, 1928, pursuant to the act ofCongress of December 23, 1913, known as the Federal Reserve Act, as amended,not to exceed sixty percent of the fair market value of such real estate,with the improvements thereon, at the time of making such investment, asascertained by an appraisal thereof made by two reputable persons who are notinterested in whether or not such investment is made; provided, that suchcity has a population, as shown by the federal census next preceding themaking of such investments, of not less than 5,000 inhabitants.

(8) Bonds of Virginia educational institutions. - Bonds of any of theeducational institutions of the Commonwealth of Virginia, which have been ormay be authorized to be issued by the General Assembly of the Commonwealth ofVirginia.

(9) Securities of the R. F. & P. - Stocks, bonds and other securities of theRichmond, Fredericksburg and Potomac Railroad Company, including bonds orother securities guaranteed by the Richmond, Fredericksburg and PotomacRailroad Company.

(10) Obligations of railroads. - Bonds, notes and other evidences ofindebtedness, including equipment trust obligations, which are direct legalobligations of or which have been unconditionally assumed or guaranteed as tothe payment of principal and interest by, any railroad corporation operatingwithin the United States which meets the following conditions andrequirements:

(a) The gross operating revenue of such corporation for the fiscal yearpreceding the making of such investment, or the average of the grossoperating revenue for the five fiscal years next preceding the making of suchinvestment, whichever of these two is the larger, shall have not been lessthan ten million dollars;

(b) The total fixed charges of such corporation, as reported for the fiscalyear next preceding the making of the investment, shall have been earned anaverage of at least two times annually during the seven fiscal yearspreceding the making of the investment and at least 1 1/2 times during thefiscal year immediately preceding the making of the investment (the term"total fixed charges" as used in this paragraph shall be deemed to refer tothe term used in the accounting reports of common carriers as prescribed bythe regulations of the Interstate Commerce Commission); and

(c) The aggregate of the average market prices of the total amounts of eachof the individual securities of such corporation junior to its bonded debtand outstanding at the time of the making of such investment shall be equalto at least two-thirds of the total fixed charges, as defined in paragraph(b) of clause (10) of this section, for such railroad corporation for thefiscal year next preceding the making of such investment capitalized at aninterest rate of five percent per annum. Such average market price of any oneof such individual securities shall be determined by the average of thehighest quotation and the lowest quotation of the individual security for aperiod immediately preceding the making of such investment, which periodshall be the full preceding calendar year plus the then expired portion ofthe calendar year in which such investment is made; provided, that if morethan six months of the calendar year in which such investment is made shallhave expired, then such period shall be only the then expired portion of thecalendar year in which such investment is made; and provided further, that ifsuch individual security shall not have been outstanding during the fullextent of such period, such period shall be deemed to be the length of timesuch individual security shall have been outstanding.

(11) Obligations of leased railroads. - Stocks, bonds, notes, other evidencesof indebtedness and any other securities of any railroad corporationoperating within the United States the railroad lines of which have beenleased by a railroad corporation, either alone or jointly with other railroadcorporations, whose bonds, notes and other evidences of indebtedness shall,at the time of the making of such investment, qualify as lawful investmentsfor fiduciaries under the terms of clause (10) of this section; provided,that the terms of such lease shall provide for the payment by such lesseerailroad corporation individually, irrespective of the liability of otherjoint lessee railroad corporations, if any, in this respect, of an annualrental of an amount sufficient to defray the total operating expenses andmaintenance charges of the lessor railroad corporation plus its total fixedcharges, plus, in the event of the purchase of such a stock as aforesaid, afixed dividend upon any issue of such stock in which such investment is made;and provided, that, if such investment so purchased shall consist of anobligation of definite maturity, such lease shall be one which shall,according to its terms, provide for the payment of the obligation at maturityor extend for a period of not less than twenty years beyond the maturity ofsuch obligations so purchased, or if such investment so purchased shall be astock or other form of investment having no definite date of maturity, suchlease shall be one which shall, according to its terms, extend for a periodof at least fifty years beyond the date of the making of such investment.

(12) Equipment trust obligations. - Equipment trust obligations issued underthe "Philadelphia Plan" in connection with the purchase for use onrailroads of new standard gauge rolling stock; provided that the owner,purchaser, or lessee of such equipment or one or more of such owners,purchasers, or lessees shall be a railroad corporation whose bonds, notes andother evidences of indebtedness shall, at the time of the making of suchinvestment, qualify as lawful investments for fiduciaries under the terms ofclause (10) of this section; and provided that all of such owners,purchasers, or lessees shall be both jointly and severally liable under theterms of such contract of purchase or lease, or both, for the fulfillmentthereof.

(13) Preferred stock of railroads. - Any preference stock of any railroadcorporation operating within the United States; provided such stock and suchrailroad corporation meet the following conditions and requirements:

(a) Such stock shall be preferred as to dividends, such dividends shall becumulative and such stock shall be preferred as to assets in the event ofliquidation or dissolution;

(b) The gross operating revenue of such corporation for the fiscal yearpreceding the making of such investment, or the average of the grossoperating revenue for the five fiscal years next preceding the making of suchinvestment, whichever of these two is the larger, shall have been not lessthan ten million dollars;

(c) The total fixed charges, as defined in paragraph (b) of clause (10) ofthis section, of such corporation, as reported for the fiscal year nextpreceding the making of such investment, plus the amount, at the time ofmaking such investment, of the annual dividend requirements on suchpreference stock and any preference stock having the same or senior rank,such fixed charges and dividend requirements being considered the same forevery year, shall have been earned an average of at least 2 1/2 timesannually for the seven fiscal years preceding the making of such investmentand at least two times for the fiscal year immediately preceding the makingof such investment; and

(d) The aggregate of the average market prices of the total amount of each ofthe individual securities of such corporation, junior to such preferencestock and outstanding at the time of the making of such investment, shall beat least equal to the par value of the total issue of the preference stock inquestion plus the total par value of all other issues of its preference stockhaving either the same rank as, or a senior rank to, the issue of suchpreference stock plus total fixed charges, as defined in paragraph (b) ofclause (10) of this section, for such railroad corporation for the fiscalyear next preceding the making of such investment capitalized at an interestrate of five percent annually. Such average market price of any one of suchindividual securities shall be determined in the same manner as prescribed inparagraph (c) of clause (10) of this section.

(14) Obligations of public utilities. - Bonds, notes and other evidences ofindebtedness of any public utility operating company operating within theUnited States; provided such company meets the following conditions andrequirements:

(a) The gross operating revenue of such public utility operating company forthe fiscal year preceding the making of such investment, or the average ofthe gross operating revenue for the five fiscal years next preceding themaking of such investment, whichever of these two is the larger, shall havebeen not less than five million dollars;

(b) The total fixed charges of such corporation, as reported for the fiscalyear next preceding the making of the investment, shall have been earned,after deducting operating expenses, depreciation and taxes, other than incometaxes, an average of at least 1 3/4 times annually during the seven fiscalyears preceding the making of the investment and at least 1 1/2 times duringthe fiscal year immediately preceding the making of the investment;

(c) In the fiscal year next preceding the making of such investment the ratioof the total par value of the bonded debt of such public utility operatingcompany including the total bonded indebtedness of all its subsidiarycompanies, whether assumed by the public utility operating company inquestion or not, to its gross operating revenue shall not be greater thanfour to one; and

(d) Such public utility operating company shall be subject to permanentregulation by a state commission or other duly authorized and recognizedregulatory body.

The term "public utility operating company" as used in this clause (14)shall mean a public utility or public service corporation (i) of whose totalincome available for fixed charges for the fiscal year next preceding themaking of such investment at least fifty-five percent thereof shall have beenderived from direct payments by customers for service rendered them, (ii) ofwhose total operating revenue for the fiscal year next preceding the makingof such investment at least sixty percent thereof shall have been derivedfrom the sale of electric power, gas, water, or telephone service and notmore than ten percent thereof shall have been derived from tractionoperations, and (iii) whose gas properties are all within the limits of onestate, if more than twenty percent of its total operating revenues arederived from gas.

(15) Preferred stock of public utilities. - Any preference stock of anypublic utility operating company operating within the United States; providedsuch stock and such company meet the following conditions and requirements:

(a) Such stock shall be preferred as to dividends, such dividends shall becumulative, and such stock shall be preferred as to assets in the event ofliquidation or dissolution;

(b) The gross operating revenue of such public utility operating company forthe fiscal year preceding the making of such investment, or the average ofthe gross operating revenue for the five fiscal years next preceding themaking of such investment, whichever of these two is the larger, shall havebeen not less than five million dollars;

(c) The total fixed charges of such public utility operating company, asreported for the fiscal year next preceding the making of such investment,plus the amount, at the time of making such investment, of the annualdividend requirements on such preference stock and any preference stockhaving the same or senior rank, such fixed charges and dividend requirementsbeing considered the same for every year, shall have been earned, afterdeducting operating expenses, depreciation and taxes, including income taxes,an average of at least two times annually for the seven fiscal yearspreceding the making of such investment and at least two times for the fiscalyear immediately preceding the making of such investment;

(d) In the fiscal year next preceding the making of such investment, theratio of the sum of the total par value of the bonded debt of such publicutility operating company, the total par value of the issue of suchpreference stock, and the total par value of all other issues of itspreference stock having the same or senior rank to its gross operatingrevenue shall not be greater than four to one; and

(e) Such public utility operating company shall be subject to permanentregulation by a state commission or other duly authorized and recognizedregulatory body.

For the purposes of this clause (15) of this section, the term "publicutility operating company" shall be construed in the same manner as definedin clause (14) of this section.

(16) Obligations of the following telephone companies. - Bonds, notes andother evidences of indebtedness of American Telephone and Telegraph, BellAtlantic, Bell South, Southwestern Bell, Pacific Telesis, Nynex, AmericanInformation Technologies, or U.S. West; and bonds, notes and other evidencesof indebtedness unconditionally assumed or guaranteed as to the payment ofprincipal and interest by any such company; provided, that the total fixedcharges, as reported for the fiscal year next preceding the making of theinvestment, of such company and all of its subsidiary corporations on aconsolidated basis shall have been earned, after deducting operatingexpenses, depreciation and taxes, other than income taxes, an average of atleast 1 3/4 times annually during the seven fiscal years preceding the makingof the investment and at least 1 1/2 times during the fiscal year immediatelypreceding the making of the investment.

(17) Obligations of municipally owned utilities. - The stocks, bonds, notesand other evidences of indebtedness of any electric, gas or water departmentof any state, county, city, town or district whose obligations would qualifyas legal for purchase under clause (3), (4) or (5) of this section, theinterest and principal of which are payable solely out of the revenues fromthe operations of the facility for which the obligations were issued;provided, that the department issuing such obligations meet the requirementsapplying to public utility operating companies as set out in paragraphs (a),(b) and (c) of clause (14) of this section.

(18) Obligations of industrial corporations. - Bonds, notes and otherevidences of indebtedness of any industrial corporation incorporated underthe laws of the United States or of any state thereof; provided suchcorporation meets the following conditions and requirements:

(a) The gross operating revenue of such corporation for the fiscal yearpreceding the making of such investment, or the average of the grossoperating revenue for the five fiscal years next preceding the making of suchinvestment, whichever of these two is the larger, shall have been not lessthan ten million dollars;

(b) The total fixed charges of such corporation, as reported for the fiscalyear next preceding the making of the investment, shall have been earned,after deducting operating expenses, depreciation and taxes, other than incometaxes, and depletion in the case of companies commonly considered asdepleting their natural resources in the course of business, an average of atleast three times annually during the seven fiscal years preceding the makingof the investment and at least 2 1/2 times during the fiscal year immediatelypreceding the making of the investment;

(c) The net working capital of such industrial corporation, as shown by itslast published fiscal year-end statement prior to the making of suchinvestment, or in the case of a new issue, as shown by the financialstatement of such corporation giving effect to the issuance of any newsecurity, shall be at least equal to the total par value of its bonded debtas shown by such statement; and

(d) The aggregate of the average market prices of the total amounts of eachof the individual securities of such industrial corporation, junior to itsbonded debt and outstanding at the time of the making of such investment,shall be at least equal to the total par value of the bonded debt of suchindustrial corporation at the time of the making of such investment, suchaverage market price of any one of such individual securities beingdetermined in the same manner as prescribed in paragraph (c) of clause (10)of this section.

(19) Preferred stock of industrial corporations. - Any preference stock ofany industrial corporation incorporated under the laws of the United Statesor of any state thereof; provided such stock and such industrial corporationmeet the following conditions and requirements:

(a) Such stock shall be preferred as to dividends, such dividends shall becumulative and such stock shall be preferred as to assets in the event ofliquidation or dissolution;

(b) The gross operating revenue of such corporation for the fiscal yearpreceding the making of such investment, or the average of the grossoperating revenue for the five fiscal years next preceding the making of suchinvestment, whichever of these two is the larger, shall have been not lessthan ten million dollars;

(c) The total fixed charges of such corporation, as reported for the fiscalyear next preceding the making of such investment, plus the amount, at thetime of making such investment, of the annual dividend requirements on suchpreference stock and any preference stock having the same or senior rank,such fixed charges and dividend requirements being considered the same forevery year, shall have been earned, after deducting operating expenses,depreciation and taxes, including income taxes, and depletion in the case ofcompanies commonly considered as depleting their natural resources in thecourse of business, an average of at least four times annually for the sevenfiscal years preceding the making of such investment and at least three timesfor the fiscal year immediately preceding the making of such investment;

(d) The net working capital of such industrial corporation, as shown by itslast published fiscal year-end statement prior to the making of suchinvestment, or, in the case of a new issue, as shown by the financialstatement of such corporation giving effect to the issuance of any newsecurity, shall be at least equal to the total par value of its bonded debtplus the total par value of the issue of such preference stock plus the totalpar value of all other issues of its preference stock having the same orsenior rank; and

(e) The aggregate of the lowest market prices of the total amounts of each ofthe individual securities of such industrial corporation junior to suchpreference stock and outstanding at the time of the making of such investmentshall be at least 2 1/2 times the par value of the total issue of suchpreference stock plus the total par value of all other issues of itspreference stock having the same or senior rank plus the par value of thetotal bonded debt of such industrial corporation. Such lowest market price ofany one of such individual securities shall be determined by the lowestsingle quotation of the individual security for a period immediatelypreceding the making of such investment, which period shall be the fullpreceding calendar year plus the then expired portion of the calendar year inwhich such investment is made; and provided, that if such individual securityshall not have been outstanding during the full extent of such period, suchperiod shall be deemed to be the length of time such individual securityshall have been outstanding.

(20) Obligations of finance corporations. - Bonds, notes and other evidencesof indebtedness of any finance corporation incorporated under the laws of theUnited States or of any state thereof; provided such corporation meets thefollowing conditions and requirements:

(a) The gross operating income of such corporation for the fiscal yearpreceding the making of such investment or the average of the gross operatingincome for the five fiscal years next preceding the making of suchinvestment, whichever of these two is the larger, shall have been not lessthan five million dollars;

(b) The total fixed charges of such corporation, as reported for the fiscalyear next preceding the making of the investment, shall have been earned,after deducting operating expenses, depreciation and taxes, other than incometaxes, an average of at least 2 1/2 times annually during the seven fiscalyears preceding the making of the investment and at least two times duringthe fiscal year immediately preceding the making of the investment;

(c) The aggregate indebtedness of such finance corporation as shown by itslast fiscal year-end statement, or, in the case of a new issue, as shown bythe financial statement giving effect to the issuance of any new securities,shall be no greater than three times the aggregate net worth, as representedby preferred and common stocks and surplus of such corporation; and

(d) The aggregate of the average market prices of the total amounts of eachof the individual securities of such finance corporation, junior to itsbonded debt and outstanding at the time of the making of such investment,shall be at least equal to one-third of the sum of the par value of thebonded debt plus all other indebtedness of such finance corporation as shownby the last published fiscal year-end statement, such average market price ofany one of such individual securities being determined in the same manner asprescribed in paragraph (c) of clause (10) of this section.

(21) Preferred stock of finance corporations. - Any preference stock of anyfinance corporation, incorporated under the laws of the United States or ofany state thereof; provided, such stock and such corporation meet thefollowing conditions and requirements:

(a) Such stock shall be preferred as to dividends, such dividends shall becumulative, and such stock shall be preferred as to assets in the event ofliquidation or dissolution;

(b) The gross operating income of such corporation for the fiscal yearpreceding the making of such investment or the average of the gross operatingincome for the five fiscal years next preceding the making of suchinvestment, whichever of these two is the larger, shall have been not lessthan five million dollars;

(c) The total fixed charges of such finance corporation, as reported for thefiscal year next preceding the making of such investment, plus the amount, atthe time of making such investment, of the annual dividend requirements onsuch preference stock and any preference stock having the same or seniorrank, such fixed charges and dividend requirements being considered the samefor every year, shall have been earned, after deducting operating expenses,depreciation and taxes, including income taxes, an average of at least 3 1/2times annually for the seven fiscal years preceding the making of suchinvestment and at least three times for the fiscal year immediately precedingthe making of such investment;

(d) The aggregate indebtedness and par value of the purchased stock, both theissue in question and any issues equal or senior thereto, of such financecorporation as shown by its last published fiscal year-end statement, or inthe case of a new issue as shown by the financial statement giving effect tothe issuance of any new securities, shall be no greater than three times theaggregate par value of the junior securities and surplus of such corporation;and

(e) The aggregate of the lowest market prices of the total amounts of each ofthe individual securities of such finance corporation junior to suchpreference stock and outstanding at the time of the making of such investmentshall be at least equal to one-third of the sum of the par value of suchpreference stock plus the total par value of all other issues of preferencestock having the same or senior rank plus the par value of the total bondeddebt plus all other indebtedness of such finance corporation as shown by thelast published fiscal year-end statement, such lowest market price of any oneof such individual securities being determined in the same manner asprescribed in paragraph (e) of clause (19) of this section.

(22) Federal housing loans. - First mortgage real estate loans insured by theFederal Housing Administrator, under Title II of the National Housing Act.

(23) Certificates of deposit and savings accounts. - Certificates of depositof, and savings accounts in, any bank, banking institution or trust company,whose deposits are insured by the Federal Deposit Insurance Corporation atthe prevailing rate of interest on such certificates or savings accounts;provided, however, no such fiduciary shall invest in such certificates of, ordeposits in, any one bank, banking institution or trust company an amountfrom any one fund in his or its care which shall be in excess of such amountas shall be fully insured as a deposit in such bank, banking institution ortrust company by the Federal Deposit Insurance Corporation. A corporatefiduciary shall not, however, be prohibited by the terms of this clause (23)of this section from depositing in its own banking department, in the form ofdemand deposits, savings accounts, time deposits or certificates of deposit,funds in any amount awaiting investments or distribution, provided that itshall have complied with the provisions of 6.1-23 and 6.1-21, withreference to the securing of such deposits.

(24) Obligations of International Bank, Asian Development Bank and AfricanDevelopment Bank. - Bonds and other obligations issued, guaranteed or assumedby the International Bank for Reconstruction and Development, by the AsianDevelopment Bank or by the African Development Bank.

(25) Deposits in savings institutions. - Certificates of deposit of, andsavings accounts in, any state or federal savings institution or savings banklawfully authorized to do business in this Commonwealth whose accounts areinsured by the Federal Deposit Insurance Corporation or other federalinsurance agency; however, no such fiduciary shall invest in such shares ofany one such association an amount from any one fund in his or its care whichshall be in excess of such amount as shall be fully insured as an account insuch association by the Federal Deposit Insurance Corporation or otherfederal insurance agency.

(26) Certificates evidencing ownership of undivided interests in pools ofmortgages. - Certificates evidencing ownership of undivided interests inpools of bonds or negotiable notes directly secured by first lien deeds oftrust or mortgages on real property located in the Commonwealth of Virginiaimproved by single-family residential housing units or multi-family dwellingunits; provided that (i) such certificates are rated AA or better by anationally recognized independent rating agency; (ii) the loans evidenced bysuch bonds or negotiable notes do not exceed eighty percent of the fairmarket value, as determined by an independent appraisal thereof, of the realproperty and the improvements thereon securing such loans; and (iii) suchbonds or negotiable notes are assigned to a corporate trustee for the benefitof the holders of such certificates.

(27) Shares and share certificates in any credit union lawfully authorized todo business in this Commonwealth whose accounts are insured by the NationalCredit Union Share Insurance Fund or the Virginia Credit Union ShareInsurance Corporation; provided no such fiduciary shall invest in such sharesan amount from any one fund in his or its care which shall be in excess ofsuch amount as shall be fully insured as an account in such credit union bythe National Credit Union Share Insurance Fund or the Virginia Credit UnionShare Insurance Corporation.

(Code 1919, 5431; 1918, pp. 271, 454; 1920, p. 556; 1928, p. 1109; 1933, p.79; 1934, p. 831; 1936, p. 172; 1942, p. 652; 1952, c. 196; 1954, c. 600;1956, c. 83; 1958, c. 281; 1960, c. 589; 1970, c. 73; 1971, Ex. Sess., cc.115, 245; 1973, c. 353; 1974, c. 557; 1982, c. 496; 1984, c. 264; 1985, cc.362, 399; 1990, c. 3; 1991, c. 697; 1992, c. 810; 1996, c. 508; 1999, c. 772.)