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Developed and maintained by the Division of Legislative Automated Systems.
1997 SESSION
Be it enacted by the General Assembly of Virginia:
1. That § 51.1-803 of the Code of Virginia is amended and reenacted as follows:
§ 51.1-803. Investments of retirement systems.
If the governing body of any county, city, or town establishes a retirement
system pursuant to the provisions of this article, any funds that may be
allocated, segregated, or otherwise designated for the retirement system, which
are on hand at any time and are not necessary for immediate payment of pensions
or benefits, shall be invested in the following:
1. Obligations of the Commonwealth. - Stocks, bonds, notes, and other
evidences of indebtedness of the Commonwealth of Virginia, and those
unconditionally guaranteed as to the payment of principal and interest by the
Commonwealth of Virginia.
2. Obligations of the United States, etc. - Stocks, bonds, treasury notes
and other evidences of indebtedness of the United States, including the
guaranteed portion of any loan guaranteed by the Small Business Administration,
an agency of the United States government, and those unconditionally guaranteed
as to the payment of principal and interest by the United States; and bonds of
the District of Columbia, and bonds and notes of the 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 pursuant to acts of Congress, and obligations
issued by the United States Postal Service when the principal and interest
thereon are guaranteed by the government of the United States. The evidences of
indebtedness enumerated by this paragraph may be held directly or in the form
of repurchase agreements collateralized by such debt securities or in the form
of securities of any open-end or closed-end management type investment company
or investment trust registered under the Investment Company Act of 1940,
provided that the portfolio of such investment company or investment trust is
limited to such evidences of indebtedness or repurchase agreements
collateralized by such debt securities, or securities of other such investment
companies or investment trusts whose portfolios are so restricted.
3. Obligations of other states. - Stocks, bonds, notes and other evidences
of indebtedness of any state of the United States upon which there is no
default and upon which there has been no default for more than ninety days;
provided that within the twenty fiscal years next preceding the making of such
investment, such state has not been in default for more than ninety days in the
payment of any part of principal or interest of any debt authorized by the
legislature of such state to be contracted.
4. Obligations of Virginia counties, cities, etc. - Stocks, bonds, notes
and other evidences of indebtedness of any county, city, town, district,
authority or other public body in the Commonwealth of Virginia upon which there
is no default; provided, that if the principal and interest be payable from
revenues or tolls and the project has not been completed, or if completed, has
not established an operating record of net earnings available for payment of
principal and interest equal to estimated requirements for that purpose
according to the terms of the issue, the standards of judgment and care
required in § 26-45.1, without reference to this section, shall
apply.
In any case in which an authority, having an established record of net
earnings available for payment of principal and interest equal to estimated
requirements for that purpose according to the terms of the issue, issues
additional evidences of indebtedness for the purposes of acquiring or
constructing additional facilities of the same general character that it is
then operating, such additional evidences of indebtedness shall be governed
fully by the provisions of this section without limitation.
5. Obligations of cities, counties, etc., of other states. - Legally
authorized stocks, bonds, notes and other evidences of indebtedness of any
city, county, town or district situated in any one of the states of the United
States upon which there is no default and upon which there has been no default
for more than ninety days; provided that (i) within the twenty fiscal 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 the payment of
any part of principal or interest of any stock, bond, note or other evidence of
indebtedness issued by it; (ii) such city, county, town or district shall have
been in continuous existence for at least twenty years; (iii) such city,
county, town or district has a population, as shown by the federal census next
preceding the making of such investment, of not less than 25,000 inhabitants;
(iv) the stocks, bonds, notes or other evidences of indebtedness in which such
investment is made are the direct legal obligations of the city, county, town
or district issuing the same; (v) the city, county, town or district has power
to levy taxes on the taxable real property therein for the payment of such
obligations without limitation of rate or amount; and (vi) the net indebtedness
of such city, county, town or district (including the issue in which such
investment is made), after deducting the amount of its bonds issued for
self-sustaining public utilities, does not exceed ten percent of the value of
the taxable property in such city, county, town or district, to be ascertained
by the valuation of such property therein for the assessment of taxes next
preceding the making of such investment.
6. Obligations of International Bank, Asian Development Bank and African
Development Bank. - Bonds and other obligations issued, guaranteed or assumed
by the International Bank for Reconstruction and Development, by the Asian
Development Bank or by the African Development Bank.
7. Other investments made in conformity with the standards and
requirements set forth in § 51.1-124.32 with the care, skill,
prudence and diligence under the circumstances then prevailing that a prudent
person acting in a like capacity and familiar with such matters would use in
the conduct of an enterprise of like character and with the same aims. Such
investments shall be diversified so as to minimize the risk of large losses
unless under the circumstances it is clearly prudent not to do so.
The selection of services related to the management, purchase, or sale of investments authorized by this section, including but not limited to actuarial services, shall be governed by the standard of care set forth in this section and shall not be subject to the provisions of the Virginia Public Procurement Act (§ 11-35 et seq.) of Title 11.