Investments of funds received from United States Department of Veterans Affairs.

Subject to the conditions herein contained, and except as otherwise authorized by law, guardians holding funds received from, or currently in receipt of funds from, the United States Department of Veterans Affairs, to the extent of those funds alone, may invest such funds only in the following:

(1) UNITED STATES GOVERNMENT OBLIGATIONS.—In bonds or other obligations, either bearing interest or sold on a discount basis, of the United States, or the United States Treasury, or those for the payment of the principal and interest of which the faith and credit of the United States is pledged, including such bonds or obligations of the District of Columbia.

(2) BONDS AND OBLIGATIONS OF STATES AND TERRITORIES.—In bonds or other interest-bearing obligations of any state of the United States, or the Territory of Puerto Rico; provided such state or territory has not, within 10 years previous to the date of making such investment, defaulted for more than 90 days in the payment of any part of the principal or interest of any of its bonded indebtedness.

(3) BONDS AND OTHER OBLIGATIONS OF POLITICAL SUBDIVISIONS WITHIN THE STATE OF FLORIDA.—In bonds or other interest-bearing obligations of any incorporated county, city, town, school district, or road and bridge district located within the state and which has according to the federal census next preceding the date of making the investment, a population of not less than 2,000 inhabitants and for which the full faith and credit of such political subdivision has been pledged; provided, that such political subdivision or its successor through merger, consolidation, or otherwise, has not within 5 years previous to the making of such investment, defaulted for more than 6 months in the payment of any part of the principal or interest of its bonded indebtedness.

(4) BONDS AND OBLIGATIONS OF POLITICAL SUBDIVISIONS LOCATED OUTSIDE THE STATE OF FLORIDA.—In bonds or other interest-bearing obligations of any incorporated county, city, or town located outside of the state, but within another state of the United States, which county, city, or town has, according to the federal census next preceding the date of making the investment a population of not less than 40,000 inhabitants and the indebtedness of which does not exceed 7 percent of the last preceding valuation of property for the purposes of taxation; provided, that the full faith and credit of such political subdivision shall have been pledged for the payment of the principal and interest of such bonds or obligations, and provided further, that such political subdivision or its successor, through merger, consolidation, or otherwise, has not within 15 years previous to the making of such investment, defaulted for more than 90 days in the payment of any part of the principal or interest of its bonded indebtedness.

(5) BONDS OR OBLIGATIONS OF FEDERAL LAND BANKS AND FARM CREDIT INSTITUTIONS.—In the bonds or other interest-bearing obligations of any federal land bank organized under any Act of Congress enacted prior to June 14, 1937, provided such bank is not in default in the payment of principal or interest on any of its obligations at the time of making the investment; and on any notes, bonds, debentures, or other similar obligations, consolidated or otherwise, issued by farm credit institutions pursuant to the Farm Credit Act of 1971, Pub. L. No. 92-181.

(6) BONDS OF RAILROAD COMPANIES.—

(a) Bonds bearing a fixed rate of interest secured by first mortgage, general mortgage, refunding mortgage, or consolidated mortgage which is a lien on real estate, rights or interest therein, leaseholds, right-of-way, trackage, or other fixed assets; provided, that such bonds have been issued or assumed by a qualified railroad company or guaranteed as to principal and interest by indorsement by a qualified railroad company or guaranteed as to principal and interest by indorsement, which guaranty has been assumed by a qualified railroad company.

(b) In bonds secured by first mortgage upon terminal, depot, or tunnel property, including buildings and appurtenances used in the service or transportation by one or more qualified railroad companies; provided that such bonds have been issued or assumed by a qualified railroad company or guaranteed as to principal and interest by indorsement by a qualified railroad company, or guaranteed as to principal and interest by indorsement, which guaranty has been assumed by a qualified railroad company.

(c) As used in this subsection, the words “qualified railroad company” means a railroad corporation other than a street railroad corporation which, at the date of the investment by the fiduciary, meets the following requirements:

1. It shall be a railroad corporation incorporated under the laws of the United States or of any state or commonwealth thereof or of the District of Columbia.

2. It shall own and operate within the United States not less than 500 miles of standard gauge railroad lines, exclusive of sidings.

3. Its railroad operating revenues derived from the operation of all railroad lines operated by it, including leased lines and lines owned or leased by a subsidiary corporation, all of the voting stock of which, except directors’ qualifying shares, is owned by it, for its fiscal year next preceding the date of the investment, shall have been not less than $10 million.

4. At no time during its fiscal year in which the investment is made, and its 5 fiscal years immediately prior thereto, shall it have been in default in the payment of any part of the principal or interest owing by it upon any part of its funded indebtedness.

5. In at least 4 of its 5 fiscal years immediately preceding the date of investment, its net income available for fixed charges shall have been at least equal to its fixed charges, and in its fiscal year immediately preceding the date of investment, its net income available for fixed charges shall have been not less than 11/4 times its fixed charges.

(d) As used in this subsection, the words “income available for fixed charges” mean the amount obtained by deducting from gross income all items deductible in ascertaining the net income other than contingent income interest and those constituting fixed charges as used in the accounting reports of common carriers as prescribed by the accounting regulations of the Interstate Commerce Commission.

(e) As used in this subsection, the words “fixed charges” mean rent for leased roads, miscellaneous rents, funded debt interest, and amortization of discount on funded debt.

(7) BONDS OF GAS, WATER, OR ELECTRIC COMPANIES.—In bonds issued by, or guaranteed as to principal and interest by, or assumed by, any gas, water, or electric company, subject to the following conditions:

(a) Gas, water, or electric companies by which such bonds are issued, guaranteed, or assumed, shall be incorporated under the laws of the United States or any state or commonwealth thereof or of the District of Columbia.

(b) The company shall be an operating company transacting the business of supplying water, electrical energy, artificial gas, or natural gas for light, heat, power, and other purposes, and provided that at least 75 percent of its gross operating revenue shall be derived from such business and not more than 15 percent of its gross operating revenues shall be derived from any other one kind of business.

(c) The company shall be subject to regulation by a public service commission, a public utility commission, or any other similar regulatory body duly established by the laws of the United States or any state or commonwealth or of the District of Columbia in which such company operates.

(d) The company shall have all the franchises necessary to operate in the territory in which at least 75 percent of its gross revenues are obtained, which franchises shall either be indeterminate permits of, or agreements with, or subject to the jurisdiction of, a public service commission or other duly constituted regulatory body, or shall extend at least 5 years beyond the maturity of the bonds.

(e) The company shall have been in existence for a period of not less than 8 fiscal years, and at no time within the period of 8 fiscal years immediately preceding the date of such investment shall such company have failed to pay punctually and regularly the matured principal and interest of all its indebtedness, direct, assumed, or guaranteed, but the period of life of the company, together with the period of life of any predecessor company, or company from which a major portion of its property was acquired by consolidation, merger, or purchase, shall be considered together in determining such required period.

(f) For a period of 5 fiscal years immediately preceding the date of the investment, net earnings shall have averaged per year not less than 2 times the average annual interest charges on its entire funded debt, applicable to that period and for the last fiscal year preceding the date of investment, such net earnings shall have been not less than 2 times such interest charges for that year.

(g) The bonds of any such company must be part of an issue of not less than $1 million and must be mortgage bonds secured by a first or refunding mortgage upon property owned and operated by the company issuing or assuming them or must be underlying mortgage bonds secured by property owned and operated by the companies issuing or assuming them. The aggregate principal amount of bonds secured by such first or refunding mortgage, plus the principal amount of all the underlying outstanding bonds, shall not exceed 60 percent of the value of the physical property owned, which shall be book value less such reserves for depreciation or retirement, as the company may have established, and subject to the lien of such mortgage or mortgages securing the total mortgage debt. If such mortgage is a refunding mortgage, it must provide for the retirement on or before the date of maturity of all bonds secured by prior liens on the property.

(h) As used in this subsection, the words “gross operating revenues and expenses” mean, respectively, the total amount earned from the operation of, and the total expenses of maintaining and operating, all property owned and operated by, or leased and operated by, such companies, as determined by the system of accounts prescribed by the Public Service Commission or other similar regulatory body having jurisdiction.

(i) As used in this subsection, the words “net earnings” mean the balance obtained by deducting from its gross operating revenues, its operating and maintenance expenses, taxes, other than federal and state income taxes, rentals, and provisions for depreciation, renewals and retirements of the physical assets of the company, and by adding to such balance its income from securities and miscellaneous sources, but not, however, exceeding 15 percent of such balance.

(8) BONDS OF TELEPHONE COMPANIES.—In bonds issued by, or guaranteed as to principal and interest by, or assumed by, any telephone company, subject to the following conditions:

(a) The telephone company by which such bonds are issued shall be incorporated under the laws of the United States or of any state or commonwealth thereof or of the District of Columbia and shall be engaged in the business of supplying telephone service in the United States and shall be subject to regulations by the Federal Communications Commission, a public service commission, a public utility commission, or any similar regulatory body duly established by the laws of the United States or of any state or commonwealth or of the District of Columbia in which such company operates.

(b) The company by which such bonds are issued, guaranteed, or assumed shall have been in existence for a period of not less than 8 fiscal years, and at no time within the period of 8 fiscal years immediately preceding the date of such investment shall such company have failed to pay punctually and regularly the matured principal and interest of all its indebtedness, direct, assumed, or guaranteed, but the period of life of the company, together with the period of life of any predecessor company, or company from which a major portion of its property was acquired by consolidation, merger, or purchase, shall be considered together in determining such required period. The company shall file with the Federal Communications Commission, or a public service commission or similar regulatory body having jurisdiction over it, and make public in each year a statement and a report giving the income account covering the previous fiscal year, and a balance sheet showing in reasonable detail the assets and liabilities at the end of the year.

(c) For a period of 5 fiscal years immediately preceding the investment, the net earnings of such telephone company shall have averaged per year not less than twice the average annual interest charges on its outstanding obligations applicable to that period, and for the last fiscal year preceding such investment, such net earnings shall have been not less than twice such interest charges for that year.

(d) The bonds must be part of an issue of not less than $5 million and must be mortgage bonds secured by a first or refunding mortgage upon property owned and operated by the company issuing or assuming them, or must be underlying mortgage bonds similarly secured. As of the close of the fiscal year preceding the date of the investment by the fiduciary, the aggregate principal amount of bonds secured by such first or refunding mortgage, plus the principal amount of all the underlying outstanding bonds, shall not exceed 60 percent of the value of the real estate and tangible personal property owned absolutely, which value shall be book value less such reserves for depreciation or retirement as the company may have established, and subject to the lien of such mortgage, or mortgages, securing the total mortgage debt. If such mortgage is a refunding mortgage, it must provide for the retirement, on or before the date of their maturity, of all bonds secured by prior liens on the property.

(e) As used in this subsection, the words “gross operating revenues and expenses” mean, respectively, the total amount earned from the operation of, and the total expenses of maintaining and operating all property owned and operated by, or leased and operated by, such company as determined by the system of accounts prescribed by the Federal Communications Commission, or any other similar federal or state regulatory body having jurisdiction in the matter.

(f) As used in this subsection, the words “net earnings” mean the balance obtained by deducting from the telephone company’s gross operating revenues its operating and maintenance expenses, provision for depreciation of the physical assets of the company, taxes, other than federal and state income taxes, rentals, and miscellaneous charges, and by adding to such balance its income from securities and miscellaneous sources but not, however, to exceed 15 percent of such balance.

(9) FIRST MORTGAGES.—In mortgages signed by one or more individuals or corporations, subject to the following conditions:

(a) If the taking of the mortgages as an investment for any particular trust, estate, or guardianship will not result in more than 40 percent of the then value of the principal of such trust, estate, or guardianship being invested in mortgages.

(b) Within 30 days preceding the taking of a mortgage as an investment, the property encumbered or to be encumbered thereby shall be appraised by two or more reputable persons especially familiar with real estate values. The fair market value of the property as disclosed by the appraisal of such persons shall be set forth in a writing dated and signed by them and in such writing they shall certify that their valuation of the property was made after an inspection of the same, including all buildings and other improvements.

(c) The mortgage shall encumber improved real estate located in the state and in or within 5 miles of the corporate limits of a city or town having a population of 2,000 or more, according to the federal census next preceding the date of making any such investment.

(d) The mortgage shall be or become, through the recordation of documents simultaneously filed for record, a first lien upon the property described therein prior to all other liens, except taxes previously levied or assessed but not due and payable at the time the mortgage is taken as an investment.

(e) The mortgage shall secure no indebtedness other than that owing to the executor, administrator, trustee, or guardian taking the same as an investment.

(f) The amount of the indebtedness secured by the mortgage shall not exceed 60 percent of the fair market value, as determined in accordance with the provisions of paragraph (b), of the property encumbered or to be encumbered by said mortgage.

(g) If the amount of the indebtedness secured by the mortgage is in excess of 50 percent of the fair market value, as determined in accordance with the provisions of paragraph (b), of the property encumbered or to be encumbered by said mortgage, then the mortgage shall require principal payments, at annual or more frequent intervals, sufficient to reduce by or before the expiration of 3 years from the date the mortgage is taken as an investment, the unpaid principal balance secured thereby to an amount not in excess of 50 percent of the fair market value of said property, as determined in accordance with the provisions of paragraph (b).

(h) The mortgage shall contain a covenant of the mortgagor to keep insured at all times the improvements on the real estate encumbered by said mortgage, with loss payable to the mortgagee, against loss and damage by fire, in an amount not less than the unpaid principal secured by said mortgage.

(i) Provided, however, that the foregoing limitations and requirements shall not apply to notes or bonds secured by mortgage or trust deed insured by the Federal Housing Administrator, and that notes or bonds secured by mortgage or trust deed insured by the Federal Housing Administrator are declared to be eligible for investment under the provisions of this chapter.

(10) LIFE INSURANCE.—Annuity or endowment contracts with any life insurance company which is qualified to do business in the state under the laws thereof.

(11) SAVINGS AND LOAN ASSOCIATIONS.—In savings share or investment share accounts of any federal savings and loan association chartered under the laws of the United States, and doing business in this state, and in the shares of any Florida building and loan association which is a member of the Federal Home Loan Bank System.

(12) SAVINGS ACCOUNTS, CERTIFICATES OF DEPOSIT; STATE AND NATIONAL BANKS.—In savings accounts and certificates of deposit in any bank chartered under the laws of the United States and doing business in this state, and in savings accounts and certificates of deposit in any bank chartered under the laws of this state.

(13) SAVINGS SHARE ACCOUNTS, CREDIT UNIONS.—In savings share accounts of any credit union chartered under the laws of the United States and doing business in this state, and savings share accounts of any credit union chartered under the laws of this state, provided the credit union is insured under the federal share insurance program or an approved state share insurance program.

In determining the qualification of investments under the requirements of this section, published statements of corporations or statements of reliable companies engaged in the business of furnishing statistical information on bonds may be used.