State Bonds; Security Intrsts

Exempts state government agencies, including the judiciary, from
having to perfect security interests in state bonds.  (SD1)

THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Chapter 39, Hawaii Revised Statutes, is amended
 2 by adding a new part to be appropriately designated and to read
 3 as follows:
 4                   "PART  .  SECURITY INTERESTS
 5      39-  Definitions.  Whenever used in this part, unless a
 6 different meaning clearly appears from the context:
 7      "Authorizing statute" means any statute which authorizes the
 8 issuance of bonds.
 9      "Bonds" means any bonds, notes, and other instruments of
10 indebtedness, or lease, lease purchase, or certificates of
11 participation, or other evidence of indebtedness for which a
12 security interest is granted or a pledge made upon revenue or
13 other property to provide for payment or security.
14      "Governmental unit" means the State of Hawaii, and any state
15 department, board, commission, officer, authority, agency, public
16 corporation, or instrumentality, or the judiciary.
17      "Measure" means any act, certificate, resolution, statute,
18 or other enactment authorizing the issuance of bonds or
19 authorizing an indenture with respect to bonds pursuant to an

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                                     S.B. NO.           S.D. 1

 1 authorizing statute.
 2      39-  Perfection of a security interest.  Any security
 3 interest created by a governmental unit pursuant to any
 4 authorizing statute is perfected by the adoption of the measure
 5 or measures from the date on which the measure takes effect
 6 without the need for any physical delivery, filing, or recording
 7 in any office.
 8      39-  Priority of a security interest.  The priority of
 9 any security interest created by a governmental unit shall be
10 governed by the contractural terms set forth in the measure or
11 measures, including the terms of any indenture or any other
12 agreement approved by the measure or measures, adopted by the
13 governmental unit.  No security interest having priority over an
14 existing security interest may be created in violation of the
15 terms of an existing measure governing outstanding bonds.
16      39-  Enforcement of a security interest.  The terms of
17 any applicable authorizing statute shall govern the enforcement
18 of any security interest to the extent that the authorizing
19 statute contains express provisions relating to enforcement or
20 authorizes a governmental unit to contract with respect to
21 enforcement."
22      SECTION 2.  This Act shall take effect upon its approval.