PART II. INVESTMENTS; TRANSFERS

 

§36-21  Short-term investment of statemoneys.  (a)  [Repeal and reenactment on July 1, 2015.  L 2009, c 79,§34(4).]  The director of finance may invest any moneys of the State whichin the director's judgment are in excess of the amounts necessary for meetingthe immediate requirements of the State and where in the director's judgmentthe action will not impede or hamper the necessary financial operations of theState in:

(1)  Any bonds or interest-bearing notes or obligations:

(A)  Of the State (including state director offinance's warrant notes issued pursuant to chapter 40);

(B)  Of the United States;

(C)  For which the faith and credit of theUnited States are pledged for the payment of principal and interest;

(2)  Federal Farm Credit System notes and bonds;

(3)  Federal Agricultural Mortgage Corporation notesand bonds;

(4)  Federal Home Loan Bank notes and bonds;

(5)  Federal Home Loan Mortgage Corporation bonds;

(6)  Federal National Mortgage Association notes andbonds;

(7)  Student Loan Marketing Association notes andbonds;

(8)  Tennessee Valley Authority notes and bonds;

(9)  Securities of a mutual fund whose portfolio islimited to bonds or securities issued or guaranteed by the United States or anagency thereof or repurchase agreements fully collateralized by any such bondsor securities;

(10)  Securities of a money market mutual fund that israted AAA, or its equivalent, by a nationally recognized rating agency or whoseportfolio consists of securities that are rated as first tier securities by anationally recognized statistical rating organization as provided in 17 Code ofFederal Regulations section 270.2a-7;

(11)  Federally insured savings accounts;

(12)  Time certificates of deposit;

(13)  Certificates of deposit open account;

(14)  Repurchase agreements with federally insuredbanks, savings and loan associations, and financial services loan companies;

(15)  Student loan resource securities including:

(A)  Student loan auction rate securities;

(B)  Student loan asset-backed notes;

(C)  Student loan program revenue notes andbonds; and

(D)  Securities issued pursuant to Rule 144A ofthe Securities Act of 1933, including any private placement issues;

issued with either bond insurance orovercollateralization guaranteed by the United States Department of Education;provided all insurers maintain a triple-A rating by Standard & Poor's,Moody's, Duff & Phelps, Fitch, or any other major national securitiesrating agency;

(16)  Commercial paper with an A1/P1 or equivalentrating by any national securities rating service; and

(17)  Bankers' acceptances with an A1/P1 or equivalentrating by any national securities rating service;

provided that the investments are due to mature notmore than five years from the date of investment.  Income derived from thoseinvestments shall be a realization of the general fund; provided that, exceptas provided by Act 79, Session Laws of Hawaii 2009, income earned from moneysinvested by the general funds, special funds, bond funds, and trust and agencyfunds on an investment pool basis shall be paid into and credited to therespective funds based on the contribution of moneys into the investment poolby each fund.  As used in this section, "investment pool" means theaggregate of state treasury moneys that are maintained in the custody of thedirector of finance for investment and reinvestment without regard to funddesignation.

(b)  Except with respect to an early withdrawalpenalty on an investment permitted by this section, the amount of such penaltybeing mutually agreed at the time of acquisition of such investment, noinvestment permitted by this section shall require or may in the future requirepayments by the State, whether unilateral, reciprocal, or otherwise, includingmargin payments, or shall bear interest at a variable rate which causes or maycause the market price of such investment to fluctuate; provided that suchlimitation shall not apply to money market mutual funds which:

(1)  Invest solely in:

(A)  Direct and general obligations of theUnited States of America; or

(B)  Obligations of any agency orinstrumentality of the United States of America the payment of the principaland interest on which are unconditionally guaranteed by the full faith andcredit of the United States of America;

(2)  Are rated at the time of purchase"AAAm-G" or its equivalent by Standard & Poor's Ratings Group;and

(3)  Are open-end management investment companiesregulated under the Investment Company Act of 1940, as amended, which calculatetheir current price per share pursuant to Rule 2a-7 (17 Code of FederalRegulations section 270.2a-7) promulgated under such act.

(c)  Furthermore, the State shall not acquireany investment or enter into any agreement in connection with the acquisitionof any investment or related to any existing investment held by the State,which would require or may in the future require any payment by the State,whether unilateral, reciprocal, or otherwise, such as swap agreements, hedgeagreements, or other similar agreements.  For purposes of this section, a swapor hedge payment is any payment made by the State in consideration or inexchange for a reciprocal payment by any person, such as a variable ratepayment in exchange for a fixed rate payment, a fixed rate payment in exchangefor a variable rate payment, a payment when a cap or a floor amount isexceeded, or other similar payment. [L 1945, c 59, §1; am L 1947, c 244, §1; RL1955, §132-12; am L 1959, c 119, §1; am L Sp 1959 2d, c 1, §14; am L 1963, c114, §1; HRS §36-21; am L 1977, c 105, §1; am L 1982, c 155, §1; gen ch 1985;am L 1988, c 78, §1; am L 1993, c 107, §1; am L 1995, c 109, §1; am L 1996, c117, §1; am L 1997, c 47, §1; am L 1998, c 119, §1 and c 273, §1; am L 1999, c160, §23; am L 2000, c 26, §1; am L 2001, c 39, §1; am L 2009, c 79, §31]

 

Attorney General Opinions

 

  Interest from moneys deposited in qualified depositorycredited to special fund.  Interest on other short term investments credited togeneral fund.  Att. Gen. Op. 85-22.