§36-21 - Short-term investment of state moneys.

PART II.
INVESTMENTS; TRANSFERS

§36-21 Short-term investment of state
moneys. (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 which
in the director's judgment are in excess of the amounts necessary for meeting
the immediate requirements of the State and where in the director's judgment
the action will not impede or hamper the necessary financial operations of the
State in:

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

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

(B) Of the United States;

(2) Federal Farm Credit System notes and bonds;

(3) Federal Agricultural Mortgage Corporation notes
and bonds;

(4) Federal Home Loan Bank notes and bonds;

(5) Federal Home Loan Mortgage Corporation bonds;

(6) Federal National Mortgage Association notes and
bonds;

(7) Student Loan Marketing Association notes and
bonds;

(8) Tennessee Valley Authority notes and bonds;

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

(10) Securities of a money market mutual fund that is
rated AAA, or its equivalent, by a nationally recognized rating agency or whose
portfolio consists of securities that are rated as first tier securities by a
nationally recognized statistical rating organization as provided in 17 Code of
Federal 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 insured
banks, 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;

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

issued with either bond insurance or
overcollateralization 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 securities
rating agency;

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

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

provided that the investments are due to mature not
more than five years from the date of investment. Income derived from those
investments shall be a realization of the general fund; provided that, except
as provided by Act 79, Session Laws of Hawaii 2009, income earned from moneys
invested by the general funds, special funds, bond funds, and trust and agency
funds on an investment pool basis shall be paid into and credited to the
respective funds based on the contribution of moneys into the investment pool
by each fund. As used in this section, "investment pool" means the
aggregate of state treasury moneys that are maintained in the custody of the
director of finance for investment and reinvestment without regard to fund
designation.

(b) Except with respect to an early withdrawal
penalty on an investment permitted by this section, the amount of such penalty
being mutually agreed at the time of acquisition of such investment, no
investment permitted by this section shall require or may in the future require
payments by the State, whether unilateral, reciprocal, or otherwise, including
margin payments, or shall bear interest at a variable rate which causes or may
cause the market price of such investment to fluctuate; provided that such
limitation shall not apply to money market mutual funds which:

(1) Invest solely in:

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

(B) Obligations of any agency or
instrumentality of the United States of America the payment of the principal
and interest on which are unconditionally guaranteed by the full faith and
credit 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 companies
regulated under the Investment Company Act of 1940, as amended, which calculate
their current price per share pursuant to Rule 2a-7 (17 Code of Federal
Regulations section 270.2a-7) promulgated under such act.

(c) Furthermore, the State shall not acquire
any investment or enter into any agreement in connection with the acquisition
of 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, hedge
agreements, or other similar agreements. For purposes of this section, a swap
or hedge payment is any payment made by the State in consideration or in
exchange for a reciprocal payment by any person, such as a variable rate
payment in exchange for a fixed rate payment, a fixed rate payment in exchange
for a variable rate payment, a payment when a cap or a floor amount is
exceeded, or other similar payment. [L 1945, c 59, §1; am L 1947, c 244, §1; RL
1955, §132-12; am L 1959, c 119, §1; am L Sp 1959 2d, c 1, §14; am L 1963, c
114, §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, c
117, §1; am L 1997, c 47, §1; am L 1998, c 119, §1 and c 273, §1; am L 1999, c
160, §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 depository
credited to special fund. Interest on other short term investments credited to
general fund. Att. Gen. Op. 85-22.