[§557A-415]  Asset-backed securities. 
(a)  As used in this section, "asset-backed security" means an asset
whose value is based upon the right it gives the owner to receive distributions
from the proceeds of financial assets that provide collateral for the
security.  The term includes an asset that gives the owner the right to receive
only the interest or other current return from the collateral financial assets
or only the proceeds from the capital investment in the collateral financial
assets.  It does not include an asset to which section 557A-401 or 557A-409
applies.



(b)  If a trust receives a payment from the
interest or other current return and the capital investment of the collateral
financial assets, the trustee shall allocate to income the portion of a payment
that the payor identifies as being from the interest or other current return,
and shall allocate the balance of the payment to principal.



(c)  If a trust receives one or more payments
in exchange for the trust's entire interest in an asset-backed security in one
accounting period, the trustee shall allocate the payments to principal.  If a
payment is one of a series of payments that will result in the liquidation of
the trust's interest in the security over more than one accounting period, the
trustee shall allocate ten per cent of the payment to income and the balance to
principal.  [L 2000, c 191, pt of §1]