Sec. 2. Definitions
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In this Act: The term attachment means the time at which a security interest becomes enforceable against a debtor with respect to collateral. The term collateral means property subject to a security interest. The term financial guaranty insurance means a surety bond, an insurance policy, an indemnity contract, or any similar guaranty, under which loss is payable on proof of a financial loss to an insured claimant, an obligee, or an indemnitee as a result of the failure of any obligor on or issuer of any debt instrument or other monetary obligation to pay, when due, principal, interest, or any other amount due or payable with respect to that instrument or obligation, if that failure to pay is the result of a financial default, a financial insolvency, or a discharge in bankruptcy.
The term financial guaranty insurer means a party that is obligated as a surety, insurer, or indemnitor under a financial guaranty insurance contract. The term financial obligation — means an obligation validly owed as of the effective date of this Act by a qualifying territory or an instrumentality of a qualifying territory thereof that arises from any— security issued by a qualifying territory or instrumentality of a qualifying territory; loan taken out by a qualifying territory or instrumentality of a qualifying territory; repurchase or swap or other derivative contract entered into by a qualifying territory or instrumentality of a qualifying territory; or guaranty of any security or loan or repurchase or swap or other derivative contract by a qualifying territory or instrumentality of a qualifying territory; and does not include any— claim made by a vendor or service provider that is owed payment by a qualifying territory or an instrumentality of a qualifying territory for a good or service rendered in the ordinary course of business; claim made by or on behalf of a current or former employee of a qualifying territory or an instrumentality of a qualifying territory that is owed payment for a pension or other retirement benefit, or for a health care benefit of any kind; or claim against a qualifying territory or an instrumentality of a qualifying territory for a pending tax refund or tax credit.
The term instrumentality includes— a political subdivision of a qualifying territory; a public agency of a qualifying territory; a public corporation of a qualifying territory; and a banking corporation of a qualifying territory. The term per capita debt of a territory means the quotient obtained by dividing— the aggregate amount of the financial obligations of a territory and the instrumentalities of the territory, which shall not include— the Federal debt; or the unfunded liabilities of a pension system of the government of the qualifying territory or any instrumentality of a qualifying territory for the payment of pension and other retirement benefits, or health care benefits of any kind, to current or former employees of the qualifying territory or the instrumentality of the qualifying territory that are owed payment for a pension or other retirement benefit, or for a health care benefit of any kind; by the population of the territory (based on the most recent data available from the Bureau of the Census).
The term proceeds means— whatever is acquired upon the sale, lease, license, exchange, or other disposition of collateral; or whatever is collected on, or distributed on account of, collateral. The term qualifying territory means a territory that meets not less than 2 of the following qualifications: The population of the territory, based on the most recent data available from the Bureau of the Census, has decreased by more than 5 percent during the 10-year period ending on the date of a discharge under section 101.
The territory has received major disaster assistance under the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5121 et seq.) during the 5-year period ending on the date of a discharge under section 101. The per capita debt of the territory is greater than $15,000 (as adjusted annually to reflect the percentage change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor). The term security agreement means an agreement or resolution that creates or provides for a security interest.
The term secured financial obligation means any financial obligation to the extent of the value of any collateral pledged by a qualifying territory or an instrumentality of a qualifying territory to secure the repayment of the financial obligation pursuant to a valid and perfected security interest under applicable territorial law, not including— any property acquired or anticipated to be acquired by a qualifying territory or an instrumentality of a qualifying territory after the date of a discharge under section 101, even if that property, when acquired, would have become collateral subject to a security interest; or any proceeds, products, offspring, or profits of the collateral not in existence on the date of a discharge under section 101, unless the property constitutes the proceeds of collateral to which the security interest has attached as of the date of the discharge.
The term security interest — means an interest in property, including a lien or other pledge of property, that secures a payment or the performance of an obligation; and does not include a pledge of the full faith and credit of a qualifying territory or its instrumentality, even in the case that such pledge includes a promise of all available resources of the qualifying territory or its instrumentality. The term territory — means any self-governing Federal territory; and includes— the Commonwealth of Puerto Rico;
Guam; the Commonwealth of the Northern Mariana Islands; the United States Virgin Islands; and American Samoa. The term unsecured financial obligation means any financial obligation to the extent the financial obligation is not a secured financial obligation.
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