Secured Transactions Act 2007
TITLE 24 – PROPERTY
CHAPTER 5 - SECURED TRANSACTIONS
sRepublic of the Marshall Islands
Jepilpilin Ke Ejukaan
SECURED TRANSACTIONS ACT 2007
Arrangement of Sections
Section Page
PART I – DEFINITIONS AND SCOPE OF THE LAW 5
§501. Short title. .............................................................................................................................. 5
§502. Definitions. ............................................................................................................................ 6
§503. Scope. ..................................................................................................................................... 9
PART II – SECURITY INTEREST 9
§504. Obligations. ........................................................................................................................... 9
§505. Security interest in consumer goods. ................................................................................. 9
§506. Description of collateral..................................................................................................... 10
§507. Attachment of security interest. ....................................................................................... 10
§508. Notice to account debtors not required. .......................................................................... 10
§509. Continuity of security interest. ......................................................................................... 10
§510. Security agreement in a record. ........................................................................................ 10
§511. Perfection of security interest. .......................................................................................... 10
§512. Means of perfection in special cases. ............................................................................... 11
§513. Continuity of perfection. ................................................................................................... 12
§514. Assignment of security interest. ....................................................................................... 12
§515. Lapse of perfection. ............................................................................................................ 12
§516. Priority rules. ...................................................................................................................... 12
§517. Priority continues in proceeds. ......................................................................................... 12
§518. Purchase of secured sales contracts or instruments. ..................................................... 12
§519. Transferee exceptions. ....................................................................................................... 13
§520. Purchase money security interest. ................................................................................... 13
§521. Livestock. ............................................................................................................................. 14
§522. Fixtures. ............................................................................................................................... 14
§523. Crops. ................................................................................................................................... 14
§524. Right of retention. .............................................................................................................. 15
§525. Accessions. .......................................................................................................................... 15
§526. Commingled goods. .......................................................................................................... 15
§527. Subordination. .................................................................................................................... 16
PART III – FILING 16
§528. Establishment of electronic filing office .......................................................................... 16
§529. Regulations. ........................................................................................................................ 16
§530. Public record. ...................................................................................................................... 16
§531. Sufficiency of notice. .......................................................................................................... 17
§532. Effectiveness of notice. ...................................................................................................... 18
§533. Amendment. ....................................................................................................................... 18
§534. Continuation. ...................................................................................................................... 18
§535. Termination. ....................................................................................................................... 19
§536. Notice of objection. ............................................................................................................ 19
§537. Filing office refusal to file notice. ..................................................................................... 20
§538. Filing office duties.............................................................................................................. 20
§539. Search of filing office records and certified report. ....................................................... 21
§540. Fees set by regulation. ....................................................................................................... 22
PART IV – ENFORCEMENT OF SECURITY INTEREST 22
§541. Secured party rights upon default by debtor. ................................................................ 22
§542. Recovery without judicial process. .................................................................................. 22
§543. Expedited possession by secured party. ......................................................................... 23
§544. Right to dispose of collateral ............................................................................................ 25
§545. Commercial reasonableness required. ............................................................................ 25
§546. Notice of disposition.......................................................................................................... 26
§547. Repair or preparation of collateral. ................................................................................. 26
§548. Application of proceeds and clear title of buyer. .......................................................... 26
§549. Retention of collateral by secured party ......................................................................... 27
§550. Redemption......................................................................................................................... 27
§551. Remedies for secured party noncompliance. ................................................................. 28
PART V – COLLECTION OF PAYMENTS 28
§552. Collection of payments to the filing office...................................................................... 28
PART VI – PRE-EMPTION AND TRANSITION 28
§554. Pre-emption of conflicting laws. ...................................................................................... 28
§555. Transition provisions. ........................................................................................................ 29
§556. Amendments. ..................................................................................................................... 30
§557. Effective Date. ..................................................................................................................... 39

TITLE 24 – PROPERTY
CHAPTER 5 - SECURED TRANSACTIONS
sRepublic of the Marshall Islands
Jepilpilin Ke Ejukaan
SECURED TRANSACTIONS ACT 2007
AN ACT to enact a law relating to secured transactions: to amend Title 24 MIRC by
adding a new Chapter 5 to enable lending secured by movable property in the
Republic of the Marshall Islands, in particular to provide for creation of security
interests in movable property, to provide for prioritization of competing interests in
movable property, to provide for a public filing office where notices of security
interests may be filed and where they are publicly available for inspection, and to
provide for simplified, expedited enforcement against collateral when a debtor
defaults; to amend Chapter 1 of Title 24 MIRC to delete references to personal
property; to amend Section 109 of Title 30 MIRC to harmonize the enforcement of
judgments with the Secured Transactions Act; to amend Section 106 of Title 48 MIRC
to bring employer withholding tax liens within the notice and priority provisions of
the Secured Transactions Act; and to amend Section 158 of Title 49 MIRC to bring
social security contribution liens within the notice and priority provisions of the
Secured Transactions Act.
Commencement: May 11, 2015
Source: P. L. 2007 -77
Amended By: P. L. 2007-91
PART I – DEFINITIONS AND SCOPE OF THE LAW
DIVISION 1 – DEFINITIONS
§501. Short title.
This Chapter may be cited as the Secured Transactions Act of 2007.
§502. Definitions.
The following terms shall have the meanings set out hereunder this Chapter:
(a) “accession” means goods that are physically united with other
goods in a manner such that the identity of the goods is not
lost;
(b) “account” means an unsecured right to payment for goods
sold or otherwise disposed of, or for services rendered;
(c) “account debtor” means the person who is obligated on an
account, secured sales contract or payment intangible;
(d) “attachment” means completion of all conditions necessary to
make a security interest enforceable against the debtor with
respect to the collateral;
(e) “collateral” means present or future movable property subject
to a security interest or lien;
(f) “company” means an entity such as a corporation, limited
liability company or limited partnership, but does not include
a sole proprietorship;
(g) “consumer goods” means goods used primarily for personal,
family, or household purposes, but does not include licensed
motor vehicles;
(h) “debtor” means a person who owes payment or other
performance of a secured obligation, whether or not the
person owns or has rights in the collateral, and includes a
seller of accounts or secured sales contracts, and a lessee of
goods;
(i) “default” means a material failure of a debtor to perform
under a security agreement;
(j) “deposit account” means a demand, time, savings, passbook,
or similar account maintained with a bank. The term does not
include investment property or accounts evidenced by an
instrument;
(k) “document” means a document of title, or a receipt such as a
bill of lading or warehouse receipt issued by a person in the
business of transporting or storing goods.
(l) “equipment” means goods that are not crops, livestock,
inventory, or consumer goods;
(m) “fixture” means goods that are fixed or are intended to
become fixed to immovable property in a manner that causes a
property right to arise in the goods. Building materials and
readily removable factory machines, office machines, and
domestic appliances are not fixtures;
(n) “goods” means all things that are movable when a security
interest attaches. The term includes fixtures, crops and
livestock but does not include accounts or secured sales
contracts, money, documents, or instruments;
(o) “instrument” means a writing that evidences a right to
payment of money, that is not a security agreement or lease,
and that in the ordinary course of business may be transferred
by delivery with endorsement or assignment;
(p) “inventory” means goods held for sale or lease, or goods that
are raw materials, work in process, or materials used or
consumed in a business;
(q) “investment securities” means equity or debt interests in a
business enterprise that are held for investment purposes,
whether or not they are evidenced by certificates;
(r) “lien holder” means a person who obtains a right in collateral
by order of a court or other legal authority, or by the authority
of an administrator in an insolvency proceeding, or any other
person who obtains a right in collateral by operation of law,
except a person with a right of retention;
(s) “Minister” means the Minister responsible for the Ministry of
Resources and Development;
(t) “movable property” means movable things of any nature,
intangibles of any nature and fixtures;
(u) “notice” means a record filed in the filing office. The term
includes an initial notice, amended notice, continuation notice,
termination notice and notice of objection;
(v) “ordinary course of business” refers to a transfer of movable
property by a person who deals in the kind of property
transferred;
(w) “payment intangible” means a right to receive payment of a
monetary obligation, other than an account or a secured sales
contract;
(x) “perfection” means optimization of a secured party’s rights in
collateral against third parties such as buyers, other secured
parties, lien holders and an insolvency administrator;
(y) “proceeds” means whatever is acquired upon sale, lease or
other disposition of collateral, or whatever is collected on or
distributed with respect to collateral. Proceeds include money,
property exchanged for the original collateral, property
purchased with money proceeds, a deposit account into which
money proceeds are deposited, and a right to insurance
payment or other compensation for loss or damage of the
collateral;
(z) “purchase money security interest” means a security interest
taken by a seller of goods to secure their price or by a person
who gives value to enable a debtor to acquire goods;
(aa) “record” means information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and
is retrievable in perceivable form;
(bb) “right of retention” means the right of a person who provides
services or materials to maintain or enhance the value of goods
to retain possession of the goods until paid for the services or
materials;
(cc) “secured party” means a person in whose favor a security
interest is created under a security agreement. For the
purposes of priority determination and filing only, it includes
a buyer of accounts or secured sales contracts and a lessor of
goods for more than a year;
(dd) “secured sales contract” means a contract for the sale of goods
on credit that includes a security agreement creating a security
interest in the sold goods;
(ee) “security interest” means a property right in collateral that
secures performance of an obligation; and for the purposes of
perfection and priority, it includes the interests of a buyer of
accounts or secured sales contracts and a lessor of goods for
more than one year;
(ff) “serial numbered equipment” means major end items of
industrial, construction or agricultural equipment that are
identified by unique serial numbers.
DIVISION 2 – SCOPE OF THE LAW
§503. Scope.
(1) This law applies to transactions that secure an obligation with
collateral, regardless of the form of the agreement or the terminology
used, and whether the collateral is owned by the secured party or the
debtor.
(2) This law applies to the sale of accounts and secured sales contracts
and to the lease of goods for more than one year, but only for the
purposes of priority determination and filing of a notice.
(3) This law does not apply to the sale of a business, assignment for
collection action only, the transfer of a claim for compensation of an
employee, or interests in vessels that are subject to Chapter 3 of Title
47, MIRC.
(4) This law does not apply to non-resident corporations, partnerships,
trusts, limited liability companies, foreign maritime entities,
unincorporated associations or other entities not doing business in
the Republic that are subject to Title 52, MIRC. [Subsection (4) inserted byP.L. 2007-91.]
PART II – SECURITY INTEREST
DIVISION 1 – SECURITY INTEREST AND SECURED OBLIGATION
§504. Obligations.
A security interest may secure one or more obligations. An obligation may
be: described specifically or generally; monetary or non-monetary; pre-
existing, present or future; or a current account.
§505. Security interest in consumer goods.
A security interest may not be taken in the consumer goods of a debtor
except for a purchase money security interest in the consumer goods.
§506. Description of collateral.
(1) A description of collateral is sufficient, whether it is specific or
general, if it reasonably identifies what is described. A description
such as “all equipment” or “all movable property” is sufficient.
(2) Reasonable description of consumer goods requires a specific
description.
§507. Attachment of security interest.
A security interest attaches to collateral and becomes enforceable only if the
debtor has signed a security agreement that describes the collateral, if value
has been given by the secured party and if the debtor has rights in the
collateral. Unless otherwise agreed, a security interest attaches to proceeds.
§508. Notice to account debtors not required.
When collateral consists of present or future accounts, secured sales
contracts or payment intangibles, notice to the account debtors is not
required as a condition of attachment, perfection or enforcement of the
security interest.
§509. Continuity of security interest.
A security interest continues in collateral notwithstanding sale, lease,
license, exchange, or other disposition of the collateral, except as otherwise
provided in this law or agreed upon by the parties.
DIVISION 2 – SECURITY AGREEMENT
§510. Security agreement in a record.
A security agreement must be in a record or multiple records, which may be
electronic. It is effective between the parties and against purchasers and
creditors, except as otherwise provided in this law.
DIVISION 3 – PERFECTION OF SECURITY INTEREST
§511. Perfection of security interest.
A security interest is perfected when it has attached to the collateral and a
means of perfection is completed, subject to the conditions of Section 512.
The means of perfection are: filing of a notice; possession of the collateral;
control of the collateral; and automatic perfection as provided in paragraphs
1 and 5 of Section 512.
§512. Means of perfection in special cases.
(1) A notice must be filed in the filing office to perfect a security interest
with the following qualifications:
(a) Perfection occurs automatically upon attachment of the
security interest in case of a purchase money security interest
in consumer goods of the debtor.
(b) A security interest in goods, instruments, documents, or
secured sales contracts may be perfected by the secured
party’s taking possession.
(c) A security interest in money may be perfected only by the
secured party’s taking possession of the money, except for
cash proceeds.
(d) A security interest in a deposit account may be perfected only
by the secured party’s control of the deposit account.
(e) Upon disposition of collateral, a security interest attaches to
proceeds of the collateral and is continuously perfected if the
security interest in the collateral was perfected. The security
interest in proceeds becomes unperfected 15 days after the
debtor receives the proceeds unless they are identifiable cash
proceeds or are described by the collateral description in the
filed notice.
(f) A lessor or a buyer of accounts or secured sales contracts may
perfect its interest in the same manner as for a security interest.
(g) A security interest in a motor vehicle or serial numbered
equipment may be perfected by filing a notice that describes
the motor vehicle or serial numbered equipment generally or
by serial number. As against a buyer or lessee, however,
priority requires description by serial number.
§513. Continuity of perfection.
A security interest is perfected continuously if it is first perfected in one
manner and later perfected in another manner, without a period when it is
not perfected.
§514. Assignment of security interest.
If a secured party assigns a perfected security interest, a notice need not be
filed under this law to continue perfection of the security interest.
§515. Lapse of perfection.
When a filing period lapses as a result of a failure to file a continuation
notice by the lapse date, perfection of the security interest also lapses, unless
perfection is achieved by another means prior to the lapse.
DIVISION 4 - PRIORITY
§516. Priority rules.
(1) Security interests and interests of lien holders in the same collateral
have priority according to time of filing of a notice or perfection by
other means, except as otherwise provided in this law.
(2) Priority is measured from the earlier to occur of filing of a notice or
perfection by other means, provided that there is no time thereafter
when a filed notice is not effective or perfection does not exist.
(3) The first security interest to attach to collateral has priority among
security interests for which there is no effective filed notice or other
form of perfection.
§517. Priority continues in proceeds.
The priority of a security interest in proceeds is the same as the priority of
the security interest in the original collateral.
§518. Purchase of secured sales contracts or instruments.
A purchaser of secured sales contracts or instruments has priority over a
secured party’s security interest in the secured sales contracts or instruments
if, in the ordinary course of the purchaser’s business, the purchaser gives
new value and takes possession of the secured sales contracts or
instruments, and if the secured sales contracts or instruments do not
indicate an assignment to the secured party.
§519. Transferee exceptions.
(1) A transferee takes collateral free of a security interest if the transferee
gives value and takes delivery of the collateral without knowledge of
the security interest and before a notice is filed or the security interest
is otherwise perfected.
(2) A buyer or lessee of goods in the ordinary course of business takes
free of a security interest, even if the security interest is perfected and
the buyer or lessee knows of its existence.
(3) A buyer or lessee of a motor vehicle or serial numbered equipment
takes it free of a security interest if the buyer or lessee does not know
of the security interest and if the serial number is not included on a
filed notice of security interest.
(4) A buyer takes free of a perfected security interest in goods if the
secured party consents to the sale by the debtor.
(5) A person who receives cash for value takes free of a perfected
security interest in the cash.
(6) A lien holder who causes collateral to be seized before a security
interest is perfected takes free of the security interest.
(7) A court or a liquidator of an insolvent company that takes physical
custody of assets before a security interest is perfected in them takes
free of the security interest.
§520. Purchase money security interest.
(1) A purchase money security interest in equipment has priority over a
conflicting security interest if the purchase money security interest is
perfected when the debtor receives possession of the equipment or
within 10 days thereafter.
(2) A purchase money security interest in goods or their proceeds that is
perfected not later than 10 days from the date the debtor obtains
possession of the goods has priority over the rights of a buyer, lessee,
or lien holder which arise between the time the security interest
attaches and the time the notice is filed.
(3) A perfected purchase money security interest in inventory or
livestock has priority over a conflicting perfected security interest in
the same inventory or livestock if the purchase money security
interest is perfected when the debtor receives possession of the
inventory or livestock, and if, not later than 10 days after the debtor
receives possession, the purchase money secured party gives written
notice to the holder of the conflicting perfected security interest in the
same types of inventory or livestock.
§521. Livestock.
A perfected security interest in livestock given for value to enable the debtor
obtain food or medicine for the livestock has priority over any other security
interest in the livestock or their proceeds granted by the debtor except for a
perfected purchase money security interest in the livestock.
§522. Fixtures.
(1) A security interest may continue in goods that become fixtures.
(2) A security interest in fixtures is subordinate to rights in the
immovable property to which it is affixed unless a notice of the
security interest in the fixtures has been filed in the filing office
established by this law and, if the right in the immovable property
arose after the goods became fixed, filing of notice of the security
interest in the fixtures preceded registration of the rights in or seizure
of the immovable property.
§523. Crops.
(1) A perfected security interest in crops growing or to be grown has
priority over a conflicting interest of the owner or mortgagee of the
land if the debtor is in possession of the land or has an interest in the
land that is registered in accordance with the Land law.
(2) A perfected security interest in crops or their proceeds, given for
value to enable the debtor to produce or harvest the crops and given
while the crops are growing crops or during the 6 month period
before the crops were planted has priority over any other security
interest in the same collateral given by the same debtor.
(3) An unperfected security interest in crops is subordinate to the rights
of a judgment creditor who causes the land to be seized in order to
enforce a judgment.
§524. Right of retention.
A right of retention has priority over a perfected security interest in goods if
it arises in the ordinary course of business of the person in possession of the
goods.
§525. Accessions.
A security interest continues in collateral that becomes an accession. If a
security interest is perfected when the collateral becomes an accession, the
security interest remains perfected in the accession.
§526. Commingled goods.
(1) In this section, “commingled goods” means goods that are physically
united with other goods in a way that their identity is lost in a
product or mass.
(2) A security interest may not be created in commingled goods.
However, if collateral to which a security interest has attached
becomes commingled, the security interest attaches to the product or
mass.
(3) If a security interest is perfected before the collateral becomes
commingled, the security interest continues to be perfected in the
product or mass. The priority of the security interest in the product or
mass is measured from the time of perfection of the security interest
in the collateral that became commingled, except as limited by
paragraph 4(c), below.
(4) If more than one security interest attaches to the product or mass, the
following rules determine priority.
(a) A security interest that is perfected has priority over a security
interest that is unperfected at the time the collateral becomes
commingled goods;
(b) The first security interest to attach to the product or mass has
priority among unperfected security interests; and
(c) If more than one security interest is perfected, the perfected
security interests rank equally in proportion to the value of the
collateral at the time it became commingled.
§527. Subordination.
A secured party may, in a security agreement or otherwise, subordinate its
security interest to any other interest.
PART III – FILING
DIVISION 1 – FILING OFFICE OPERATION
§528. Establishment of electronic filing office
(1) The filing office will be established by the Ministry of Resources and
Development.
(2) The filing office shall provide electronic means for filing of notices of
security interest and liens, and for searching for notices. The
electronic records of the filing office shall be the official records.
(3) The filing office is the place to file a notice of a security interest or
other interest in movable property that is within the scope of this law.
§529. Regulations.
The Ministry may issue regulations consistent with this law.
§530. Public record.
Information contained in a filed notice is a public record. Indices and other
records created by the filing office with respect to notices are public records.
Any person may inspect notices in the filing office.
DIVISION 2 – NOTICES TO BE FILED
§531. Sufficiency of notice.
(1) An initial notice of security interest is sufficient if it includes the
following information:
(a) The notice must identify the debtor by name. The standard for
correct name shall be the name as it appears in the records of
the Social Security Administration if a citizen of the Republic
of the Marshall Islands, on its organizational document if a
company or other organization, or on his or her passport if an
individual other than a citizen.
(b) The notice must identify the secured party or an agent of the
secured party by name and provides an address.
(c) The notice must describe the collateral covered by the notice.
The collateral description may be general or specific. If the
collateral is a fixture, the notice must describe the immovable
property to which a fixture is to be affixed.
(2) A debtor must authorize the filing of an initial notice by signing a
security agreement or other record. A signature may be any tangible
indication of the debtor’s intent to enter the agreement.
(3) A notice may be filed before a security agreement is concluded or
before a security interest attaches to collateral.
(4) A notice of lien may be filed by a lien holder without the consent of
the lienee.
(a) A notice of lien on the property of an insolvent company may
be filed by the court or a liquidator constituted by the court.
(b) A notice of a lien created by Section 102 of the Enforcement of
Judgments Act on the movable property of a judgment debtor
may be filed by the Clerk of the High Court.
(c) A notice of lien on the movable property of a person who is
delinquent in payment of taxes or employer Social Security
contributions may be filed by the government.
(5) A notice substantially complying with the requirements of this
Division is effective unless it is seriously misleading. A notice that
does not provide the name of the debtor is seriously misleading.
§532. Effectiveness of notice.
(1) A notice is effective at the time it is discoverable on the records of the
filing office.
(2) A notice is effective for five (5) years unless a continuation notice is
filed before the period lapses.
(3) Upon lapse, a notice becomes ineffective, and the security interest
that was perfected by the notice becomes unperfected unless it is
perfected by another means.
§533. Amendment.
(1) An initial notice may be amended. An amended notice must:
(a) identify the initial notice by its file number;
(b) identify each secured party who authorizes the amendment;
and
(c) provide all of the information required for an initial notice.
(2) An amended notice that adds collateral or adds a debtor must be
authorized by the debtor by signing the security agreement or other
record.
(3) An amended notice is effective only as to each secured party who
authorizes it.
(4) An amended notice that adds collateral or a debtor is effective as to
the added collateral or debtor from the date of filing of the amended
notice.
§534. Continuation.
(1) The period of effectiveness of a notice may be continued by filing a
continuation notice that:
(a) identifies the initial notice by its file number; and
(b) identifies each secured party who authorizes the continuation
notice.
(2) A continuation notice may be filed only within six months before the
expiration of the initial period of the notice.
(3) Upon filing of a continuation notice, the effectiveness of the initial
notice is extended for five (5) years as to each authorizing secured
party.
§535. Termination.
(1) The effectiveness of a notice may be terminated by filing a
termination notice that:
(a) identifies the initial notice by its file number;
(b) identifies each secured party who authorizes the termination
notice; and
(c) indicates that the initial notice is no longer effective with
respect to each secured party who authorized the termination
notice.
(2) Within 20 days after the secured party receives a written demand by
the debtor, a secured party shall file a termination notice if:
(a) there is no outstanding secured obligation and no commitment
to make an advance or otherwise give value; or
(b) the debtor did not authorize filing of the initial notice.
(3) A termination notice terminates effectiveness of the initial notice as to
each authorizing secured party.
§536. Notice of objection.
(1) A person may file a notice of objection to a notice of security interest
that identifies the person as a debtor if the person believes that the
notice is inaccurate or was wrongfully filed.
(2) A notice of objection must:
(a) identify the notice to which it relates by its file number;
(b) name the person who files the notice of objection; and
(c) provide the basis for the person’s belief that the notice of
security interest is inaccurate or was incorrectly or wrongfully
filed.
(3) Filing of a notice of objection does not affect the effectiveness of a
notice of security interest.
DIVISION 3 – FILING OFFICE AUTHORITY AND DUTIES
§537. Filing office refusal to file notice.
(1) The filing office may refuse to file a notice because:
(a) in the case of an initial notice, it does not identify a debtor by
name;
(b) in the case of an amended notice, it does not identify a debtor
by name; it does not provide the file number of the initial
notice; it identifies an initial notice whose effectiveness has
lapsed; or it does not identify an authorizing secured party;
(c) in the case of a continuation notice, it does not provide the file
number of the initial notice, it was not presented within the
permitted six-month period, or it does not identify an
authorizing secured party;
(d) in the case of a termination notice, it does not provide the file
number of the initial notice, it relates to an initial notice that
has lapsed, or it does not identify an authorizing secured
party;
(e) in the case of a notice of objection, it does not provide the file
number of the initial notice, or it does not name the person
who files the notice; or
(f) less than the filing fee is tendered, or no arrangement has been
made for payment of fees by other means
(2) If the filing office refuses to file a notice, it shall promptly
communicate the fact of and reason for its refusal to the person who
presented the notice.
§538. Filing office duties.
(1) For each notice filed, the filing office shall:
(a) assign a unique file number;
(b) create a record that bears the number assigned to the initial
notice and the date and time of filing; and
(c) maintain the record for public inspection.
(2) The filing office shall index notices by the name of the debtor and, for
notices containing a serial number of a motor vehicle or serial
numbered equipment, by serial number.
(3) The filing office shall return a copy of the electronic record of the
notice, to include the file number and the date and time of filing.
(4) The filing office shall maintain the capability to retrieve a record by
the name of the debtor, by the file number assigned to the initial
notice and, for notices containing the serial number of motor vehicle
or serial numbered equipment, by serial number.
(5) The filing office shall maintain records of lapsed notices for a period
of ten years beyond the date of lapse.
(6) The duties of the filing office are merely administrative. By filing a
notice or refusing to file a notice, the filing office does not determine
the sufficiency, correctness, authenticity, or validity of any
information contained in the notice.
DIVISION 4 – INFORMATION FROM FILING OFFICE
§539. Search of filing office records and certified report.
(1) The filing office shall communicate the following information to any
person who requests it:
(a) whether there are in the filing office any effective notices that
designate a particular file number, debtor name, or vehicle or
serial numbered equipment serial number;
(b) the file number, and the date and time of filing of each notice;
(c) the name of each debtor and the name and address of each
secured party on each notice;
(d) all of the information contained in each notice.
(2) If requested, the filing office shall issue a certified report of the results
of a search that is an official record of the filing office and shall be
admissible into evidence in the courts without extrinsic evidence of
its authenticity.
(3) The purpose of information provided by the filing office is only to
give notice of the possible existence of a security interest in collateral.
For more complete information, the person who requested the
information may inquire of the secured party. The secured party
may, in its sole discretion, disclose terms of the security agreement,
more detailed description of the collateral, and the nature and
amount of the secured obligation, notwithstanding contrary
provisions of other laws.
DIVISION 5 – FEES OF FILING OFFICE
§540. Fees set by regulation.
The fees for filing a notice and for requesting a certified search report shall
be set by regulation to recover the costs of operation. There shall be no fee
for access to examine the records of the filing office by electronic means or
for other services.
PART IV – ENFORCEMENT OF SECURITY INTEREST
DIVISION 1 – SECURED PARTY’S RIGHTS
§541. Secured party rights upon default by debtor.
(1) If the debtor defaults on its obligation to pay or otherwise perform, or
upon the occurrence of another event of default, the security interest
becomes enforceable.
(2) Upon default, the secured party shall have:
(a) the right to possession or control of the collateral, even if the
security agreement is silent about possession or control;
(b) the right to dispose of the collateral; and
(c) other rights or remedies provided in the security agreement,
this law or other law.
§542. Recovery without judicial process.
(1) Upon default, a secured party with a security interest in an account,
secured sales contract or payment intangible may instruct the account
debtor to make payment to the secured party, and shall apply such
payment to satisfaction of the obligation secured by the security
interest after deducting the secured party’s reasonable collection
expenses.
(2) Upon default, a secured party with a security interest in a document
that is perfected by possession may proceed as to the goods covered
by the document.
(3) If the security interest secures a debt, the secured party shall pay the
debtor any amount collected in excess of the sum of the secured debt
and expenses of collection. Unless otherwise agreed, a deficiency
continues as an unsecured debt.
(4) If so agreed, and in any event after default:
(a) A bank with a perfected security interest in a deposit account
maintained by the bank may apply the balance of the deposit
account to the obligation secured by the deposit account; and
(b) In other cases, a secured party that has a security interest in a
deposit account perfected by control may instruct the bank to
pay the balance of the deposit account to the secured party’s
account.
(5) The secured party may act under this section without judicial
process, notwithstanding any other provision of this law.
§543. Expedited possession by secured party.
(1) In cases not covered by Section 542, the secured party may take
possession or control of collateral without legal process if the security
agreement so provides or if the debtor has agreed in writing after
default, provided that possession or control can be taken without a
breach of the peace. If the collateral is a fixture, the secured party may
remove it from the immovable property to which it is fixed without
judicial process only if the debtor has agreed in writing after default.
(2) As used in this section, breach of the peace includes entering the
premises of the debtor without permission, resorting to physical
violence or intimidation, or being accompanied by a law enforcement
officer when taking possession or confronting the debtor.
(3) If, upon default, the secured party cannot take possession or control
of collateral without breach of the peace, or if the debtor does not
agree after default to removal of collateral that is a fixture, the
secured party may proceed as follows:
(a) The secured party shall be entitled to an expedited hearing
upon application for a pre-judgment order granting the
secured party possession of the collateral. Such application
shall include a statement by the secured party, under oath,
verifying the existence of the security agreement attached to
the application and identifying at least one event of default by
the debtor under the security agreement.
(b) The secured party shall serve a copy of the application upon
the debtor, including a copy of all documents and evidence
submitted to the court in support thereof. The court shall
schedule the hearing under subparagraph a. at the earliest
available time, provided that no hearing shall be conducted
without service on the debtor of the application and
reasonable notice of the hearing unless:
(i) the court finds that the secured party has made
reasonable efforts to make service on the debtor and
that such efforts have not been successful; or
(ii) the court finds that the hearing should be conducted
without delay to prevent damage to the collateral,
substantial loss of the collateral’s value or the secured
party’s right to possession.
(c) If the court finds, after hearing, that it is probable that a default
has occurred under the security agreement and that the
secured party has a right to take possession of the collateral,
the court shall enter a pre-judgment order granting the
secured party possession of the collateral pending final
judgment or further order of the court. The order may direct
the debtor to take such action as the court deems necessary
and appropriate so that the secured party may take possession.
(d) If the court enters an order under subparagraph c. granting the
secured party pre-judgment possession of the collateral, it
shall also, upon application by the secured party, enter an
order permitting the prejudgment sale or other disposition of
the collateral under Section 544 unless the collateral is rare or
unique, or otherwise of such a nature that it is unlikely to be
replaceable. In the event of a disposition under this subsection,
the secured party shall retain possession of the proceeds of the
disposition pending final judgment or further order of the
court, unless the Court shall, in its sole discretion, order that
the proceeds be held in escrow.
(e) A secured party who takes possession of collateral under an
order issued pursuant to subparagraph c. shall use reasonable
care in the custody and preservation of collateral in the
secured party’s possession, pending disposition under
subparagraph d. or a final judgment or further order of the
court.
(f) Unless otherwise agreed, while the collateral is in the
possession of the secured party, reasonable expenses may be
charged to the debtor and secured by the collateral, including
the cost of any insurance, and the payment of taxes or fees
associated with the collateral.
(4) Alternatively to the procedure in paragraph 3, a secured party may
elect to proceed to judgment with respect to collateral and to enforce
pursuant to 30 MIRC Chapter 1.
DIVISION 2 – DISPOSITION OR RETENTION OF COLLATERAL
§544. Right to dispose of collateral
(1) After default, a secured party may sell, lease, license or otherwise
dispose of the collateral, publicly or privately.
(2) The secured party may buy at any public or private sale.
§545. Commercial reasonableness required.
(1) In disposing of collateral, the secured party shall act in a
commercially reasonable manner.
(2) A sale is not commercially unreasonable merely because a better
price could have been obtained by a sale at a different time or by a
different method from the time and method selected by the secured
party.
(3) A sale is commercially reasonable if the secured party disposes of the
collateral in conformity with commercial practices among dealers in
that type of property.
(4) If a method of disposition of collateral has been approved in any legal
proceeding, it is conclusively deemed to be commercially reasonable,
but no such approval is required by this law.
§546. Notice of disposition.
(1) Not later than ten (10) days before disposition of the collateral, the
secured party shall give notice to:
(a) the debtor;
(b) any other secured party or lien holder who, 5 days before the
date notice is given, held a security interest or lien in the
collateral that was perfected by filing; and
(c) any other person from whom the secured party received notice
of a claim of an interest in the collateral if the notice was
received before the secured party gives notice of the proposed
disposition.
(2) The debtor may waive the right to be notified.
(3) A notice of disposition is sufficient if the notice: identifies the debtor
and the secured party; describes the collateral; states the method of
intended disposition; and states the time and place of a public sale or
the time after which other disposition is to be made.
(4) The requirement for notice described in paragraph 1 does not apply if
the collateral is perishable or threatens to decline speedily in value or
is of a type customarily sold on a recognized market.
§547. Repair or preparation of collateral.
The collateral may be disposed of by the secured party in its existing
condition or after repair, processing or preparation for disposition.
§548. Application of proceeds and clear title of buyer.
(1) The proceeds of disposition shall be applied in the following order.
(a) The reasonable expenses of retaking, holding, preparing for
disposition, and disposing of the collateral, including
reasonable attorneys’ fees and legal expenses incurred by the
secured party;
(b) The satisfaction of debt secured by the security interest;
(c) The satisfaction of debt secured by any subordinate security
interest or lien in the collateral if a written demand and proof
of the interest are received before distribution of the proceeds
is completed.
(2) The secured party shall account to the debtor for any surplus, and,
unless otherwise agreed, the debtor is liable for any deficiency.
(3) Where collateral is sold to a purchaser who acquires the interest for
value and in good faith and who takes possession of it, the purchaser
acquires the collateral free from the interests of the secured party,
debtor and any subordinate secured party or lien holder.
§549. Retention of collateral by secured party
(1) After default, the secured party may propose to the debtor to take all
or part of the collateral in satisfaction of all or a part of the debtor’s
obligation, and shall give notice of the proposal to:
(a) the debtor;
(b) any other secured party or lien holder who, 5 days before the
notice is given to the debtor, has perfected its security interest
or lien by filing;
(c) any other person with an interest in the collateral who has
given a written notice to the secured party before the notice is
given to the debtor.
(2) If the secured party receives objection in writing from a person
entitled to receive notice under paragraph 1 within 20 days after the
notice was given, the secured party must dispose of the collateral as
provided in this Division.
(3) If no objection is received within the 20-day period, the secured party
may retain the collateral in satisfaction of the debtor’s obligation in
accordance with the proposal.
DIVISION 3 – DEBTOR RIGHTS
§550. Redemption.
(1) A person who is entitled to receive a notice of disposition may
redeem the collateral provided that:
(a) the person has not, after the default, waived in writing the
right to redeem;
(b) the secured party has not yet disposed of or contracted for
disposition of the collateral; and
(c) the secured party has not irrevocably elected to retain the
collateral.
(2) To redeem the collateral, the person must tender performance of all
obligations secured by the collateral, and pay the reasonable expenses
that were incurred to seize, hold, repair and prepare the collateral for
disposition.
§551. Remedies for secured party noncompliance.
(1) If the secured party does not comply with the requirements of this
Part, the court may order or restrain disposition of collateral.
(2) If disposition has occurred, the debtor or any person entitled to be
informed or whose security interest has been made known to the
secured party prior to the disposition has a right to recover from the
secured party any loss caused by a failure to comply with this Part.
PART V – COLLECTION OF PAYMENTS
§552. Collection of payments to the filing office
(1) Payments of fees to the Secured Transactions Filing Office may be
made to an account in a commercial bank established by the Minister.
(2) The contract with the bank shall provide for a statement of payment
details into the filing office’s database and for transfer of funds to the
General Fund on a schedule and conditions agreed by the bank and
the Minister of Resources and Development.
(3) The contract may provide for fees to be paid for the services of the
bank on conditions agreed by the bank and the Minister of Resources
and Development.
PART VI – PRE-EMPTION AND TRANSITION
§554. Pre-emption of conflicting laws.
(1) If there is a conflict between a provision of this law and a provision of
any other law, this law shall govern unless the other law specifically
amends or repeals a provision of this law.
§555. Transition provisions.
(1) This section applies to transactions concluded prior to the effective
date of this law that would be subject to this law if it had been in
effect at the time the transactions were concluded. In this section,
such a transaction is referred to as a “prior transaction.”
(a) The validity and effect of a prior transaction that was
concluded before the effective date of this law shall be
determined by reference to the law in effect when the
agreement was concluded, except as provided otherwise in
this section.
(b) A secured party in a prior transaction may file a notice of the
interest in the same manner as provided for a notice of a
security interest. The secured party shall deliver a copy of the
notice to the debtor.
(c) If the secured party in a prior transaction filed a notice or
otherwise perfected its interest by a means provided in this
law within 60 days after the effective date of this law, its
priority shall be measured from the effective date of this law. If
the notice of an interest created by such a prior transaction was
filed or otherwise perfected after 60 days after the effective
date of this law, its priority shall be measured from the date of
filing.
(d) Priority between a security interest perfected under this Law
and an interest created by a prior transaction for which a
notice has not been filed under paragraph b or otherwise
perfected under this law shall be determined under this law.
The interest created under the prior transaction shall, for that
purpose, be deemed to be an unperfected security interest.
(e) A notice of lien filed in a different office prior to the effective
date of this Law shall remain effective for six (6) months after
the effective date of this Law. If a notice of such lien is filed
under this Law within the six (6) month period after the
effective date of this Law, its priority shall relate back to the
date of the initial filing under the prior law.
§556. Amendments.
(1) That the caption to Chapter 1 of Title 24 MIRC is amended to read as
“Chapter 1. Real Property.”
(2) That Chapter 1 of Title 24 MIRC be amended by amending the
caption to Part 1 thereto to read as “PART 1 – HOUSES ON LAND
NOT OWNED.”
(3) That Section 101 of Title 24 MIRC is amended to read as follows:
§101. Short title.
This Chapter may be cited as the “Real Property Act.”
(4) That Section 102 of Title 24 MIRC be amended to read as follows:
§102. Interpretations.
(1) “Debtor” as used in this Chapter shall include any debtor,
buyer, lessee, or other person having an equity in the property
under an agreement subject to this Chapter.
(2) “Creditor” as used in this Chapter shall include any creditor,
seller, lessor, or other person having rights in the
property as security under an agreement subject to this
Chapter.
(3) “Property” as used in this Chapter shall mean a house on land
not owned by the party purporting to give an interest in the
house.
(5) That Section 103 of Title 24 MIRC is amended to read as follows:
§103. Application of Chapter.
This Chapter shall apply to any agreement (hereinafter
“Agreement”), regardless of its form, which is intended to give rights
in houses on land not owned individually or entirely by the party or
parties purporting to give an interest in the house, as security for the
performance of any obligation. Such Agreements include, among
others, pledges, conditional sales agreements, and leases under which
ownership of property is to pass upon completion of the terms of the
lease.
(6) That Section 105 of Title 24 MIRC be and is hereby repealed.
(7) That Section 109 of Title 24 MIRC is amended to read as follows:
§109. Property in possession of debtor.
(1) If the Agreement provides that the creditor may take the
property if the debtor is in default for twenty (20) days or
more and the debtor is so in default, the creditor may take
possession of the property without notice if this can be done
without breach of the peace. If the creditor does so, he shall
retain the property for twenty (20) days during which period
the debtor may redeem the property as provided below;
thereafter, if the property has not been so redeemed, the
creditor may hold the property as his own subject to the
provisions of Section 111 of this Chapter.
(2) If the Agreement does not contain the provision for taking
without notice referred to in the preceding Subsection, the
creditor shall, not more than forty (40) nor less than twenty
(20) days prior to the taking, cause written notice to be given
to the debtor of the property on account of default of the
debtor. The notice shall state the default and the period at the
end of which the property will be taken. This notice may be
given personally to the debtor or by leaving it at his usual
place of abode or of business with some person not less than
eighteen (18) years of age and of sound mind then residing or
employed there, and, if the person with whom the notice is left
states he is unable to read it, by also orally explaining the
substance of it to him, if practical, in a language understood by
him, otherwise in a language generally understood in the
locality.
(3) If after such notice the debtor does not perform the obligations
in which he has made default before the day set in such notice
for taking, the creditor may take possession of the property if
this can be done without breach of the peace.
(4) Unless the property can be taken without a breach of the peace
either under subsection (1) or (3) of this Section, the
foreclosure shall proceed thereafter only by a civil action in the
High Court under the judicial foreclosure provisions of this
Chapter. Nothing herein shall be construed to authorize a
violation of the criminal law.
(5) Nothing in this Section shall affect the right of a creditor to
proceed under Sections 106 and 107 of the Enforcement of
Judgments Act, 30 MIRC 1, of this Revised Code
simultaneously with action in accordance with this Section nor
shall anything herein limit the discretion of the High Court to
order a sale authorized by Section 107 of the Enforcement of
Judgments Act of this Revised Code, on such terms or notice, if
any, as it deems best.
(8) That Section 111 of Title 24 MIRC is amended to read as follows:
§111. Procedures.
(1) If the debtor, at the time of the taking or of the foreclosure
under this Division, has paid at least one half (1/2) of the
principal due under the Agreement, the creditor shall sell the
property at public auction where it was located at the time of
the taking or foreclosure, such sale to be held not more than
ninety (90) days after the taking or foreclosure. The creditor
shall give to the debtor not less than ten (10) days written
notice of the sale in the manner provided in Section 109(2) of
this Division, which notice shall not be given until the
expiration of the twenty (20) days retention period provided
for in Section 109(1) of this Division if the taking was made
under such Section. The creditor shall also give notice of the
sale by posting in at least three (3) conspicuous places within
the area where the property is to be sold at least five (5) days
before the sale and shall make an honest attempt to obtain a
fair value at the sale and, provided he does this, may himself
bid for the property at the sale.
(2) The proceeds of the sale shall be applied:
(a) to the payment of the reasonable expenses thereof;
(b) to the payment of the reasonable expenses of taking;
(c) to the satisfaction of the balance due under the
Agreement;
Any sum remaining after the satisfaction of such claims shall
be paid to the debtor. If the proceeds of the sale are not
sufficient to defray the reasonable expenses thereof and also
the reasonable expenses of taking, keeping and storing the
property and the balance due under the Agreement, the
creditor may recover the deficiency from the debtor or anyone
who has succeeded to the obligations of the debtor.
(3) If the debtor, at the time of the taking or of the foreclosure
mentioned above, has not paid at least one half (1/2) of the
principal due under the Agreement, the creditor shall have the
option of:
(a) notifying the debtor in the manner provided in
Section 109(2) of this Division of his election to retain
the property as his own without obligation to account to
the debtor and the debtor shall then be discharged of all
obligations under the Agreement; or
(b) selling the property in the manner provided in
subsection (1) of this Section and applying the proceeds
as provided in subsection (2) of this Section, with the
same right to recover any deficiency as therein
provided.
(4) During the twenty (20) days retention period provided for in
Section 109(1) of this Division and at any other time before the
creditor has disposed of the property or before the debtor’s
obligation has been discharged under subsection (3) of this
Section, the debtor may redeem the property by tendering
fulfillment of all obligations due under the Agreement up to
the date of the tender as well as all the expenses reasonably
incurred by the creditor in taking the property and in
arranging for the sale, and upon so doing shall become entitled
to take possession of the property and to continue in the
performance of the agreement as if no default has occurred.
Upon written demand given by the debtor in the manner
provided for notice in Section 109(2) of this Division, the
creditor shall furnish to the debtor a written statement of the
sum due under the Agreement and the expenses of taking and
in arranging for the sale. For failure to furnish such a
statement within a reasonable time after demand the creditor
shall forfeit to the debtor five dollars and shall also be liable to
him for all damages suffered because of such failure.
(9) That Section 109 of Title 30 MIRC is amended to read as follows:
§109. Levying execution.
The Chief of Police, and every policeman or other person duly
authorized, receiving a writ of execution issued by any court, shall
levy or cause the Chief of Police or policeman to levy execution as
follows:
(a) He shall demand of the person against whom the
execution is issued, if he may be found within the Local
Government Area where the levy is being attempted,
that the person pay the execution or exhibit sufficient
property subject to execution. If such person has
property of a kind exempt from execution but to an
amount exceeding the exemption, he may select the
portion of this property provided by law which he
desires to retain under the exemption, providing he
makes this selection known promptly to the person
making the levy. Otherwise, the person making the levy
shall make the selection. If the person against whom the
execution is issued does not pay the execution in full,
including interest and costs and expenses thereof, the
person making the levy shall take into his possession
property of the person against whom the execution is
issued, not exempt from execution, sufficient in his
opinion to cover the amount of the execution. He shall
take first any property under attachment in the action in
which the execution was issued; next, property, if any,
indicated by the person against whom the execution
was issued. He may, if he thinks best, remove the
property to a safe place, or place a caretaker in charge of
it. He shall make a list of the property levied upon.
(b) The person making the levy shall, after levy, give public
notice of the sale at least seven (7) days in advance of
the time and place of sale, by notifying the mayor of the
Local Government Area or areas in which the levy was
made, by posting a written notice of the sale in a
conspicuous place at or near the local government office
in the Local Government Area in which the sale is to be
held, and must notify the person against whom the
execution is issued, if he can be found within the Local
Government Area or areas where the levy was made, or
notify any agent who had custody of the property
levied upon at the time of levy. The person making the
levy shall, after levy, also give ten (10) days written
notice of the time and place of sale by mail or personal
delivery to any secured party who has, prior to the levy,
filed a notice of security interest that identifies the
levied property pursuant to Section 531 of Title 24
MIRC.
(c) The person making the levy on the day and at the place
set for the sale, unless payment has been made of the
amount of the judgment and interest and the costs and
expenses in connection with the levy, shall sell the
property levied upon at public auction to the highest
bidder. He shall deduct from the proceeds of the sale
sufficient money for the full payment of his fees and
expenses and any amounts owed to secured parties
who have filed notice of or perfected security interests
in the property prior to levy and prior to any notice of
lien filed by the person making the levy pursuant to
paragraph 4.b of Section 531 of Title 24 MIRC, and shall
then pay the person in whose favor the execution was
issued, or his counsel, such balance as remains up to the
amount due on the execution. If there are any proceeds
of the sale left after the deduction and payment directed
above, such remaining proceeds shall be paid over to
the person against whom the execution was issued. The
person making the levy shall then return the writ to the
court with a report of his doings thereon, showing the
amounts collected and paid out thereon.
(d) Whenever a request in writing signed by the debtor and
creditor for a postponement of the sale to an agreed
date and hour is given to the person conducting the sale
under execution, such person shall thereupon by public
declaration postpone the sale to the day and hour so
fixed in such request and at the place originally fixed by
the person for the sale. In the case of postponements,
notice of each thereof must be given by public
declaration by the person conducting the sale at the
time and place last appointed for the sale. The person
making the sale must also give ten (10) days written
notice in advance of the postponed time of sale by mail
or personal delivery to each secured party entitled to
notice by subsection (b) above. No other notice of
postponed sale need be given.
(e) If the Chief of Police, a policeman or other person duly
authorized starts to levy execution and for any reason is
prevented from or fails to complete the matter, the
Chief of Police, a policeman or other person duly
authorized may complete the levy, sale, and payment of
proceeds as provided in this Section.
(10) That Section 106 of Title 48 MIRC is amended to read as follows:
§106. Taxes withheld by employer held in trust; employer’s liability.
All taxes withheld by any employer under this Chapter shall be held
in trust by such employer for the Government of the Republic of the
Marshall Islands and for payment to the Secretary of Finance in the
manner and at the time required by this Chapter. If any employer
shall fail, neglect, or refuse to deduct and withhold from the
compensation paid to an employee, or to pay over the amount of the
tax imposed by this Chapter, such employer shall be liable to pay to
the Government of the Republic of the Marshall Islands the tax
withheld which amount shall, whether or not tax withholding
constituting trust funds have been commingled with said employer’s
assets, form a lien on the employer’s entire assets, having priority
over all other claims and liens in the real property of the employer.
The priority of a lien in the personal (movable) property of the
employer shall have priority as provided by section 516 of Title 24
MIRC. Any employer may recover from an employee any amount
which he should have withheld but did not withhold from such
employee’s wages and salaries, which he has been required to pay
and has paid to the Government of the Republic of the Marshall
Islands out of his own funds pursuant to this Section.
(11) That Section 126 of Title 48 MIRC is amended to read as follows:
§126. Lien on property.
(1) All taxes imposed or authorized under this Chapter shall be a
lien upon any and all property of the person or business
obligated to pay the taxes, and may be collected by judicial
foreclosure upon such property.
(2) The lien imposed by subsection (1) shall not be valid against
any purchaser, holder of a security interest, mechanic’s lien, or
judgment lien creditor until notice thereof which meets the
requirements of subsection (3) has been filed by the Secretary.
(3) The notice referred to in subsection (2) shall be filed as
provided by Part III of Chapter 5, Title 24 MIRC. The form and
content of the notice referred to in subsection (2) shall be
prescribed by Section 531 of Title 24 MIRC.
(4) Subject to such regulations as the Secretary may prescribe, the
Secretary shall issue a certificate of release of any lien imposed
with respect to any income tax not later than thirty (30) days
after the day on which:
(a) the Secretary finds that the liability for the amount
assessed, together with all interest in respect thereto,
has been fully satisfied or has become legally
unenforceable; or
(b) there is furnished to the Secretary and accepted by him
a bond or letter of credit that is conditioned upon the
payment of the amount assessed, together with all
interest in respect thereof, within the time prescribed by
law (including any extension of such time), and that is
in accordance with such requirements relating to terms,
conditions, and of the bond and sureties thereon, as
may be specified by such regulations.
(5) In any case where there has been a refusal or neglect to pay
any tax, or to discharge any liability in respect thereof,
whether or not levy has been made, the Attorney-General or
his delegate may direct a civil action to be filed in the High
Court of the Republic to enforce the lien of the Republic under
this Chapter with respect to such tax or liability or to subject
any property, of whatever nature, of the delinquent, or in
which he has any right, title, or interest, to the payment of
such tax or liability. Civil actions brought for the collection of
tax shall be brought in the name of the Secretary of Finance.
(6) The court shall, after the parties have been duly notified of the
action, proceed to adjudicate all matters involved therein and
finally determine the merits of all claims to and liens upon the
property, and, in all cases where a claim or interest of the
Republic therein is established, may decree a sale of such
property by the proper officer of the court, and a distribution
of the proceeds of such sale according to the findings of the
court in respect to the interests of the parties and of the
Republic. If the property is sold to satisfy a first lien held by
the Republic, the Republic may bid at the sale such sum, not
exceeding the amount of such lien with expenses of sale, as the
Secretary directs.
(7) In any such proceeding, at the instance of the Republic, the
court may appoint a receiver to enforce the lien, or, upon
certification by the Secretary during the pendency of such
proceedings that it is in the public interest, may appoint a
receiver with all the powers of a receiver.
(12) That Section 158 of Title 49 MIRC is amended to read as follows:
§158. Lien for Contributions.
All contributions, including penalties, interest accrued, and attorney’s
fees imposed or authorized under this Chapter, shall be a lien upon
any property of any delinquent employer, including a self-employed
worker, having priority over all other claims to and liens in the real
property of the delinquent employer, including liens for other taxes,
and may be collected by levy upon such property in the same manner
as the levy of an execution. The priority of a lien in the personal
(movable) property of the delinquent employer shall have priority as
provided by section 516 of Title 24 MIRC.
§557. Effective Date.
This Chapter shall take effect on the date certain certified by the Minister of
Resources and Development to the Speaker of the Nitijela as the date on
which the filing office required by this Chapter will be operational. The
Minister shall make his certification when he knows what the operational
date of the filing office will be, but not less than one week before the
specified effective date.