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This must be based on some code or law regarding how one qualifies for the issuance of a valid BC that shows that one was born in Hawaii. What is that code or law?

Let me just go ahead and quote Judah Benjamin:

OBAMA: The Forged COLB and a New Mystery
By Judah Benjamin, Guest Author
August 5, 2008
http://texasdarlin.wordpress.com/2008/08/05/1521/
...Stanley Ann Dunham could have filed a “Birth Abroad to One Citizen and One Alien Parent in Wedlock” Form under Section 301(g) INA and the other necessary paperwork at the Consulate, and that would mean that there should be an Indonesian Birth Certificate accompanied by Consular Service Documentation and the Consular Report of Birth, or FS-240, NOT a Hawaiian BC (so far as I can tell) since Stanley Ann Dunham WAS NOT a Legal Resident of the State of Hawaii, or of the United States of America, at the time of Maya’s Birth.
So there should not be a LEGAL Hawaiian Birth Certificate unless every Record is wrong. At the very least one would imagine that the old INS, or the current USCIS, would be very interested in the fact that Hawaii was, apparently, unilaterally giving Birth Citizenship to those born abroad, in defiance of Federal Law and the US State Department.
At least that is how the situation appears to me. I have always said that the Hawaiian Code seems to lend itself to this kind of action. The very existence of a Hawaiian COLB for Maya Kassandra Soetoro argues either that all the Records are wrong or that a deliberate illegality was committed by some person, presumably Stanley Ann Dunham.
The history of Stanley Ann Dunham and her children is a swamp, not a rock pool. Who was what and when is anything but clear. Senator Obama’s version of things just doesn’t hold up under examination.
We have what seems to be a trail of bent, or broken, Laws and IF we now have a forged COLB based on that of the Senator’s sister we may have a Forged Document based on an Illegal Original.
If that does not demonstrate Mens Rea I’m not sure what would. Once again the problem would have originated with Stanley Ann Dunham, not her children, but their methods of dealing with the little complications in their lives are maximally unacceptable...