Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Economic Development and Technology, to which was referred H.B. No. 2453 entitled:

begs leave to report as follows:

The purpose of this measure is to allow the Hawaii Capital Loan Program to adjust the loan interest rate on the first of each month rather than biannually so that the rate may better reflect the most current financial market.

Your Committee received testimony in support of this measure from the Director of Business, Economic Development, and Tourism.

Your Committee finds that in 2001, there were several prime interest rate reductions between July 1 and December 31. Under existing statute, the Hawaii Capital Loan Program was unable to lower its lending rate to follow the market, and as such, borrowers closing loans during that period paid a higher rate for loans, based on the rate in effect at July 1. This measure would allow borrowers to close loans based on the most current monthly prime interest rate.

Your Committee has amended this measure by changing the word "bill" to "Act" and by amending the effective date to July 1, 2050, to promote further discussion and development of the details of this measure.

As affirmed by the record of votes of the members of your Committee on Economic Development and Technology that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2453, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2453, S.D. 1, and be referred to the Committee on Ways and Means.