Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 2453, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to allow the Hawaii Capital Loan Program to adjust its interest rates in a more timely manner.

The Hawaii Capital Loan Program provides low interest rate loans to small local businesses that are unable to secure financing elsewhere. Presently, interest rates for these loans are statutorily adjusted every six months based on the prime rate as of January 1 and July 1 of each year. Considering the recent volatility of the economy after September 11, and the profound effect it had on the stock market and the prime rate, the present six-month interest rate adjustment is both impractical and unrealistic.

This bill changes the six-month interest rate adjustment to a monthly adjustment to allow the Hawaii Capital Loan Program to better respond to borrowers in a more efficient and timely manner.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2453, S.D. 1, and recommends that it pass Third Reading.