SB1937 HD1

THE SENATE	S.B. NO.	1937
TWENTY-FOURTH LEGISLATURE, 2007		S.D. 2
STATE OF HAWAII		H.D. 1

A BILL FOR AN ACT

relating to social services.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that micro-credit is the extension of small loans to the unemployed, to poor entrepreneurs, and others who are "pre-bankable" or not otherwise qualified for traditional loans. This financial innovation originated in developing countries where it successfully engaged extremely impoverished people in self-employment projects that enabled them to generate an income. Muhammad Yunus, a United States educated professor of economics, shared the Nobel Peace Prize for 2006, for a project that he initiated in his native Bangladesh in 1974. Similar efforts throughout the developing world and even in the United States have proven that micro-credit can be a liberating force and help people find ways to break out of poverty.

The purpose of this Act is to require the department of human services to develop and implement a micro-credit pilot program and to appropriate or authorize money from temporary assistance for needy families funds to the department of human services to develop and implement the micro‑credit pilot program.

SECTION 2. (a) The department of human services shall develop and implement a micro-credit pilot program no later than July 1, 2008, that:

(1) Provides loans to low-income individuals who are pre‑bankable;

(2) Enables participants to engage in self-employment projects that allow them to generate an income; and

(3) Provides counseling and fiscal assistance to participants to help them manage their loans and responsibilities.

(b) For purposes of this section, "pre‑bankable" means lacking collateral, steady employment, verifiable credit history, or the other minimum qualifications necessary to gain access to traditional credit.

(1) Research similar programs currently implemented in other states and determine best practices;

(2) Develop the pilot program in consultation with the United States Small Business Administration; the Small Business Development Center; the department of business, economic development, and tourism; and the department of labor and industrial relations;

(3) Encourage the support of local lending institutions in the pilot program; and

(4) Request any federal funding that may be available for the pilot program.

(d) The department of human services may contract for services related to the development and implementation of the micro-credit pilot program.

SECTION 3. The department of human services shall submit an interim report including research, evaluation, and best practices for micro-credit loan programs and recommendations for implementation of such a program within the department, to the legislature no later than twenty days prior to the convening of the 2008 regular session. The department of human services shall submit a final report including its progress with the micro-credit pilot program and recommendations on whether to make the pilot program permanent and any proposed legislation, to the legislature no later than twenty days prior to the convening of the 2009 regular session.

SECTION 4. There is appropriated or authorized out of the federal temporary assistance for needy families program funds the sum of $ , or so much thereof as may be necessary for fiscal year 2007-2008, and the same sum, or so much thereof as may be necessary for fiscal year 2008-2009, for the department of human services to develop and implement a micro-credit pilot program.

The sums appropriated shall be expended by the department of human services for the purposes of this Act.

SECTION 5. This Act shall take effect on July 1, 2007.