SB2559

SECTION 1. The purpose of this Act is to create the Hawaii agricultural micro loan program by which the department of agriculture will be able to make loans of up to $25,000 for agricultural projects by producers of products produced in Hawaii intended to be marketed and consumed in Hawaii.

It is the further purpose of this Act to appropriate funds into the Hawaii agricultural micro loan revolving fund for the purposes of this Act.

SECTION 2. Chapter 155, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . AGRICULTURAL MICRO LOANS

§155‑ Hawaii agricultural micro loan program. There is established the Hawaii agricultural micro loan program, placed within the department.

§155‑ Hawaii agricultural micro loan revolving fund. There is established a revolving fund to be known as the Hawaii agricultural micro loan revolving fund from which moneys shall be loaned by the department under this part. All moneys appropriated to the fund by the legislature, received as repayments of loans, payments of interest or fees, or received as royalties, shall be deposited into the revolving fund and used for the purposes of this part. The department may use all appropriations and other moneys in the revolving fund not appropriated for a designated purpose to make loans.

§155‑ Powers and duties. The department shall have the necessary powers to carry out the purposes of this part, including the following:

(1) Establishing preferences and priorities in determining eligibility for the awarding of loans;

(2) Establishing the conditions, consistent with the purpose of this part, for the awarding of loans;

(3) Providing for inspection at reasonable hours of facilities, books, and records of an applicant or borrower and require the submission of progress and final reports;

(4) Providing loans, consistent with the purpose of this part;

(5) Determining the necessity for and the extent of security required in a loan;

(6) Administering the Hawaii agricultural micro loan revolving fund;

(7) Including in its budget for subsequent fiscal periods amounts necessary to effectuate the purpose of this part;

(8) Participating in loans made to qualified persons by private lenders;

(9) Establishing interest rates chargeable by the State for direct and participation loans; and

(10) Adopting rules pursuant to chapter 91 to implement this part.

§155‑ Loans; limitation and terms. Loans made under this part shall be for the purpose and in accordance with the terms specified in paragraphs (1) and (2) and shall be made only to applicants who meet the eligibility requirements specified therein. Loans may be made for:

(1) Projects by the producer of products produced in Hawaii that are intended to be marketed and consumed in Hawaii; or

(2) The continuation or improvement of projects by the producer of products produced in Hawaii that are intended to be marketed and consumed in Hawaii.

The loans shall be for an amount not to exceed $25,000 and for a term not to exceed ten years.

§155‑ Terms of loans. Loans shall be made to qualified applicants with the following terms and conditions:

(1) The amount of the outstanding balance on all loans issued under this chapter to any one applicant at any one time shall not exceed $25,000;

(2) The maximum term of a loan shall not exceed ten years;

(3) Each loan shall bear simple interest at a rate of not less than three and not more than ten per cent a year, depending on the nature of the loan; and

(4) The commencement date for the repayment of the first installment on principal and interest of each loan may be deferred by the board of agriculture for a period not to exceed two years."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $250,000 or so much thereof as may be necessary for fiscal year 2008-2009 to initially fund the Hawaii agriculture micro loan revolving fund.

The sum appropriated shall be expended by the department of agriculture for the purposes of this Act.

SECTION 4. This Act shall take effect on July 1, 2008.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2559
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII