STAND. COM. REP. NO.  1155

Honolulu, Hawaii

                , 2009

RE:   S.B. No. 91

      S.D. 2

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

Sir:

     Your Committee on Economic Revitalization, Business, & Military Affairs, to which was referred S.B. No. 91, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO COMMUNITY-BASED ECONOMIC DEVELOPMENT,"

begs leave to report as follows:

     The purpose of this bill is to update and improve the services provided by the Community-based Economic Development Technical and Financial Assistance Program (CBED Program) by:

     (1)  Amending the definition of "community of interest";

     (2)  Allowing the Hawaii Community-based Economic Development Revolving Fund to receive funding from any source;

     (3)  Deleting the prohibition against reallocating loan funds to the grant program that could cause an insufficient availability of funds to make loans;

     (4)  Adjusting the cap for loans to an unspecified amount; and

     (5)  Reducing the maximum interest rate for loans from ten to six percent.

     The Department of Business, Economic Development, and Tourism, Office of Hawaiian Affairs, Malu'ohai Residents Association, Hawaii Alliance of Nonprofit Organizations, and a concerned individual supported this bill.  The Hawaii Alliance for Community-Based Economic Development supported the intent of this measure.

     This bill reduces the maximum total outstanding loan balance and maximum interest rates under the CBED Program to reflect the current economic situation.  Your Committee respectfully requests the Committee on Finance to also consider whether the minimum interest rate on these loans, which at three to six percent may be higher than current interest rates, should also be reduced.

     Your Committee has amended this bill by:

     (1)  Setting the cap for loans under the CBED Program to $250,000;

     (2)  Changing the effective date to July 1, 2009; and

     (3)  Making technical, nonsubstantive amendments for clarity, consistency, and styel.

     As affirmed by the record of votes of the members of your Committee on Economic Revitalization, Business, & Military Affairs that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 91, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 91, S.D. 2, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Economic Revitalization, Business, & Military Affairs,

____________________________

ANGUS L.K. MCKELVEY, Chair