155-8 Direct loans. (a) The department of agriculture may make loans directly to qualified farmers, qualified new farmers, or qualified food manufacturers who are unable to obtain sufficient funds at reasonable rates from private lenders either independently or under sections 155-5, 155-5.5, and 155-6.

(b) Loans made under this section shall be limited by sections 155-9 to 155-13; provided that class "E" loans to food manufacturers shall not be subject to [section] 155-10.

(c) Loans made under this section shall bear simple interest on the unpaid principal balance, charged on the actual amount disbursed to the borrower. The interest rate on loans of class "A", "B", "C", "E", and "G" shall be at a rate of one per cent below the prime rate or at a rate of seven and one-half per cent a year, whichever is less. For purposes of this subsection, the prime rate shall be determined on January 1 and July 1 of each year, and shall be the prime rate charged by the two largest banks in the State identified by the department of commerce and consumer affairs. If the prime rates of the two largest banks are different, the lower prime rate of the two shall apply. The interest rate on class "F" loans shall be at a rate of one and one-half per cent below the prime rate or at a rate of six per cent a year, whichever is less. The interest rate of class "H" loans shall be three per cent a year. If the money loaned is borrowed by the department, then the interest on loans of the classes shall be the rate as determined above or one per cent over the cost to the State of borrowing the money, whichever is greater. Interest on loans made under this chapter shall not be less than three per cent a year.

(d) For loans made under this section, funds shall be disbursed in accordance with regulations of the department. [L 1959, c 278, pt of 1; am L Sp 1959 2d, c 1, 25; am L 1961, c 104, 1(j) and c 132, 2; Supp, 102-8; HRS 155-8; am L 1968, c 53, 6; am L 1972, c 87, 2; am L Sp 1977 1st, c 19, 1; am L 1979, c 222, 6; am L 1989, c 222, 3 and c 317, 2; am L 1990, c 259, 2; am L 1997, c 258, 4; am L 2000, c 51, 9; am L 2008, c 209, 3; am L 2011, c 184, 4]

 

 

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