HOUSE OF REPRESENTATIVES
TWENTY-SIXTH LEGISLATURE, 2012
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO STATE-OWNED BANK.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the Bank of North Dakota is the only state-owned and state-operated financial institution in the United States. Under North Dakota law, the bank is set up as the State of North Dakota doing business as the Bank of North Dakota. All state funds, as well as funds administered by state and county agencies, are deposited with the Bank of North Dakota, thus creating a large deposit base. In addition to paying competitive interest rates to the state treasurer, the Bank of North Dakota also invests its moneys in loan programs to spur economic development within the State. The Bank of North Dakota also regularly turns over a portion of its profits to the state general fund. Over the past decade, the bank has turned over approximately one-third of $1,000,000,000 to the state general fund, and despite the recent financial crisis, the bank earned record profits in 2008, with net earnings of approximately $57,000,000.
Rather than competing with private banks, the Bank of North Dakota has created partnerships with over one hundred other North Dakota financial institutions to assist them in meeting the needs of the citizens of North Dakota.
The legislature further finds that a state-owned bank would promote agriculture, education, community development, economic development, housing, and industry in the State by building a resource to help stabilize and expand the State's economy; use the resources of the people of the State within the State; support the common good and public benefit of the State; and leverage the State's financial capital and resources. A state-owned bank may work in partnership with financial institutions, community-based organizations, economic development groups, guaranty agencies, and other stakeholder groups to better the State's economy.
The purpose of this Act is to establish a task force within the department of commerce and consumer affairs to study the feasibility of establishing a state-owned bank in Hawaii.
SECTION 2. (a) There is established a task force within the department of commerce and consumer affairs for administrative purposes to study the feasibility of establishing a state-owned bank. The task force shall consist of the following members:
(1) One member appointed by the governor who shall have experience in banking and financial management;
(2) One member of the senate, appointed by the president of the senate;
(3) One member of the house of representatives, appointed by the speaker of the house of representatives;
(4) The director of finance or the director's designee;
(5) The director of labor and industrial relations or the director's designee;
(6) The attorney general or the attorney general's designee;
(7) The commissioner of financial institutions of the department of commerce and consumer affairs, division of financial institutions, or the commissioner's designee;
(8) The executive director of the office of consumer protection or the executive director's designee;
(9) The chair of the board of agriculture or the chair's designee;
(10) A representative from AARP;
(11) A representative from the Legal Aid Society of Hawaii;
(12) A representative from Faith Action for Community Equity;
(13) A member from an organization representing banking and financial institutions; and
(14) A member from a trade association representing credit unions;
provided that the members in paragraphs (13) and (14) shall be appointed jointly by the president of the senate and the speaker of the house of representatives.
(b) The commissioner of financial institutions of the department of commerce and consumer affairs, division of financial institutions, shall serve as the chairperson of the task force.
(c) The members of the task force shall not receive compensation for their services.
(d) No member shall be made subject to chapter 84, Hawaii Revised Statutes, solely because of that member's participation as a member of the task force.
(e) The task force shall review and evaluate the feasibility of creating a state-owned bank. Among other things, the task force shall review and evaluate the following:
(1) The bank of North Dakota, its enabling statutes, its governing structure, and its programs;
(2) The findings from Massachusetts studies in creating a state-owned bank, including the Report of the Commission to Study the Feasibility of Establishing a Bank Owned by the Commonwealth;
(3) Models used in other states and banking institutions;
(4) The effectiveness and usefulness of an existing state bank, specifically the economic impact of having a state-owned bank;
(5) Any effects a state-owned bank will have on existing banks and financial institutions in the State;
(6) The long-term broad economic impact and long-term job creation and state revenue effects of having a state-owned bank;
(7) The capital requirements of a state-owned bank;
(8) Initial capitalization options for a state-owned bank;
(9) The cash management and banking needs of the State;
(10) An estimation of the short-term operating costs and projected revenues of a state-owned bank; and
(11) The laws, statutes, rules, and regulations applicable to establishing a state-owned bank.
(f) The task force shall submit a report of its findings and recommendations, including proposed legislation, if any, to the legislature no later than twenty days prior to the convening of the regular session of 2013.
(g) The task force shall cease to exist on June 30, 2013. SECTION 3. The legislative reference bureau shall assist the task force in preparing its findings, recommendations, and proposed legislation.
SECTION 4. This Act shall take effect on July 1, 2112.
Financial Institutions; State-owned Bank; Task Force
Establishes a task force to review, investigate, and study the feasibility and cost of establishing a state-owned bank. Requires a report to the Legislature. Effective July 1, 2112. (HB1840 HD3)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.