REPORT TITLE:
Agricultural Loans



DESCRIPTION:
Includes credit unions under the definition of "private lender"
for obtaining agricultural loans and reduces the number of
required denials from three to two in the loan application
process.  (HB979 HD1)


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        979
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO AGRICULTURAL LOANS.



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

 1      SECTION 1.  Section 155-1, Hawaii Revised Statutes, is
 
 2 amended by amending the definition of "private lender" to
 
 3 read as follows:
 
 4     "(6)  "Private lender" includes banks, savings and loan
 
 5           associations, credit unions, mortgage companies, and
 
 6           other qualified companies whose business includes the
 
 7           making of loans in the State."
 
 8      SECTION 2.  Section 155-3, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "155-3  Restriction.  Loans provided for by this chapter
 
11 shall be authorized only if these loans cannot be made by two
 
12 [private] lenders, [a] which may include any of the following:
 
13 private lenders, members of the farm credit system [bank], or the
 
14 United States Department of Agriculture, except that the board of
 
15 agriculture may waive this requirement for emergency loans."
 
16      SECTION 3.  Section 155-6, Hawaii Revised Statutes, is
 
17 amended by amending subsection (e) to read as follows:
 
18      "(e)  When a participating loan has been approved by the
 
19 department, its share [shall] may be paid to the participating
 

 
Page 2                                                     979
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 1 private lender for disbursement to the borrower.  [The private
 
 2 lender shall collect all payments from the borrower and otherwise
 
 3 service the loan.]"
 
 4      SECTION 4.  Section 155-9, Hawaii Revised Statutes, is
 
 5 amended by amending subsection (d) to read as follows:
 
 6      "(d)  Class C:  Farm operating loans shall be for the
 
 7 purpose of carrying on and improving a farm operation, including:
 
 8      (1)  The purchase of farm equipment and livestock;
 
 9      (2)  The payment of production and marketing expenses
 
10           including materials, labor, and services;
 
11      (3)  The payment of living expenses; and
 
12      (4)  The liquidation of indebtedness incurred for any of the
 
13           foregoing purposes.
 
14      The loans shall be for an amount not to exceed $400,000 and
 
15 for a term not to exceed ten years.  To be eligible, an applicant
 
16 shall derive, or present an acceptable plan to derive, a major
 
17 portion of the applicant's income from and devote, or intend to
 
18 devote, most of the applicant's time to farming operations.
 
19      Qualified farmers affected by state eradication programs may
 
20 also be eligible for loans under this section.  Loans made for
 
21 rehabilitation from eradication programs shall be subject to the
 
22 terms of class "C" loans, except that the interest rate shall be
 

 
 
 
Page 3                                                     979
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 1 three per cent per annum and the requirements in section 155-3
 
 2 shall be waived and section 155-9(d)(4) shall not apply."
 
 3      SECTION 5.  Statutory material to be repealed is bracketed.
 
 4 New statutory material is underscored.
 
 5      SECTION 6.  This Act shall take effect upon its approval. 
 
 6