REPORT TITLE:
Agricultural loans; exports


DESCRIPTION:
Provides agricultural loans to qualified farmers to export crops
and livestock and to farmers who are the subject of state
eradication programs.  Appropriates funds from the agricultural
loan revolving fund to farmers in economically depressed areas.
(SB5 HD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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THE SENATE                              S.B. NO.           S.D. 2
TWENTIETH LEGISLATURE, 1999                                H.D. 2
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.  The legislature finds that in the past, state
 
 2 government has not encouraged the exportation of goods to infuse
 
 3 capital into our local economy.  Consequently, the export
 
 4 potential of markets such as the agricultural industry remains
 
 5 relatively untested and undefined.  The legislature also finds
 
 6 that countries, like Japan, lack agricultural resources to feed
 
 7 their population and depend on other nations, like Tonga, for
 
 8 their food supply.  A more productive agricultural loan program
 
 9 would encourage farmers to export crops and livestock to compete
 
10 in the world marketplace and help Hawaii's farmers to be more
 
11 economically viable and productive.
 
12      The purpose of this Act is to:
 
13      (1)  Provide agricultural loans to qualified farmers to
 
14           export crops and livestock and to farmers who are the
 
15           subject of state eradication programs; and
 
16      (2)  Appropriate funds from the agricultural loan revolving
 
17           fund to farmers in economically depressed areas.
 
18      SECTION 2.  Section 155-9, Hawaii Revised Statutes, is
 
19 amended as follows:
 
20      1.  By amending subsection (d) to read:
 

 
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 1      "(d)  Class C:  Farm operating loans shall be for the
 
 2 purpose of carrying on and improving a farming operation,
 
 3 including:
 
 4      (1)  The purchase of farm equipment and livestock;
 
 5      (2)  The payment of production and marketing expenses
 
 6           including materials, labor, and services;
 
 7      (3)  The payment of living expenses;[and]
 
 8      (4)  The liquidation of indebtedness incurred for any of the
 
 9           foregoing purposes[.];
 
10      (5)  The exportation of crops and livestock; and
 
11      (6)  Recuperation from losses incurred as a result of any
 
12           state eradication program; provided that the interest
 
13           rate shall be three per cent a year and that section
 
14           155-3 and paragraph (4) shall not apply.
 
15      The loans shall be for an amount not to exceed $400,000 and
 
16 for a term not to exceed ten years.  To be eligible, an applicant
 
17 shall derive, or present an acceptable plan to derive, a major
 
18 portion of the applicant's income from and devote, or intend to
 
19 devote, most of the applicant's time to farming operations."
 
20      2.  By amending subsection (f) to read:
 
21      "(f)  Class E:  Loans to cooperatives and corporations shall
 
22 provide credit to farmers' cooperative associations and
 
23 corporations engaged in marketing, purchasing, and processing,
 
24 and providing farm business services, including:
 

 
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 1      (1)  Facility loans to purchase or improve land, building,
 
 2           and equipment for an amount not to exceed $500,000 and
 
 3           a term not to exceed twenty years; [and]
 
 4      (2)  Operating loans to finance inventories of supplies,
 
 5           warehousing, and shipping commodities, extension of
 
 6           consumer credit to justified farmer-members, and other
 
 7           normal operating expenses for an amount not to exceed
 
 8           $300,000 and a term not to exceed seven years[.]; and
 
 9      (3)  The exportation of crops and livestock.
 
10      To be eligible, a cooperative or corporation shall have a
 
11 majority of its board of directors and a majority of its
 
12 membership as shareholders who meet the eligibility requirements
 
13 of section 155-10 and who devote most of their time to farming
 
14 operations, and the facility loans shall be for an amount not to
 
15 exceed $500,000 or eighty per cent of the cost of the project,
 
16 whichever is the lesser."
 
17      SECTION 2.  There is appropriated out of the agricultural
 
18 loan revolving fund of the State of Hawaii the sum of $2,500,000
 
19 or so much thereof as may be necessary for fiscal year 1999-2000
 
20 for loans to farmers in economically depressed areas; provided
 
21 that:
 
22      (1)  Any principal collected shall be deposited into the
 
23           agricultural loan revolving fund and interest collected
 

 
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 1           shall be deposited into the agricultural loan reserve
 
 2           fund;
 
 3      (2)  Loans under this Act shall be subject to the provisions
 
 4           of Act 118, Session Laws of Hawaii 1998; and
 
 5      (3)  The department of agriculture, in its annual report,
 
 6           shall report on loans made from the agricultural loan
 
 7           revolving fund to qualified farmers in economically
 
 8           depressed areas.
 
 9      SECTION 3.  The sum appropriated shall be expended by the
 
10 department of agriculture for the purposes of this Act.
 
11      SECTION 4.  Statutory material to be repealed is bracketed.
 
12 New statutory material is underscored.
 
13      SECTION 5.  This Act shall take effect on July 1, 1999.