STAND. COM. REP. NO. 340________

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1628

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Agriculture, to which was referred H.B.
No. 1628 entitled: 


begs leave to report as follows:

     The purpose of this bill, as referred to your Committee, is
to create a program that enables cooperating lenders to provide
loan funds, with the Department of Agriculture providing credit
underwriting and loan servicing.

     Your Committee finds that Hawaii's diversified agriculture
industry is expanding throughtout the State and that land, labor
and water are available for diversified agriculture with the
closure of most of Hawaii's sugar plantations.  It further finds
that financing is a crucial element needed to foster growth and
expansion of this industry, especially under current economic and
fiscal conditions, where creativity is needed to provide
assistance without expending limited state funds.

     This bill permits the Department of Agriculture to
underwrite and service loans utilizing cooperating lenders' funds
to expand the agricultural loan pool and provide financing to
agriculture at reasonable rates and terms.  This program is
innovative in that it utilizes non-state funds for agricultural
loans and minimizing the risks to cooperating lenders because of
the Department of Agriculture's guarantee of up to 90% of the
loan.  Also, this bill provides the Pension and Retirement
Systems added investment option, that it may invest in

                                 STAND. COM. REP. NO. 340________
                                 Page 2

obligations secured by mortgages on farm land guaranteed by the
Department of Agriculture.

     Testimony in support of this bill was received from the
Department of Agriculture.
     As affirmed by the record of votes of the members of your
Committee on Agriculture that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
1628 and recommends that it pass Second Reading and be referred
to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Agriculture,

                                   FELIPE P. ABINSAY, JR., Chair