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 HD2)
979
HOUSE OF REPRESENTATIVES H.B. NO. H.D. 2
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 "ยง155-3 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 (1) Private lenders;
14 (2) Members of the farm credit system [bank, or the]; or
15 (3) The United States Department of Agriculture[, except];
16 provided that the board of agriculture may waive this requirement
17 for emergency loans."
18 SECTION 3. Section 155-6, Hawaii Revised Statutes, is
19 amended by amending subsections (e) and (f) to read as follows:
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H.B. NO. H.D. 2
1 "(e) When a participating loan has been approved by the
2 department, its share [shall] may be paid to the participating
3 private lender for disbursement to the borrower. [The private
4 lender shall collect all payments from the borrower and otherwise
5 service the loan.]
6 (f) Out of interest collected, the private lender may be
7 paid a service fee to be determined by the department which fee
8 shall not exceed one per cent of the unpaid principal balance of
9 the loan[,]; provided that this fee shall not be added to any
10 amount which the borrower is obligated to pay[.]; and further
11 provided that the private lender services the loan."
12 SECTION 4. Section 155-9, Hawaii Revised Statutes, is
13 amended by amending subsection (d) to read as follows:
14 "(d) Class C: Farm operating loans shall be for the
15 purpose of carrying on and improving a farm operation, including:
16 (1) The purchase of farm equipment and livestock;
17 (2) The payment of production and marketing expenses
18 including materials, labor, and services;
19 (3) The payment of living expenses; and
20 (4) The liquidation of indebtedness incurred for any of the
21 foregoing purposes.
22 The loans shall be for an amount not to exceed $400,000 and
23 for a term not to exceed ten years. To be eligible, an applicant
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H.B. NO. H.D. 2
1 shall derive, or present an acceptable plan to derive, a major
2 portion of the applicant's income from and devote, or intend to
3 devote, most of the applicant's time to farming operations.
4 Qualified farmers affected by state eradication programs may
5 also be eligible for loans under this subsection. Loans made for
6 rehabilitation from eradication programs shall be subject to the
7 terms of class "C" loans; provided that the interest rate shall
8 be three per cent a year and the requirements in section 155-3
9 shall be waived and paragraph (4) shall not apply."
10 SECTION 5. Statutory material to be repealed is bracketed.
11 New statutory material is underscored.
12 SECTION 6. This Act shall take effect upon its approval.