THE SENATE	S.B. NO.	3024
THIRTY-SECOND LEGISLATURE, 2024
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO AGRICULTURAL LOANS.

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

SECTION 1. Hawaii's agricultural industry continues to struggle, the 2017 census reports that eighty-eight per cent of Hawaii farms have a gross value of production of less than $50,000 annually. High land costs along with the current rising inflation has significantly increased costs for farmers and with the rising interest rates makes it very difficult for beginning farmers as well as existing farmers to obtain financing. If Hawaii is to become more self-sufficient in food production and less reliant on imported products, it will need to assist the existing farming community and encourage new entrepreneurs to enter the industry. Access to affordable credit will encourage new entrepreneurs to enter the field and help existing farmers to maintain their operations.

The purpose of this Act is to reduce and set fixed interest rates for loans under the agricultural loan program.

SECTION 2. Section 155-8, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) Loans made under this section shall bear simple interest on the unpaid principal balance, charged on the actual amount disbursed to the borrower. The interest rate on loans of class "A", "B", "C", "E", and "G" shall be [at a rate of one per cent below the prime rate or] set at a rate of [seven and one-half] four per cent a year[, whichever is less]. [For purposes of this subsection, the prime rate shall be determined on January 1 and July 1 of each year, and shall be the prime rate charged by the two largest banks in the State identified by the department of commerce and consumer affairs. If the prime rates of the two largest banks are different, the lower prime rate of the two shall apply.] The interest rate of class "F" loans shall be set at a [rate of one and one-half per cent below the prime rate or at a] rate of [six] three per cent a year[, whichever is less]. The interest rate of class "H" and "I" loans shall be three per cent a year. If the money loaned is borrowed by the department, then the interest on loans of the classes shall be the rate as determined above or one per cent over the cost to the State of borrowing the money, whichever is greater. Interest on loans made under this chapter shall not be less than [three] two per cent a year."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________
	BY REQUEST

Report Title:

Agricultural Loan; Interest rates; Department of Agriculture

Description:

Reduces and sets fixed interest rates for loans under the Agricultural Loan Program.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.