THE SENATE	S.B. NO.	2309
THIRTY-THIRD LEGISLATURE, 2026
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. The legislature finds that the department of agriculture and biosecurity's agricultural loan division has experienced significant demand following the enactment of Act 69, Session Laws of Hawaii 2025 (Act 69), which, among other things, expanded access to farm loans at favorable interest rates. Within two months of Act 69's implementation, the agricultural loan division approved ten loans totaling nearly $5,000,000 and received an additional $10,000,000 in loan application requests that were not funded due to the existing $5,000,000 annual ceiling on the agricultural loan revolving fund. Thus, applications have been placed on hold further limiting the department's ability to meet the financing needs of Hawaii farmers and agricultural enterprises.

The legislature further finds that authorizing the agricultural loan division to sell portions of its loan portfolio, valued at approximately $11,000,000, to permitted third parties would generate additional capital that may be reinvested into the agricultural loan revolving fund. Increasing the revolving fund ceiling would also expand lending capacity and support the continued implementation of Act 69, strengthening the State's economy and advancing food security and self-sufficiency goals.

The purpose of this Act is to:

(1) Require the agricultural loan division to sell portions of its loan portfolio to permitted third parties, with proceeds to be deposited into the agricultural loan revolving fund; and

(2) Appropriate funds out of the agricultural loan revolving fund to increase its expenditure ceiling and thereby expand access to agricultural loan financing and support local food production.

SECTION 2. The agricultural loan division of the department of agriculture and biosecurity shall sell portions of its loan portfolio having an appraised value of approximately $11,000,000 to permitted third parties; provided that the proceeds from the sale shall be reinvested in the agricultural loan revolving fund and made available for loan funding.

SECTION 3. There is appropriated out of the agricultural loan revolving fund the sum of $10,000,000 or so much thereof as may be necessary for fiscal year 2026-2027 to increase the expenditure ceiling of the revolving fund and thereby expand access to agricultural loan financing and support local food production pursuant to part I of chapter 155, Hawaii Revised Statutes.

The sum appropriated shall be expended by the department of agriculture and biosecurity for the purposes of this Act.

SECTION 4. This Act shall take effect on July 1, 2026.

INTRODUCED BY:

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Report Title:

Agricultural Loan Division; DAB; Agricultural Loan Revolving Fund; Loan Portfolio; Increase Ceiling; Appropriation

Description:

Requires the Agricultural Loan Division to sell portions of its loan portfolio to permitted third parties, with proceeds to be deposited into the agricultural loan revolving fund. Appropriates funds out of the Agricultural Loan Revolving Fund to increase its expenditure ceiling and thereby expand access to agricultural loan financing and support local food production.

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