Bill Text: HI SB2805 | 2022 | Regular Session | Amended

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Bill Title: Relating To Small Business Loans.

Spectrum: Strong Partisan Bill (Democrat 12-1)

Status: (Engrossed - Dead) 2022-04-25 - Conference Committee Meeting will reconvene on Wednesday 04-27-22 10:30AM in conference room 325. [SB2805 Detail]

Download: Hawaii-2022-SB2805-Amended.html

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THE SENATE	S.B. NO.	2805
THIRTY-FIRST LEGISLATURE, 2022		S.D. 2
STATE OF HAWAII		H.D. 1

A BILL FOR AN ACT

 

 

RELATING TO SMALL BUSINESS LOANS.

 

 

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

 

     SECTION 1.  The Hawaii Revised Statutes is amended by adding a new chapter to title 13 to be appropriately designated and to read as follows:

"Chapter

HAWAII start-up business loan program

     §   -1  Definitions.  As used in this chapter:

     "Department" means the department of business, economic development, and tourism.

     "Division" means the business development and support division of the department of business, economic development, and tourism.

     "Financial institution" means any organization authorized to do business under federal or state laws relating to financial institutions, including without limitation, banks, community development financial institutions, nonprofit loan funds, credit unions, financial services loan companies, savings and loan companies or associations, and savings banks.

     "Fund" means the Hawaii start-up business loan program revolving fund established by this chapter.

     "Program" means the Hawaii start-up business loan program established by this chapter.

     "Start-up business" means a business that:

     (1)  Is registered in the State;

     (2)  Has been in business for three years or fewer; and

     (3)  Fulfills the qualifications established by the division to receive a start-up business loan under this chapter.

     §   -2  Hawaii start-up business loan program.  There is established the Hawaii start-up business loan program that shall be administered by the division in coordination with the Hawaii technology development corporation.

     §   -3  Powers of the division.  In administering the program, the division shall:

     (1)  Adopt rules pursuant to chapter 91 necessary to carry out the purposes of this chapter; and

     (2)  Perform all other functions necessary to effectuate the purposes of this chapter.

     §   -4  Rules.  Rules adopted pursuant to chapter 91 shall:

     (1)  Prescribe loan eligibility qualifications;

     (2)  Establish preferences and priorities for ranking loan applicants;

     (3)  Establish the eligibility qualifications for continuing a loan; and

     (4)  Establish procedures for inspecting, at reasonable hours, the facility, finances, and records of any enterprise that has applied for or been granted a loan, and requiring a grantee to submit progress reports and final reports.

     §   -5  Direct loans; terms and restrictions.  (a)  The division may make a loan to a start-up business to finance working capital, construction, or the improvement of facilities and equipment.  The loan shall not be made in conjunction with any other loan made or grant awarded by the division.  If loans made by the division are secured, the security may be subordinated to loans made by other financial institutions, when the subordination is required to obtain loans from those institutions.  The necessity for and the extent of security required in any loan shall be determined by the division.

     (b)  Program loans shall be subject to the following conditions:

     (1)  No loan shall be granted unless no other financial assistance is available to the applicant; provided that the division may waive this condition if the applicant has participation loans or loan guarantees with a private financial institution;

     (2)  The total amount of a loan shall not exceed $20,000;

     (3)  No loan shall be made for a term exceeding six years;

     (4)  Each loan shall bear simple interest at a rate of four per cent per annum; and

     (5)  The division may defer payment of interest on the principal of a loan; provided that interest payments shall not be deferred for more than twenty-four months from the date of issuance of the loan.

     (c)  The division may contract with any financial institution for loan services, including loan servicing or administration pursuant to this section.

     §   -6  Hawaii start-up business loan program revolving fund.  (a)  There is established in the state treasury the Hawaii start-up business loan program revolving fund, into which shall be deposited:

     (1)  Appropriations made by the legislature to the fund;

     (2)  Moneys received as loan repayments; and

     (3)  Any interest paid on program loans.

     (b)  Moneys in the fund shall be administered by the department and shall be used to provide loans to start-up businesses pursuant to section    -2.

     (c)  All unexpended and unencumbered moneys remaining in the fund at the close of business on June 30 each year shall not lapse to the credit of the general fund.

     (d)  The department may contract with any financial institution for fund management services, including the day to day management of the fund pursuant to this section.

     §   -7  Reports.  The department shall submit a report of the division's activities in administering the program to the legislature no later than twenty days prior to the convening of each regular session, beginning with the regular session of 2023.  The report shall include:

     (1)  A description of how the program has been utilized;

     (2)  A summary of information and analytical data concerning the program's administration; and

     (3)  An accounting of repaid loans."

     SECTION 2.  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2022-2023 to be deposited into the Hawaii start-up business loan program revolving fund established pursuant to section    -6 of section 1 of this Act.

     SECTION 3.  There is appropriated out of the Hawaii start-up business loan program revolving fund the sum of $           or so much thereof as may be necessary for fiscal year 2022-2023 for the purposes of implementing the Hawaii start-up business loan program and providing loans under the program.

     The sum appropriated shall be expended by the business development and support division of the department of business, economic development, and tourism for the purposes of this Act.

     SECTION 4.  If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

     SECTION 5.  This Act shall take effect on October 18, 2050.

 

Report Title:

Hawaii Start-Up Business Loan Program; Hawaii Start-Up Business Loan Program Revolving Fund; DBEDT; Business Development and Support Division; HTDC; Report; Appropriation

 

Description:

Establishes the Hawaii start-up business loan program.  Establishes the Hawaii start-up business loan program revolving fund.  Requires DBEDT to submit an annual report to the legislature regarding the program.  Appropriates funds.  Effective 10/18/2050.  (HD1)

 

 

 

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