STAND. COM. REP. NO. 281

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1059
                                        




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Economic Development, to which was
referred S.B. No. 1059 entitled: 

     "A BILL FOR AN ACT RELATING TO AGRICULTURE,"

begs leave to report as follows:
     
     The purpose of this measure is to provide the Department of
Agriculture with a streamlined program to issue loan guarantees
to private lenders.

     Your Committee received testimony in support of this measure
from the Department of Agriculture and the Hawaii Farm Bureau.

     Your Committee finds that as Hawaii's diversified
agriculture industry expands, financing is a crucial element in
fostering further growth.  However, agricultural lending poses
more risks than conventional commercial lending, and under
current economic conditions, the State's funding is limited.

     Your Committee also finds that this measure would encourage
more lending from the private sector by authorizing the
department to guarantee up to ninety percent of the principal
balance of a loan, plus interest, not to exceed a total limit of
$10,000,000.

     Your Committee has expressed concerns regarding possible
costs to the State should the default rate increase.  However,
your Committee is supportive of any efforts to assist Hawaii's

 
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                                   STAND. COM. REP. NO. 281
                                   Page 2


farming industry and believes this measure is worthy of further
discussion.

     As affirmed by the record of votes of the members of your
Committee on Economic Development that is attached to this
report, your Committee is in accord with the intent and purpose
of S.B. No. 1059 and recommends that it pass Second Reading and
be referred to the Committee on Ways and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Economic
                                   Development,



                                   ______________________________
                                   LORRAINE R. INOUYE, Chair

 
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