REPORT TITLE:
Community Development
Financial Institutions


DESCRIPTION:
Appropriates funds, with a requirement for matching funds, for
the development of community development financial institutions.
(HB1744 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1744
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1        
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS. 


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

 1      SECTION 1.  The legislature finds that access to credit and
 
 2 investment capital is essential for creating and retaining jobs,
 
 3 developing affordable housing, revitalizing neighborhoods, and
 
 4 promoting the development and growth of small businesses.  In
 
 5 economically distressed communities, where access to credit and
 
 6 investment capital through conventional sources is often limited,
 
 7 private for-profit and nonprofit community development financial
 
 8 institutions, such as nonprofit loan funds and community
 
 9 development credit unions, provide lending and investment
 
10 services.
 
11      Community development financial institutions (CDFIs) are
 
12 private for-profit and nonprofit financial institutions that
 
13 provide financial services to distressed geographic areas and
 
14 populations that are underserved by conventional lenders and
 
15 investors.  The common types of CDFIs are community development
 
16 loan funds, microenterprise loan funds, and community development
 
17 venture capital funds.
 
18      Recognizing the proven ability of CDFIs to identify and
 
19 respond to communities' financial needs, the United States
 
20 Congress in 1994 created the Community Development Financial
 

 
Page 2                                                     1744 
                                     H.B. NO.           H.D. 1        
                                                        
                                                        

 
 1 Institutions Fund to support investment in and assistance to
 
 2 CDFIs.  The fund's overall mission is to promote economic
 
 3 revitalization and community development, primarily through two
 
 4 programs: the CDFI and Bank Enterprise Award programs.  The CDFI
 
 5 program provides financing and technical assistance to CDFIs,
 
 6 while the Bank Enterprise Award program rewards banks and thrifts
 
 7 for providing similar services to CDFIs and economically
 
 8 distressed communities.
 
 9      For example, a native Hawaiian CDFI initiative has been in
 
10 the making for five years on the island of Maui.  Developed to
 
11 serve the most socio-economically distressed community in Hawaii,
 
12 this community organization, known as Na Po`e Kokua, Inc. (the
 
13 people helpers) has received from Bank of America Community
 
14 Development Bank a financial commitment of $3,500,000 for
 
15 development and additional funds for technical assistance.
 
16      The purpose of this Act is to assist with the development of
 
17 the community development financial institutions.
 
18      SECTION 2.  There is appropriated out of the general
 
19 revenues of the State of Hawaii the sum of $1 or so much thereof
 
20 as may be necessary for fiscal year 1999-2000 to develop one or
 
21 more community development financial institutions; provided that
 
22 no funds shall be made available under this Act unless Bank of
 
23 America Community Development Bank provides a dollar-for-dollar
 

 
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                                     H.B. NO.           H.D. 1        
                                                        
                                                        

 
 1 match of funds for the purpose for which this sum is
 
 2 appropriated.
 
 3      SECTION 3.  The sum appropriated shall be expended by the
 
 4 department of accounting and general services for the purposes of
 
 5 this Act.
 
 6      SECTION 4.  This Act shall take effect on July 1, 1999.