Report Title:

Agriculture; Kunia Special Agricultural District

Description:

Establishes the Kunia Special Agricultural District (District). Requires Agribusiness Development Corporation (ADC) to acquire public and private lands within the District for the development of agricultural projects and project facilities. Establishes linked investment loans for agricultural enterprises in the District. Appropriates funds into the Hawaii Agricultural Development Revolving Fund for activities relating to the District. (HB3068 HD3)

HOUSE OF REPRESENTATIVES

H.B. NO.

3068

TWENTY-THIRD LEGISLATURE, 2006

H.D. 3

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to agriculture.

 

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

SECTION 1. Chapter 163D, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part     . kunia special agricultural district

§163D-A Establishment of district. (a) There is established the Kunia special agricultural district.

(b) The district shall include all lands in the state land use agricultural district and classified by the land study bureau's detailed land classification as overall (master) productivity rating class A or B.

§163D-B Transfer of public lands and non-agricultural park lands; other lands. (a) In addition to the acquisition of public lands within the Kunia special agricultural district by the corporation pursuant to section 163D-16, the board of land and natural resources shall transfer all non-agricultural park lands, all lands subject to chapter 166E pursuant to that chapter, and other public lands in its control within the Kunia special agricultural district to the corporation; provided that the transfer of non-agricultural park lands pursuant to chapter 166E shall not otherwise be affected; and provided further that no public lands shall be transferred if the transfer would impair any existing lease between the State and a lessee or impair any covenant between the State or any county and the holders of bonds issued by the State or any county.

(b) The corporation shall further acquire other available lands within the Kunia special agricultural district, with priority to lands contiguous to existing lands it controls and large non-contiguous parcels, with suitable water resources available, capable of producing sustained high agricultural yields.

§163D-C Agricultural projects; project facilities. In accordance with sections 163D-7 and 163D-8, respectively, the corporation shall:

(1) Develop and implement projects on lands it controls within the Kunia special agricultural district; and

(2) Identify, plan, and develop project facilities, particularly irrigation facilities, for agricultural projects within the Kunia special agricultural district.

§163D-D Hawaii agricultural development revolving fund. For purposes of this part, the corporation may use funds in the Hawaii agricultural development revolving fund established pursuant to section 163D-17.

§163D-E Linked investments; limitations. (a) A linked investment is a certificate of deposit placed with a private lender at an interest rate not more than two per cent below current market rates; provided that the private lender agrees to lend the value of the deposit to an eligible borrower at a rate not more than the prime rate or seven and one-half per cent a year, whichever is lower. A linked investment certificate of deposit shall:

(1) Earn a rate of interest of not less than two per cent a year;

(2) Not be subject to a penalty for early withdrawal; and

(3) Have a maturity of one year for the initial linked investment, which may be renewed for eight additional one-year periods.

(b) The director of finance may invest not more than ten per cent of any moneys that are maintained in the custody of the director of finance for investment and reinvestment under section 36-21 in linked investments through agreements with private lenders.

(c) As used in this part, "eligible borrower" means an enterprise that proposes to be engaged in agricultural activities in the Kunia special agricultural district.

§163D-F Linked investments; application; authorization. (a) A private lender shall accept and review applications for loans, determine whether the applicant is an eligible borrower, and, if the borrower is eligible, prepare a linked investment loan package in the form and manner prescribed by the director of finance. The loan package shall include information on:

(1) The amount of the loan requested;

(2) The purpose of the loan; and

(3) The institution's certification that the applicant is an eligible borrower.

(b) The director of finance shall accept or reject the linked investment loan package or any portion of the package based on the availability of state funds.

(c) Upon acceptance of the linked investment loan package, the director of finance shall place a certificate of deposit for the loan amount with the private lender.

§163D-G Loans. (a) No loan made through linked investments shall exceed $         .

(b) Loans made through linked investments may be used for agricultural projects, project facilities, financing of plant construction or expansion, the purchase of equipment and materials, and working capital by an eligible borrower. Loans made through linked investments shall not be used for the purchase of real property.

(c) The State shall have no liability in the event of a loan default."

SECTION 2. Chapter 163D, Hawaii Revised Statutes, is amended by designating sections 163D-1 to 163D-19 as part I and inserting a title before section 163D-1 to read as follows:

"PART I. "GENERAL PROVISIONS"

SECTION 3. Section 36-21, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The director of finance may invest any moneys of the State which, in the director's judgment, are in excess of the amounts necessary for meeting the immediate requirements of the State and where in the director's judgment the action will not impede or hamper the necessary financial operations of the State in:

(1) Any bonds or interest-bearing notes or obligations:

(A) Of the State (including state director of finance's warrant notes issued pursuant to chapter 40);

(B) Of the United States;

(C) For which the faith and credit of the United States are pledged for the payment of principal and interest;

(2) Federal Farm Credit System notes and bonds;

(3) Federal Agricultural Mortgage Corporation notes and bonds;

(4) Federal Home Loan Bank notes and bonds;

(5) Federal Home Loan Mortgage Corporation bonds;

(6) Federal National Mortgage Association notes and bonds;

(7) Student Loan Marketing Association notes and bonds;

(8) Tennessee Valley Authority notes and bonds;

(9) Securities of a mutual fund whose portfolio is limited to bonds or securities issued or guaranteed by the United States or an agency thereof or repurchase agreements fully collateralized by any such bonds or securities;

(10) Securities of a money market mutual fund that is rated AAA, or its equivalent, by a nationally recognized rating agency or whose portfolio consists of securities that are rated as first tier securities by a nationally recognized statistical rating organization as provided in 17 Code of Federal Regulations section 270.2a-7;

(11) Federally insured savings accounts;

(12) Time certificates of deposit;

(13) Certificates of deposit open account;

(14) Repurchase agreements with federally insured banks, savings and loan associations, and financial services loan companies;

(15) Student loan resource securities, including:

(A) Student loan auction rate securities;

(B) Student loan asset-backed notes;

(C) Student loan program revenue notes and bonds; and

(D) Securities issued pursuant to Rule 144A of the Securities Act of 1933, including any private placement issues;

issued with either bond insurance or over collateralization guaranteed by the United States Department of Education; provided all insurers maintain a triple-A rating by Standard & Poor's, Moody's, Duff & Phelps, Fitch, or any other major national securities rating agency;

(16) Commercial paper with an A1/P1 or equivalent rating by any national securities rating service; [and]

(17) Bankers' acceptances with an A1/P1 or equivalent rating by any national securities rating service; and

(18) Linked investments established pursuant to section 163D-E;

provided that the investments are due to mature not more than five years from the date of investment. Income derived from those investments shall be a realization of the general fund; provided that income earned from moneys invested by the general funds, special funds, bond funds, and trust and agency funds on an investment pool basis shall be paid into and credited to the respective funds based on the contribution of moneys into the investment pool by each fund. As used in this section, "investment pool" means the aggregate of state treasury moneys that are maintained in the custody of the director of finance for investment and reinvestment without regard to fund designation."

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $1 or so much thereof as may be necessary for fiscal year 2006-2007 to be deposited into the Hawaii agricultural development revolving fund for the acquisition of land, development of agricultural projects, development of project facilities, assistance of enterprises engaging in agricultural activities within the Kunia special agricultural district, and the hiring of staff for these projects.

The sum appropriated shall be expended by the agribusiness development corporation for the purposes of this Act.

SECTION 5. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 6. In codifying the new part added to chapter 163D, Hawaii Revised Statutes, by section 1 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on July 1, 2020.