Community Development
Financial Institutions

Appropriates funds, with a requirement for matching funds, for
the development of community development financial institutions.

HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 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

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                                     H.B. NO.           

 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 the Community Development
14 Investment Fund a financial commitment of $3,500,000 for
15 development and $1,000,000 in 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 $3,500,000 or so much
20 thereof as may be necessary for fiscal year 1999-2000 to develop
21 one or more community development financial institutions;
22 provided that no funds shall be made available under this Act
23 unless the federal government provides a dollar-for-dollar match

Page 3                                         1744        
                                     H.B. NO.           

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