§155-6  Participation in loans by the
department.  (a)  The department of agriculture may provide funds for a
share, not to exceed ninety per cent, of the principal amount of a loan made to
a qualified farmer, qualified new farmer, or qualified food manufacturer by a
private lender who is unable otherwise to lend the applicant sufficient funds
at reasonable rates.



(b)  Participating loans under this section
shall be limited by sections 155-9 to 155-13 for purposes of class
"A" through class "F", the department's share not to exceed
the maximum amounts specified therefor; provided that class "E" loans
to food manufacturers shall not be subject to section 155-10.



(c)  Interest charged on the private lender's
share of the loan shall not be more than the sum of two per cent above the
lowest rate of interest charged by all state or national banks authorized to
accept or hold deposits in the State of Hawaii, on unsecured short term loans
made to borrowers who have the highest credit rating with those banks.



(d)  The private lender's share of the loan may
be insured by the department up to ninety per cent of the principal balance of
the loan, under the provisions of section 155-5.



(e)  When a participating loan has been
approved by the department, its share may be paid to the participating private
lender for disbursement to the borrower.



(f)  Out of interest collected, the private
lender may be paid a service fee to be determined by the department which fee
shall not exceed one per cent of the unpaid principal balance of the loan;
provided that this fee shall not be added to any amount which the borrower is
obligated to pay; and further provided that the private lender services the
loan.



(g)  The participating private lender may take
over a larger percentage or the full principal balance of the loan at any time
that it has determined, to the satisfaction of the department, that the
borrower is able to pay any increased interest charges resulting.



(h)  Security for participating loans shall be
limited by the provisions of section 155-11.  All collateral documents shall be
held by the private lender.  Division of interest in collateral received shall
be in proportion to participation by the department and the private lender. [L
1959, c 278, pt of §1; am L Sp 1959 2d, c 1, §25; am L 1961, c 104, §1(f), (g),
(h), and c 132, §2; Supp, §102-6; HRS §155-6; am L 1968, c 53, §§4, 5; am L
1989, c 222, §2 and c 261, §8; am L 1993, c 350, §4; am L 1997, c 258, §3; am L
1999, c 32, §3; am L 2000, c 51, §7]