42 U.S.C. § 2991b-1 : US Code - Section 2991B-1: Loan fund; demonstration project

Search 42 U.S.C. § 2991b-1 : US Code - Section 2991B-1: Loan fund; demonstration project

(a) Grant to Office of Hawaiian Affairs to establish revolving loan
fund; purposes of fund; administrative costs; matching funds
(1) In order to provide funding that is not available from
private sources, the Commissioner shall award a grant to the Office
of Hawaiian Affairs of the State of Hawaii (referred to in this
section as the "Office"), which shall use that grant to carry out,
in the State of Hawaii, a demonstration project involving the
establishment of a revolving loan fund -
(A) from which the Office shall make loans or loan guarantees
to Native Hawaiian organizations and to individual Native
Hawaiians for the purpose of promoting economic development in
the State of Hawaii; and
(B) into which all payments, interest, charges, and other
amounts collected from loans made under subparagraph (A) shall be
deposited notwithstanding any other provision of law.
(2) The agreement under which a grant is awarded under paragraph
(1) shall contain provisions which set forth the administrative
costs of the grantee that are to be paid out of the funds provided
under the grant and a requirement that the grantee contribute to
the revolving loan fund an amount of non-Federal funds equal to the
amount of such grant.
(b) Loans or loan guarantees to borrowers; determinations; term;
interest rate; default and collection procedures; prohibition on
self-lending
(1) The Office may make a loan or loan guarantee to a borrower
under subsection (a)(1)(A) of this section only if the Office
determines that -
(A) the borrower is unable to obtain financing from other
sources on reasonable terms and conditions; and
(B) there is a reasonable prospect that the borrower will repay
the loan.
(2) Each loan or loan guarantee made under subsection (a)(1)(A)
of this section shall be -
(A) for a term that does not exceed 7 years; and
(B) at a rate of interest that does not exceed a rate equal to
the sum of -
(I) the most recently published prime rate (as published in
the newspapers of general circulation in the State of Hawaii
before the date on which the loan is made); and
(II) 3 percentage points.
(3) The Office may require any borrower of a loan made under
subsection (a)(1)(A) of this section to provide such collateral as
the Office determines to be necessary to secure the loan.
(4) Prior to making loans under subsection (a)(1)(A) of this
section, the Office shall establish written procedures and
definitions pertaining to defaults and collections of payments
under the loans which shall be subject to the review and approval
of the Commissioner. Such Office shall provide to each applicant
for a loan under subsection (a)(1)(A) of this section, at the time
application for the loan is made, a written copy of such procedures
and definitions.
(5) The Office may not lend to itself any of the funds awarded
under the grant.
(c) Notice to Commissioner of loans in default and uncollectability
of such loans; instructions by Commissioner
(1) The Office shall provide the Commissioner at regular
intervals written notice of each loan made under subsection
(a)(1)(A) of this section that is in default and the status of such
loan.
(2)(A) After making reasonable efforts to collect all amounts
payable under a loan made under subsection (a)(1)(A) of this
section that is in default, the Office shall notify the
Commissioner that such loan is uncollectable or collectable only at
an unreasonable cost. Such notice shall include recommendations for
future action to be taken by the Office.
(B) Upon receiving such notice, the Commissioner shall instruct
the Office -
(i) to continue with its collection activities;
(ii) to cancel, adjust, compromise, or reduce the amount of
such loan; or
(iii) to modify any term or condition of such loan, including
any term or condition relating to the rate of interest or the
time of payment of any installment of principal or interest, or
portion thereof, that is payable under such loan.
(C) The Office shall carry out all instructions received under
subparagraph (B) from the Commissioner.
(d) Payment of administrative costs; management and technical
assistance
(1) The Office shall, out of funds available in the revolving
loan fund established under such subsection -
(A) pay expenses incurred by the Office in administering the
revolving loan fund; and
(B) provide competent management and technical assistance to
borrowers of loans made under subsection (a)(1)(A) of this
section to assist the borrowers to achieve the purposes of such
loans.
(2) The Commissioner shall provide to the Office such management
and technical assistance as the Office may request in order to
carry out the provisions of this section.
(e) Regulations
Not later than 120 days after November 29, 1987, the
Commissioner, in consultation with appropriate agencies of the
State of Hawaii and community-based Native Hawaiian organizations,
shall prescribe regulations which set forth the procedures and
criteria to be used -
(1) in making loans under subsection (a)(1)(A) of this section;
and
(2) in canceling, adjusting, compromising, and reducing under
subsection (c) of this section the outstanding amounts of such
loans.
The Commissioner may prescribe such other regulations as may be
necessary to carry out the purposes of this section, including
regulations involving reporting and auditing.
(f) Authorization of appropriations; investment in obligations of
United States
(1) There is authorized to be appropriated for each of the fiscal
years 2000 and 2001, $1,000,000 for the purpose of carrying out the
provisions of this section. Any amount appropriated under this
paragraph shall remain available for expenditure without fiscal
year limitation.
(2) The revolving loan fund that is required to be established
under subsection (a)(1) of this section shall be maintained as a
separate account. Any portion of the revolving loan fund that is
not required for expenditure shall be invested in obligations of
the United States or in obligations guaranteed or insured by the
United States.
(g) Reports to Congress; contents
(1) The Commissioner, in consultation with the Office, shall
submit a report to the President pro tempore of the Senate and the
Speaker of the House of Representatives not later than January 1
following each fiscal year, regarding the administration of this
section in such fiscal year.
(2) Such report shall include the views and recommendations of
the Commissioner with respect to the revolving loan fund
established under subsection (a)(1) of this section and with
respect to loans made from such fund, and shall -
(A) describe the effectiveness of the operation of such fund in
improving the economic and social self-sufficiency of Native
Hawaiians;
(B) specify the number of loans made in such fiscal year;
(C) specify the number of loans outstanding as of the end of
such fiscal year; and
(D) specify the number of borrowers who fail in such fiscal
year to repay loans in accordance with the agreements under which
such loans are required to be repaid.