Transcript Highlights:

• include any and all forms of financing, including but not limited to equity, credit enhancement, and collateral

Bills: SB2060, SB2063, SB2062, SB2069, SB2070

Keywords: rental housing revolving fund, HHFDC, Hawaii Housing Finance and Development Corporation, mixed-income housing, mixed-income rental project, affordable housing, low-income housing, housing finance, housing development, preservation, rehabilitation, pre-development, construction financing, equity investment, credit enhancement, collateral, gap financing, area median income, AMI, perpetual affordability

Summary: The committee heard five housing measures, with the chair announcing that SB 2060, SB 2063, SB 2062, and SB 2069 were works in progress and that decision-making would be deferred to February 3. SB 2060 would allow HHFDC, with Finance approval, to transfer money within the rental housing revolving fund and its subaccounts without further legislative authorization, including a transfer to the mixed-income subaccount for FY 2026-2027. HHFDC and other supporters said the change would give the agency more flexibility to move projects forward, while Catholic Charities Hawaii and a testifier from Roars and Cares supported the bill but warned that shifting money away from lower-income housing could weaken efforts to serve households under 80% of area median income and people at risk of homelessness. HHFDC said the fund’s uncommitted balance was about $100 million and that demand exceeded available resources. SB 2063 would revise the mixed-income subaccount by changing project priorities, adding new criteria, allowing transfers within the subaccount without legislative approval, and directing conveyance tax revenues into the subaccount. HHFDC, OPSD, LURF, Hawaii Appleseed, Housing Hawaii’s Future, Stanford Carr Development, and Roars and Cares supported the measure, while Catholic Charities urged the committee to keep rental and for-sale housing policy separate and to use other mechanisms for homeownership. Catholic Charities said the rental housing revolving fund should remain focused on rentals, and that for-sale initiatives should be addressed separately. The chair indicated an intent to defer the bill for further edits. SB 2062 would make the dwelling unit revolving fund equity pilot a permanent HHFDC program, allowing the agency to buy equity in for-sale developments to lower initial purchase prices and require repayment through shared appreciation. HHFDC said the pilot had been successful, with 83 units committed and $7.6 million of the $10 million program cap already committed, and said permanence would let the agency pair the program with DERF loans earlier in project financing. The chair said SB 2069 would be used as the vehicle for amendments to the DERF equity program and related changes. SB 2069 would authorize HHFDC to use existing dwelling unit revolving fund balances for the equity pilot; it drew support from HHFDC and several housing organizations. SB 2070 would create a permanently affordable for-sale housing program by replacing the current 10-year buyback restriction with a resale price cap tied to an appreciation index, which HHFDC said would preserve affordability while allowing owners to build equity. In questioning, senators pressed HHFDC on whether the bill was necessary, whether it would remove first-time homebuyer and other ownership restrictions, and whether the new program was truly “permanently affordable” if not tied to AMI. HHFDC said the current statutory restrictions limit flexibility, that the proposal would expand access to local residents, and that the price cap would be based on about 4.5% annual appreciation. Supporters said the approach would help buyers move up the housing ladder, while some senators expressed concern that it could open the program to owners of multiple properties and that the committee should see sales-velocity data on existing restricted units before proceeding.

Bills: SB2069, SB2177, SB2342, SB2060, SB2544, SB3011, SB2061, SB2552

Keywords: SB2069, Hawaii housing, HHFDC, Hawaii Housing Finance and Development Corporation, Dwelling Unit Revolving Fund, equity pilot program, housing affordability, homeownership, first-time homebuyer, for-sale housing, transit-oriented development, TOD, transit-oriented development zone, bus route, bus stop, critical workforce housing, health care workers, educators, law enforcement, correctional officers

Summary: The House Housing Committee opened its Friday morning hearing by noting potentially catastrophic flooding on the island and acknowledging that some members were absent helping their communities, so quorum for voting was uncertain. The committee then heard testimony on several housing-related measures, with most bills drawing support from housing agencies and community organizations and little or no opposition in the room. On SB 2069 SD2, SB 2177 SD2, and SB 2342 SD2, witnesses largely supported the measures. HHFDC supported SB 2069 and SB 2177, and HPHA supported SB 2342. For SB 2342, HHFDC raised concerns that the bill would alter the Qualified Allocation Plan outside the normal open, public process required by federal law and could exclude stakeholders; Kathy Charities echoed those concerns and also objected to changing point allocations in ways that could raise rents and weaken long-term affordability. Members questioned HHFDC about how the QAP is normally updated, the meaning of the point system, and whether a legislative working group could mandate changes; HHFDC said recommendations would still need public hearing and board approval. The committee also heard SB 2060 SD2, which would create a mixed-income subaccount in the rental housing revolving fund. HHFDC said the subaccount would likely use tier-two funds, estimated at about $100 million total, to support mixed-income projects above 60% AMI, citing Front Street Apartments as a possible example. Members asked about project selection and funding needs. On SB 2544 SD2, OHA opposed the bill’s Chapter 6E-related exemptions and mandatory review timelines, arguing that burial review protections should not be weakened and that the SPEED Task Force process was a better venue for streamlining. The sponsor later clarified that the bill was not meant to eliminate the 60-day review process but to make the deadline clearer. For SB 3011 SD1, which concerns public housing and pet ownership, HPHA and several humane organizations supported the measure, saying it would help low-income residents and seniors keep pets and benefit from animal companionship. HPHA explained its existing pet policy, including deposits, monthly fees, and restrictions, and said the requested funding would support ADA-accessible pet areas and related administration. Finally, on SB 2061 SD2, HCDA supported the bill while OHA opposed it unless protections for Hawaiian Crown and Government lands were strengthened. Committee members questioned the project’s 60/40 split between income-restricted and market-rate units, the 10-year owner-occupancy restriction, and the procurement exemption; the sponsor said the exemption was tied to a real estate transaction and that the project would still use 103D-like solicitation procedures. No votes were taken during the hearing, and several items were left for later action because quorum was uncertain.

Transcript Highlights:

• And there's a chart in this showing the flow of collateral from collateral givers to collateral takers
• And there's a chart in this showing the flow of collateral from collateral givers to collateral takers
• And there's a chart in this showing the flow of collateral from collateral givers to collateral takers
• And there's a chart in this showing the flow of collateral from collateral givers to collateral takers
• And there's a chart in this showing the flow of collateral from collateral givers to collateral takers

Keywords: 928, house, all

Summary: The committee first heard testimony on House Bill 167, a PFAS-related measure to add ski, snowboard, and boat wax to the state’s list of banned consumer products containing PFAS. The sponsor said the product is already banned in many other places, alternatives exist, and the concern is that these products go directly into water rather than landfills. She cited high PFAS levels in several New Hampshire lakes and argued the bill would help stop further contamination. A member of the public also described personal experience with ski wax products disappearing from the market, suggesting PFAS may have been the reason. The chair then closed the hearing on HB 167. The committee next opened a hearing on House Bill 312, dealing with college athletes’ name, image, and likeness (NIL) rights. Representative Moffett explained the bill was prompted by the U.S. Supreme Court’s NCAA v. Alston decision and was modeled on New Jersey law. He said the bill would prevent colleges from restricting NIL compensation, require athletes to use licensed attorneys or registered sports agents, and limit certain endorsements involving addictive drugs, adult entertainment, firearms, and weapons. He framed the measure as a proactive response to a changing college sports landscape and noted possible future conflicts involving schools, agents, and endorsements. Committee members raised several concerns and suggested changes. One member questioned the bill’s exclusion of two-year institutions, another objected to the weapons restriction, and others asked how the bill would affect scholarships. The sponsor said the intent was to protect scholarships, especially athletic scholarships, and clarified that need-based scholarships were not meant to be affected. He also acknowledged discomfort with the endorsement restrictions and said the committee might want to broaden or revise the language. The hearing remained open for further consideration, with no vote taken in the excerpt.

Transcript Highlights:

• So, uh, there is always collateral that we would take, but what collateral always sort of depends on
• minsu as well uh what type of collateral minsu as well uh what type of collateral are<00:48:17.400
• that we would take but always collateral that we would take but what<00:48:45.119> collateral
• <00:48:52.680> can<00:48:52.799> they what collateral can they what collateral can
• hard and fast rule that the collateral hard and fast rule that the collateral has<01:02:36.960><

Keywords: 1187, senate, all

Transcript Highlights:

• During our review of collateral, we noted a deficiency of $2.5 million in collateral covering one bank's
• I want to try to see if I understand the second finding with the collateralization.
• I want to try to see if I understand the second finding with the collateralization.
• What do they use as collateral? So the bank has to provide that collateral? That's great.
• The collateral was okay, but they didn't have it pledged in the name of the State Police.

Summary: The committee first approved the minutes from the prior meeting. It then heard audit reports from Tom Bullington, including two reports with findings and three without findings, which were filed without objection. The Department of Public Safety FY24 audit had two findings: a duplicate vendor payment of nearly $3,700 that was later recouped, and a $2.5 million collateral shortfall tied to bank-held cash funds because securities were not properly pledged in the State Police’s name. Agency representatives from Arkansas State Police and the Department of Public Safety answered questions, and members discussed how collateralization works for deposits above FDIC coverage. The committee next reviewed the Department of Transformation and Shared Services FY24 audit, which contained five findings. These included an $800 career service overpayment caused by a rehire data entry error, delayed deactivation and inventory issues for assets including stolen cameras, a double count of more than $940,000 in year-end cash records, $10.3 million in health claims that should have been recorded as fiscal year 2024 payables, and repeated deficiencies in vehicle mileage logs. Agency officials explained that the stolen cameras were recovered through restitution, that inventory reviews are being expanded, and that the vehicle log problems are expected to be addressed through a statewide electronic GPS/telematics system. Members asked about the scope of audit testing, asset tracking, vehicle oversight, and whether the new vehicle system would allow monitoring of use, fuel purchases, geofencing, and possible sharing of vehicles across agencies. Shared Administrative Services said it would administer the statewide system, with departments retaining operational responsibility and access controls. After discussion, the committee filed the report without objection and adjourned, noting the next meeting would be held June 4.

Transcript Highlights:

• During our review of collateral, we noted a deficiency of $2.5 million in collateral covering one bank's
• I want to try to see if I understand the second finding with the collateralization.
• I want to try to see if I understand the second finding with the collateralization.
• . $50,000, they have to have that collateralized insurance somehow in case the bank defaults.
• What do they use as collateral? So the bank has to provide that collateral? That's great.

Summary: The committee first approved the minutes and then heard audit reports from Tom Bullington. For the Department of Public Safety FY24 audit, two findings were presented: a duplicate vendor payment of nearly $3,700 that was later recouped, and a $2.5 million collateral deficiency tied to bank deposits that exceeded FDIC coverage because securities were not properly pledged to the State Police. Agency representatives from Arkansas State Police and the Department of Public Safety answered questions, and members discussed how the collateral requirement works before the report was filed without objection. The committee then reviewed the Department of Transformation and Shared Services FY24 audit, which contained five findings. These included an $800 career service overpayment caused by incorrect rehire data, delayed deactivation and inaccurate listing of fixed assets including stolen cameras, a double count of more than $940,000 in year-end cash records, $10.3 million in health claims that should have been recorded as fiscal year 2024 payables, and repeated deficiencies in vehicle mileage logs. Agency officials said the stolen cameras were recovered through restitution, and they described corrective steps for asset tracking, cash reporting, and vehicle logs. Members asked detailed questions about the vehicle log issues and the planned statewide GPS/telematics rollout. Shared Administrative Services said it is negotiating a vendor contract, expects to implement the system first in its own department, and aims to use GPS, geofencing, alerts, and WEX fuel-card data to improve oversight while preserving privacy. The committee also discussed possible future vehicle sharing across agencies, but no action was taken beyond filing the report. The meeting adjourned after announcing the next meeting date.

Transcript Highlights:

• We stand on our testimony and support the collateral.
• using you know State funds as collateral using you know State funds as collateral for<00:28:09.679
• Well, I think the bill is specifically for collateral.
• Well, I think the bill is specifically for collateral.
• land or other assets as collateral land or other assets as collateral currently<00:32:11.440>

Keywords: 910, house, all

Summary: The House Committee on Housing held a public hearing and moved quickly through a long agenda, beginning with HB 606 on the Department of Hawaiian Homelands. DHHL and several community testifiers strongly supported the bill, describing it as a way to fulfill long-standing promises to Native Hawaiians, reduce the DHHL waitlist, keep families in Hawaii, and support housing production and the broader economy. Testifiers emphasized the cultural and economic importance of stable housing and noted the large number of people still waiting for DHHL homes. The committee then heard HB 1086, also relating to DHHL, which would allow the department to use a $75 million appropriation from the dwelling unit revolving fund as collateral for loans. DHHL, HHFDC, and other supporters said the measure would help DHHL obtain better loan terms and preserve trust funds for other uses. Members asked detailed questions about how the collateral would work, whether other agencies use similar structures, and what would happen if the collateral were drawn upon; staff explained that the funds would be encumbered for the loan and that a similar model had been used for a HUD-backed project. The committee also heard HB 739, which would create the COM homes program to fund counties to buy voluntary deed restrictions from eligible homeowners or buyers. Supporters said the program could help keep local workers in Hawaii by using existing housing stock and cited examples from places like Aspen and Vail. The Attorney General’s office recommended amendments to remove duration requirements to avoid right-to-travel concerns, and the Tax Foundation suggested clarifying the conveyance tax exemption so it also covers the instrument imposing the restriction. Members asked whether tax dollars would be used to buy homes, who would be eligible, and how enforcement would work; supporters said the program is voluntary and income-blind, with restrictions tied to living and working in the state. No votes were taken during the hearing.

Transcript Highlights:

• The collateral pledge must be held by an unaffiliated third-party custodian in an amount at least equal
• During our review of collateral, we noted a deficiency of $2.5 million in collateral covering one bank's
• I want to try to see if I understand the second finding with the collateralization.
• What do they use as collateral? So the bank has to provide that collateral? That's great.
• The collateral was okay, but they didn't have it pledged in the name of the state police.

Keywords: 1204, all

Transcript Highlights:

• dtcc the pool can be used as collateral dtcc the pool can be used as collateral by<01:15:09.520>
• And there's a chart in this showing the flow of collateral from collateral givers to collateral takers
• of the collateral is calling.
• collateral<01:31:31.960> givers<01:31:32.600> to<01:31:32.960> Collateral<01:31
• :33.679> takers collateral givers to Collateral takers collateral givers to Collateral takers

Keywords: 928, house, all

Summary: The committee first heard testimony on House Bill 167, which would add ski, snowboard, and boat wax containing PFAS to the state’s consumer-product restrictions. The sponsor argued the product is already banned in many places, has PFAS-free alternatives, and is used in ways that can directly contaminate water rather than landfills. She cited high PFAS levels in several New Hampshire lakes and said the bill was a simple extension of prior PFAS legislation. A witness also described a personal experience where a liquid ski wax disappeared from the market and later returned, likely because of PFAS concerns. The chair then closed the hearing on HB 167 without a vote. The committee then opened a hearing on House Bill 312, dealing with college athletes’ name, image, and likeness (NIL) rights. Representative Moffett said the bill was modeled on New Jersey law and intended to let student-athletes earn compensation from NIL without losing institutional scholarships, while also requiring licensed representation and setting limits on certain endorsements. He described the measure as proactive because NIL rules are evolving and could create conflicts among schools and future lawsuits. Members questioned whether the bill should apply to two-year institutions, whether it should exclude firearms and weapons, and whether the scholarship protections would cover need-based or academic aid as well as athletic scholarships. Moffett said the scholarship language was intended to protect scholarships generally, but not need-based aid specifically, and he acknowledged discomfort with some of the endorsement restrictions. Public testimony on HB 312 was mixed. One supporter, a former Division III athlete and coach, backed the bill but urged removal of a section allowing institutions or athletic bodies to use an athlete’s NIL without compensation, arguing most New Hampshire athletes do not receive NIL money and should not have to work extra jobs to cover basic expenses. The chair also raised concerns about the bill’s contractual and identity-rights implications, referencing prior committee work on a J.D. Salinger-related identity case and noting the committee had previously declined to get involved in similar contractual disputes. No vote was taken during the hearing.

Transcript Highlights:

• 3% and 50% collateral.
• fees and collateral fees and collateral uh<00:08:33.519> was<00:08:33.839> 3%<00:08
• But we're working to try to collateral.
• Um, and so we're trying to collateral.
• If they 100% of the bond as collateral.

Bills: SJ0001

Keywords: mineral leasing, federal lands, Wyoming, energy policy, local control, federalism, 916, all

Transcript Highlights:

• The lawyers will refer to it as collateral source rule.
• It doesn't touch the collateral source rule.
• With the collateral source rule, and I don't explain this to you.
• Adios, Understanding collateral source law, I'll apologize if it sounded dismissive.
• Same thing with collateral source and all the other things here.

Keywords: 996, all

Transcript Highlights:

• There will be personal guarantees, and we do require collateral.
• Personal guarantees and collateral are required.
• But, and collateral—these are loans.
• And so, is that collateralized through cash... Or just other collateral that can be used?
• So number one, in terms of the collateral, the collateral could be land, building, you know, equipment

Transcript Highlights:

• However, if that property, is not taken care of and passed on to a bank as collateral, and the damage
• Drill down one more layer for me and explain. collateralized mortgages to those properties.
• But there seems to be a question on whether they've done it on their collateralized book or business.
• I'm not sure it was applied to the collateralized properties, if that makes sense.
• I would say that I believe the banks have a good inventory of their collateralized property.

Summary: The committee heard a work session on earthquake insurance, beginning with background from the Office of the Insurance Commissioner. OIC staff explained that earthquake and earth movement are generally excluded from standard property policies, that earthquake coverage is usually purchased through endorsements or standalone policies with high deductibles and relatively high premiums, and that surplus lines are a limited backstop market not covered by the state guarantee fund. They also described parametric insurance and captive insurance as more specialized products generally suited to commercial or governmental buyers rather than ordinary consumers. A second panel of insurance and banking experts focused on commercial earthquake exposure, especially for older buildings, collateralized loans, and potential knock-on effects to banks and consumers if a major quake caused widespread damage. Members asked about consumer impacts, mitigation incentives, inventories of vulnerable buildings, and whether legislation such as prior work on unreinforced masonry could help reduce risk. The Washington Bankers Association said earthquake insurance is expensive and that affordability is a major concern, while also noting banks participate in disaster-recovery planning and would be affected by major regional losses. No votes or formal actions were taken. The committee then received a presentation from the Washington State Institute for Public Policy on its cannabis and Initiative 502 research. WSIPP staff described the agency as a nonpartisan research institute that conducts legislative-directed studies and explained that its long-term I-502 assignment includes periodic reports leading to a final benefit-cost evaluation in 2032. Staff summarized findings from a 2023 report showing that cannabis possession convictions fell sharply after legalization, though some racial disproportionalities persisted, and that closer retail access was associated with higher reported adult cannabis use, more fatal traffic crashes involving drivers from nearby areas, and higher rates of cannabis use disorder diagnoses among Medicaid enrollees. A 2023 youth-focused report found that students attending schools near retailers were more likely to report cannabis use, had more unexcused absences, and were less likely to graduate on time. In the newest 2025 Medicaid study, staff said retail access was associated with higher probabilities of cannabis use disorder diagnoses, related hospitalizations, inpatient treatment, and co-occurring mental health diagnoses, with event-study analysis suggesting the increases appeared after retailers opened rather than before. Members asked about racial disproportionality, the meaning of cannabis use disorder diagnoses, THC and impairment, whether the findings reflected medical versus recreational use, and how the results should be interpreted in light of broader trends and data limitations. No formal committee action was taken.

Transcript Highlights:

• You also have the collateral damage of that criminal or criminal defendant's family.
• You also have the collateral damage of that criminal or criminal defendant's family.
• So either way, if it's collateralized, they have no incentive to go look for anybody because they have
• collateral.
• If it's not collateralized, they're running and they're looking for somebody.

Summary: The Criminal Justice Subcommittee met with a quorum present and considered two bills. HB 59, by Rep. Koster, would expand Florida’s wrongful incarceration compensation process by extending the filing deadline from 90 days to two years, removing the statute’s clean hands provision, and allowing exonerees to choose between a civil lawsuit and the state compensation process. Supporters from criminal defense, innocence, civil liberties, and justice reform groups appeared in support, and members spoke favorably about the bill’s purpose. A technical amendment was adopted to align the bill with the Senate companion and remove conflicting statutory language. The committee then voted 17-0 to report HB 59 favorably as amended. The committee next heard HB 243, by Rep. Andrade, which would prevent cash bond funds posted by third parties from being automatically used to satisfy a criminal defendant’s fines, fees, or judgments. The sponsor said the bill protects third-party depositors, while some members raised concerns about clerk revenue, bail incentives, and whether third-party organizations posting bonds should be treated differently. Rep. Gottlieb indicated he would support an amendment allowing a cash depositor to authorize those funds to be used for costs at the time of posting, and the sponsor said he would accept that concept. Public testimony was in support from Florida Smart Justice Alliance and the Florida Association of Criminal Defense Lawyers. After debate, the committee voted 15-3 to report HB 243 favorably. The meeting then adjourned.

Transcript Highlights:

• Collateral was not required as part of the loan package.
• Additionally, there were issues with collateral requirements. Lastly, the industry.
• Also, if they owned the building, then that was, you know, collateral.
• What we had were loans, or potential loans, that were poorly secured in terms of collateral.
• Where you get 50% of your collateral, if you put 50% of that, it's a great program.

Transcript Highlights:

• in an in our to all of the collaterals in an in our independent<00:16:22.600> investigation<00
• So, depending on the case, children bring different collaterals to their situation, so whether that's
• That's one consideration in the big picture, um, and so there's consultation with collaterals.
• there's um consultation with collaterals there's um consultation with collaterals I<00:20:26.480
• <00:20:55.840> rather contacts happens collaterals rather contacts happens collaterals rather

Keywords: 1183, house

Summary: The House Judiciary Finance and Civil Law Committee approved the January 21 minutes and then reviewed committee rules, emphasizing deadlines for handouts, testimony notices, and substantive amendments, along with a warning that disruptive signs, noise, or demonstrations could lead to removal from the hearing room. The chair said the rules would be shared with the full House and noted the committee would operate with quorum and not tolerate chaos. The committee then heard a presentation from Tammy Baker Olson, the state program administrator for the Guardian ad Litem Board, on the program’s structure and budget request. She explained that guardians ad litem are independent voices for children’s best interests in child protection and family court cases, not attorneys or direct service providers. She said the program operates statewide, with 243 employees, and in 2024 advocated for more than 12,000 children, attended over 30,000 court proceedings, and filed reports in over 16,000 hearings. She also described specialized Family Court and Indian Child Welfare divisions, efforts to address racial disparities, and training requirements for guardians. Members asked about mileage and travel demands, the distinction between a child’s attorney and a guardian ad litem, caseloads, re-entry outcomes, the move from contractor/volunteer models to employee-based staffing, and the role of volunteers. Olson said most guardians use personal vehicles and mileage reimbursement, average caseloads are about 24, and the program has not seen a statewide increase in cases but does face staffing vacancies and turnover in some areas. She said the board believes the employee model improved advocacy and supervision, while the program is rebuilding a modest volunteer pool. She also said the program supports Indian Family Preservation Act-related work and has a formal process for handling conflicts of interest, which should be raised immediately to a supervisor rather than waiting for a complaint process.

Transcript Highlights:

• certifying that the cell possessed the requisite funding to commence business, including any required collateral
• The requisite funding and collateral requirements would be in the business plan of a cell’s application
• commencing business including<00:15:40.800> any<00:15:41.040> required<00:15:41.360> collateral
• <00:15:41.839> in including any required collateral in including any required collateral in
• funding and collateral requirements funding and collateral requirements would<00:16:01.920> be

Keywords: 927, senate, all

Transcript Highlights:

• In that agreement, it was stipulated that my client would have the first lien on collateral.
• As I've said in my experience, they will go after collateral on day one.
• What do their collateral add? Receivables?
• Most governmental deposits are secured by pledged collateral or LOCs.
• Cost of the collateral to the local government entities is typically put out in a bid process.

Bills: HB245, HB700, HB2783, HB3526, HB3900, HB4061, HB4124, HB4166, HB4395, HB4534, HB4609, HB4641, HB4736, HB4738, HB4739, HB4945, HB5015, HJR175, HB245

Keywords: military service, retirement, law enforcement, custodial officer, Employees Retirement System, commercial financing, brokers, registration, disclosures, finance, consumer protection, fees, deferred compensation, automatic participation, county employees, payroll deductions, retirement plans, fiscal transparency, local government, bond issuance

Transcript Highlights:

• Conventional lenders rely heavily on collateral, real estate, savings, and other assets, along with strong
• fund and under what terms, particularly for startups or entrepreneurs without traditional forms of collateral
• Minnesota where success is determined by innovation and hard work, not by whether you inherited collateral
• viable revenue-generating businesses, but they are denied capital because they lack traditional collateral
• ,<00:03:21.599> lengthy<00:03:22.080> credit traditional collateral, lengthy credit

Keywords: 1183, house

Summary: House File 2581 was presented as a request for a $1 million state investment in Fortis Capital, a Minnesota nonprofit economic development lender. The bill was described as supporting entrepreneurship and wealth-building by expanding access to capital for businesses that are underserved by traditional lending, especially in rural areas, communities of color, immigrant communities, and low-wealth areas. Testifiers argued that conventional underwriting standards leave viable businesses without financing and that Fortis provides flexible gap financing to help deals close, complementing rather than replacing banks and CDFIs. Brian Smith, co-founder and CEO of Fortis Capital, said the organization was established in 2019 and has deployed 37 loans totaling over $4 million since 2021, leveraging an additional $29.5 million through partnerships. He said Fortis seeks to increase lending capacity, reduce risk in innovative capital structures, expand statewide partnerships, and accelerate small business growth and job creation. In response to questions, he said Fortis typically charges about 6.12% on average, has had two defaults, and operates as a revolving loan fund. He also explained that Fortis already participates in some Department of Employment and Economic Development programs, but is not eligible for certain grant programs because those grants go directly to borrowers. Committee members asked how the proposal fits with existing state economic development efforts and whether competitive grant programs exist for this kind of work. A DED representative said he would need more detail to compare the proposal to agency programs, though he mentioned the emerging entrepreneur loan program as a possible fit. Members also discussed broader concerns about direct appropriations versus competitive grants. No public testimony was offered. Chair Frasier closed by saying the bill addresses a real need and laid House File 2581 over for possible inclusion in a budget bill.

Transcript Highlights:

• The path to yes was challenging because the business's assets available as collateral were well short
• Due to being a start-up and a lack of sufficient collateral, once again Common Capital turned to the
• We had to decline the request, given his limited collateral. have likely been a challenge for him.
• It's almost always a lack of collateral.
• So, we've needed the CA program to help bridge the gap when we've had a collateral deficiency.

Keywords: SBA, 7A loan program, underwriting standards, loan defaults, Community Advantage Program, small business funding, testimony

Summary: The committee meeting focused on discussions regarding the SBA's 7A loan program and its implementation challenges. Members raised significant concerns about recent changes to the underwriting standards, which have been criticized for leading to an increase in loan defaults. Ranking members expressed a desire for a return to stronger guidelines to protect taxpayers and ensure the program remains a viable source for small businesses struggling to secure funding. Testimonies from community lenders highlighted their efforts to support underserved communities and stressed the importance of the Community Advantage Program.