Hawaii Regulations § 3-160-39 Loans to candidates or committees
Regulation Text
(a)
A candidate or candidate's committee may receive loans from:
(1)
A financial institution regulated by the State or a federally chartered depository institution and made in accordance with applicable law in the ordinary course of business;
(2)
The candidate's own funds;
(3)
The candidate's immediate family in an aggregate amount with contributions not to exceed $50,000 during an election period;
(4)
Persons other than immediate family of a candidate in an aggregate amount not to exceed $10,000 during an election period.
(b)
All loans to a candidate or candidate's committee must be reported to the commission in the report covering the period when the loan was received.
(1)
The loan and payments made to repay the loan must be reported in each reporting period until the loan is repaid.
(2)
A copy of the loan agreement, for every loan in excess of $100 containing the terms of the loan shall be mailed and received or delivered to the commission by 4:30 p.m. on the due date of the report covering the applicable reporting period and the following information shall be disclosed in the report:
(A)
The lender's name, address, employer, and occupation and purpose of the loan;
(B)
The date, amount, repayment schedule, and interest rate of the loan; and
(C)
The types and value of collateral, if any, or other sources that secure the loan.
(c)
The failure to document the loan or to disclose the loan to the commission in the report covering the reporting period when the loan was received shall cause the loan to be treated as a contribution, unless the loan is from the candidate, in which case it shall be treated as an other receipt.
(d)
The following records must be preserved for five years after the loan is paid or until ordered by the executive director:
(1)
Records to demonstrate the ownership of the accounts or assets securing the loans;
(2)
Copies of the executed loan agreement and all security and guarantee statements;
(3)
Statements of account for all accounts used to secure any loan for the period the loan is outstanding, and statements on any line of credit account that were used for the purpose of influencing the candidate's election; and
(4)
Documentation for all payments to repay the loan.
(e)
The $10,000 loan limit for loans from persons other than immediate family and commercial depository institutions, in section
11-371
, Hawaii Revised Statutes, is applicable to the candidate, rather than the person making the loan.
(f)
A candidate or candidate's committee may receive loans in an aggregate amount with contributions not to exceed $50,000 during an election period.
(g)
A loan from a financial institution is made in the ordinary course of business if it meets the following requirements:
(1)
The terms and conditions of the loan are incorporated into a written promissory note or loan agreement;
(2)
The loan shall be fully repaid within one year from the effective date of the loan except that home equity or business loans may be repaid within the terms and conditions of that particular loan;
(3)
The loan is secured by collateral with a market value covering at least eighty per cent of the amount borrowed; except that loan for less than $5,000 require only a signature of the candidate and no collateral; and
(4)
The loan includes the payment of interest at a rate that is not less than the prevailing market rate for a similarly secured institutional loan.
(h)
If a loan from a financial institution provides for the payment of interest at a rate that is less than the prevailing market rate for a similarly secured institutional loan, the difference between the rate charged the candidate and the prevailing market rate is deemed to be a contribution from the lender to the candidate.
History
[Eff MAY 29 2010] (Auth: HRS §§ 11-193, 11-216) (Imp: HRS §§ 11-191, 11-199, 111-200, 11-201, 11-202, 11-203, 11-204, 11-204, 11-205.5, 11-205.6, 11-206, 11-207, 11-207.5, 11-211, 11-212, 11-213)
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