Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Judiciary and Hawaiian Affairs, to which was referred H.B. No. 2363, H.D. 1, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to provide the Department of the Attorney General (AG) with clear statutory authority to oversee and supervise public benefit corporations and to initiate enforcement proceedings.

Testimony was submitted in support of this measure by the AG.

Your Committee finds that in 2001, the Hawaii Nonprofit Corporation Act (Act) was enacted under Chapter 414D, Hawaii Revised Statutes. However, when the Act was codified, provisions were not included that would give the AG tools, short of dissolution of the public benefit corporation, to allow oversight of these corporations.

Your Committee believes that the provisions left out of the Act should have been included. This measure provides the AG with the necessary authority to ensure that charitable assets of public benefit corporations are being appropriately used and ensures that the AG will receive the necessary notice of derivative suits, mergers, and judicial dissolution of public benefit corporations.

Your Committee has amended this measure by clarifying that the AG shall be given written notice within ten days of the commencement of any proceeding that the Act authorizes the AG to bring but has been commenced by another person.

As affirmed by the record of votes of the members of your Committee on Judiciary and Hawaiian Affairs that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2363, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 2363, H.D. 1, S.D. 2.