STAND. COM. REP. NO. 798-04
Honolulu, Hawaii
, 2004
RE: S.B. No. 2839
S.D. 2
H.D. 1
Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twenty-Second State Legislature
Regular Session of 2004
State of Hawaii
Sir:
Your Committees on Consumer Protection and Commerce and Judiciary, to which was referred S.B. No. 2839, S.D. 2, entitled:
"A BILL FOR AN ACT RELATING TO SOLICITATION OF FUNDS FOR CHARITABLE PURPOSES,"
beg leave to report as follows:
The purpose of this bill is to transfer, from the Department of Commerce and Consumer Affairs to the Department of the Attorney General (AG), the duty to oversee the registration of charitable organizations and their professional solicitors and professional fundraising counsel. The AG already has the duty of overseeing the activities of public charities and private charitable foundations.
In addition to the transfer of registration, the bill:
(1) Requires that contracts between charities and professional fundraisers be in writing and filed with the AG;
(2) Requires that the contract identify the percentage of gross revenue that the professional fundraisers will receive;
(3) Authorizes charitable organizations to cancel any contract with a professional fundraiser within 10 days and provides that any funds subsequently raised must be held in trust for the charitable organization, without deduction for fundraising costs;
(4) Requires professional solicitors to file a financial report, within 90 days of the completion of a fundraising campaign, that includes the gross revenue and an itemization of all of the expenses incurred, which information will be compiled and made available to the public;
(5) Permits the AG to refuse to register, to suspend a registration, or to revoke a registration when the professional fundraiser or charitable organization violates a requirement of registration, fails to produce required records, or makes a false statement in any required report;
(6) Increases the existing bond requirement, from $5,000 to $25,000, and registration fee, from $50 to $250. The registration fee in other states ranges from $200 to $1,000; and
(7) Creates a Solicitation of Funds for Charitable Purposes Special Fund, into which the fees will be paid, to enforce the law and disseminate information to the general public.
Your Committees heard testimony in support of this bill from the AG and the National Association of State Charities Officials. The Association for Healthcare Philanthropy (AHP) opposed the bill.
AHP expressed concern that the transfer to AG reflected a philosophical shift, from regulation to enforcement, that may prove unhelpful to smaller charities that will struggle to meet the new requirements. However, that is clearly not the intent of this bill.
In addition, Myerberg Shain & Associates, professional consultant to charitable organizations, informally contacted your Committees to say that the current draft of the bill addresses its previously expressed concerns and to commend the AG's openness and willingness to work collaboratively.
Your Committees were favorably impressed by the willingness of the AG to embrace additional responsibility and are confident that the authority that is granted will be exercised with sound judgment and an appreciation for the importance of the work of Hawaii's charitable organizations, irrespective of their size and sophistication.
Your Committees have made technical, nonsubstantive amendments to the bill for clarity, consistency, and style that include:
(1) Amending the definition of "professional fund-raising counsel" to include the alternate spelling, "professional fundraising counsel;" and
(2) Moving several subsections of the first new section established by the bill, to more appropriate locations in existing sections of chapter 467B, Hawaii Revised Statutes.
As affirmed by the records of votes of the members of your Committees on Consumer Protection and Commerce and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2839, S.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2839, S.D. 2, H.D. 1, and be referred to the Committee on Finance.
Respectfully submitted on behalf of the members of the Committees on Consumer Protection and Commerce and Judiciary,
|
____________________________ ERIC G. HAMAKAWA, Chair |
____________________________ KENNETH T. HIRAKI, Chair |