Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 3049, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to lessen the financial net worth and reserve requirements on nonprofit educational foundations or nonprofit organizations that seek to have their charitable gift annuity agreements, under which annuities are paid to donors, exempted from regulation as life insurance under the insurance code.

Specifically, this bill reduces minimum net worth requirements from $5,000,000 to $100,000. Additionally, this bill replaces the requirement that the organization maintain a separate annuity fund with at least one-half of the value of the annuity with a new requirement that the organization maintain segregated assets equal to the higher of $100,000 or the sum of the reserves on its outstanding charitable gift annuity agreements and a surplus of ten per cent of the reserves.

Your Committee finds that current law precludes many small but meritorious nonprofit organizations from utilizing charitable gift annuity agreements as a fundraising tool. This bill will enable more local nonprofit organizations to enter into charitable gift annuity agreements with donors and thereby encourage more local citizens to donate to local nonprofit organizations.

Your Committee has amended this measure by:

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3049, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 3049, S.D. 2.