HB2308

SECTION 1. Chapter 467B, Hawaii Revised Statutes, is amended by adding three new sections to be appropriately designated and to read as follows:

"§467B-A Registration of charitable organizations. (a) Every charitable organization that intends to solicit contributions within or from the State, prior to any solicitation, shall register with the attorney general. The registration statement shall be in the form prescribed by the attorney general and shall contain the information as the attorney general may require. The registration statement shall be accompanied by a fee as prescribed by the attorney general by rule.

(b) The registration statement required under subsection (a) shall include at least the following:

(1) The name of the charitable organization and the purpose for which it was organized;

(2) The principal address of the charitable organization and the addresses of any office in the State. If the charitable organization does not maintain an office in the State, the registration statement shall include the name and address of the person having custody of its financial records;

(3) The name and address of any chapter, branch, or affiliate in the State;

(4) The date and place where the charitable organization was legally established, and the form of its organization. The charitable organization shall include in its filing a copy of its articles of incorporation and bylaws; trust agreement; or other instrument creating or governing its organization;

(5) The name and address of all officers, directors, and trustees, and of the principal executive staff officer, if any; the name of the individual or officer of the charitable organization who will have responsibility for the custody of the contributions; and the name of the individual or officer of the charitable organization responsible for the final distribution of the contributions;

(6) Whether the charitable organization has obtained tax exempt status under state or federal law and, if so, copies of its federal or state tax exemption determination letters. A charitable organization that receives a federal or state tax exemption determination letter after filing its initial registration statement shall file a copy of the determination letter with the attorney general within thirty days of its receipt by the organization;

(7) Whether the charitable organization intends to solicit contributions from the public directly or have the solicitation done on its behalf by others, including any professional fund-raising counsel or professional solicitor;

(8) Whether the charitable organization has been authorized by any other state or governmental authority to solicit contributions in a jurisdiction outside this State, and whether it has ever been enjoined from soliciting contributions or had the authority to solicit contributions denied, suspended, or revoked by any other jurisdiction;

(9) The general purpose for which the contributions to be solicited shall be used;

(10) The accounting method used by the charitable organization; and

(11) Any other information that the attorney general may require.

(c) Each charitable organization required to register under this chapter shall annually renew its registration by filing a renewal statement with the attorney general, in a form as prescribed by the attorney general, and accompanied by a renewal fee as prescribed by the attorney general by rule.

(d) Any change of information required by this section shall be reported to the attorney general within ten days. The attorney general may adopt, by rule, other reporting requirements as may be deemed necessary to protect the public interest.

(e) When a charitable organization is terminated or dissolved, a final report shall be filed with the attorney general showing the disposition of all remaining assets.

§467B-B Annual financial statements. (a) Except as provided in this chapter, each charitable organization subject to this chapter shall file with the attorney general annual financial statements on or before July 1 of each calendar year, in a form as prescribed by the attorney general, and accompanied by a filing fee as prescribed by the attorney general by rule.

(b) Annual financial statements shall include information as required by the attorney general; provided that the annual financial statement shall include at least the following:

(1) A copy of all year-end, federal reporting forms, schedules, and attachments filed with the Internal Revenue Service for the same period;

(2) Internal Revenue Service form 990-EZ or 990 completed for the same period if the charitable organization's federal reporting forms for the period do not include Internal Revenue Service form 990-EZ, 990-PF, or 990 and the organization's total revenue is equal to or greater than $25,000;

(3) Internal Revenue Service Schedule A of form 990 completed for the same period if the organization's federal reporting forms for the period do not include Internal Revenue Service Schedule A of form 990 or form 990-PF, and the organization holds tax exempt status under section 501(c)(3) or 4947(a)(1) of the Internal Revenue Code;

(4) A copy of an independent auditor's report on the organization's financial records and accompanying financial statements and other attachments if an audit was prepared; and

(5) Any information requested by the attorney general.

(c) If the charitable organization is a trust with both charitable and non-charitable beneficiaries, the annual financial statement shall include:

(1) A copy of all year-end, federal reporting forms, schedules, and attachments filed with the Internal Revenue Service for the same period;

(2) Internal Revenue Service form 1041-A completed for the same period if the trust's federal reporting forms for the period do not include Internal Revenue Service form 1041-A;

(3) A copy of an independent auditor's report on the trust's financial records and accompanying financial statements and other attachments if an audit was prepared; and

(4) Any information requested by the attorney general.

(d) If the federal form 990 is submitted as part of the filing with the attorney general, the charitable organization shall not attach a list of contributors as may be required as part of the submission to the Internal Revenue Service. This list is not intended to be subject to public inspection but may be inspected if submitted to the attorney general's office.

§467B-C Charitable organizations; exemption from filing requirements. (a) Charitable organizations shall be exempt from the registration requirements of section 467B-A if:

(1) The charitable organization is otherwise exempt under state law;

(2) The charitable organization has not received property for charitable purposes;

(3) The charitable organization is:

(A) An educational institution that is recognized or accredited by a regional accrediting association; or

(B) A foundation having an established identity with such an educational institution;

and the charitable organization does not hold property in the State and solicitations of individuals residing in the State are confined to alumni of the institution; or

(4) A trustee of a charitable remainder trust is also the sole charitable beneficiary of the trust estate.

(b) Charitable organizations shall register with the attorney general as required by section 467B-A, but shall be exempt from filing annual registration statements pursuant to section 467B-B if:

(1) All of the following conditions were met during the reporting period:

(A) Total revenue was less than $25,000;

(B) Net assets or fund balance at the end of the reporting period was less than $50,000; and

(C) The charitable organization has delivered to the attorney general a comparable report approved by the attorney general; or

(2) The reporting requirements have been suspended by the attorney general."

SECTION 2. Section 467B-1, Hawaii Revised Statutes, is amended by adding two new definitions to be appropriately inserted and to read as follows:

""Charitable organization":

(1) Means:

(A) Any person determined by the Internal Revenue Service to be a tax exempt organization pursuant to section 501(c)(3) of the Internal Revenue Code of 1986, as amended; or

(B) Any person who is, or holds itself out to be, established for any benevolent, educational, philanthropic, humane, scientific, patriotic, social welfare or advocacy, public health, environmental conservation, civic, or other charitable purpose;

(2) Includes:

(A) Any person who in any manner employs a charitable appeal as the basis of any solicitation or an appeal that has a tendency to suggest there is a charitable purpose to the solicitation; or

(B) Any chapter or local division of the charitable organization organized within the State if the division has the authority and discretion to disburse funds or property otherwise than by transfer to any parent organization; and

(3) Does not include any federal, state, or county agency; or political parties and candidates for federal, state, or county office required to file financial information with federal or state election authorities or commission.

"Charitable purpose" means:

(1) Any purpose described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended; or

(2) Any purpose to promote the well-being of the public at large, or for the benefit of an indefinite number of persons, including but not limited to educational, literary, or scientific purposes, or for the prevention of cruelty to children or animals, or for the benefit of religion, rehabilitation services, public recreation or civic improvement."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2308
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII