STAND. COM. REP. NO. 2437

Honolulu, Hawaii

RE:    S.B. No. 3171

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Madam:

     Your Committees on Judiciary and Labor and Commerce, Consumer Protection, and Affordable Housing, to which was referred S.B. No. 3171 entitled:

"A BILL FOR AN ACT RELATING TO CHARITABLE TRUSTS AND NONPROFIT ORGANIZATIONS,"

beg leave to report as follows:

     The purpose of this measure is to protect charitable giving by providing oversight for charitable organizations in the State.

     Specifically, this measure:

     (1)  Requires charitable trusts and nonprofit organizations to register and file annual financial reports with the Attorney General;

     (2)  Provides standards for registration of professional fund raising counsel and professional solicitors and registration of charitable trusts and nonprofits;

     (3)  Authorizes the Attorney General to investigate possible violations;

     (4)  Prohibits contracting with unregistered solicitors;

     (5)  Requires submittal of a fee with this annual financial report, based on total revenue of the organization; and

(6)  Appropriates funds to staff additional positions in the Department of the Attorney General.

     Your Committees received testimony in support of this measure from the Attorney General and the Children's Alliance of Hawaii.  The Domestic Violence Action Center submitted testimony in opposition.  The Hawaii Alliance of Nonprofit Organizations and ARC of Maui County offered comments.

     Upon further consideration, your Committees have amended this measure by:

(1)  Requiring a charitable organization to file a report not more than eight months, rather than four months, following the close of a charitable organization's fiscal year on or before the date the organization files a Form 990 or 990EZ with the Internal Revenue Service;

(2)  Adding a new section 6 to amend section 467B‑8, Hawaii Revised Statutes, and renumbering the remaining sections to provide that information in any registration statement concerning the residential addresses of any officer or director or that identifies a charitable organization's financial or banking accounts shall be confidential under the Uniform Information Practices Act;

(3)  Changing the date on which the new registration requirements are to take effect from January 9, 2009, to January 1, 2009; and

(4)  Making technical nonsubstantive amendments for the purposes of clarity, consistency, and style.

     As affirmed by the records of votes of the members of your Committees on Judiciary and Labor and Commerce, Consumer Protection, and Affordable Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 3171, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 3171, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Judiciary and Labor and Commerce, Consumer Protection, and Affordable Housing,

____________________________ RUSSELL S. KOKUBUN, Chair

____________________________ BRIAN T. TANIGUCHI, Chair