STAND. COM. REP. NO. 2101

Honolulu, Hawaii

RE:    S.B. No. 2842

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2010

State of Hawaii

Madam:

     Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 2842 entitled:

"A BILL FOR AN ACT RELATING TO THE PERMITTED TRANSFERS IN TRUST ACT,"

begs leave to report as follows:

     The purpose of this measure is to allow the establishment of perpetual trusts that are protected against some provisions of federal estate taxes and are protected against the claims of certain creditors. 

     Your Committee received testimony in support of this measure from First Hawaiian Bank.  Written testimony presented to the Committee may be reviewed on the Legislature's website.

     Your Committee finds that this measure would allow wealthy individuals to establish trusts within this State that are not subject to the rule against perpetuities in order to protect a portion of their liquid assets from the federal estate tax and from the claims of certain creditors.  Your Committee finds that over half of the states have enacted laws that contain at least some provisions similar to this measure and that currently Alaska, Delaware, Nevada, and South Dakota have laws substantially similar to this measure.  Your Committee finds that allowing the establishment of these types of trusts within the State creates the potential to attract investment, tax revenue, and white-collar financial jobs at no cost to the State.

     Your Committee has amended this measure by making nonsubstantive technical changes for the purposes of clarity and accuracy.

     As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2842, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2842, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,

____________________________

ROSALYN H. BAKER, Chair