STAND. COM. REP. NO. 96
Honolulu, Hawaii
RE: S.B. No. 1233
S.D. 1
Honorable Shan S. Tsutsui
President of the Senate
Twenty-Sixth State Legislature
Regular Session of 2011
State of Hawaii
Sir:
Your Committees on Commerce and Consumer Protection and Judiciary and Labor, to which was referred S.B. No. 1233 entitled:
"A BILL FOR AN ACT RELATING TO THE SOLICITATION OF FUNDS FROM THE PUBLIC,"
beg leave to report as follows:
The purpose and intent of this measure is to amend current law governing charitable solicitation to enhance the enforcement authority of the Department of the Attorney General.
Your Committees received testimony in support of this measure from the Office of Consumer Protection of the Department of Commerce and Consumer Affairs, the Department of the Attorney General, the Hawaii Association of Independent Schools, the Hawai‘i Alliance of Nonprofit Organizations, and the Better Business Bureau of Hawaii. Your Committees received comments on this measure from two private individuals.
Your Committees find that Hawaii is a national leader in providing consumer protection in charitable donations. This State's charitable solicitation laws create transparency for donors and beneficiaries of charitable organizations by requiring registration of organizations and fundraising professionals and providing for a public accounting of an organization's receipts and expenditures. Your Committees find that the amendments contained in this measure will strengthen the consumer protections contained in the current law by granting the Department of the Attorney General the authority to more effectively enforce the requirements of the law.
Your Committees note that the majority of registered charitable organizations that solicit money within the State are located outside of the State; additionally, personal service of process may be difficult or impossible for some Hawaii-domiciled entities. The provisions in this measure allowing the Department of the Attorney General to accept service of process on behalf of out-of-state registrants and to provide for alternate service mechanisms will allow the Attorney General to more effectively regulate these entities.
Additionally, your Committees find that the remaining provisions in this measure clarify areas of the existing law that have been ambiguous and may have allowed entities to circumvent compliance with the spirit of the regulatory structure embodied in chapter 467B, Hawaii Revised Statutes.
Finally, your Committees are pleased to find that the Department of the Attorney General has been efficient enough in its operations that filing fees collected from charitable organizations have outpaced expenditures involved in managing the regulatory structure created by chapter 467B. Therefore, your Committees find that it is appropriate to reduce the filing fees paid by regulated entities.
Your Committees have amended this measure by:
(1) Clarifying that educational institutions accredited by the National Association for the Education of Young Children are included in the educational institutions that are exempt from registration and financial disclosure requirements;
(2) Reducing filing fees paid by regulated entities by specifying that fees shall be based on gross revenues and reducing the amount of fees paid by certain entities; and
(3) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.
As affirmed by the records of votes of the members of your Committees on Commerce and Consumer Protection and Judiciary and Labor that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1233, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1233, S.D. 1, and be referred to the Committee on Ways and Means.
Respectfully submitted on behalf of the members of the Committees on Commerce and Consumer Protection and Judiciary and Labor,
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____________________________ CLAYTON HEE, Chair |
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____________________________ ROSALYN H. BAKER, Chair |
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