STAND. COM. REP. NO. 1251-18

Honolulu, Hawaii

, 2018

RE: S.B. No. 2748

S.D. 2

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred S.B. No. 2748, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO CHARITABLE ORGANIZATIONS,"

begs leave to report as follows:

The purpose of this measure is to make clarifying amendments to Hawaii's charitable solicitations law by:

(1) Replacing the terms "gross revenue" and "gross receipts" with "total revenue" and "total receipts," respectively, to conform with federal Internal Revenue Service Form 990;

(2) Clarifying that professional solicitors must file financial reports for charitable solicitation campaigns after the completion of the campaign or event and, for any campaign lasting more than one year, after the anniversary of the campaign's commencement;

(3) Clarifying that commercial co-ventures must provide a charitable organization with an accounting and the benefit of a charitable sales promotion after the completion of the campaign or event and, for any campaign or event lasting more than one year, after the anniversary of the commencement of the promotion;

(4) Relieving registered charitable organizations that receive more than $500,000 in contributions and are not required to obtain an audit report by any other party from the requirement to submit an audit report to the Attorney General;

(5) Protecting audit reports from all charitable organizations, not just charities, from public disclosure; and

(6) Making educational institutions licensed by the Hawaii Council of Private Schools eligible for exemption from the registration and financial disclosure requirements.

The Department of the Attorney General, Association of Fundraising Professionals – Aloha Chapter, Hawai‘i Association of Independent Schools, Hawaii Council of Private Schools, and Hawai‘i Alliance of Nonprofit Organizations testified in support of this measure.

Your Committee has amended this measure by:

(1) Clarifying the timeframe within which professional solicitors must file financial reports and commercial co-ventures must provide an accounting and benefit to avoid any misinterpretation that the timeframes may be discretionary; and

(2) Changing its effective date to July 1, 2050, to promote further discussion.

As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2748, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2748, S.D. 2, H.D. 1, and be referred to your Committee on Finance.

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

____________________________

ROY M. TAKUMI, Chair