STAND. COM. REP. NO. 1954

Honolulu, Hawaii

RE: H.B. No. 945

H.D. 1

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committee on Judiciary, to which was referred H.B. No. 945, H.D. 1, S.D. 1, entitled:

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

begs leave to report as follows:

The purpose and intent of this measure is to clarify Hawaii's charitable solicitation laws by:

(1) Replacing the term "gross revenue" with "total revenue";

(2) Defining the term "total revenue" for purposes of calculating the annual filing fee;

(3) Clarifying when professional solicitors must file financial reports;

(4) Clarifying when commercial co-venturers must provide a charitable organization with an accounting and the date by which a benefit must be conferred;

(5) Clarifying that charitable organizations are required to submit financial audits only when otherwise required to do so by other external entities; and

(6) Making other housekeeping amendments.

Your Committee received testimony in support of this measure from the Department of the Attorney General, University of Hawai‘i Foundation, and Hawai‘i Alliance of Nonprofit Organizations.

Your Committee finds that clarity of application of various federal laws and regulatory procedures for charitable organizations is of utmost importance in assisting those organizations in carrying out their charitable missions. As such, this measure clarifies terms for consistency with Internal Revenue Service forms, provides oversight of charitable organizations and fundraising activities, clarifies regulatory procedures for the non-profit sector, and provides additional disclosures to the public. This measure also repeals the requirement that certain charitable organizations submit an audit report with their annual financial reports, unless the organization is required to produce an audit report by other government authority or third party.

As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 945, H.D. 1, S.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Judiciary,

________________________________

KARL RHOADS, Chair