STAND. COM. REP. NO. 2642

Honolulu, Hawaii

RE: S.B. No. 2585

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Health, to which was referred S.B. No. 2585 entitled:

"A BILL FOR AN ACT RELATING TO NONDEPOSITORY TRUSTS,"

begs leave to report as follows:

The purpose and intent of this measure is to establish:

(1) Yearly assessments for nondepository trusts beginning July 1, 2021;

(2) Paid-in-capital and surplus requirements for nondepository trust companies; and

(3) Powers and duties of nondepository trust companies.

Your Committee received testimony in support of this measure from the Department of Commerce and Consumer Affairs and one individual.

Your Committee finds that nondepository trust companies operate similarly to the trust department of a bank but do not take deposits or make loans. Nondepository trust companies can provide fiduciary oversight for consumers who do not have friends or family members to manage their assets, or whose assets do not qualify for asset management by banks or large investment firms. This measure establishes provisions concerning nondepository trust companies to help provide services to this "gap group" of consumers, as chartered nondepository trust companies would provide a safe and sound alternative for kupuna and other individuals unserved or underserved in the community.

Your Committee has amended this measure by:

(1) Inserting the definition for "total assets under management" into chapter 412, article 8, Hawaii Revised Statutes, rather than article 1 of this chapter, and making conforming amendments; and

(2) Clarifying the definition of "nondepository trust company" to mean a company that is not authorized to accept deposits.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Health that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2585, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2585, S.D. 1, and be referred to your Committee on Ways and Means.

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

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ROSALYN H. BAKER, Chair