Report Title:

Part-time Employee; Nonprofit Organization Volunteer; Auto Insurance

Description:

Provides automobile insurance rider for part-time employees or volunteers of nonprofit organizations.

THE SENATE

S.B. NO.

918

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to nonprofit corporations and organizations.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that nonprofit corporations and organizations operating in the State frequently utilize the automobiles of part-time paid employees and volunteers in order to carry out the functions of the organizations. These duties include delivering goods and transporting clients, customers, and other recipients of the organization's services. In many cases, the functions of the nonprofit corporation or organization are hindered when the owner of the vehicle is precluded from using their motor vehicle because the owner does not have automobile insurance for business purposes.

The purpose of this Act is to require every insurer issuing a motor vehicle insurance policy to make available to the insured optional insurance coverage when the insured is operating the vehicle in the course of duties for the nonprofit corporation or organization. It is the intent of the legislature that this optional insurance coverage be priced significantly lower than what is otherwise provided for other business purposes. Furthermore, it is the legislature's intent that the volunteers of the nonprofit corporations or organizations be able to deduct the optional insurance fee from the gross income, adjusted gross income, and taxable income on their state income tax return.

SECTION 2. Chapter 431, Article 10C, Hawaii Revised Statutes, is amended by adding a new section to part III, to be appropriately designated and to read as follows:

"§431:10C-   Additional required optional additional insurance. (a) In addition to the motor vehicle insurance coverage described in sections 431:10C-301 and 431:10C-302, every insurer issuing a motor vehicle insurance policy to an individual shall make available to the insured individual an option in writing, for identical coverages that the insured has purchased for non-business uses of the motor vehicle, to be applied when the insured's vehicle is used by the insured in the insured's capacity as a paid part-time employee or full-time or part-time volunteer for a nonprofit organization or nonprofit corporation; provided that the insured is acting in good faith and within the scope of a part-time employee or volunteer conducting official functions and duties for the nonprofit organization or nonprofit corporation.

(b) For the purposes of this section:

"Individual" means a natural person.

"Nonprofit corporation" means any corporation that is exempt from taxation pursuant to section 501(c)(3) of the Internal Revenue Code of 1986, as amended.

"Nonprofit organization" means any organization that is exempt from taxation pursuant to section 501(c)(3) of the Internal Revenue Code of 1986, as amended.

"Part-time employee" is a person performing services for compensation, in addition to reimbursement for actual expenses incurred, for a nonprofit organization or a nonprofit corporation when the total hours worked per week for one or more nonprofit organizations or nonprofit corporations is less than twenty hours.

"Volunteer" means a person performing services without compensation, other than reimbursement for actual expenses incurred, for a nonprofit organization or a nonprofit corporation. The term includes a volunteer serving as a director, officer, trustee, member, or direct service volunteer.

(c) The commissioner shall adopt rules, including policy limits, terms, and conditions as necessary to implement the requirements of this section."

SECTION 3. Section 235-7, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) There shall be excluded from gross income, adjusted gross income, and taxable income:

(1) Income not subject to taxation by the State under the Constitution and laws of the United States;

(2) Rights, benefits, and other income exempted from taxation by section 88-91, having to do with the state retirement system, and the rights, benefits, and other income, comparable to the rights, benefits, and other income exempted by section 88-91, under any other public retirement system;

(3) Any compensation received in the form of a pension for past services;

(4) Compensation paid to a patient affected with Hansen's disease employed by the State or the United States in any hospital, settlement, or place for the treatment of Hansen's disease;

(5) Except as otherwise expressly provided, payments made by the United States or this State, under an act of Congress or a law of this State, which by express provision or administrative regulation or interpretation are exempt from both the normal and surtaxes of the United States, even though not so exempted by the Internal Revenue Code itself;

(6) Any income expressly exempted or excluded from the measure of the tax imposed by this chapter by any other law of the State, it being the intent of this chapter not to repeal or supersede any such express exemption or exclusion;

(7) The first $1,750 received by each member of the reserve components of the Army, Navy, Air Force, Marine Corps, or Coast Guard of the United States of America, and the Hawaii national guard as compensation for performance of duty;

(8) Income derived from the operation of ships or aircraft if the income is exempt under the Internal Revenue Code pursuant to the provisions of an income tax treaty or agreement entered into by and between the United States and a foreign country, provided that the tax laws of the local governments of that country reciprocally exempt from the application of all of their net income taxes, the income derived from the operation of ships or aircraft which are documented or registered under the laws of the United States;

(9) The value of legal services provided by a prepaid legal service plan to a taxpayer, the taxpayer's spouse, and the taxpayer's dependents;

(10) Amounts paid, directly or indirectly, by a prepaid legal service plan to a taxpayer as payment or reimbursement for the provision of legal services to the taxpayer, the taxpayer's spouse, and the taxpayer's dependents;

(11) Contributions by an employer to a prepaid legal service plan for compensation (through insurance or otherwise) to the employer's employees for the costs of legal services incurred by the employer's employees, their spouses, and their dependents; [and]

(12) Amounts received in the form of a monthly surcharge by a utility acting on behalf of an affected utility under section 269-16.3 shall not be gross income, adjusted gross income, or taxable income for the acting utility under this chapter. Any amounts retained by the acting utility for collection or other costs shall not be included in this exemption[.]; and

(13) Amounts paid to a motor vehicle insurance company for optional additional insurance for coverage of a volunteer or employee of a nonprofit corporation or nonprofit organization pursuant to section 431:10C-  ."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval; provided that section 2 shall apply to taxable years beginning after December 31, 2003.

INTRODUCED BY:

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