Report Title:

Nonprofit Employees and Volunteers; Auto Insurance; Tax Deduction

Description:

Requires auto insurers to offer nonprofit employees and volunteers insurance coverage for use of personal vehicles in the course of employment or volunteering. Allows amounts paid for the coverage to be claimed as a tax deduction. (SD2)

THE SENATE

S.B. NO.

918

TWENTY-SECOND LEGISLATURE, 2003

S.D. 2

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 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 a vehicle is precluded from using the owner's 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 a 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 to allow as a deduction when computing taxable income, amounts paid by employees and volunteers of nonprofit corporations and organizations for the optional insurance.

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 full-time or 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 full-time or part-time employee or volunteer conducting official functions and duties for the nonprofit organization or nonprofit corporation.

(b) For the purposes of this section:

"Full-time employee" means a person who performs 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 is twenty hours or more.

"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" means a person who performs 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 who performs 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 (g) to read as follows:

"(g) In computing taxable income there shall be allowed as a deduction:

(1) Political contributions by any taxpayer not in excess of $250 in any year; provided that such contributions are made to a central or county committee of a political party whose candidates shall have qualified by law to be voted for at the immediately previous general election; [or]

(2) Political contributions by any individual taxpayer in an aggregate amount not to exceed $1,000 in any year; provided that such contributions are made to candidates as defined in section 11-191, who have agreed to abide by the campaign expenditure limits as set forth in section 11-209; and provided further that not more than $250 of an individual's total contribution to any single candidate shall be deductible for purposes of this section[.]; or

(3) Amounts paid by an individual to a motor vehicle insurance company for optional additional insurance purchased under section 431:10C-   for coverage of a volunteer or employee of a nonprofit corporation or nonprofit organization."

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

SECTION 5. This Act shall take effect on December 31, 2050; provided that section 3 shall apply to taxable years beginning after December 31, 2003.