STAND. COM. REP. 2345

Honolulu, Hawaii

, 2004

RE: S.B. No. 2839

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committees on Commerce, Consumer Protection and Housing and Judiciary and Hawaiian Affairs, to which was referred S.B. No. 2839 entitled:

"A BILL FOR AN ACT RELATING TO SOLICITATION OF FUNDS FOR CHARITABLE PURPOSES,"

beg leave to report as follows:

The purpose of this measure is to clarify and strengthen provisions regarding professional solicitors and professional fundraising counsel who contract with charitable organizations to conduct fundraising campaigns.

This measure also:

(1) Transfers the duty to serve as the registrar for professional solicitors and professional fundraising counsel from the Department of Commerce and Consumer Affairs to the Department of the Attorney General, which has general oversight over charitable trusts and charitable organizations;

(2) Authorizes the Attorney General to refuse to register, revoke, or suspend the registration of any charitable organization, professional fundraising counsel, or professional solicitor; and

(3) Creates the "solicitation of funds for charitable purposes special fund" into which all fees will be paid.

Testimony in support of this measure was submitted by the Department of the Attorney General, the Better Business Bureau of Hawaii, and the National Association of State Charities Officials. Testimony in opposition to this measure was submitted by Myerberg Shain and Associates.

Your Committees find that the regulation of professional solicitors or fundraisers is essential to ensure that donors and charitable organization are not exploited. Your Committees further find that although statutory regulations regarding professional solicitors and fundraisers in Hawaii were established over three decades ago, most of these provisions have not been updated in over ten years. Therefore, your Committees determine that amendments to the law have become necessary in order to clarify and strengthen the regulations imposed upon professional solicitors and fundraisers for the protection of the public.

Your Committees believe that accountability is of the utmost importance and that, therefore, the transmittal of oversight responsibility for professional solicitors and fundraisers to the Department of the Attorney General, which currently oversees activities of public charities and private charitable foundations, is a logical move. Additionally, the authorization of enforcement powers, including the authority to impose penalties, such as the refusal to allow for the registration of a charitable organization or a professional solicitor or fundraiser, or the suspension or revocation of such registration, will provide further protection for consumers. Your Committees also believe that through the imposition of reporting requirements and written contracts containing specified provisions, the Attorney General will be better able to regulate in this area and consumers will be more informed as to how their monetary donations are being disbursed.

Accordingly, your Committees have amended this measure by:

(1) Clarifying that, if the compensation of a professional fundraising counsel or professional solicitor is contingent upon the number of contributions or the amount of revenue received, a statement of the percentage of the gross revenue that is the basis for compensation shall be included in the written contract;

(2) Clarifying that, if the compensation of a professional fundraising counsel is not contingent upon the number of contributions or amount of revenue received from the solicitation campaign, the compensation shall be stated in a dollar amount within the written contract; and

(3) Making technical, nonsubstantive amendments for purposes of clarity and style.

As affirmed by the records of votes of the members of your Committees on Commerce, Consumer Protection and Housing and Judiciary and Hawaiian Affairs that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2839, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2839, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Commerce, Consumer Protection and Housing and Judiciary and Hawaiian Affairs,

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COLLEEN HANABUSA, Chair

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RON MENOR, Chair