H.B. NO.



H.D. 1
















     SECTION 1.  Section 210D-2, Hawaii Revised Statutes, is amended by amending the definition of "community-based organization" to read as follows:

     ""Community-based organization" means a [membership-based,] nonprofit corporation incorporated in the State of Hawaii that is organized and controlled by either a geographic community, a community of identity, or a community of interest and [which] that is directly involved in community-based economic development activities."

     SECTION 2.  Section 210D-5, Hawaii Revised Statutes, is amended to read as follows:

     "§210D-5  Community-based economic development advisory council; established.  There is established the community-based economic development advisory council, which shall consist of [twelve] ten members.  The director of business, economic development, and tourism, the chairperson of the board of agriculture, and the chairperson of the office of Hawaiian affairs, or their respective designees, shall be ex officio voting members of the council.  The remaining [nine] seven members shall be appointed by the governor in accordance with section 26-34.  Each county shall be represented by at least one member who is a resident of that county, and at least one member of the council shall be a representative of the financial community.  The council shall be placed for administrative purposes in the department of business, economic development, and tourism."

     SECTION 3.  Section 210D-11, Hawaii Revised Statutes, is amended to read as follows:

     "§210D-11  Grants; conditions and qualifications.  (a)  Grants shall be made for amounts not to exceed $100,000 for each applicant.  Applications for grants shall be made to the department and contain [such] information as the department shall require by rules adopted pursuant to chapter 91.  At a minimum, the applicant must show that:

     (1)  The grant shall be used exclusively for community-based economic development activities [or], a community-based business or enterprise [that are], or the provision of technical assistance to community-based organizations, consistent with the purposes of this chapter [for a continuous period of at least five years];

     (2)  The community-based business or enterprise shall have applied for or received all applicable licenses and permits;

     (3)  The applicant [will] shall comply with all applicable federal and state laws prohibiting discrimination against any person on the basis of race, color, national origin, religion, creed, sex, age, [or physical handicap;] sexual orientation, disability, or any other characteristic protected under applicable federal or state law;

     (4)  The grant shall not be used for purposes of entertainment or perquisites;

     (5)  The applicant shall comply with other requirements as the department [of business, economic development, and tourism] may prescribe;

     (6)  All activities and improvements undertaken with funds received shall comply with all applicable federal, state, and county statutes and ordinances, including applicable building codes and agency rules;

     (7)  The applicant [will] shall indemnify and save harmless the State of Hawaii and its officers, agents, and employees from and against any and all claims arising out of or resulting from activities carried out or projects undertaken with funds provided hereunder, and procure sufficient insurance to provide this indemnification if requested to do so by the department; and

     (8)  The facilities [will] shall not be used and are not intended to be used for sectarian instruction or as a place of worship.

     (b)  To receive a grant under this section for community-based economic development activities [or development of], a community-based enterprise[,] or business, or the provision of technical assistance to community-based organizations, an applicant shall:

     (1)  Be either:

          (A)  A profit subsidiary of a nonprofit community-based organization incorporated under the laws of the State;

          (B)  A nonprofit community-based organization determined to be exempt from federal income taxation by the Internal Revenue Service; [or]

          (C)  A cooperative association; or

        (D)  An organization providing technical assistance to community-based organizations;

     (2)  In the case of a nonprofit organization[, have]:

(A)  Have a governing board whose members have no material conflict of interest and serve without compensation[, have];

(B)  Have bylaws or policies that describe the manner in which business is conducted and policies relating to nepotism and management of potential conflict of interest situations[, and employ]; and

(C)  Employ or contract with no two or more members of a family or kin of the first or second degree unless specifically permitted by the department;

     (3)  Agree to make available to the department all records the applicant may have relating to the [operation of the community-based enterprise,] grant, to allow state agencies to monitor the applicant's compliance with the purpose of this chapter; and

     (4)  Establish, to the satisfaction of the department, that sufficient funds are available for the effective operation of the activity, business, [or] enterprise, or technical assistance for the purpose for which the grant is awarded."

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

     SECTION 5.  This Act, upon its approval, shall take effect on July 1, 2038.



Report Title:

Hawaii Community-Based Economic Development Technical and Financial Assistance Program



Amends the definition of "community-based organization."  Amends the qualifications for community-based economic development grants to include technical assistance to community-based organizations.  Reduces the number of Community-based Economic Development Advisory Council members from twelve to ten.  Effective 7/1/2038.  (HD1)




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