SB 1048: Department of the Attorney General; Solicitation of Funds from the Public; Donations; Charitable Funding Platforms; Platform Charities; Registration
- Session Year: 2025-2026
- House: Senate
- Latest Version Date: 2025-04-25
Current Status:
In Progress
(2025-05-29: Act 108, on 05/29/2025 (Gov. Msg. No. 1208).)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Final Decking
Enacted
What does this bill do?
This bill tightens rules for online crowdfunding by requiring charitable fundraising platforms and "platform charities" (charities that run fundraising sites) to register separately with the state and follow new reporting, fee, and oversight rules. It requires clear disclosures about who gets donations, any fees, and how long transfers will take; written consent before using a charity's name; protection of donors' personal data; separate accounts for donated funds; prompt tax receipts; and periodic financial reports and bonds for certain solicitors.
The summary is provided by generative AI which can make mistakes. For original language, please view the details in the table below.
Amends Act 205, SLH 2024, to clarify standards and safeguards in online crowdfunding, including creating separate registration, reporting, and fee requirements that are specific to platform charities and charitable fundraising platforms. Extends the effective date of Act 205 to July 1, 2026. (CD1)
Amends Act 205, SLH 2024, to clarify standards and safeguards in online crowdfunding, including creating separate registration, reporting, and fee requirements that are specific to platform charities and charitable fundraising platforms. Extends the effective date of Act 205 to July 1, 2026. Effective 7/1/3000. (HD2)
Amends Act 205, SLH 2024, to clarify standards and safeguards in online crowdfunding, including creating separate registration, reporting, and fee requirements that are specific to platform charities and charitable fundraising platforms. Extends the effective date of Act 205 to July 1, 2026. Effective 7/1/2050. (HD1)
Amends Act 205, Session Laws of Hawaii 2024, to clarify standards and safeguards in online crowdfunding. Effective 7/1/2050. (SD2)
Amends Act 205, Session Laws of Hawaii 2024, to clarify standards and safeguards in online crowdfunding. Effective 7/1/2050. (SD1)
Amends Act 205, Session Laws of Hawaii 2024, to clarify standards and safeguards in online crowdfunding. Takes effect 7/1/2026.
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THE SENATE |
S.B. NO. |
1048 |
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THIRTY-THIRD LEGISLATURE, 2025 |
S.D. 2 |
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STATE OF HAWAII |
H.D. 2 |
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C.D. 1 |
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A BILL FOR AN ACT
RELATING TO SOLICITATION OF FUNDS FROM THE PUBLIC.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
The legislature further finds that Act 205's well-intended language creates undue burdens on charitable fundraising platforms and, more importantly, potentially hampers and inhibits the ability of charitable organizations to respond to community needs and fundraise, especially in times of emergency.
The legislature additionally finds that it would be prudent to amend Act 205 before its scheduled effective date of January 1, 2026, in a manner that would still achieve the important purposes of public protection, donor security, and transparency, but not overburden charitable fundraising platforms, charitable organizations, and the department of the attorney general, which oversees these activities.
Accordingly, the purpose of this Act is to amend the language in Act 205 to clarify existing standards and safeguards in online crowdfunding.
SECTION 2. Chapter 467B, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§467B- Platform charities. (a) Every platform charity not exempted by section 467B-11.5 shall register with the department as a platform charity before conducting activities regulated by this chapter in accordance with section 467B-2.1. A platform charity shall be subject to the annual financial report and annual filing fee requirements of section 467B-6.5. Each report shall:
(1) Enable the department to ascertain whether charitable funds have been properly solicited, received, held, controlled, or distributed;
(2) Provide information on the number of donations made, amount raised, length of time for distributing donations or grants of recommended donations, fees charged by or through a charitable fundraising platform or platform charity, and names of recipient charitable organizations or other charitable organizations that were sent or have not yet been sent donations or grants of recommended donations; and
(3) Protect from disclosure any personally identifiable information of donors or other users of the charitable fundraising platform.
(b) No platform charity shall facilitate acts of solicitation on a charitable fundraising platform unless the platform charity is in good standing.
(c) A platform charity shall only solicit, permit, or otherwise enable solicitations or receive, control, or distribute funds from donations for purported charitable purposes for recipient charitable organizations or other charitable organizations in good standing. To determine good standing of a recipient charitable organization or other charitable organization, a platform charity may rely on information displayed on the department's registry.
(d) With respect to purported charitable purposes, a platform charity that performs, permits, or otherwise enables solicitation activities shall, before a person can complete a donation or select or change a recipient charitable organization, provide conspicuous disclosures that reduce the likelihood of deception, confusion, or misunderstanding, including:
(1) A statement that donations are made to the charitable fundraising platform, platform charity, recipient charitable organization, or person engaging in peer- to-peer charitable fundraising, whichever is applicable;
(2) A statement that a recipient charitable organization may not receive donations or grants, with an explanation identifying the most pertinent reasons that a recipient charitable organization may not receive the funds; provided that the explanation of the most pertinent reasons that a recipient charitable organization may not receive the funds may be provided through a conspicuous hyperlink, so long as the disclosure is conspicuous when the hyperlink is selected; provided further that this paragraph shall not apply when there are no circumstances under which a recipient charitable organization may not receive the funds;
(3) The maximum length of time it will take to send the donation or a grant of the recommended donation to a recipient charitable organization with an explanation of the time needed, unless the donation is sent contemporaneously to a recipient charitable organization after the donation is made; provided that the explanation as to the maximum length of time may be provided through a conspicuous hyperlink, so long as the disclosure is conspicuous when the hyperlink is selected;
(4) The fees or any other amounts that will be deducted from or added to the donation or a grant of the recommended donation and that are charged or retained by the charitable fundraising platform, platform charity, or any other partnering vendor, other than any applicable digital payment processing fees; and
(5) A statement as to the tax deductibility of the donation.
(e) Each platform charity that solicits, permits, or otherwise enables solicitations shall obtain the written consent of a recipient charitable organization before using the recipient charitable organization's name in a solicitation for a purported charitable purpose. Written consent shall be provided directly to the platform charity or may be provided to a platform charity by one authorized officer, director, trustee, or other duly authorized representative of the recipient charitable organization and may apply to multiple affiliated charitable fundraising platforms expressly identified in the agreement providing consent.
(f) After a donor contributes donations and with respect to purported charitable purposes, the platform charity shall promptly provide a tax donation receipt to the donor in a manner provided by section 170(f)(8) of the Internal Revenue Code of 1986, as amended.
(g) The platform charity shall not divert or otherwise misuse any donations made for purported charitable purposes that the platform charity receives through solicitation on the charitable fundraising platform and shall hold the donations in a separate account or accounts from other funds belonging to the platform charity. The platform charity shall promptly ensure that donations and grants of recommended donations are sent to the recipient charitable organizations with an accounting of any fees assessed for processing the funds, and in accordance with any rules adopted by the department pursuant to chapter 91.
(h) If a platform charity enters into any contract with a vendor to solicit, receive, control, process, distribute, and otherwise account for donations on the charitable fundraising platform, the contract shall be available for inspection by the department.
(i) As used in this section, "good standing" means that a platform charity, recipient charitable organization, or other charitable organization is not prohibited by the department from soliciting or operating in the State."
SECTION 3. Section 467B-1, Hawaii Revised Statutes, is amended as follows:
1. By amending the definition of "commercial co-venturer" to read:
""Commercial co-venturer" means a person who, for profit, is regularly and primarily engaged in trade or commerce other than in connection with soliciting for charitable organizations or charitable purposes, and who conducts charitable sales promotions. A person who meets the definitions of "commercial co-venturer" and "charitable fundraising platform" shall be considered a commercial co-venturer when the acts of solicitation through an internet website, service, or other platform to persons in this State are for six or fewer recipient charitable organizations per calendar year, and the commercial co-venturer complies with section 467B-5.5."
2. By amending the definition of "owner" to read:
""Owner"
means any person who has a direct or indirect interest in any professional
fundraising counsel[,] or professional solicitor[, charitable
fundraising platform, or platform charity]."
3. By amending the definition of "platform charity" to read:
""Platform charity" means a charitable organization that facilitates acts of solicitation on a charitable fundraising platform, which includes either of the following and any similar activity:
(1) [Solicits]
Soliciting donations through a charitable fundraising platform for
itself from donors who use the charitable fundraising platform with the implied
or express representation that the platform charity may grant donations to
recipient charitable organizations; or
(2) [Grants]
Granting funds to recipient charitable organizations based on purchases
made or other activity performed by persons who use a charitable fundraising
platform.
"Platform charity" does not include a sponsoring organization of donor advised funds that solicits donors to open donor advised fund accounts or similar accounts, receives recommendations from donors on charitable organizations that may receive grants of funds previously contributed to the sponsoring organization for a donor's donor advised fund account, and the sponsoring organization does not list or reference by name one or more recipient charitable organizations for solicitation purposes on its platform for persons who do not have advisory privileges with respect to the granting of funds in a donor advised fund of the sponsoring organization. A person who meets the definitions of "platform charity" and "charitable fundraising platform" shall be deemed a charitable fundraising platform."
SECTION 4. Section 467B-1.5, Hawaii Revised Statutes, is amended to read as follows:
"§467B-1.5 Professional
solicitors[,] and charitable fundraising platforms[, platform
charities]; required disclosures. (a)
Every professional solicitor, charitable fundraising platform, [platform
charity,] and every employee or agent thereof, who solicits contributions
from a prospective donor or contributor in this State shall at the outset of
any oral or written request for a contribution:
(1) Identify themselves by their true surname and first name, and the name of their employer or the contractor as the case may be, that is compensating the individual making the solicitation;
(2) Identify the name of the professional
solicitor[,] or charitable fundraising platform[, or platform
charity] registered with the department that has contracted with the
charitable organization to provide the solicitation services and, if the
individual is employed by a subcontractor, the name of the registered
subcontractor;
(3) Disclose that the person making the
oral or written request for a donation is being paid to make [such] the
solicitation and the name of the charitable organization on whose behalf the
person making the request is soliciting; and
(4) Disclose, orally and in writing, the
fact that a copy of the professional solicitor's[,] or charitable
fundraising platform's[, or platform charity's] registration data and
financial reports are available from the department.
(b) A professional solicitor[, charitable
fundraising platform, or platform charity] who makes an oral solicitation
by telephone, door-to-door, or otherwise, [prior to] before
collecting or attempting to collect any contribution, shall provide a written
confirmation of the expected contribution and clearly disclose that the
contribution is not tax-deductible, if applicable, or, if the professional
solicitor[, charitable fundraising platform, or platform charity]
maintains that the contribution is tax-deductible in whole or in part, the
portion of the contribution that the professional solicitor[, charitable
fundraising platform, or platform charity] maintains is tax‑deductible. The written confirmation shall also
conspicuously disclose the name and current address of the registered
professional solicitor[, charitable fundraising platform, or platform
charity]."
SECTION 5. Section 467B-2.3, Hawaii Revised Statutes, is amended to read as follows:
"[[]§467B-2.3[]] Charitable fundraising platforms[; platform charities]. (a) [Each charitable fundraising platform
shall be subject to the department's supervision for activities regulated by
this section.] Before soliciting,
permitting, or otherwise enabling any solicitations for purported charitable
purposes, a charitable fundraising platform shall register with the department
on a form or in a manner as provided by the department. [Registrations under this section shall be
subject to an annual report and an annual renewal fee imposed by the
department. Fee revenues from this
section shall be deposited into the solicitation of funds for charitable
purposes special fund.
(b) A platform charity shall be subject to the
department's supervision. The platform
charity shall register with the department as a platform charity before
conducting activities regulated by this section.
(c) Each charitable fundraising platform and
platform charity shall file periodic reports with the department on a form
provided by the department. Reports
shall be filed pursuant to section 467B-12.] The registration statement shall contain
the information set forth in subsection (b).
The registration under this section shall be accompanied by a fee in the
amount of $250, or in the amount and with any additional sums as may be
prescribed by the attorney general.
Renewal registration statements shall be filed with the department on or
before July 1 of each calendar year by each charitable fundraising
platform. The renewal statement shall
contain the information set forth in subsection (b). A renewal fee of $250, or in any amount and
with any additional sums as may be prescribed by the attorney general, shall
accompany the renewal statement. If a
renewal registration required under this subsection is not filed, unless it is
shown that the failure is due to reasonable cause, a fine of $20 shall be imposed
for each day during which the violation continues; provided that the total
amount imposed under this subsection shall not exceed $1,000.
(b) Each registration and renewal registration report shall:
(1) Enable the department to ascertain whether charitable funds have been properly solicited, received, held, controlled, or distributed;
(2) Provide information on the number of donations made, amount raised, length of time for distributing donations or grants of recommended donations, fees charged by or through a charitable fundraising platform or platform charity, and names of recipient charitable organizations or other charitable organizations that were sent or have not yet been sent donations or grants of recommended donations; and
(3) Protect from disclosure any personally identifiable information of donors or other users of the charitable fundraising platform.
[(d) No platform charity shall facilitate acts of
solicitation on a charitable fundraising platform unless the platform charity
is in good standing.
(e)]
(c) A charitable fundraising
platform [or platform charity] shall only solicit, permit, or otherwise
enable solicitations, or receive, control, or distribute funds from donations
for purported charitable purposes for recipient charitable organizations or
other charitable organizations in good standing. To determine good standing of a recipient
charitable organization or other charitable organization, a charitable
fundraising platform [or platform charity] may rely on [electronic
lists periodically published by the Internal Revenue Service, department of
taxation, or department.] the department's registry.
[(f)]
(d) With respect to purported
charitable purposes, a charitable fundraising platform [or platform charity]
that performs, permits, or otherwise enables solicitation activities shall,
before a person can complete a donation or select or change a recipient
charitable organization, provide conspicuous disclosures that reduce the
likelihood of deception, confusion, or misunderstanding, including:
(1) A statement that donations are made to the charitable fundraising platform, platform charity, recipient charitable organization, or person engaging in peer-to-peer charitable fundraising, whichever is applicable;
(2) A
statement that a recipient charitable organization may not receive donations or
grants [or recommended donations], with an explanation identifying the
most pertinent reasons [under which] that a recipient charitable
organization may not receive the funds; provided that the explanation [as to
the maximum length of time] of the most pertinent reasons that a
recipient charitable organization may not receive the funds may be provided
through a conspicuous hyperlink, so long as the disclosure is conspicuous when
the hyperlink is selected; provided further that this paragraph shall not apply
when there are no circumstances under which a recipient charitable organization
may not receive the funds;
(3) The maximum length of time it will take to send the donation or a grant of the recommended donation to a recipient charitable organization with an explanation of the time needed, unless the donation is sent contemporaneously to a recipient charitable organization after the donation is made; provided that the explanation as to the maximum length of time may be provided through a conspicuous hyperlink, so long as the disclosure is conspicuous when the hyperlink is selected;
(4) The
fees or any other amounts that will be deducted from or added to the donation
or a grant of the recommended donation and that are charged or retained by the
charitable fundraising platform, [platform charity,] or any other
partnering vendor, other than any applicable digital payment processing fees;
and
(5) A statement as to the tax deductibility of the donation.
[(g)]
(e) Each charitable fundraising
platform [or platform charity] that solicits, permits, or otherwise
enables solicitations shall obtain the written consent of a recipient
charitable organization before using the recipient charitable organization's
name in a solicitation for a purported charitable purpose. Written consent shall be provided directly to
the charitable fundraising platform [or platform charity], or may be
provided to a charitable fundraising platform [or platform charity] by
one authorized officer, director, trustee, or other duly authorized
representative of the recipient charitable organization and may apply to
multiple affiliated charitable fundraising platforms expressly identified in
the agreement providing consent.
[(h)]
(f) After a donor contributes
donations and with respect to purported charitable purposes, the charitable
fundraising platform [or platform charity] shall promptly provide a tax
donation receipt to the donor in a [format determined by the department.]
manner provided by section 170(f)(8) of the Internal Revenue Code of 1986,
as amended.
[(i)]
(g) The charitable fundraising
platform [or platform charity] shall not divert or otherwise misuse any
donations made for purported charitable purposes that the charitable
fundraising platform [or platform charity] receives through solicitation
on the charitable fundraising platform, and shall hold the donations in a
separate account or accounts from other funds belonging to the charitable
fundraising platform [or platform charity]. The charitable fundraising platform [or
platform charity] shall promptly ensure that donations and grants of
recommended donations are sent to the recipient charitable organizations with
an accounting of any fees assessed for processing the funds, and in accordance
with any rules adopted by the department pursuant to chapter 91. A platform charity shall be [vicariously]
liable for [a charitable fundraising platform's] its misuse of
funds[, and vice versa]. A charitable
fundraising platform shall maintain and operate a process for complaints about
any fundraising activity regulated by this chapter and shall investigate and
make findings on complaints, and, at the request of the department, shall
report its findings to the department along with its actions for resolution,
including any full refunds of contributions.
[(j)]
(h) If a charitable fundraising
platform [or platform charity] enters into any contract with a vendor to
solicit, receive, control, process, distribute, and otherwise account for
donations on the charitable fundraising platform, the contract shall be
available for inspection by the department.
(i) The attorney general may require that registration and renewal registration and contracts be filed with the department electronically and may require the use of electronic signatures.
[(k)] (j) As used in this section, "good
standing" means that a platform charity, recipient charitable
organization, or other charitable [organization's tax-exempt status has not
been revoked by the Internal Revenue Service or] organization is not
prohibited from soliciting or operating in the [state] State by
the department."
SECTION 6. Section 467B-2.5, Hawaii Revised Statutes, is amended to read as follows:
"§467B-2.5 Professional solicitor[, charitable
fundraising platform, and platform charity] financial reports; contribution
account.
(a) A professional solicitor[, charitable fundraising platform, or
platform charity] shall file with the attorney general a financial report for any
charitable solicitation campaign, including gross
revenue from Hawaii donors and national gross revenue and an itemization of all expenses incurred on a form prescribed by the
attorney general no more than ninety days after the end of the solicitation
campaign and, for solicitation campaigns lasting more than one year, within
ninety days after each anniversary of the commencement of the solicitation
campaign and within ninety days after the end of the solicitation campaign.
(b) The attorney general may require
the financial report required by subsection (a) to be submitted electronically and may require the use of electronic signatures. This report shall be signed by the
professional solicitor, [charitable fundraising platform, platform charity,]
or [by] an authorized officer or agent of the professional solicitor[,
charitable fundraising platform, or platform charity] who shall certify
that the statements therein are true and correct to the best of the
solicitor's, officer's, or agent's knowledge subject to penalties imposed by
section 710-1063. If a financial report
required under this section is not filed in a timely manner, taking into
account any extension of time for filing, unless it is shown that the failure
is due to reasonable cause, an initial late filing fee of $100 shall be
imposed, and an additional late filing fee of $20 per day shall be imposed, for
each day during which the violation continues; provided that the total fee
amount imposed under this subsection shall not exceed $1,000. The attorney general may waive all or part of the
late filing fee imposed by this subsection if there is a reasonable cause for
the failure to timely file. The
professional solicitor[, charitable fundraising platform, or
platform charity] shall provide a copy of
the financial report to the charitable organization to which the financial
report pertains within ten days of its
submission of the report to
the attorney general.
(c) A
professional solicitor[, charitable
fundraising platform, or platform charity] shall maintain during each solicitation campaign and for
not less than three years after the completion of that campaign the
following records, which shall be available for inspection upon demand by the attorney general:
(1) The date and amount of each contribution received and the name and address of each contributor;
(2) The name and residence of each employee, agent, or other person involved in the solicitation;
(3) Records of all revenue received and expenses incurred in the course of the solicitation campaign; and
(4) The location and
account number of each bank or
other financial institution account in which the professional solicitor[, charitable
fundraising platform, or platform charity] has deposited revenue from the solicitation campaign.
(d)
Any material change in any information filed with the attorney general
pursuant to this section shall be reported in writing by the professional
solicitor[, charitable fundraising platform, or platform charity] to the
attorney general not more than seven days after the change occurs.
(e)
Each contribution in the control or custody of the professional
solicitor[, charitable fundraising platform, or platform charity] in its
entirety and within five days of its receipt, shall be deposited in an account
at a bank or other federally insured financial institution, which shall be in
the name of the charitable organization.
The charitable organization shall maintain and administer the account
and shall have sole control of all withdrawals."
SECTION 7. Section 467B-9, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d)
No professional solicitor, charitable fundraising platform, or platform
charity, and no agent, employee, independent contractor, or other person acting
on behalf of the professional solicitor, charitable fundraising platform, or
platform charity, shall solicit in the name of or on behalf of any charitable
organization unless[:] the charitable fundraising platform or
platform charity has obtained written consent pursuant to section 467B-2.3(e)
or:
(1) The
professional solicitor[, charitable fundraising platform, or platform
charity] has obtained the written authorization of two officers of the
organization, which authorization shall bear the signature of the professional
solicitor[, charitable fundraising platform, or platform charity] and
the officers of the charitable organization and shall expressly state on its
face the period for which it is valid, which shall not exceed one year from the
date of issuance, and has filed a copy of the written authorization with the
attorney general [prior to] before the solicitation; and
(2) The
professional solicitor[, charitable fundraising platform, or platform
charity] and any person who, for compensation, acts as an agent, employee,
independent contractor, or otherwise on behalf of the professional solicitor, [charitable
fundraising platform, or platform charity,] carries a copy of the
authorization while conducting solicitations, and exhibits it on request to
persons solicited or police officers or agents of the department."
SECTION 8. Section 467B-12, Hawaii Revised Statutes, is amended to read as follows:
"§467B-12 Filing requirements for professional
fundraising counsel[,] and professional solicitors[, charitable fundraising platforms, and
platform charities].
(a) Every professional fundraising counsel[,]
or professional solicitor, [charitable fundraising platform, or
platform charity, prior to] before any solicitation, shall register
with the department. The
registration statement shall contain the information set forth in subsection
(e). The registration statement shall be
accompanied by a fee in the amount of $250, or in the amount and with any
additional sums as may be prescribed by the attorney general. Renewal registration statements shall be
filed with the department on or before July 1 of each calendar year by each
professional fundraising counsel[,] or professional solicitor[,
charitable fundraising platform, or platform charity]. The renewal statement shall contain the
information set forth in subsection (e).
A renewal fee of $250, or in any amount and with any additional sums as
may be prescribed by the attorney general, shall accompany the renewal
statement. If a renewal
registration required under this section is not filed, unless it is shown that
the failure is due to reasonable cause, a fine of $20 shall be imposed for each
day during which the violation continues; provided that the total amount
imposed under this subsection shall not exceed $1,000.
(b) Each professional solicitor, [charitable
fundraising platform, or platform charity,] at the time of
each filing, shall file with and have approved by the attorney general a bond
in which the applicant is the principal obligor in the penal sum of $25,000
issued with good and sufficient surety or sureties approved by the attorney
general and which shall remain in effect for one year. The bond shall inure to the benefit of the
State, conditioned that the applicant, its officers, directors, employees,
agents, servants, and independent contractors shall not violate this
chapter. A partnership or corporation
that is a professional solicitor[, charitable fundraising
platform, or platform charity] may file a consolidated bond on
behalf of all its members, officers, and employees.
(c) The attorney general shall examine each
registration statement and supporting document filed by a professional
fundraising counsel[,] or professional solicitor[, charitable
fundraising platform, or platform charity] and shall
determine whether the registration requirements are satisfied. If the attorney general determines that the
registration requirements are not satisfied, the attorney general shall notify
the professional fundraising counsel[,] or professional solicitor[,
charitable fundraising platform, or platform charity]
in writing within fifteen business days of its receipt of the registration
statement; otherwise the registration statement [is] shall be
deemed to be approved. Within seven
business days after receipt of a notification that the registration
requirements are not satisfied, the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] may request a hearing.
(d) The attorney general may require that registration and renewal registration, surety bonds, and contracts be filed with the department electronically and may require the use of electronic signatures.
(e) Each registration and renewal registration shall contain:
(1) The names and addresses of all owners,
officers, and directors of a professional fundraising counsel [or charitable
fundraising platform], and the names and addresses of all owners, officers,
and directors of a professional solicitor [or platform charity];
(2) A statement concerning the corporate form of the registrant, whether corporation, limited liability corporation, partnership, or individual;
(3) A statement whether the registrant has an office in Hawaii and the name and phone number of the person in charge of the office;
(4) The names and addresses of any individuals supervising any solicitation activity;
(5) A statement whether the [[]registrant[]]
has entered into a consent agreement with, or been disciplined by or subject to
administrative action by, another governmental agency;
(6) A statement whether any officer, director, or any person with a controlling interest in the registrant has ever been convicted of a felony or a misdemeanor involving dishonesty in the solicitation for a charitable purpose;
(7) The date that the registrant began soliciting Hawaii residents on behalf of a charitable organization or providing professional fundraising counsel services; and
(8) Whether any owners, directors, or officers are related to:
(A) Any other officers, directors, owners, or employees of the registrant;
(B) Any officer, director, trustee, or employee of a charitable organization under contract with the registrant; and
(C) Any vendor or supplier providing goods or services to a charitable organization under contract with the registrant."
SECTION 9. Section 467B-12.5, Hawaii Revised Statutes, is amended by amending subsections (a), (b), and (c) to read as follows:
"(a) There shall be a written
contract between a charitable organization and a professional fundraising
counsel[,] or professional solicitor[, charitable
fundraising platform, or platform charity] that
shall be filed by the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] with the attorney general
at least ten business days [prior to] before the performance by
the professional fundraising counsel[,] or professional solicitor[,
charitable fundraising platform, or platform charity]
of any service. No solicitation or
service pursuant to the contract shall begin before the contract is filed with
the attorney general. The contract shall
be signed by two authorized officials of the charitable organization, one of
whom shall be a member of the organization's governing body, and the authorized
contracting officer for the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity]. The contract shall contain all of the
following provisions:
(1) The legal name and address of the charitable organization;
(2) A statement of the charitable purpose for which the solicitation campaign is being conducted;
(3) A statement of the
respective obligations of the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] and the charitable
organization;
(4) A statement of the guaranteed minimum percentage of the gross receipts from contributions that will be remitted to or retained by the charitable organization, if any, or, if the solicitation involves the sale of goods, services, or tickets to a fundraising event, the percentage of the purchase price that will be remitted to the charitable organization, if any. The stated percentage shall exclude any amount that the charitable organization is to pay as fundraising costs;
(5) Information concerning the compensation of the professional solicitor and professional fundraising counsel as follows:
(A) If the
compensation of the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] is contingent upon the
number of contributions or the amount of revenue received, a statement shall be
included specifying the percentage of the gross revenue that is the basis for
that compensation. The stated percentage
shall include any amount that the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] is to be reimbursed for
fundraising costs;
(B) If the
compensation of the professional solicitor[, charitable
fundraising platform, or platform charity] is not
contingent upon the number of contributions or amount of revenue received from
the solicitation campaign, the compensation shall be expressed as a reasonable
estimate of the percentage of the gross revenue, and the contract shall clearly
disclose the assumptions upon which the estimate is based. The stated assumptions shall be based upon
all of the relevant facts known to the professional solicitor regarding the
solicitation to be conducted by the professional solicitor; or
(C) If the
compensation of the professional fundraising counsel[, charitable
fundraising platform, or platform charity] is not
contingent on the number of contributions or amount of revenue received from
the solicitation campaign, the compensation shall be stated in a dollar amount;
(6) The effective and termination dates of the contract or, if the contract does not have a set termination date, a clause allowing either party a reasonable period to terminate the contract or notify the other party if either party chooses not to renew. The contract shall also contain the date services will commence with respect to solicitation in this State of contributions for a charitable organization;
(7) In the case of a
professional fundraising counsel, [charitable fundraising platform,
or platform charity,] a statement that the
professional fundraising counsel will not at any time have custody or control
of contributions, as applicable;
(8) A statement that the charitable organization exercises control and approval over the content and volume of any solicitation; and
(9) Any other information required by the rules of the attorney general.
(b) No professional fundraising counsel[,]
or professional solicitor[, charitable fundraising platform, or
platform charity] shall contract with a charitable organization unless the
professional fundraising counsel[,] or professional solicitor[,
charitable fundraising platform, or platform charity] is registered with
the department. A contract with an
unregistered professional fundraising counsel[,] or professional
solicitor[, charitable fundraising platform, or platform charity] shall
be voidable at the option of the charitable organization.
(c) Whenever a charitable organization
contracts with a professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or platform
charity,] the charitable organization shall have the right to cancel the
contract without cost, penalty, or liability, for a period of ten days
following the date on which that contract is executed. Any provision in the contract that is
intended to waive this right of cancellation shall be void and unenforceable."
SECTION 10. Act 205, Session Laws of Hawaii 2024, is amended by amending section 16 to read as follows:
"SECTION
16. This Act shall take effect on [January]
July 1, 2026."
SECTION 11. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 12. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 13. This Act shall take effect on July 1, 2026; provided that section 10 shall take effect on July 1, 2025.
Report Title:
Department of the Attorney General; Solicitation of Funds from the Public; Donations; Charitable Funding Platforms; Platform Charities; Registration
Description:
Amends Act 205, SLH 2024, to clarify standards and safeguards in online crowdfunding, including creating separate registration, reporting, and fee requirements that are specific to platform charities and charitable fundraising platforms. Extends the effective date of Act 205 to July 1, 2026. (CD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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THE SENATE |
S.B. NO. |
1048 |
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THIRTY-THIRD LEGISLATURE, 2025 |
S.D. 2 |
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STATE OF HAWAII |
H.D. 2 |
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A BILL FOR AN ACT
RELATING TO SOLICITATION OF FUNDS FROM THE PUBLIC.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
The legislature further finds that Act 205's well-intended language creates undue burdens on charitable fundraising platforms and, more importantly, potentially hampers and inhibits the ability of charitable organizations to respond to community needs and fundraise, especially in times of emergency.
The legislature additionally finds that it would be prudent to amend Act 205 before its scheduled effective date of January 1, 2026, in a manner that would still achieve the important purposes of public protection, donor security, and transparency, but not overburden charitable fundraising platforms, charitable organizations, and the department of the attorney general, which oversees these activities.
Accordingly, the purpose of this Act is to amend the language in Act 205 to clarify existing standards and safeguards in online crowdfunding.
SECTION 2. Chapter 467B, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§467B- Platform charities. (a) Every platform charity not exempted by section 467B-11.5 shall register with the department as a platform charity before conducting activities regulated by this chapter in accordance with section 467B-2.1. A platform charity shall be subject to the annual financial report and annual filing fee requirements of section 467B-6.5. Each report shall:
(1) Enable the department to ascertain whether charitable funds have been properly solicited, received, held, controlled, or distributed;
(2) Provide information on the number of donations made, amount raised, length of time for distributing donations or grants of recommended donations, fees charged by or through a charitable fundraising platform or platform charity, and names of recipient charitable organizations or other charitable organizations that were sent or have not yet been sent donations or grants of recommended donations; and
(3) Protect from disclosure any personally identifiable information of donors or other users of the charitable fundraising platform.
(b) No platform charity shall facilitate acts of solicitation on a charitable fundraising platform unless the platform charity is in good standing.
(c) A platform charity shall only solicit, permit, or otherwise enable solicitations or receive, control, or distribute funds from donations for purported charitable purposes for recipient charitable organizations or other charitable organizations in good standing. To determine good standing of a recipient charitable organization or other charitable organization, a platform charity may rely on information displayed on the department's registry.
(d) With respect to purported charitable purposes, a platform charity that performs, permits, or otherwise enables solicitation activities shall, before a person can complete a donation or select or change a recipient charitable organization, provide conspicuous disclosures that reduce the likelihood of deception, confusion, or misunderstanding, including:
(1) A statement that donations are made to the charitable fundraising platform, platform charity, recipient charitable organization, or person engaging in peer- to-peer charitable fundraising, whichever is applicable;
(2) A statement that a recipient charitable organization may not receive donations or grants, with an explanation identifying the most pertinent reasons that a recipient charitable organization may not receive the funds; provided that the explanation of the most pertinent reasons that a recipient charitable organization may not receive the funds may be provided through a conspicuous hyperlink, so long as the disclosure is conspicuous when the hyperlink is selected; provided further that this paragraph shall not apply when there are no circumstances under which a recipient charitable organization may not receive the funds;
(3) The maximum length of time it will take to send the donation or a grant of the recommended donation to a recipient charitable organization with an explanation of the time needed, unless the donation is sent contemporaneously to a recipient charitable organization after the donation is made; provided that the explanation as to the maximum length of time may be provided through a conspicuous hyperlink, so long as the disclosure is conspicuous when the hyperlink is selected;
(4) The fees or any other amounts that will be deducted from or added to the donation or a grant of the recommended donation and that are charged or retained by the charitable fundraising platform, platform charity, or any other partnering vendor, other than any applicable digital payment processing fees; and
(5) A statement as to the tax deductibility of the donation.
(e) Each platform charity that solicits, permits, or otherwise enables solicitations shall obtain the written consent of a recipient charitable organization before using the recipient charitable organization's name in a solicitation for a purported charitable purpose. Written consent shall be provided directly to the platform charity or may be provided to a platform charity by one authorized officer, director, trustee, or other duly authorized representative of the recipient charitable organization and may apply to multiple affiliated charitable fundraising platforms expressly identified in the agreement providing consent.
(f) After a donor contributes donations and with respect to purported charitable purposes, the platform charity shall promptly provide a tax donation receipt to the donor in a manner provided by section 170(f)(8) of the Internal Revenue Code of 1986, as amended.
(g) The platform charity shall not divert or otherwise misuse any donations made for purported charitable purposes that the platform charity receives through solicitation on the charitable fundraising platform and shall hold the donations in a separate account or accounts from other funds belonging to the platform charity. The platform charity shall promptly ensure that donations and grants of recommended donations are sent to the recipient charitable organizations with an accounting of any fees assessed for processing the funds, and in accordance with any rules adopted by the department pursuant to chapter 91.
(h) If a platform charity enters into any contract with a vendor to solicit, receive, control, process, distribute, and otherwise account for donations on the charitable fundraising platform, the contract shall be available for inspection by the department.
(i) As used in this section, "good standing" means that a platform charity, recipient charitable organization, or other charitable organization is not prohibited from soliciting or operating in the State by the department."
SECTION 3. Section 467B-1, Hawaii Revised Statutes, is amended as follows:
1. By amending the definition of "commercial co-venturer" to read:
""Commercial co-venturer" means a person who, for profit, is regularly and primarily engaged in trade or commerce other than in connection with soliciting for charitable organizations or charitable purposes, and who conducts charitable sales promotions. A person who meets the definitions of "commercial co-venturer" and "charitable fundraising platform" shall be considered a commercial co-venturer when the acts of solicitation through an internet website, service, or other platform to persons in this State are for six or fewer recipient charitable organizations per calendar year, and the commercial co-venturer complies with section 467B-5.5."
2. By amending the definition of "owner" to read:
""Owner"
means any person who has a direct or indirect interest in any professional
fundraising counsel[,] or professional solicitor[, charitable
fundraising platform, or platform charity]."
3. By amending the definition of "platform charity" to read:
""Platform charity" means a charitable organization that facilitates acts of solicitation on a charitable fundraising platform, which includes either of the following and any similar activity:
(1) [Solicits]
Soliciting donations through a charitable fundraising platform for
itself from donors who use the charitable fundraising platform with the implied
or express representation that the platform charity may grant donations to
recipient charitable organizations; or
(2) [Grants]
Granting funds to recipient charitable organizations based on purchases
made or other activity performed by persons who use a charitable fundraising
platform.
"Platform charity" does not include a sponsoring organization of donor advised funds that solicits donors to open donor advised fund accounts or similar accounts, receives recommendations from donors on charitable organizations that may receive grants of funds previously contributed to the sponsoring organization for a donor's donor advised fund account, and the sponsoring organization does not list or reference by name one or more recipient charitable organizations for solicitation purposes on its platform for persons who do not have advisory privileges with respect to the granting of funds in a donor advised fund of the sponsoring organization. A person who meets the definitions of "platform charity" and "charitable fundraising platform" shall be deemed a charitable fundraising platform."
SECTION 4. Section 467B-1.5, Hawaii Revised Statutes, is amended to read as follows:
"§467B-1.5 Professional
solicitors[,] and charitable fundraising platforms[, platform
charities]; required disclosures. (a)
Every professional solicitor, charitable fundraising platform, [platform
charity,] and every employee or agent thereof, who solicits contributions
from a prospective donor or contributor in this State shall at the outset of
any oral or written request for a contribution:
(1) Identify themselves by their true surname and first name, and the name of their employer or the contractor as the case may be, that is compensating the individual making the solicitation;
(2) Identify the name of the professional
solicitor[,] or charitable fundraising platform[, or platform
charity] registered with the department that has contracted with the
charitable organization to provide the solicitation services and, if the
individual is employed by a subcontractor, the name of the registered
subcontractor;
(3) Disclose that the person making the
oral or written request for a donation is being paid to make [such] the
solicitation and the name of the charitable organization on whose behalf the
person making the request is soliciting; and
(4) Disclose, orally and in writing, the
fact that a copy of the professional solicitor's[,] or charitable
fundraising platform's[, or platform charity's] registration data and
financial reports are available from the department.
(b) A professional solicitor[, charitable
fundraising platform, or platform charity] who makes an oral solicitation
by telephone, door-to-door, or otherwise, [prior to] before
collecting or attempting to collect any contribution, shall provide a written
confirmation of the expected contribution and clearly disclose that the
contribution is not tax-deductible, if applicable, or, if the professional
solicitor[, charitable fundraising platform, or platform charity]
maintains that the contribution is tax-deductible in whole or in part, the
portion of the contribution that the professional solicitor[, charitable
fundraising platform, or platform charity] maintains is
tax-deductible. The written confirmation
shall also conspicuously disclose the name and current address of the
registered professional solicitor[, charitable fundraising platform, or
platform charity]."
SECTION 5. Section 467B-2.3, Hawaii Revised Statutes, is amended to read as follows:
"[[]§467B-2.3[]] Charitable fundraising platforms[; platform charities]. (a) [Each charitable fundraising platform
shall be subject to the department's supervision for activities regulated by
this section.] Before soliciting,
permitting, or otherwise enabling any solicitations for purported charitable
purposes, a charitable fundraising platform shall register with the department
on a form or in a manner as provided by the department. [Registrations under this section shall be
subject to an annual report and an annual renewal fee imposed by the
department. Fee revenues from this
section shall be deposited into the solicitation of funds for charitable
purposes special fund.
(b) A platform charity shall be subject to the
department's supervision. The platform
charity shall register with the department as a platform charity before
conducting activities regulated by this section.
(c) Each charitable fundraising platform and
platform charity shall file periodic reports with the department on a form
provided by the department. Reports
shall be filed pursuant to section 467B-12.] The registration statement shall contain
the information set forth in subsection (b).
The registration under this section shall be accompanied by a fee in the
amount of $250, or in the amount and with any additional sums as may be
prescribed by the attorney general.
Renewal registration statements shall be filed with the department on or
before July 1 of each calendar year by each charitable fundraising
platform. The renewal statement shall
contain the information set forth in subsection (b). A renewal fee of $250, or in any amount and
with any additional sums as may be prescribed by the attorney general, shall
accompany the renewal statement. If a
renewal registration required under this subsection is not filed, unless it is
shown that the failure is due to reasonable cause, a fine of $20 shall be imposed
for each day during which the violation continues; provided that the total
amount imposed under this subsection shall not exceed $1,000.
(b) Each registration and renewal registration report shall:
(1) Enable the department to ascertain whether charitable funds have been properly solicited, received, held, controlled, or distributed;
(2) Provide information on the number of donations made, amount raised, length of time for distributing donations or grants of recommended donations, fees charged by or through a charitable fundraising platform or platform charity, and names of recipient charitable organizations or other charitable organizations that were sent or have not yet been sent donations or grants of recommended donations; and
(3) Protect from disclosure any personally identifiable information of donors or other users of the charitable fundraising platform.
[(d) No platform charity shall facilitate acts of
solicitation on a charitable fundraising platform unless the platform charity
is in good standing.
(e)]
(c) A charitable fundraising
platform [or platform charity] shall only solicit, permit, or otherwise
enable solicitations, or receive, control, or distribute funds from donations
for purported charitable purposes for recipient charitable organizations or
other charitable organizations in good standing. To determine good standing of a recipient
charitable organization or other charitable organization, a charitable
fundraising platform [or platform charity] may rely on [electronic
lists periodically published by the Internal Revenue Service, department of
taxation, or department.] the department's registry.
[(f)]
(d) With respect to purported
charitable purposes, a charitable fundraising platform [or platform charity]
that performs, permits, or otherwise enables solicitation activities shall,
before a person can complete a donation or select or change a recipient
charitable organization, provide conspicuous disclosures that reduce the
likelihood of deception, confusion, or misunderstanding, including:
(1) A statement that donations are made to the charitable fundraising platform, platform charity, recipient charitable organization, or person engaging in peer-to-peer charitable fundraising, whichever is applicable;
(2) A
statement that a recipient charitable organization may not receive donations or
grants [or recommended donations], with an explanation identifying the
most pertinent reasons [under which] that a recipient charitable
organization may not receive the funds; provided that the explanation [as to
the maximum length of time] of the most pertinent reasons that a
recipient charitable organization may not receive the funds may be provided
through a conspicuous hyperlink, so long as the disclosure is conspicuous when
the hyperlink is selected; provided further that this paragraph shall not apply
when there are no circumstances under which a recipient charitable organization
may not receive the funds;
(3) The maximum length of time it will take to send the donation or a grant of the recommended donation to a recipient charitable organization with an explanation of the time needed, unless the donation is sent contemporaneously to a recipient charitable organization after the donation is made; provided that the explanation as to the maximum length of time may be provided through a conspicuous hyperlink, so long as the disclosure is conspicuous when the hyperlink is selected;
(4) The
fees or any other amounts that will be deducted from or added to the donation
or a grant of the recommended donation and that are charged or retained by the
charitable fundraising platform, [platform charity,] or any other
partnering vendor, other than any applicable digital payment processing fees;
and
(5) A statement as to the tax deductibility of the donation.
[(g)]
(e) Each charitable fundraising
platform [or platform charity] that solicits, permits, or otherwise
enables solicitations shall obtain the written consent of a recipient
charitable organization before using the recipient charitable organization's
name in a solicitation for a purported charitable purpose. Written consent shall be provided directly to
the charitable fundraising platform [or platform charity], or may be
provided to a charitable fundraising platform [or platform charity] by
one authorized officer, director, trustee, or other duly authorized
representative of the recipient charitable organization and may apply to
multiple affiliated charitable fundraising platforms expressly identified in
the agreement providing consent.
[(h)]
(f) After a donor contributes
donations and with respect to purported charitable purposes, the charitable
fundraising platform [or platform charity] shall promptly provide a tax
donation receipt to the donor in a [format determined by the department.]
manner provided by section 170(f)(8) of the Internal Revenue Code of 1986,
as amended.
[(i)]
(g) The charitable fundraising
platform [or platform charity] shall not divert or otherwise misuse any
donations made for purported charitable purposes that the charitable
fundraising platform [or platform charity] receives through solicitation
on the charitable fundraising platform, and shall hold the donations in a
separate account or accounts from other funds belonging to the charitable
fundraising platform [or platform charity]. The charitable fundraising platform [or
platform charity] shall promptly ensure that donations and grants of
recommended donations are sent to the recipient charitable organizations with
an accounting of any fees assessed for processing the funds, and in accordance
with any rules adopted by the department pursuant to chapter 91. A platform charity shall be [vicariously]
liable for [a charitable fundraising platform's] its misuse of
funds[, and vice versa]. A charitable
fundraising platform shall maintain and operate a process for complaints about
any fundraising activity regulated by this chapter and shall investigate and
make findings on complaints, and, at the request of the department, shall
report its findings to the department along with its actions for resolution,
including any full refunds of contributions.
[(j)]
(h) If a charitable fundraising
platform [or platform charity] enters into any contract with a vendor to
solicit, receive, control, process, distribute, and otherwise account for
donations on the charitable fundraising platform, the contract shall be
available for inspection by the department.
(i) The attorney general may require that registration and renewal registration and contracts be filed with the department electronically and may require the use of electronic signatures.
[(k)] (j) As used in this section, "good
standing" means that a platform charity, recipient charitable
organization, or other charitable [organization's tax-exempt status has not
been revoked by the Internal Revenue Service or] organization is not
prohibited from soliciting or operating in the [state] State by
the department."
SECTION 6. Section 467B-2.5, Hawaii Revised Statutes, is amended to read as follows:
"§467B-2.5
Professional solicitor[, charitable fundraising platform, and
platform charity] financial reports; contribution account. (a) A
professional solicitor[, charitable
fundraising platform, or platform charity] shall file with
the attorney general a financial report for
any charitable solicitation campaign, including
gross revenue from Hawaii donors and
national gross revenue and an itemization of all expenses
incurred on a form prescribed by the
attorney general no more than ninety days after the end of the solicitation
campaign and, for solicitation campaigns lasting more than one year, within
ninety days after each anniversary of the commencement of the solicitation campaign
and within ninety days after the end of the solicitation campaign.
(b) The attorney general may require
the financial report required by subsection (a) to be submitted electronically and may require the use of electronic signatures. This report shall be signed by the
professional solicitor, [charitable fundraising platform, platform charity,]
or [by] an authorized officer or agent of the professional solicitor[,
charitable fundraising platform, or platform charity] who shall certify
that the statements therein are true and correct to the best of the
solicitor's, officer's, or agent's knowledge subject to penalties imposed by
section 710-1063. If a financial report
required under this section is not filed in a timely manner, taking into
account any extension of time for filing, unless it is shown that the failure
is due to reasonable cause, an initial late filing fee of $100 shall be
imposed, and an additional late filing fee of $20 per day shall be imposed, for
each day during which the violation continues; provided that the total fee
amount imposed under this subsection shall not exceed $1,000. The attorney general may waive all or part of the
late filing fee imposed by this subsection if there is a reasonable cause for
the failure to timely file. The
professional solicitor[, charitable fundraising platform, or
platform charity] shall provide a copy of
the financial report to the charitable organization to which the financial
report pertains within ten days of its
submission of the report to
the attorney general.
(c) A
professional solicitor[, charitable
fundraising platform, or platform charity] shall maintain during each solicitation campaign and for
[not] no less than three
years after the completion of that campaign the following records,
which shall be available for inspection
upon demand by the attorney general:
(1) The date and amount of each contribution received and the name and address of each contributor;
(2) The name and residence of each employee, agent, or other person involved in the solicitation;
(3) Records of all revenue received and expenses incurred in the course of the solicitation campaign; and
(4) The location and
account number of each bank or
other financial institution account in which the professional solicitor[, charitable
fundraising platform, or platform charity] has deposited revenue from the solicitation campaign.
(d)
Any material change in any information filed with the attorney general
pursuant to this section shall be reported in writing by the professional
solicitor[, charitable fundraising platform, or platform charity] to the
attorney general [not] no more than seven days after the change
occurs.
(e)
Each contribution in the control or custody of the professional
solicitor[, charitable fundraising platform, or platform charity] in its
entirety and within five days of its receipt, shall be deposited in an account
at a bank or other federally insured financial institution, which shall be in
the name of the charitable organization.
The charitable organization shall maintain and administer the account
and shall have sole control of all withdrawals."
SECTION 7. Section 467B-9, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d)
No professional solicitor, charitable fundraising platform, or platform
charity, and no agent, employee, independent contractor, or other person acting
on behalf of the professional solicitor, charitable fundraising platform, or
platform charity, shall solicit in the name of or on behalf of any charitable
organization unless[:] the charitable fundraising platform or
platform charity has obtained written consent pursuant to section 467B-2.3(e)
or:
(1) The
professional solicitor[, charitable fundraising platform, or platform
charity] has obtained the written authorization of two officers of the
organization, which authorization shall bear the signature of the professional
solicitor[, charitable fundraising platform, or platform charity] and
the officers of the charitable organization and shall expressly state on its
face the period for which it is valid, which shall not exceed one year from the
date of issuance, and has filed a copy of the written authorization with the
attorney general prior to the solicitation; and
(2) The
professional solicitor[, charitable fundraising platform, or platform
charity] and any person who, for compensation, acts as an agent, employee,
independent contractor, or otherwise on behalf of the professional solicitor, [charitable
fundraising platform, or platform charity,] carries a copy of the
authorization while conducting solicitations, and exhibits it on request to
persons solicited or police officers or agents of the department."
SECTION 8. Section 467B-12, Hawaii Revised Statutes, is amended to read as follows:
"§467B-12 Filing requirements for professional
fundraising counsel[,] and professional solicitors[, charitable fundraising platforms, and
platform charities].
(a) Every professional fundraising counsel[,]
or professional solicitor, [charitable fundraising platform, or
platform charity, prior to] before any solicitation, shall register
with the department. The
registration statement shall contain the information set forth in subsection
(e). The registration statement shall be
accompanied by a fee in the amount of $250, or in the amount and with any
additional sums as may be prescribed by the attorney general. Renewal registration statements shall be
filed with the department on or before July 1 of each calendar year by each
professional fundraising counsel[,] or professional solicitor[,
charitable fundraising platform, or platform charity]. The renewal statement shall contain the
information set forth in subsection (e).
A renewal fee of $250, or in any amount and with any additional sums as
may be prescribed by the attorney general, shall accompany the renewal
statement. If a renewal
registration required under this section is not filed, unless it is shown that
the failure is due to reasonable cause, a fine of $20 shall be imposed for each
day during which the violation continues; provided that the total amount
imposed under this subsection shall not exceed $1,000.
(b) Each professional solicitor, [charitable
fundraising platform, or platform charity,] at the time of
each filing, shall file with and have approved by the attorney general a bond
in which the applicant is the principal obligor in the penal sum of $25,000
issued with good and sufficient surety or sureties approved by the attorney
general and which shall remain in effect for one year. The bond shall inure to the benefit of the
State, conditioned that the applicant, its officers, directors, employees,
agents, servants, and independent contractors shall not violate this
chapter. A partnership or corporation
that is a professional solicitor[, charitable fundraising
platform, or platform charity] may file a consolidated bond on
behalf of all its members, officers, and employees.
(c) The attorney general shall examine each
registration statement and supporting document filed by a professional
fundraising counsel[,] or professional solicitor[, charitable
fundraising platform, or platform charity] and shall
determine whether the registration requirements are satisfied. If the attorney general determines that the
registration requirements are not satisfied, the attorney general shall notify
the professional fundraising counsel[,] or professional solicitor[,
charitable fundraising platform, or platform charity]
in writing within fifteen business days of its receipt of the registration
statement; otherwise the registration statement [is] shall be
deemed to be approved. Within seven
business days after receipt of a notification that the registration
requirements are not satisfied, the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] may request a hearing.
(d) The attorney general may require that registration and renewal registration, surety bonds, and contracts be filed with the department electronically and may require the use of electronic signatures.
(e) Each registration and renewal registration shall contain:
(1) The names and addresses of all owners,
officers, and directors of a professional fundraising counsel [or charitable
fundraising platform], and the names and addresses of all owners, officers,
and directors of a professional solicitor [or platform charity];
(2) A statement concerning the corporate form of the registrant, whether corporation, limited liability corporation, partnership, or individual;
(3) A statement whether the registrant has an office in Hawaii and the name and phone number of the person in charge of the office;
(4) The names and addresses of any individuals supervising any solicitation activity;
(5) A statement whether the [[]registrant[]]
has entered into a consent agreement with, or been disciplined by or subject to
administrative action by, another governmental agency;
(6) A statement whether any officer, director, or any person with a controlling interest in the registrant has ever been convicted of a felony or a misdemeanor involving dishonesty in the solicitation for a charitable purpose;
(7) The date that the registrant began soliciting Hawaii residents on behalf of a charitable organization or providing professional fundraising counsel services; and
(8) Whether any owners, directors, or officers are related to:
(A) Any other officers, directors, owners, or employees of the registrant;
(B) Any officer, director, trustee, or employee of a charitable organization under contract with the registrant; and
(C) Any vendor or supplier providing goods or services to a charitable organization under contract with the registrant."
SECTION 9. Section 467B-12.5, Hawaii Revised Statutes, is amended by amending subsections (a), (b), and (c) to read as follows:
"(a) There shall be a written
contract between a charitable organization and a professional fundraising
counsel[,] or professional solicitor[, charitable
fundraising platform, or platform charity] that
shall be filed by the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] with the attorney general
at least ten business days [prior to] before the performance by
the professional fundraising counsel[,] or professional solicitor[,
charitable fundraising platform, or platform charity]
of any service. No solicitation or
service pursuant to the contract shall begin before the contract is filed with
the attorney general. The contract shall
be signed by two authorized officials of the charitable organization, one of
whom shall be a member of the organization's governing body, and the authorized
contracting officer for the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity]. The contract shall contain all of the
following provisions:
(1) The legal name and address of the charitable organization;
(2) A statement of the charitable purpose for which the solicitation campaign is being conducted;
(3) A statement of the
respective obligations of the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] and the charitable
organization;
(4) A statement of the guaranteed minimum percentage of the gross receipts from contributions that will be remitted to or retained by the charitable organization, if any, or, if the solicitation involves the sale of goods, services, or tickets to a fundraising event, the percentage of the purchase price that will be remitted to the charitable organization, if any. The stated percentage shall exclude any amount that the charitable organization is to pay as fundraising costs;
(5) Information concerning the compensation of the professional solicitor and professional fundraising counsel as follows:
(A) If the
compensation of the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] is contingent upon the
number of contributions or the amount of revenue received, a statement shall be
included specifying the percentage of the gross revenue that is the basis for
that compensation. The stated percentage
shall include any amount that the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] is to be reimbursed for
fundraising costs;
(B) If the
compensation of the professional solicitor[, charitable
fundraising platform, or platform charity] is not
contingent upon the number of contributions or amount of revenue received from
the solicitation campaign, the compensation shall be expressed as a reasonable
estimate of the percentage of the gross revenue, and the contract shall clearly
disclose the assumptions upon which the estimate is based. The stated assumptions shall be based upon
all of the relevant facts known to the professional solicitor regarding the
solicitation to be conducted by the professional solicitor; or
(C) If the
compensation of the professional fundraising counsel[, charitable
fundraising platform, or platform charity] is not
contingent on the number of contributions or amount of revenue received from
the solicitation campaign, the compensation shall be stated in a dollar amount;
(6) The effective and termination dates of the contract or, if the contract does not have a set termination date, a clause allowing either party a reasonable period to terminate the contract or notify the other party if either party chooses not to renew. The contract shall also contain the date services will commence with respect to solicitation in this State of contributions for a charitable organization;
(7) In the case of a
professional fundraising counsel, [charitable fundraising platform,
or platform charity,] a statement that the
professional fundraising counsel will not at any time have custody or control
of contributions, as applicable;
(8) A statement that the charitable organization exercises control and approval over the content and volume of any solicitation; and
(9) Any other information required by the rules of the attorney general.
(b) No professional fundraising counsel[,]
or professional solicitor[, charitable fundraising platform, or
platform charity] shall contract with a charitable organization unless the
professional fundraising counsel[,] or professional solicitor[,
charitable fundraising platform, or platform charity] is registered with
the department. A contract with an
unregistered professional fundraising counsel[,] or professional
solicitor[, charitable fundraising platform, or platform charity] shall
be voidable at the option of the charitable organization.
(c) Whenever a charitable organization
contracts with a professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or platform
charity,] the charitable organization shall have the right to cancel the
contract without cost, penalty, or liability, for a period of ten days
following the date on which that contract is executed. Any provision in the contract that is
intended to waive this right of cancellation shall be void and unenforceable."
SECTION 10. Act 205, Session Laws of Hawaii 2024, is amended by amending section 16 to read as follows:
"SECTION
16. This Act shall take effect on [January]
July 1, 2026."
SECTION 11. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 12. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 13. This Act shall take effect on July 1, 3000; provided that section 10 shall take effect on July 1, 2025.
Report Title:
AG; Solicitations of Funds from the Public; Donations; Charitable Funding Platforms; Platform Charities; Registration
Description:
Amends Act 205, SLH 2024, to clarify standards and safeguards in online crowdfunding, including creating separate registration, reporting, and fee requirements that are specific to platform charities and charitable fundraising platforms. Extends the effective date of Act 205 to July 1, 2026. Effective 7/1/3000. (HD2)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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THE SENATE |
S.B. NO. |
1048 |
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THIRTY-THIRD LEGISLATURE, 2025 |
S.D. 2 |
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STATE OF HAWAII |
H.D. 1 |
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A BILL FOR AN ACT
RELATING TO SOLICITATION OF FUNDS FROM THE PUBLIC.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
The legislature further finds that Act 205's well-intended language creates undue burdens on charitable fundraising platforms and, more importantly, potentially hampers and inhibits the ability of charitable organizations to respond and fundraise, especially in times of emergency and need.
The legislature additionally finds that it would be prudent to amend Act 205 before its scheduled effective date of January 1, 2026, in a manner that would still achieve the important purposes of public protection, donor security, and transparency, but not overburden charitable fundraising platforms, charitable organizations, and the department of the attorney general, who oversees these activities.
Accordingly, the purpose of this Act is to amend the language in Act 205 to clarify existing standards and safeguards in online crowdfunding.
SECTION 2. Chapter 467B, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§467B- Platform charities. (a) Every platform charity not exempted by section 467B-11.5 shall register with the department as a platform charity before conducting activities regulated by this chapter in accordance with section 467B-2.1. A platform charity shall be subject to the annual financial report and annual filing fee requirements of section 467B-6.5. Each report shall:
(1) Enable the department to ascertain whether charitable funds have been properly solicited, received, held, controlled, or distributed;
(2) Provide information on the number of donations made, amount raised, length of time for distributing donations or grants of recommended donations, fees charged by or through a charitable fundraising platform or platform charity, and names of recipient charitable organizations or other charitable organizations that were sent or have not yet been sent donations or grants of recommended donations; and
(3) Protect from disclosure any personally identifiable information of donors or other users of the charitable fundraising platform.
(b) No platform charity shall facilitate acts of solicitation on a charitable fundraising platform unless the platform charity is in good standing.
(c) A platform charity shall only solicit, permit, or otherwise enable solicitations or receive, control, or distribute funds from donations for purported charitable purposes for recipient charitable organizations or other charitable organizations in good standing. To determine good standing of a recipient charitable organization or other charitable organization, a platform charity may rely on information displayed on the department's registry.
(d) With respect to purported charitable purposes, a platform charity that performs, permits, or otherwise enables solicitation activities shall, before a person can complete a donation or select or change a recipient charitable organization, provide conspicuous disclosures that reduce the likelihood of deception, confusion, or misunderstanding, including:
(1) A statement that donations are made to the charitable fundraising platform, platform charity, recipient charitable organization, or person engaging in peer- to-peer charitable fundraising, whichever is applicable;
(2) A statement that a recipient charitable organization may not receive donations or grants or recommended donations, with an explanation identifying the most pertinent reasons that a recipient charitable organization may not receive the funds; provided that the explanation of the most pertinent reasons that a recipient charitable organization may not receive the funds may be provided through a conspicuous hyperlink, so long as the disclosure is conspicuous when the hyperlink is selected; provided further that this paragraph shall not apply when there are no circumstances under which a recipient charitable organization may not receive the funds;
(3) The maximum length of time it will take to send the donation or a grant of the recommended donation to a recipient charitable organization with an explanation of the time needed, unless the donation is sent contemporaneously to a recipient charitable organization after the donation is made; provided that the explanation as to the maximum length of time may be provided through a conspicuous hyperlink, so long as the disclosure is conspicuous when the hyperlink is selected;
(4) The fees or any other amounts that will be deducted from or added to the donation or a grant of the recommended donation and that are charged or retained by the charitable fundraising platform, platform charity, or any other partnering vendor, other than any applicable digital payment processing fees; and
(5) A statement as to the tax deductibility of the donation.
(e) Each platform charity that solicits, permits, or otherwise enables solicitations shall obtain the written consent of a recipient charitable organization before using the recipient charitable organization's name in a solicitation for a purported charitable purpose. Written consent shall be provided directly to the platform charity or may be provided to a platform charity by one authorized officer, director, trustee, or other duly authorized representative of the recipient charitable organization and may apply to multiple affiliated charitable fundraising platforms expressly identified in the agreement providing consent.
(f) After a donor contributes donations and with respect to purported charitable purposes, the platform charity shall promptly provide a tax donation receipt to the donor in a manner provided by section 170(f)(8) of the Internal Revenue Code of 1986, as amended.
(g) The platform charity shall not divert or otherwise misuse any donations made for purported charitable purposes that the platform charity receives through solicitation on the charitable fundraising platform and shall hold the donations in a separate account or accounts from other funds belonging to the platform charity. The platform charity shall promptly ensure that donations and grants of recommended donations are sent to the recipient charitable organizations with an accounting of any fees assessed for processing the funds, and in accordance with any rules adopted by the department pursuant to chapter 91.
(h) If a platform charity enters into any contract with a vendor to solicit, receive, control, process, distribute, and otherwise account for donations on the charitable fundraising platform, the contract shall be available for inspection by the department.
(i) As used in this section, "good standing" means that a platform charity, recipient charitable organization, or other charitable organization is not prohibited from soliciting or operating in the State by the department."
SECTION 3. Section 467B-1, Hawaii Revised Statutes, is amended as follows:
1. By amending the definition of "commercial co-venture" to read:
""Commercial co-venturer" means a person who, for profit, is regularly and primarily engaged in trade or commerce other than in connection with soliciting for charitable organizations or charitable purposes, and who conducts charitable sales promotions. A person who meets the definitions of "commercial co-venturer" and "charitable fundraising platform" shall be considered a commercial co-venturer when the acts of solicitation through an internet website, service, or other platform to persons in this State are for six or fewer recipient charitable organizations per calendar year, and the commercial co-venturer complies with section 467B-5.5."
2. By amending the definition of "owner" to read:
""Owner"
means any person who has a direct or indirect interest in any professional
fundraising counsel[,] or professional solicitor[, charitable
fundraising platform, or platform charity]."
3. By amending the definition of "platform charity" to read:
""Platform charity" means a charitable organization that facilitates acts of solicitation on a charitable fundraising platform, which includes either of the following and any similar activity:
(1) [Solicits]
Soliciting donations through a charitable fundraising platform for
itself from donors who use the charitable fundraising platform with the implied
or express representation that the platform charity may grant donations to
recipient charitable organizations; or
(2) [Grants]
Granting funds to recipient charitable organizations based on purchases
made or other activity performed by persons who use a charitable fundraising
platform.
"Platform charity" does not include a sponsoring organization of donor advised funds that solicits donors to open donor advised fund accounts or similar accounts, receives recommendations from donors on charitable organizations that may receive grants of funds previously contributed to the sponsoring organization for a donor's donor advised fund account, and the sponsoring organization does not list or reference by name one or more recipient charitable organizations for solicitation purposes on its platform for persons who do not have advisory privileges with respect to the granting of funds in a donor advised fund of the sponsoring organization. A person who meets the definitions of "platform charity" and "charitable fundraising platform" shall be deemed a charitable fundraising platform."
SECTION 4. Section 467B-1.5, Hawaii Revised Statutes, is amended to read as follows:
"§467B-1.5 Professional
solicitors[,] and charitable fundraising platforms[, platform
charities]; required disclosures. (a)
Every professional solicitor, charitable fundraising platform, [platform
charity,] and every employee or agent thereof, who solicits contributions
from a prospective donor or contributor in this State shall at the outset of
any oral or written request for a contribution:
(1) Identify themselves by their true surname and first name, and the name of their employer or the contractor as the case may be, that is compensating the individual making the solicitation;
(2) Identify the name of the professional
solicitor[,] or charitable fundraising platform[, or platform
charity] registered with the department that has contracted with the
charitable organization to provide the solicitation services and, if the
individual is employed by a subcontractor, the name of the registered
subcontractor;
(3) Disclose that the person making the
oral or written request for a donation is being paid to make [such] the
solicitation and the name of the charitable organization on whose behalf the
person making the request is soliciting; and
(4) Disclose, orally and in writing, the
fact that a copy of the professional solicitor's[,] or charitable
fundraising platform's[, or platform charity's] registration data and
financial reports are available from the department.
(b) A professional solicitor[, charitable
fundraising platform, or platform charity] who makes an oral solicitation
by telephone, door-to-door, or otherwise, [prior to] before
collecting or attempting to collect any contribution, shall provide a written
confirmation of the expected contribution and clearly disclose that the
contribution is not tax-deductible, if applicable, or, if the professional
solicitor[, charitable fundraising platform, or platform charity]
maintains that the contribution is tax-deductible in whole or in part, the
portion of the contribution that the professional solicitor[, charitable
fundraising platform, or platform charity] maintains is
tax-deductible. The written confirmation
shall also conspicuously disclose the name and current address of the
registered professional solicitor[, charitable fundraising platform, or
platform charity]."
SECTION 5. Section 467B-2.3, Hawaii Revised Statutes, is amended to read as follows:
"[[]§467B-2.3[]] Charitable fundraising platforms[; platform charities]. (a) [Each charitable fundraising platform
shall be subject to the department's supervision for activities regulated by
this section.] Before soliciting,
permitting, or otherwise enabling any solicitations for purported charitable
purposes, a charitable fundraising platform shall register with the department
on a form or in a manner as provided by the department. [Registrations under this section shall be
subject to an annual report and an annual renewal fee imposed by the
department. Fee revenues from this
section shall be deposited into the solicitation of funds for charitable
purposes special fund.
(b) A platform charity shall be subject to the
department's supervision. The platform
charity shall register with the department as a platform charity before
conducting activities regulated by this section.
(c) Each charitable fundraising platform and
platform charity shall file periodic reports with the department on a form
provided by the department. Reports
shall be filed pursuant to section 467B-12.] The registration statement shall contain
the information set forth in subsection (b).
The registration under this section shall be accompanied by a fee in the
amount of $250, or in the amount and with any additional sums as may be
prescribed by the attorney general.
Renewal registration statements shall be filed with the department on or
before July 1 of each calendar year by each charitable fundraising
platform. The renewal statement shall
contain the information set forth in subsection (b). A renewal fee of $250, or in any amount and
with any additional sums as may be prescribed by the attorney general, shall
accompany the renewal statement. If a
renewal registration required under this subsection is not filed, unless it is
shown that the failure is due to reasonable cause, a fine of $20 shall be imposed
for each day during which the violation continues; provided that the total
amount imposed under this subsection shall not exceed $1,000.
(b) Each registration and renewal registration report shall:
(1) Enable the department to ascertain whether charitable funds have been properly solicited, received, held, controlled, or distributed;
(2) Provide information on the number of donations made, amount raised, length of time for distributing donations or grants of recommended donations, fees charged by or through a charitable fundraising platform or platform charity, and names of recipient charitable organizations or other charitable organizations that were sent or have not yet been sent donations or grants of recommended donations; and
(3) Protect from disclosure any personally identifiable information of donors or other users of the charitable fundraising platform.
[(d) No platform charity shall facilitate acts of
solicitation on a charitable fundraising platform unless the platform charity
is in good standing.
(e)]
(c) A charitable fundraising
platform [or platform charity] shall only solicit, permit, or otherwise
enable solicitations, or receive, control, or distribute funds from donations
for purported charitable purposes for recipient charitable organizations or
other charitable organizations in good standing. To determine good standing of a recipient
charitable organization or other charitable organization, a charitable
fundraising platform [or platform charity] may rely on [electronic
lists periodically published by the Internal Revenue Service, department of
taxation, or department.] the department's registry.
[(f)]
(d) With respect to purported
charitable purposes, a charitable fundraising platform [or platform charity]
that performs, permits, or otherwise enables solicitation activities shall,
before a person can complete a donation or select or change a recipient
charitable organization, provide conspicuous disclosures that reduce the
likelihood of deception, confusion, or misunderstanding, including:
(1) A statement that donations are made to the charitable fundraising platform, platform charity, recipient charitable organization, or person engaging in peer-to-peer charitable fundraising, whichever is applicable;
(2) A
statement that a recipient charitable organization may not receive donations or
grants or recommended donations, with an explanation identifying the most
pertinent reasons [under which] that a recipient charitable
organization may not receive the funds; provided that the explanation [as to
the maximum length of time] of the most pertinent reasons that a
recipient charitable organization may not receive the funds may be provided
through a conspicuous hyperlink, so long as the disclosure is conspicuous when
the hyperlink is selected; provided further that this paragraph shall not apply
when there are no circumstances under which a recipient charitable organization
may not receive the funds;
(3) The maximum length of time it will take to send the donation or a grant of the recommended donation to a recipient charitable organization with an explanation of the time needed, unless the donation is sent contemporaneously to a recipient charitable organization after the donation is made; provided that the explanation as to the maximum length of time may be provided through a conspicuous hyperlink, so long as the disclosure is conspicuous when the hyperlink is selected;
(4) The fees or any other amounts that will be deducted from or added to the donation or a grant of the recommended donation and that are charged or retained by the charitable fundraising platform, platform charity, or any other partnering vendor, other than any applicable digital payment processing fees; and
(5) A statement as to the tax deductibility of the donation.
[(g)]
(e) Each charitable fundraising
platform [or platform charity] that solicits, permits, or otherwise
enables solicitations shall obtain the written consent of a recipient
charitable organization before using the recipient charitable organization's
name in a solicitation for a purported charitable purpose. Written consent shall be provided directly to
the charitable fundraising platform [or platform charity], or may be
provided to a charitable fundraising platform [or platform charity] by
one authorized officer, director, trustee, or other duly authorized
representative of the recipient charitable organization and may apply to
multiple affiliated charitable fundraising platforms expressly identified in
the agreement providing consent.
[(h)]
(f) After a donor contributes
donations and with respect to purported charitable purposes, the charitable
fundraising platform [or platform charity] shall promptly provide a tax
donation receipt to the donor in a [format determined by the department.]
manner provided by section 170(f)(8) of the Internal Revenue Code of 1986,
as amended.
[(i)]
(g) The charitable fundraising
platform [or platform charity] shall not divert or otherwise misuse any
donations made for purported charitable purposes that the charitable
fundraising platform [or platform charity] receives through solicitation
on the charitable fundraising platform, and shall hold the donations in a
separate account or accounts from other funds belonging to the charitable
fundraising platform [or platform charity]. The charitable fundraising platform [or
platform charity] shall promptly ensure that donations and grants of
recommended donations are sent to the recipient charitable organizations with
an accounting of any fees assessed for processing the funds, and in accordance
with any rules adopted by the department pursuant to chapter 91. A platform charity shall be [vicariously]
liable for [a charitable fundraising platform's] its misuse of
funds[, and vice versa]. A charitable
fundraising platform shall maintain and operate a process for complaints about
any fundraising activity regulated by this chapter and shall investigate and
make findings on complaints, and, at the request of the department, shall
report its findings to the department along with its actions for resolution,
including any full refunds of contributions.
[(j)]
(h) If a charitable fundraising
platform [or platform charity] enters into any contract with a vendor to
solicit, receive, control, process, distribute, and otherwise account for
donations on the charitable fundraising platform, the contract shall be
available for inspection by the department.
(i) The attorney general may require that registration and renewal registration and contracts be filed with the department electronically and may require the use of electronic signatures.
[(k)] (j) As used in this section, "good
standing" means that a platform charity, recipient charitable
organization, or other charitable [organization's tax-exempt status has not
been revoked by the Internal Revenue Service or] organization is not
prohibited from soliciting or operating in the [state] State by
the department."
SECTION 6. Section 467B-2.5, Hawaii Revised Statutes, is amended to read as follows:
"§467B-2.5
Professional solicitor[, charitable fundraising platform, and
platform charity] financial reports; contribution account. (a) A
professional solicitor[, charitable
fundraising platform, or platform charity] shall file with
the attorney general a financial report for
any charitable solicitation campaign, including
gross revenue from Hawaii donors and
national gross revenue and an itemization of all expenses
incurred on a form prescribed by the
attorney general no more than ninety days after the end of the solicitation
campaign and, for solicitation campaigns lasting more than one year, within
ninety days after each anniversary of the commencement of the solicitation
campaign and within ninety days after the end of the solicitation campaign.
(b) The attorney general may require
the financial report required by subsection (a) to be submitted electronically and may require the use of electronic signatures. This report shall be signed by the
professional solicitor, [charitable fundraising platform, platform charity,]
or [by] an authorized officer or agent of the professional solicitor[,
charitable fundraising platform, or platform charity] who shall certify
that the statements therein are true and correct to the best of the
solicitor's, officer's, or agent's knowledge subject to penalties imposed by
section 710-1063. If a financial report
required under this section is not filed in a timely manner, taking into
account any extension of time for filing, unless it is shown that the failure
is due to reasonable cause, an initial late filing fee of $100 shall be
imposed, and an additional late filing fee of $20 per day shall be imposed, for
each day during which the violation continues; provided that the total fee
amount imposed under this subsection shall not exceed $1,000. The attorney general may waive all or part of the
late filing fee imposed by this subsection if there is a reasonable cause for
the failure to timely file. The
professional solicitor[, charitable fundraising platform, or
platform charity] shall provide a copy of
the financial report to the charitable organization to which the financial
report pertains within ten days of its
submission of the report to
the attorney general.
(c) A
professional solicitor[, charitable
fundraising platform, or platform charity] shall maintain during each solicitation campaign and for
[not] no less than three
years after the completion of that campaign the following records,
which shall be available for inspection
upon demand by the attorney general:
(1) The date and amount of each contribution received and the name and address of each contributor;
(2) The name and residence of each employee, agent, or other person involved in the solicitation;
(3) Records of all revenue received and expenses incurred in the course of the solicitation campaign; and
(4) The location and
account number of each bank or
other financial institution account in which the professional solicitor[, charitable
fundraising platform, or platform charity] has deposited revenue from the solicitation campaign.
(d)
Any material change in any information filed with the attorney general
pursuant to this section shall be reported in writing by the professional
solicitor[, charitable fundraising platform, or platform charity] to the
attorney general [not] no more than seven days after the change
occurs.
(e)
Each contribution in the control or custody of the professional
solicitor[, charitable fundraising platform, or platform charity] in its
entirety and within five days of its receipt, shall be deposited in an account
at a bank or other federally insured financial institution, which shall be in
the name of the charitable organization.
The charitable organization shall maintain and administer the account
and shall have sole control of all withdrawals."
SECTION 7. Section 467B-9, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d)
No professional solicitor, charitable fundraising platform, or platform
charity, and no agent, employee, independent contractor, or other person acting
on behalf of the professional solicitor, charitable fundraising platform, or
platform charity, shall solicit in the name of or on behalf of any charitable
organization unless[:] the charitable fundraising platform or
platform charity has obtained written consent pursuant to section 467B-2.3(g)
or:
(1) The
professional solicitor[, charitable fundraising platform, or platform
charity] has obtained the written authorization of two officers of the
organization, which authorization shall bear the signature of the professional
solicitor[, charitable fundraising platform, or platform charity] and
the officers of the charitable organization and shall expressly state on its
face the period for which it is valid, which shall not exceed one year from the
date of issuance, and has filed a copy of the written authorization with the
attorney general prior to the solicitation; and
(2) The
professional solicitor[, charitable fundraising platform, or platform
charity] and any person who, for compensation, acts as an agent, employee,
independent contractor, or otherwise on behalf of the professional solicitor, [charitable
fundraising platform, or platform charity,] carries a copy of the
authorization while conducting solicitations, and exhibits it on request to
persons solicited or police officers or agents of the department."
SECTION 8. Section 467B-12, Hawaii Revised Statutes, is amended to read as follows:
"§467B-12 Filing requirements for professional
fundraising counsel[,] and professional solicitors[, charitable fundraising platforms, and
platform charities].
(a) Every professional fundraising counsel[,]
or professional solicitor, [charitable fundraising platform, or
platform charity, prior to] before any solicitation, shall register
with the department. The
registration statement shall contain the information set forth in subsection
(e). The registration statement shall be
accompanied by a fee in the amount of $250, or in the amount and with any
additional sums as may be prescribed by the attorney general. Renewal registration statements shall be
filed with the department on or before July 1 of each calendar year by each
professional fundraising counsel[,] or professional solicitor[,
charitable fundraising platform, or platform charity]. The renewal statement shall contain the
information set forth in subsection (e).
A renewal fee of $250, or in any amount and with any additional sums as
may be prescribed by the attorney general, shall accompany the renewal
statement. If a renewal
registration required under this section is not filed, unless it is shown that
the failure is due to reasonable cause, a fine of $20 shall be imposed for each
day during which the violation continues; provided that the total amount
imposed under this subsection shall not exceed $1,000.
(b) Each professional solicitor, [charitable
fundraising platform, or platform charity,] at the time of
each filing, shall file with and have approved by the attorney general a bond
in which the applicant is the principal obligor in the penal sum of $25,000
issued with good and sufficient surety or sureties approved by the attorney
general and which shall remain in effect for one year. The bond shall inure to the benefit of the
State, conditioned that the applicant, its officers, directors, employees,
agents, servants, and independent contractors shall not violate this
chapter. A partnership or corporation
that is a professional solicitor[, charitable fundraising
platform, or platform charity] may file a consolidated bond on
behalf of all its members, officers, and employees.
(c) The attorney general shall examine each
registration statement and supporting document filed by a professional
fundraising counsel[,] or professional solicitor[, charitable
fundraising platform, or platform charity] and shall
determine whether the registration requirements are satisfied. If the attorney general determines that the
registration requirements are not satisfied, the attorney general shall notify
the professional fundraising counsel[,] or professional solicitor[,
charitable fundraising platform, or platform charity]
in writing within fifteen business days of its receipt of the registration
statement; otherwise the registration statement [is] shall be
deemed to be approved. Within seven
business days after receipt of a notification that the registration
requirements are not satisfied, the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] may request a hearing.
(d) The attorney general may require that registration and renewal registration, surety bonds, and contracts be filed with the department electronically and may require the use of electronic signatures.
(e) Each registration and renewal registration shall contain:
(1) The names and addresses of all owners,
officers, and directors of a professional fundraising counsel [or charitable
fundraising platform], and the names and addresses of all owners, officers,
and directors of a professional solicitor [or platform charity];
(2) A statement concerning the corporate form of the registrant, whether corporation, limited liability corporation, partnership, or individual;
(3) A statement whether the registrant has an office in Hawaii and the name and phone number of the person in charge of the office;
(4) The names and addresses of any individuals supervising any solicitation activity;
(5) A statement whether the [[]registrant[]]
has entered into a consent agreement with, or been disciplined by or subject to
administrative action by, another governmental agency;
(6) A statement whether any officer, director, or any person with a controlling interest in the registrant has ever been convicted of a felony or a misdemeanor involving dishonesty in the solicitation for a charitable purpose;
(7) The date that the registrant began soliciting Hawaii residents on behalf of a charitable organization or providing professional fundraising counsel services; and
(8) Whether any owners, directors, or officers are related to:
(A) Any other officers, directors, owners, or employees of the registrant;
(B) Any officer, director, trustee, or employee of a charitable organization under contract with the registrant; and
(C) Any vendor or supplier providing goods or services to a charitable organization under contract with the registrant."
SECTION 9. Section 467B-12.5, Hawaii Revised Statutes, is amended by amending subsections (a), (b), and (c) to read as follows:
"(a) There shall be a written
contract between a charitable organization and a professional fundraising
counsel[,] or professional solicitor[, charitable
fundraising platform, or platform charity] that
shall be filed by the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] with the attorney general
at least ten business days [prior to] before the performance by
the professional fundraising counsel[,] or professional solicitor[,
charitable fundraising platform, or platform charity]
of any service. No solicitation or
service pursuant to the contract shall begin before the contract is filed with
the attorney general. The contract shall
be signed by two authorized officials of the charitable organization, one of
whom shall be a member of the organization's governing body, and the authorized
contracting officer for the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity]. The contract shall contain all of the
following provisions:
(1) The legal name and address of the charitable organization;
(2) A statement of the charitable purpose for which the solicitation campaign is being conducted;
(3) A statement of the
respective obligations of the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] and the charitable
organization;
(4) A statement of the guaranteed minimum percentage of the gross receipts from contributions that will be remitted to or retained by the charitable organization, if any, or, if the solicitation involves the sale of goods, services, or tickets to a fundraising event, the percentage of the purchase price that will be remitted to the charitable organization, if any. The stated percentage shall exclude any amount that the charitable organization is to pay as fundraising costs;
(5) Information concerning the compensation of the professional solicitor and professional fundraising counsel as follows:
(A) If the
compensation of the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] is contingent upon the
number of contributions or the amount of revenue received, a statement shall be
included specifying the percentage of the gross revenue that is the basis for
that compensation. The stated percentage
shall include any amount that the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] is to be reimbursed for
fundraising costs;
(B) If the
compensation of the professional solicitor[, charitable
fundraising platform, or platform charity] is not
contingent upon the number of contributions or amount of revenue received from
the solicitation campaign, the compensation shall be expressed as a reasonable
estimate of the percentage of the gross revenue, and the contract shall clearly
disclose the assumptions upon which the estimate is based. The stated assumptions shall be based upon
all of the relevant facts known to the professional solicitor regarding the
solicitation to be conducted by the professional solicitor; or
(C) If the
compensation of the professional fundraising counsel[, charitable
fundraising platform, or platform charity] is not
contingent on the number of contributions or amount of revenue received from
the solicitation campaign, the compensation shall be stated in a dollar amount;
(6) The effective and termination dates of the contract or, if the contract does not have a set termination date, a clause allowing either party a reasonable period to terminate the contract or notify the other party if either party chooses not to renew. The contract shall also contain the date services will commence with respect to solicitation in this State of contributions for a charitable organization;
(7) In the case of a
professional fundraising counsel, [charitable fundraising platform,
or platform charity,] a statement that the
professional fundraising counsel will not at any time have custody or control
of contributions, as applicable;
(8) A statement that the charitable organization exercises control and approval over the content and volume of any solicitation; and
(9) Any other information required by the rules of the attorney general.
(b) No professional fundraising counsel[,]
or professional solicitor[, charitable fundraising platform, or
platform charity] shall contract with a charitable organization unless the
professional fundraising counsel[,] or professional solicitor[,
charitable fundraising platform, or platform charity] is registered with
the department. A contract with an
unregistered professional fundraising counsel[,] or professional
solicitor[, charitable fundraising platform, or platform charity] shall
be voidable at the option of the charitable organization.
(c) Whenever a charitable organization
contracts with a professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or platform
charity,] the charitable organization shall have the right to cancel the
contract without cost, penalty, or liability, for a period of ten days
following the date on which that contract is executed. Any provision in the contract that is
intended to waive this right of cancellation shall be void and unenforceable."
SECTION 10. Act 205, Session Laws of Hawaii 2024, is amended by amending section 16 to read as follows:
"SECTION
16. This Act shall take effect on [January]
July 1, 2026."
SECTION 11. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 12. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 13. This Act shall take effect on July 1, 2050; provided that section 10 shall take effect on July 1, 2025.
Report Title:
AG; Solicitations of Funds from the Public; Donations; Charitable Funding Platforms; Platform Charities; Registration
Description:
Amends Act 205, SLH 2024, to clarify standards and safeguards in online crowdfunding, including creating separate registration, reporting, and fee requirements that are specific to platform charities and charitable fundraising platforms. Extends the effective date of Act 205 to July 1, 2026. Effective 7/1/2050. (HD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
|
THE SENATE |
S.B. NO. |
1048 |
|
THIRTY-THIRD LEGISLATURE, 2025 |
S.D. 2 |
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|
STATE OF HAWAII |
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|
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||
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A BILL FOR AN ACT
RELATING TO SOLICITATION OF FUNDS FROM THE PUBLIC.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
The legislature further finds that Act 205's well-intended language creates undue burdens on charitable fundraising platforms and, more importantly, potentially hampers and inhibits the ability of charitable organizations to respond and fundraise, especially in times of emergency and need.
The legislature additionally finds that it would be prudent to amend Act 205 before its scheduled effective date of January 1, 2026, in a manner that would still achieve the important purposes of public protection, donor security, and transparency, but not overburden charitable fundraising platforms, charitable organizations, and the department of the attorney general, who oversees these activities.
Accordingly, the purpose of this Act is to amend the language in Act 205 to clarify existing standards and safeguards in online crowdfunding.
SECTION 2. Section 467B-2.3, Hawaii Revised Statutes, is amended as follows:
1. By amending its title and subsections (a) and (b) to read:
"[[]§467B-2.3[]] Charitable
fundraising platforms; platform charities. (a) Each charitable fundraising platform shall be
subject to the department's supervision for activities regulated by this
section. Before soliciting, permitting,
or otherwise enabling any solicitations for purported charitable purposes, a
charitable fundraising platform shall register with the department on a form or
in a manner as provided by the
department. Registrations under this
section shall be subject to an annual report and an annual renewal fee imposed
by the department. Fee revenues from
this section shall be deposited into the solicitation of funds for charitable
purposes special fund.
(b) A platform charity shall be subject to the
department's supervision. The platform
charity shall register with the department as a platform charity before
conducting activities regulated by this section[.] and shall
only solicit donations through a registered charitable fundraising platform."
2. By amending subsection (e) to read:
"(e) A charitable fundraising platform or platform
charity shall only solicit, permit, or otherwise enable solicitations, or
receive, control, or distribute funds from donations for purported charitable
purposes for recipient charitable organizations or other charitable
organizations in good standing. To
determine good standing of a recipient charitable organization or other
charitable organization, a charitable fundraising platform [or platform
charity] may rely on [electronic lists periodically published by the
Internal Revenue Service, department of taxation, or department.] the
department's registry."
3. By amending subsection (i) to read:
"(i) The charitable fundraising platform or
platform charity shall not divert or otherwise misuse any donations made for
purported charitable purposes that the charitable fundraising platform or
platform charity receives through solicitation on the charitable fundraising
platform, and shall hold the donations in a separate account or accounts from
other funds belonging to the charitable fundraising platform or platform
charity. The charitable fundraising
platform or platform charity shall promptly ensure that donations and grants of
recommended donations are sent to the recipient charitable organizations with
an accounting of any fees assessed for processing the funds, and in accordance
with any rules adopted by the department pursuant to chapter 91. A platform charity shall be [vicariously] liable for [a charitable
fundraising platform's] its
misuse of funds[, and vice versa]. A charitable fundraising platform shall
maintain and operate a process for complaints about any fundraising activity
regulated by this chapter and shall investigate and make findings on
complaints, and, at the request of the department, shall report its findings to
the department along with its actions for resolution, including any full
refunds of contributions."
SECTION 3. Section 467B-2.5, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c) A professional solicitor, charitable fundraising platform, or platform charity shall maintain during each solicitation campaign and for not less than three years after the completion of that campaign the following records, which shall be available for inspection upon demand by the attorney general:
(1) The date and amount of each contribution received and the name and address of each contributor; provided that an electronic mail address and internet protocol address shall be sufficient for any contribution received over the Internet;
(2) The name and residence of each employee, agent, or other person involved in the solicitation;
(3) Records of all revenue received and expenses incurred in the course of the solicitation campaign; and
(4) The location and account number of each bank or other financial institution account in which the professional solicitor, charitable fundraising platform, or platform charity has deposited revenue from the solicitation campaign."
SECTION 4. Section 467B-9, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d)
No professional solicitor, charitable fundraising platform, or platform
charity, and no agent, employee, independent contractor, or other person acting
on behalf of the professional solicitor, charitable fundraising platform, or
platform charity, shall solicit in the name of or on behalf of any charitable
organization unless[:] the charitable fundraising platform or
platform charity has obtained written consent pursuant to section 467B-2.3(g)
or:
(1) The
professional solicitor[, charitable fundraising platform, or platform
charity] has obtained the written authorization of two officers of the
organization, which authorization shall bear the signature of the professional solicitor[,
charitable fundraising platform, or platform charity] and the officers of
the charitable organization and shall expressly state on its face the period
for which it is valid, which shall not exceed one year from the date of
issuance, and has filed a copy of the written authorization with the attorney
general prior to the solicitation; and
(2) The
professional solicitor[, charitable fundraising platform, or platform
charity] and any person who, for compensation, acts as an agent, employee,
independent contractor, or otherwise on behalf of the professional solicitor, [charitable
fundraising platform, or platform charity,] carries a copy of the
authorization while conducting solicitations, and exhibits it on request to
persons solicited or police officers or agents of the department."
SECTION 5. Section 467B-12, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b)
Each professional solicitor, [charitable fundraising platform, or
platform charity,] at the time of each filing, shall file with and have
approved by the attorney general a bond in which the applicant is the principal
obligor in the penal sum of $25,000 issued with good and sufficient surety or
sureties approved by the attorney general and which shall remain in effect for
one year. The bond shall inure to the
benefit of the State, conditioned that the applicant, its officers, directors,
employees, agents, servants, and independent contractors shall not violate this
chapter. A partnership or corporation
that is a professional solicitor[, charitable fundraising platform, or
platform charity] may file a consolidated bond on behalf of all its
members, officers, and employees."
SECTION 6. Section 467B-12.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) There shall be a written contract between a
charitable organization and a professional fundraising counsel, professional
solicitor, charitable fundraising platform, or platform charity
that shall be filed by the professional fundraising counsel, professional
solicitor, charitable fundraising platform, or platform charity
with the attorney general. In the
case of a professional fundraising counsel or professional solicitor, a written
contract shall be filed at least ten business days [prior to] before
the performance by the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] of any service. No solicitation or service pursuant to the
contract shall begin before the contract is filed with the attorney
general. The contract shall be signed by
two authorized officials of the charitable organization, one of whom shall be a
member of the organization's governing body, and the authorized contracting
officer for the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity]. In the case of a charitable fundraising
platform or platform charity, a written contract shall be filed with the
attorney general before any fundraising activity. The contract shall contain all of the
following provisions:
(1) The legal name and address of the charitable organization;
(2) A statement of the charitable purpose for which the solicitation campaign is being conducted;
(3) A statement of the respective obligations of the professional fundraising counsel, professional solicitor, charitable fundraising platform, or platform charity, and the charitable organization;
(4) A statement of the guaranteed minimum percentage of the gross receipts from contributions that will be remitted to or retained by the charitable organization, if any, or, if the solicitation involves the sale of goods, services, or tickets to a fundraising event, the percentage of the purchase price that will be remitted to the charitable organization, if any. The stated percentage shall exclude any amount that the charitable organization is to pay as fundraising costs;
(5) Information concerning the compensation of the professional solicitor and professional fundraising counsel as follows:
(A) If the compensation of the professional fundraising counsel, professional solicitor, charitable fundraising platform, or platform charity is contingent upon the number of contributions or the amount of revenue received, a statement shall be included specifying the percentage of the gross revenue that is the basis for that compensation. The stated percentage shall include any amount that the professional fundraising counsel, professional solicitor, charitable fundraising platform, or platform charity is to be reimbursed for fundraising costs;
(B) If the compensation of the professional solicitor, charitable fundraising platform, or platform charity is not contingent upon the number of contributions or amount of revenue received from the solicitation campaign, the compensation shall be expressed as a reasonable estimate of the percentage of the gross revenue, and the contract shall clearly disclose the assumptions upon which the estimate is based. The stated assumptions shall be based upon all of the relevant facts known to the professional solicitor regarding the solicitation to be conducted by the professional solicitor; or
(C) If the compensation of the professional fundraising counsel, charitable fundraising platform, or platform charity is not contingent on the number of contributions or amount of revenue received from the solicitation campaign, the compensation shall be stated in a dollar amount;
(6) The effective and termination dates of the contract or, if the contract does not have a set termination date, a clause allowing either party a reasonable period to terminate the contract or notify the other party if either party chooses not to renew. The contract shall also contain the date services will commence with respect to solicitation in this State of contributions for a charitable organization;
(7) In the case of a professional fundraising counsel, charitable fundraising platform, or platform charity, a statement that the professional fundraising counsel will not at any time have custody or control of contributions, as applicable;
(8) A statement that the charitable organization exercises control and approval over the content and volume of any solicitation; and
(9) Any other information required by the rules of the attorney general."
SECTION 7. Act 205, Session Laws of Hawaii 2024, is amended by amending section 16 to read as follows:
"SECTION
16. This Act shall take effect on [January
1,] June 30, 2026."
SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 9. This Act shall take effect on July 1, 2050; provided that section 7 shall take effect on June 29, 2026.
Report Title:
Department of the Attorney General; Solicitations of Funds from the Public; Donations; Charitable Funding Platforms; Platform Charities; Registration
Description:
Amends Act 205, Session Laws of Hawaii 2024, to clarify standards and safeguards in online crowdfunding. Effective 7/1/2050. (SD2)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
|
THE SENATE |
S.B. NO. |
1048 |
|
THIRTY-THIRD LEGISLATURE, 2025 |
S.D. 1 |
|
|
STATE OF HAWAII |
|
|
|
|
|
|
|
|
||
|
|
||
A BILL FOR AN ACT
RELATING TO SOLICITATION OF FUNDS FROM THE PUBLIC.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
The legislature further finds that Act 205's well-intended language creates undue burdens on charitable fundraising platforms and, more importantly, potentially hampers and inhibits the ability of charitable organizations to respond and fundraise, especially in times of emergency and need.
The legislature additionally finds that it would be prudent to amend Act 205 before its scheduled effective date of January 1, 2026, in a manner that would still achieve the important purposes of public protection, donor security, and transparency, but not overburden charitable fundraising platforms, charitable organizations, and the department of the attorney general, who oversees these activities.
Accordingly, the purpose of this Act is to amend the language in Act 205 to clarify existing standards and safeguards in online crowdfunding.
SECTION 2. Section 467B-2.3, Hawaii Revised Statutes, is amended as follows:
1. By amending its title and subsections (a) and (b) to read:
"[[]§467B-2.3[]] Charitable
fundraising platforms; platform charities. (a) Each charitable fundraising platform shall be
subject to the department's supervision for activities regulated by this
section. Before soliciting, permitting,
or otherwise enabling any solicitations for purported charitable purposes, a
charitable fundraising platform shall register with the department on a form or
in a manner as provided by the
department. Registrations under this
section shall be subject to an annual report and an annual renewal fee imposed
by the department. Fee revenues from
this section shall be deposited into the solicitation of funds for charitable
purposes special fund.
(b) A platform charity shall be subject to the
department's supervision. The platform
charity shall register with the department as a platform charity before
conducting activities regulated by this section[.] and shall
only solicit donations through a registered charitable fundraising platform."
2. By amending subsections (d) and (e) to read:
"(d) No platform charity shall facilitate acts of solicitation on a charitable fundraising platform unless the platform charity is in good standing. If the department notifies a charitable organization that it is prohibited from soliciting or operating in the State, the department shall indicate whether the basis for the prohibition is due to a ministerial deficiency.
(e) A charitable fundraising platform or platform
charity shall only solicit, permit, or otherwise enable solicitations, or
receive, control, or distribute funds from donations for purported charitable
purposes for recipient charitable organizations or other charitable
organizations in good standing. To
determine good standing of a recipient charitable organization or other
charitable organization, a charitable fundraising platform [or platform
charity] may rely on [electronic lists periodically published by the
Internal Revenue Service, department of taxation, or department.] the
department's registry."
3. By amending subsection (i) to read:
"(i) The charitable fundraising platform or
platform charity shall not divert or otherwise misuse any donations made for
purported charitable purposes that the charitable fundraising platform or
platform charity receives through solicitation on the charitable fundraising
platform, and shall hold the donations in a separate account or accounts from
other funds belonging to the charitable fundraising platform or platform
charity. The charitable fundraising
platform or platform charity shall promptly ensure that donations and grants of
recommended donations are sent to the recipient charitable organizations with
an accounting of any fees assessed for processing the funds, and in accordance
with any rules adopted by the department pursuant to chapter 91. A platform charity shall be [vicariously] liable for [a charitable
fundraising platform's] its
misuse of funds[, and vice versa]. A charitable fundraising platform shall
maintain and operate a process for complaints about any fundraising activity
regulated by this chapter and shall investigate and make findings on
complaints, and, at the request of the department, shall report its findings to
the department along with its actions for resolution, including any full
refunds of contributions."
SECTION 3. Section 467B-2.5, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c) A professional solicitor, charitable fundraising platform, or platform charity shall maintain during each solicitation campaign and for not less than three years after the completion of that campaign the following records, which shall be available for inspection upon demand by the attorney general:
(1) The date and amount of each contribution received and the name and address of each contributor; provided that an electronic mail address and internet protocol address shall be sufficient for any contribution received over the Internet;
(2) The name and residence of each employee, agent, or other person involved in the solicitation;
(3) Records of all revenue received and expenses incurred in the course of the solicitation campaign; and
(4) The location and account number of each bank or other financial institution account in which the professional solicitor, charitable fundraising platform, or platform charity has deposited revenue from the solicitation campaign."
SECTION 4. Section 467B-9, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d)
No professional solicitor, charitable fundraising platform, or platform
charity, and no agent, employee, independent contractor, or other person acting
on behalf of the professional solicitor, charitable fundraising platform, or
platform charity, shall solicit in the name of or on behalf of any charitable
organization unless[:] the charitable fundraising platform or
platform charity has obtained written consent pursuant to section 467B-2.3(a)
or:
(1) The
professional solicitor[, charitable fundraising platform, or platform
charity] has obtained the written authorization of two officers of the
organization, which authorization shall bear the signature of the professional
solicitor[, charitable fundraising platform, or platform charity] and
the officers of the charitable organization and shall expressly state on its
face the period for which it is valid, which shall not exceed one year from the
date of issuance, and has filed a copy of the written authorization with the
attorney general prior to the solicitation; and
(2) The
professional solicitor[, charitable fundraising platform, or platform
charity] and any person who, for compensation, acts as an agent, employee,
independent contractor, or otherwise on behalf of the professional solicitor, [charitable
fundraising platform, or platform charity,] carries a copy of the
authorization while conducting solicitations, and exhibits it on request to
persons solicited or police officers or agents of the department."
SECTION 5. Section 467B-12, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b)
Each professional solicitor, [charitable fundraising platform, or
platform charity,] at the time of each filing, shall file with and have
approved by the attorney general a bond in which the applicant is the principal
obligor in the penal sum of $25,000 issued with good and sufficient surety or
sureties approved by the attorney general and which shall remain in effect for
one year. The bond shall inure to the
benefit of the State, conditioned that the applicant, its officers, directors,
employees, agents, servants, and independent contractors shall not violate this
chapter. A partnership or corporation
that is a professional solicitor[, charitable fundraising platform, or
platform charity] may file a consolidated bond on behalf of all its
members, officers, and employees."
SECTION 6. Section 467B-12.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) There shall be a written contract between a
charitable organization and a professional fundraising counsel, professional
solicitor, charitable fundraising platform, or platform charity
that shall be filed by the professional fundraising counsel, professional
solicitor, charitable fundraising platform, or platform charity
with the attorney general. In the
case of a professional fundraising counsel or professional solicitor, a written
contract shall be filed at least ten business days [prior to] before
the performance by the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] of any service. No solicitation or service pursuant to the
contract shall begin before the contract is filed with the attorney
general. The contract shall be signed by
two authorized officials of the charitable organization, one of whom shall be a
member of the organization's governing body, and the authorized contracting
officer for the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity]. In the case of a charitable fundraising
platform or platform charity, a written contract shall be filed with the
attorney general before any fundraising activity; provided that when a
recipient charitable organization has a contractual relationship with the
charitable fundraising platform to facilitate the transfer of funds using a
third-party disbursement intermediary, a written contract between a platform
charity and a recipient charitable organization shall not be required to be
filed unless ordered by the department.
The contract shall contain all of the following provisions:
(1) The legal name and address of the charitable organization;
(2) A statement of the charitable purpose for which the solicitation campaign is being conducted;
(3) A statement of the respective obligations of the professional fundraising counsel, professional solicitor, charitable fundraising platform, or platform charity, and the charitable organization;
(4) A statement of the guaranteed minimum percentage of the gross receipts from contributions that will be remitted to or retained by the charitable organization, if any, or, if the solicitation involves the sale of goods, services, or tickets to a fundraising event, the percentage of the purchase price that will be remitted to the charitable organization, if any. The stated percentage shall exclude any amount that the charitable organization is to pay as fundraising costs;
(5) Information concerning the compensation of the professional solicitor and professional fundraising counsel as follows:
(A) If the compensation of the professional fundraising counsel, professional solicitor, charitable fundraising platform, or platform charity is contingent upon the number of contributions or the amount of revenue received, a statement shall be included specifying the percentage of the gross revenue that is the basis for that compensation. The stated percentage shall include any amount that the professional fundraising counsel, professional solicitor, charitable fundraising platform, or platform charity is to be reimbursed for fundraising costs;
(B) If the compensation of the professional solicitor, charitable fundraising platform, or platform charity is not contingent upon the number of contributions or amount of revenue received from the solicitation campaign, the compensation shall be expressed as a reasonable estimate of the percentage of the gross revenue, and the contract shall clearly disclose the assumptions upon which the estimate is based. The stated assumptions shall be based upon all of the relevant facts known to the professional solicitor regarding the solicitation to be conducted by the professional solicitor; or
(C) If the compensation of the professional fundraising counsel, charitable fundraising platform, or platform charity is not contingent on the number of contributions or amount of revenue received from the solicitation campaign, the compensation shall be stated in a dollar amount;
(6) The effective and termination dates of the contract or, if the contract does not have a set termination date, a clause allowing either party a reasonable period to terminate the contract or notify the other party if either party chooses not to renew. The contract shall also contain the date services will commence with respect to solicitation in this State of contributions for a charitable organization;
(7) In the case of a professional fundraising counsel, charitable fundraising platform, or platform charity, a statement that the professional fundraising counsel will not at any time have custody or control of contributions, as applicable;
(8) A statement that the charitable organization exercises control and approval over the content and volume of any solicitation; and
(9) Any other information required by the rules of the attorney general."
SECTION 7. Act 205, Session Laws of Hawaii 2024, is amended by amending section 16 to read as follows:
"SECTION
16. This Act shall take effect on [January
1,] June 30, 2026."
SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 9. This Act shall take effect on July 1, 2050; provided that section 7 shall take effect on June 29, 2026.
Report Title:
Department of the Attorney General; Solicitations of Funds from the Public; Donations; Charitable Funding Platforms; Platform Charities; Registration
Description:
Amends Act 205, Session Laws of Hawaii 2024, to clarify standards and safeguards in online crowdfunding. Effective 7/1/2050. (SD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
|
THE SENATE |
S.B. NO. |
1048 |
|
THIRTY-THIRD LEGISLATURE, 2025 |
|
|
|
STATE OF HAWAII |
|
|
|
|
|
|
|
|
||
|
|
||
A BILL FOR AN ACT
relating to solicitation of funds from the public.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
The legislature further finds that Act 205's well-intended language creates undue burdens on charitable fundraising platforms and, more importantly, potentially hampers and inhibits the ability of charitable organizations to respond and fundraise, especially in times of emergency and need.
The legislature additionally finds that it would be prudent to amend Act 205 before its scheduled effective date of January 1, 2026, in a manner that would still achieve the important purposes of public protection, donor security, and transparency, but not overburden charitable fundraising platforms, charitable organizations, and the department of the attorney general, who oversees these activities.
Accordingly, the purpose of this Act is to amend the language in Act 205 to clarify existing standards and safeguards in online crowdfunding.
SECTION 2. Section 467B-2.3, Hawaii Revised Statutes, is amended to read as follows:
"[[]§467B-2.3[]] Charitable
fundraising platforms; platform charities. (a) Each charitable fundraising platform shall be
subject to the department's supervision for activities regulated by this
section. Before soliciting, permitting,
or otherwise enabling any solicitations for purported charitable purposes, a
charitable fundraising platform shall register with the department on a form or
in a manner as provided by the
department. Registrations under this
section shall be subject to an annual report and an annual renewal fee imposed
by the department. Fee revenues from this
section shall be deposited into the solicitation of funds for charitable
purposes special fund.
(b) A platform charity shall be subject to the
department's supervision. The platform
charity shall register with the department as a platform charity before
conducting activities regulated by this section[.] and shall
only solicit donations through a registered charitable fundraising platform.
(c) Each charitable fundraising platform and platform charity shall file periodic reports with the department on a form provided by the department. Reports shall be filed pursuant to section 467B-12. Each report shall:
(1) Enable the department to ascertain whether charitable funds have been properly solicited, received, held, controlled, or distributed;
(2) Provide information on the number of donations made, amount raised, length of time for distributing donations or grants of recommended donations, fees charged by or through a charitable fundraising platform or platform charity, and names of recipient charitable organizations or other charitable organizations that were sent or have not yet been sent donations or grants of recommended donations; and
(3) Protect from disclosure any personally identifiable information of donors or other users of the charitable fundraising platform.
(d) No platform charity shall facilitate acts of solicitation on a charitable fundraising platform unless the platform charity is in good standing. If the department notifies a charitable organization that it is prohibited from soliciting or operating in the State, the department shall indicate whether the basis for the prohibition is due to a ministerial deficiency.
(e) A charitable fundraising platform or platform
charity shall only solicit, permit, or otherwise enable solicitations, or
receive, control, or distribute funds from donations for purported charitable
purposes for recipient charitable organizations or other charitable
organizations in good standing. To
determine good standing of a recipient charitable organization or other
charitable organization, a charitable fundraising platform or platform charity
may rely on electronic lists periodically published by the Internal Revenue
Service, department of taxation, or department[.]; provided
that:
(1) If a recipient charitable organization is deemed not to be in good standing by the department due to a minor administrative or ministerial deficiency, and not due to its tax exempt status being revoked by the Internal Revenue Service, the charitable fundraising platform or platform charity may continue to solicit, permit, or otherwise enable solicitations, or receive, control, or distribute funds from donations for purported charitable purposes for the recipient charitable organization;
(2) Recipient charitable organizations or other charitable organizations deemed not to be in good standing by the department due to a ministerial deficiency, and not due to its tax exempt status being revoked by the Internal Revenue Service, shall take steps to achieve good standing or compliance to establish good standing in a manner as required by the department; and
(3) Recipient charities that continue to receive funds from donations for purported charitable purposes after being deemed to not be in good standing by the department, and fail to take steps to achieve good standing within a reasonable period, may be subject to penalties or fines as set forth in this chapter.
(f) With respect to purported charitable purposes, a charitable fundraising platform or platform charity that performs, permits, or otherwise enables solicitation activities shall, before a person can complete a donation or select or change a recipient charitable organization, provide conspicuous disclosures that reduce the likelihood of deception, confusion, or misunderstanding, including:
(1) A statement that donations are made to the charitable fundraising platform, platform charity, recipient charitable organization, or person engaging in peer-to-peer charitable fundraising, whichever is applicable;
(2) A statement that a recipient charitable organization may not receive donations or grants or recommended donations, with an explanation identifying the most pertinent reasons under which a recipient charitable organization may not receive the funds; provided that the explanation as to the maximum length of time may be provided through a conspicuous hyperlink, so long as the disclosure is conspicuous when the hyperlink is selected; provided further that this paragraph shall not apply when there are no circumstances under which a recipient charitable organization may not receive the funds;
(3) The maximum length of time it will take to send the donation or a grant of the recommended donation to a recipient charitable organization with an explanation of the time needed, unless the donation is sent contemporaneously to a recipient charitable organization after the donation is made; provided that the explanation as to the maximum length of time may be provided through a conspicuous hyperlink, so long as the disclosure is conspicuous when the hyperlink is selected;
(4) The fees or any other amounts that will be deducted from or added to the donation or a grant of the recommended donation and that are charged or retained by the charitable fundraising platform, platform charity, or any other partnering vendor, other than any applicable digital payment processing fees; and
(5) A statement as to the tax deductibility of the donation.
(g) Each charitable fundraising platform or platform charity that solicits, permits, or otherwise enables solicitations shall obtain the written consent of a recipient charitable organization before using the recipient charitable organization's name in a solicitation for a purported charitable purpose. Written consent shall be provided directly to the charitable fundraising platform or platform charity, or may be provided to a charitable fundraising platform or platform charity by one authorized officer, director, trustee, or other duly authorized representative of the recipient charitable organization and may apply to multiple affiliated charitable fundraising platforms expressly identified in the agreement providing consent.
(h) After a donor contributes donations and with respect to purported charitable purposes, the charitable fundraising platform or platform charity shall promptly provide a tax donation receipt to the donor in a format determined by the department.
(i) The charitable fundraising platform or
platform charity shall not divert or otherwise misuse any donations made for
purported charitable purposes that the charitable fundraising platform or
platform charity receives through solicitation on the charitable fundraising
platform, and shall hold the donations in a separate account or accounts from
other funds belonging to the charitable fundraising platform or platform
charity. The charitable fundraising
platform or platform charity shall promptly ensure that donations and grants of
recommended donations are sent to the recipient charitable organizations with
an accounting of any fees assessed for processing the funds, and in accordance
with any rules adopted by the department pursuant to chapter 91. A platform charity shall be [vicariously] liable for [a charitable
fundraising platform's] its
misuse of funds[, and vice versa]. A charitable fundraising platform shall
maintain and operate a process for complaints about any fundraising activity
regulated by this chapter and shall investigate and make findings on
complaints, and, at the request of the department, shall report its findings to
the department along with its actions for resolution, including any full
refunds of contributions.
(j) If a charitable fundraising platform or platform charity enters into any contract with a vendor to solicit, receive, control, process, distribute, and otherwise account for donations on the charitable fundraising platform, the contract shall be available for inspection by the department.
(k) Nothing in this chapter shall prohibit the department from entering into an agreement with any charitable fundraising platform to be relieved of any requirements under this chapter when the charitable fundraising platform properly demonstrates to the department that its standard operations and procedures achieves the same or similar purposes of transparency, reporting, monitoring, and accountability.
[(k)] (l) As used in this section, "good
standing" means that a platform charity, recipient charitable
organization, or other charitable organization's tax-exempt status has not been
revoked by the Internal Revenue Service or is not prohibited from soliciting or
operating in the state by the department."
SECTION 3. Section 467B-2.5, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c) A professional solicitor, charitable fundraising platform, or platform charity shall maintain during each solicitation campaign and for not less than three years after the completion of that campaign the following records, which shall be available for inspection upon demand by the attorney general:
(1) The date and amount of each contribution received and the name and address of each contributor; provided that an electronic mail address and internet protocol address shall be sufficient for any contribution received over the Internet;
(2) The name and residence of each employee, agent, or other person involved in the solicitation;
(3) Records of all revenue received and expenses incurred in the course of the solicitation campaign; and
(4) The location and account number of each bank or other financial institution account in which the professional solicitor, charitable fundraising platform, or platform charity has deposited revenue from the solicitation campaign."
SECTION 4. Section 467B-9, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d)
No professional solicitor, charitable fundraising platform, or platform
charity, and no agent, employee, independent contractor, or other person acting
on behalf of the professional solicitor, charitable fundraising platform, or
platform charity, shall solicit in the name of or on behalf of any charitable
organization unless[:] the charitable fundraising platform or
platform charity has obtained written consent pursuant to section 468B-2.3(a)
or:
(1) The
professional solicitor[, charitable fundraising platform, or platform
charity] has obtained the written authorization of two officers of the
organization, which authorization shall bear the signature of the professional
solicitor[, charitable fundraising platform, or platform charity] and
the officers of the charitable organization and shall expressly state on its
face the period for which it is valid, which shall not exceed one year from the
date of issuance, and has filed a copy of the written authorization with the
attorney general prior to the solicitation; and
(2) The
professional solicitor[, charitable fundraising platform, or platform
charity] and any person who, for compensation, acts as an agent, employee,
independent contractor, or otherwise on behalf of the professional solicitor, [charitable
fundraising platform, or platform charity,] carries a copy of the
authorization while conducting solicitations, and exhibits it on request to
persons solicited or police officers or agents of the department."
SECTION 5. Section 467B-12, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b)
Each professional solicitor, [charitable fundraising platform, or
platform charity,] at the time of each filing, shall file with and have
approved by the attorney general a bond in which the applicant is the principal
obligor in the penal sum of $25,000 issued with good and sufficient surety or
sureties approved by the attorney general and which shall remain in effect for
one year. The bond shall inure to the
benefit of the State, conditioned that the applicant, its officers, directors,
employees, agents, servants, and independent contractors shall not violate this
chapter. A partnership or corporation
that is a professional solicitor[, charitable fundraising platform, or
platform charity] may file a consolidated bond on behalf of all its
members, officers, and employees."
SECTION 6. Section 467B-12.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) There shall be a written contract between a
charitable organization and a professional fundraising counsel, professional
solicitor, charitable fundraising platform, or platform charity
that shall be filed by the professional fundraising counsel, professional
solicitor, charitable fundraising platform, or platform charity
with the attorney general. In the
case of a professional fundraising counsel or professional solicitor, a written
contract shall be filed at least ten business days [prior to] before
the performance by the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity] of any service. No solicitation or service pursuant to the
contract shall begin before the contract is filed with the attorney
general. The contract shall be signed by
two authorized officials of the charitable organization, one of whom shall be a
member of the organization's governing body, and the authorized contracting
officer for the professional fundraising counsel[,] or
professional solicitor[, charitable fundraising platform, or
platform charity]. In the case of a charitable fundraising
platform or platform charity, a written contract shall be filed with the
attorney general before any fundraising activity; provided that when a
recipient charitable organization has a contractual relationship with the
charitable fundraising platform to facilitate the transfer of funds using a
third-party disbursement intermediary, a written contract between a platform
charity and a recipient charitable organization shall not be required to be
filed unless ordered by the department.
The contract shall contain all of the following provisions:
(1) The legal name and address of the charitable organization;
(2) A statement of the charitable purpose for which the solicitation campaign is being conducted;
(3) A statement of the respective obligations of the professional fundraising counsel, professional solicitor, charitable fundraising platform, or platform charity, and the charitable organization;
(4) A statement of the guaranteed minimum percentage of the gross receipts from contributions that will be remitted to or retained by the charitable organization, if any, or, if the solicitation involves the sale of goods, services, or tickets to a fundraising event, the percentage of the purchase price that will be remitted to the charitable organization, if any. The stated percentage shall exclude any amount that the charitable organization is to pay as fundraising costs;
(5) Information concerning the compensation of the professional solicitor and professional fundraising counsel as follows:
(A) If the compensation of the professional fundraising counsel, professional solicitor, charitable fundraising platform, or platform charity is contingent upon the number of contributions or the amount of revenue received, a statement shall be included specifying the percentage of the gross revenue that is the basis for that compensation. The stated percentage shall include any amount that the professional fundraising counsel, professional solicitor, charitable fundraising platform, or platform charity is to be reimbursed for fundraising costs;
(B) If the compensation of the professional solicitor, charitable fundraising platform, or platform charity is not contingent upon the number of contributions or amount of revenue received from the solicitation campaign, the compensation shall be expressed as a reasonable estimate of the percentage of the gross revenue, and the contract shall clearly disclose the assumptions upon which the estimate is based. The stated assumptions shall be based upon all of the relevant facts known to the professional solicitor regarding the solicitation to be conducted by the professional solicitor; or
(C) If the compensation of the professional fundraising counsel, charitable fundraising platform, or platform charity is not contingent on the number of contributions or amount of revenue received from the solicitation campaign, the compensation shall be stated in a dollar amount;
(6) The effective and termination dates of the contract or, if the contract does not have a set termination date, a clause allowing either party a reasonable period to terminate the contract or notify the other party if either party chooses not to renew. The contract shall also contain the date services will commence with respect to solicitation in this State of contributions for a charitable organization;
(7) In the case of a professional fundraising counsel, charitable fundraising platform, or platform charity, a statement that the professional fundraising counsel will not at any time have custody or control of contributions, as applicable;
(8) A statement that the charitable organization exercises control and approval over the content and volume of any solicitation; and
(9) Any other information required by the rules of the attorney general."
SECTION 7. Act 205, Session Laws of Hawaii 2024, is amended by amending section 16 to read as follows:
"SECTION
16. This Act shall take effect on [January
1,] June 30, 2026."
SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 9. This Act shall take effect on July 1, 2026.
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INTRODUCED BY: |
_____________________________ |
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Report Title:
Department of the Attorney General; Solicitations of Funds from the Public; Donations; Charitable Funding Platforms; Platform Charities; Registration
Description:
Amends Act 205, Session Laws of Hawaii 2024, to clarify standards and safeguards in online crowdfunding. Takes effect 7/1/2026.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
|
Date
|
Status
|
|---|---|
| May 29, 2025 | Act 108, on 05/29/2025 (Gov. Msg. No. 1208). |
| May 29, 2025 | Act 108, 05/29/2025 (Gov. Msg. No. 1208). |
| May 2, 2025 | Enrolled to Governor. |
| May 2, 2025 | Received notice of passage on Final Reading in House (Hse. Com. No. 821). |
| May 1, 2025 | Received notice of Final Reading (Sen. Com. No. 888). |
| Apr 30, 2025 | Passed Final Reading as amended in CD 1 with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Pierick excused (2). |
| Apr 30, 2025 | Passed Final Reading, as amended (CD 1). Ayes, 25; Aye(s) with reservations: none . 0 No(es): none. 0 Excused: none. |
| Apr 25, 2025 | Forty-eight (48) hours notice Wednesday, 04-30-25. |
| Apr 25, 2025 | Reported from Conference Committee (Conf Com. Rep. No. 161) as amended in (CD 1). |
| Apr 25, 2025 | 48 Hrs. Notice (as amended CD 1) 04-30-25. |
| Apr 25, 2025 | Reported from Conference Committee as amended CD 1 (Conf. Com. Rep. No. 161). |
| Apr 24, 2025 | The Conference Committee recommends that the measure be Passed, with Amendments. The votes were as follows: 4 Ayes: Representative(s) Matayoshi, Takenouchi, Iwamoto, Pierick; Ayes with reservations: none; 0 Noes: none; and 0 Excused: none. |
| Apr 24, 2025 | The Conference committee recommends that the measure be PASSED, WITH AMENDMENTS. The votes of the Senate Conference Managers were as follows: 2 Aye(s): Senator(s) Keohokalole, Rhoads; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Awa. |
| Apr 23, 2025 | Conference Committee Meeting will reconvene on Thursday 04-24-25 1:30PM in conference room 224. |
| Apr 22, 2025 | Conference committee meeting to reconvene on 04-23-25 1:31PM; Conference Room 224. |
| Apr 22, 2025 | Conference Committee Meeting will reconvene on Wednesday 04-23-25 1:30PM in conference room 224. |
| Apr 21, 2025 | Conference Committee Meeting will reconvene on Tuesday 04-22-25 1:30PM in conference room 224. |
| Apr 17, 2025 | Bill scheduled for Conference Committee Meeting on Monday, 04-21-25 1:30PM in conference room 224. |
| Apr 21, 2025 | Received notice of appointment of House conferees (Hse. Com. No. 754). |
| Apr 17, 2025 | House Conferees Appointed: Matayoshi, Takenouchi Co-Chairs; Iwamoto, Pierick. |
| Apr 16, 2025 | Received notice of Senate conferees (Sen. Com. No. 811). |
| Apr 16, 2025 | Senate Conferees Appointed: Keohokalole Chair; Rhoads Co-Chair; Awa. |
| Apr 10, 2025 | Received notice of disagreement (Sen. Com. No. 779). |
| Apr 10, 2025 | Senate disagrees with House amendments. |
| Apr 10, 2025 | Received from House (Hse. Com. No. 670). |
| Apr 8, 2025 | Passed Third Reading as amended in HD 2 with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Marten excused (2). Transmitted to Senate. |
| Apr 4, 2025 | Forty-eight (48) hours notice Tuesday, 04-08-25. |
| Apr 4, 2025 | Reported from FIN (Stand. Com. Rep. No. 1972) as amended in HD 2, recommending passage on Third Reading. |
| Mar 31, 2025 | The committee on FIN recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 14 Ayes: Representative(s) Yamashita, Takenouchi, Grandinetti, Hussey, Keohokapu-Lee Loy, Kitagawa, Kusch, Lamosao, Lee, M., Miyake, Morikawa, Templo, Alcos, Reyes Oda; Ayes with reservations: none; Noes: none; and 2 Excused: Representative(s) Holt, Ward. |
| Mar 28, 2025 | Bill scheduled to be heard by FIN on Monday, 03-31-25 3:15PM in House conference room 308 VIA VIDEOCONFERENCE. |
| Mar 21, 2025 | Passed Second Reading as amended in HD 1 and referred to the committee(s) on FIN with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Garrett, Kapela, Kitagawa, Ward excused (5). |
| Mar 21, 2025 | Reported from CPC (Stand. Com. Rep. No. 1471) as amended in HD 1, recommending passage on Second Reading and referral to FIN. |
| Mar 18, 2025 | The committee on CPC recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 8 Ayes: Representative(s) Matayoshi, Chun, Ilagan, Ichiyama, Iwamoto, Kong, Lowen, Marten; Ayes with reservations: none; Noes: none; and 2 Excused: Representative(s) Tam, Pierick. |
| Mar 14, 2025 | Bill scheduled to be heard by CPC on Tuesday, 03-18-25 2:05PM in House conference room 329 VIA VIDEOCONFERENCE. |
| Mar 6, 2025 | Referred to CPC, FIN, referral sheet 19 |
| Mar 6, 2025 | Pass First Reading |
| Mar 4, 2025 | Received from Senate (Sen. Com. No. 249) in amended form (SD 2). |
| Mar 4, 2025 | Report adopted; Passed Third Reading, as amended (SD 2). Ayes, 25; Aye(s) with reservations: none . Noes, 0 (none). Excused, 0 (none). Transmitted to House. |
| Feb 27, 2025 | 48 Hrs. Notice 03-04-25. |
| Feb 27, 2025 | Reported from JDC (Stand. Com. Rep. No. 735) with recommendation of passage on Third Reading, as amended (SD 2). |
| Feb 19, 2025 | The committee(s) on JDC recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in JDC were as follows: 4 Aye(s): Senator(s) Rhoads, Chang, San Buenaventura, Awa; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Gabbard. |
| Feb 14, 2025 | The committee(s) on JDC will hold a public decision making on 02-19-25 9:45AM; Conference Room 016 & Videoconference. |
| Feb 14, 2025 | Report adopted; Passed Second Reading, as amended (SD 1) and referred to JDC. |
| Feb 14, 2025 | Reported from CPN (Stand. Com. Rep. No. 493) with recommendation of passage on Second Reading, as amended (SD 1) and referral to JDC. |
| Feb 10, 2025 | The committee(s) on CPN recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in CPN were as follows: 5 Aye(s): Senator(s) Keohokalole, Fukunaga, McKelvey, Richards, Awa; Aye(s) with reservations: none ; 0 No(es): none; and 0 Excused: none. |
| Feb 6, 2025 | The committee(s) on CPN has scheduled a public hearing on 02-10-25 9:35AM; Conference Room 229 & Videoconference. |
| Jan 23, 2025 | Referred to CPN, JDC. |
| Jan 21, 2025 | Passed First Reading. |
| Jan 17, 2025 | Introduced. |
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Date
|
Description
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Location
|
Votes
|
|
|---|---|---|---|---|
| Apr 30, 2025 | Final Reading | House Floor |
Passed |
|
| Apr 30, 2025 | Final Reading | Senate Floor |
Passed |
|
| Apr 8, 2025 | Third Reading | House Floor |
Passed |
|
| Mar 31, 2025 | The committee on FIN recommend that the measure be PASSED, WITH AMENDMENTS | House Standing Committee on Finance |
Passed |
|
| Mar 18, 2025 | The committee on CPC recommend that the measure be PASSED, WITH AMENDMENTS | House Standing Committee on Consumer Protection & Commerce |
Passed |
|
| Mar 4, 2025 | Third Reading | Senate Floor |
Passed |
|
| Feb 19, 2025 | The committee(s) on JDC recommend(s) that the measure be PASSED, WITH AMENDMENTS | Senate Standing Committee on Judiciary |
Passed |
|
| Feb 10, 2025 | The committee(s) on CPN recommend(s) that the measure be PASSED, WITH AMENDMENTS | Senate Standing Committee on Commerce and Consumer Protection |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Department of the Attorney General | ** Against | |
| Department of the Attorney General | ** Support | |
| GoFundMe | ** Support | |
| Hawaiʻi Community Foundation | ** Support |
CONFERENCE COMMITTEE REP. NO. 161
Honolulu, Hawaii
, 2025
RE: S.B. No. 1048
S.D. 2
H.D. 2
C.D. 1
Honorable Ronald D. Kouchi
President of the Senate
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Honorable Nadine K. Nakamura
Speaker, House of Representatives
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Sir and Madam:
Your Committee on Conference on the disagreeing vote of the Senate to the amendments proposed by the House of Representatives in S.B. No. 1048, S.D. 2, H.D. 2, entitled:
"A BILL FOR AN ACT RELATING TO SOLICITATION OF FUNDS FROM THE PUBLIC,"
having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.
The purpose of this measure is to amend Act 205, Session Laws of Hawaii 2024 (Act 205), by:
(1) Establishing separate registration, reporting, and fee requirements specific to platform charities and charitable fundraising platforms;
(2) Clarifying standards and safeguards in online crowdfunding; and
(3) Extending its effective date to July 1, 2026.
Your Committee on Conference finds that Act 205 was enacted in response to concerns over potentially fraudulent online fundraising platforms following the 2023 Maui wildfires. Among other things, Act 205 improved and expanded the Department of the Attorney General's regulation and enforcement of charitable fundraising activities through online platforms. Although Act 205 sought to ensure proper and transparent fundraising activities in the State, it has also imposed additional administrative burdens on charities and platforms, potentially slowing down donations and reducing the availability of support for the State's residents in times of crises. This measure seeks to strike a balance between targeting unscrupulous actors while providing charities with the necessary flexibility to raise funds for their charitable causes.
Your Committee on Conference has amended this measure by:
(1) Changing its effective date to July 1, 2026; and
(2) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.
As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of S.B. No. 1048, S.D. 2, H.D. 2, as amended herein, and recommends that it pass Final Reading in the form attached hereto as S.B. No. 1048, S.D. 2, H.D. 2, C.D. 1.
Respectfully submitted on behalf of the managers:
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ON THE PART OF THE HOUSE |
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ON THE PART OF THE SENATE |
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____________________________ SCOT Z. MATAYOSHI Co-Chair |
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____________________________ JARRETT KEOHOKALOLE Chair |
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____________________________ JENNA TAKENOUCHI Co-Chair |
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____________________________ KARL RHOADS Co-Chair |
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STAND. COM. REP. NO. 1972
Honolulu, Hawaii
, 2025
RE: S.B. No. 1048
S.D. 2
H.D. 2
Honorable Nadine K. Nakamura
Speaker, House of Representatives
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Madame:
Your Committee on Finance, to which was referred S.B. No. 1048, S.D. 2, H.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO SOLICITATION OF FUNDS FROM THE PUBLIC,"
begs leave to report as follows:
The purpose of this measure is to amend Act 205, Session Laws of Hawaii 2024, by:
(1) Clarifying definitions for platform charities and charitable fundraising platforms;
(2) Creating separate registration, reporting, and fee requirements that are specific to platform charities and charitable fundraising platforms;
(3) Updating provisions on prohibited acts, enforcement powers, and remedies; and
(4) Extending its effective date to July 1, 2026.
Your Committee received testimony in support of this measure from the Department of the Attorney General; GoFundMe; and Hawaiʻi Community Foundation.
Your Committee has amended this measure by:
(1) Changing the effective date to July 1, 3000, to encourage further discussion; and
(2) Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.
As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1048, S.D. 2, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1048, S.D. 2, H.D. 2.
Respectfully submitted on behalf of the members of the Committee on Finance,
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____________________________ KYLE T. YAMASHITA, Chair |
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STAND. COM. REP. NO. 1471
Honolulu, Hawaii
, 2025
RE: S.B. No. 1048
S.D. 2
H.D. 1
Honorable Nadine K. Nakamura
Speaker, House of Representatives
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Madame:
Your Committee on Consumer Protection & Commerce, to which was referred S.B. No. 1048, S.D. 2, entitled:
"A BILL FOR AN ACT RELATING TO SOLICITATION OF FUNDS FROM THE PUBLIC,"
begs leave to report as follows:
The purpose of this measure is to:
(1) Clarify the standards and safeguards in online crowdfunding as enacted by Act 205, Session Laws of Hawaii 2024 (Act 205); and
(2) Extend the effective date of Act 205 to June 30, 2026.
Your Committee finds that Act 205 was enacted in response to concerns over potentially fraudulent online fundraising platforms following the August 2023 Maui wildfires. Act 205 improved and expanded the Department of the Attorney General's enforcement of charitable fundraising activities, including regulation of charitable fundraising on online platforms. However, the provisions of Act 205 may also hamper the ability of charities to fundraise in the State. This measure seeks to strike a balance in order to target unscrupulous actors while providing charities with the necessary flexibility to raise funds for their charitable causes.
Your Committee has amended this measure by:
(1) Consolidating all of the requirements applicable to platform charities under one section, which creates a separate registration, reporting, and fee requirements for platform charities to address the potential for duplication of these requirements;
(2) Clarifying when certain definitions are applicable to charitable fundraising platforms and platform charities;
(3) Consolidating all of the requirements applicable to charitable fundraising platforms under one section, which creates a separate registration, reporting, and fee requirements specific to charitable fundraising platforms to address the potential for duplication of these requirements;
(4) Deleting language that allowed, for purposes of documenting contributions received over the Internet, the use of electronic mail addresses and internet protocol addresses;
(5) Extending the effective date of Act 205 to July 1, 2026, and making such extension effective July 1, 2025;
(6) Inserting a savings clause; and
(7) Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.
As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1048, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1048, S.D. 2, H.D. 1, and be referred to your Committee on Finance.
Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,
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____________________________ SCOT Z. MATAYOSHI, Chair |
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STAND. COM. REP. NO. 735
Honolulu, Hawaii
RE: S.B. No. 1048
S.D. 2
Honorable Ronald D. Kouchi
President of the Senate
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Sir:
Your Committee on Judiciary, to which was referred S.B. No. 1048, S.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO SOLICITATION OF FUNDS FROM THE PUBLIC,"
begs leave to report as follows:
The purpose and intent of this measure is to amend Act 205, Session Laws of Hawaii 2024, to clarify standards and safeguards in online crowdfunding.
Your Committee received testimony in support of this measure from GoFundMe.
Your Committee received testimony in opposition to this measure from the Department of the Attorney General.
Your Committee finds that although Act 205, Session Laws of 2024 (Act 205), was intended to regulate charitable fundraising platforms to ensure proper and transparent fundraising activities in the State, Act 205 poses significant risks to charitable fundraising in the State by potentially slowing down donations, imposing administrative burdens on charities and platforms, and reducing support for the State's residents in times of crisis. This measure will provide necessary fixes to preserve trust in online fundraising while ensuring the State's residents continue to receive vital charitable support, especially in times of disaster.
Your Committee notes that this measure requires the Department of the Attorney General to indicate whether a charitable organization is prohibited from soliciting or operating in the State due to "ministerial deficiency". However, this term is not defined in chapter 467B, Hawaii Revised Statutes, making its fair and uniform application challenging, and the purpose unclear. Your Committee also notes that this measure proposes to exempt a copy of the written contract between a platform charity and a charitable organization from being filed with the Attorney General when a platform charity uses a third-party disbursement intermediary to facilitate the transfer of funds. This exemption may undermine the Department of the Attorney General's oversight and enforcement of charitable fundraising activity because the filing requirement for written contracts allows the Department to track charitable fundraising in the State. Therefore, amendments to this measure are necessary.
Accordingly, your Committee has amended this measure by:
(1) Deleting language that would have required the Department of the Attorney General, upon notifying a charitable organization that it is prohibited from soliciting or operating in the State, to indicate whether the basis for the prohibition is due to a ministerial deficiency;
(2) Deleting language that would have exempt a copy of the written contract between a platform charity and a charitable organization from being filed with the Attorney General when a platform charity uses a third-party disbursement intermediary to facilitate the transfer of funds; and
(3) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.
As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1048, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1048, S.D. 2.
Respectfully submitted on behalf of the members of the Committee on Judiciary,
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________________________________ KARL RHOADS, Chair |
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STAND. COM. REP. NO. 493
Honolulu, Hawaii
RE: S.B. No. 1048
S.D. 1
Honorable Ronald D. Kouchi
President of the Senate
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Sir:
Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 1048 entitled:
"A BILL FOR AN ACT RELATING TO SOLICITATION OF FUNDS FROM THE PUBLIC,"
begs leave to report as follows:
The purpose and intent of this measure is to amend the language in Act 205, Session Laws of Hawaii 2024, to clarify existing standards and safeguards in online crowdfunding.
Your Committee received testimony in support of this measure from GoFundMe.
Your Committee received comments on this measure from the Department of the Attorney General.
Your Committee finds that Act 205, Session Laws of Hawaii 2024 (Act 205), was intended to regulate charitable crowdfunding platforms to ensure proper and transparent fundraising activities in the State. Although the language in Act 205 is well-intended, it imposes undue burdens on charitable fundraising platforms and could potentially inhibit the ability of charitable organizations to respond and fundraise, especially in times of emergency and need.
Your Committee has amended this measure by:
(1) Specifying that, to determine good standing of a recipient charitable organization or other charitable organization, a charitable fundraising platform may rely on the Department of the Attorney General's online registry rather than electronic lists published by the Internal Revenue Service or Department of Taxation;
(2) Deleting language that would have allowed the Department of the Attorney General to grant exemptions or waivers from laws relating to solicitation of funds from the public;
(3) Inserting an effective date of July 1, 2050, to encourage further discussion; and
(4) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.
As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1048, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1048, S.D. 1, and be referred to your Committee on Judiciary.
Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,
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________________________________ JARRETT KEOHOKALOLE, Chair |
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Date
|
Testimony PDF
|
|---|---|
| Mar 31, 2025 | SB1048_HD1_TESTIMONY_FIN_03-31-25_.PDF |
| Mar 18, 2025 | SB1048_SD2_TESTIMONY_CPC_03-18-25_.PDF |
| Feb 19, 2025 | SB1048_SD1_TESTIMONY_JDC_02-19-25_.PDF |
| Feb 10, 2025 | SB1048_TESTIMONY_CPN_02-10-25_.PDF |
Discussed in Hearing
1MIN
Conference Committee
1MIN
Conference Committee
1MIN
Conference Committee
1MIN
Conference Committee
2MIN
House Standing Committee on Finance
5MIN
House Standing Committee on Consumer Protection & Commerce
5MIN
House Standing Committee on Judiciary & Hawaiian Affairs
Bill Author
