Bills would require nonprofits to register with AG

Two bills have been introduced by Legislators in the new session that began Jan. 16 to require nonprofits to register with the state. Two more, drafted by the Attorney General's office, are expected to be introduced, too.

HB 2308 

Introduced by Representative Kirk Caldwell, HB 2308 would require all 501(c)(3) organizations to register and file annual updates and financial statements to the AG. Exceptions include those not receiving donations, accredited schools and their foundations, some trusts, and organizations with less than $25,000 in revenue or $50,000 in assets. The annual updates would include copies of the organization's federal tax return and an auditor's report, if an audit was prepared.

SB 2014

Introduced by Senators Clarence Nishihara and Willie Espero, SB 2014 would require charities to file copies of their annual federal tax returns with the AG and provide on request copies of their bylaws, articles of incorporation, financial statements, applications for tax-exempt status and other information. Charities would pay annual registration fees ranging from $10 to $750 depending on revenues. The bill also would give the AG additional enforcement powers. Religious organizations and those not required to file either a Form 990, Form 990EZ or Hawaii general excise tax return would be exempt.

Attorney General's proposal

House and Senate companion bills proposed by the AG, but not yet introduced, would require only charities that solicit funds from the public to register using the Uniform Registration Statement. Exceptions would be religious organizations, hospitals, PTAs, accredited schools and those with less than $25,000 in annual revenue. This proposal would require annual financial reports from registered charities, including audited financial statements from those with more than $500,000 in gross revenues. Charities would pay registration fees ranging from $10 to $750 per year depending on income. It would allow the AG to impose fines of up to $300 or twice the registration fee, require charities to maintain financial records for three years and make them available for inspection, expand enforcement powers, and appropriate funds for two deputy AG positions, an auditor and a legal assistant.

No hearings have yet been scheduled for these bills. If you have comments or suggestions regarding these proposals, please click here to contact John Flanagan at HANO.