Sector Level Bills Alive and Moving Through the Legislature

We’re in the final stretch of the legislative session. Multiple bills that HANO is tracking have made it past the half-way mark. We will continue to monitor these and other bills that affect Hawaii’s nonprofit sector.

SB 1130, SD 1 – Transportation UBIT

The federal Tax Cuts and Jobs Act, effective Jan. 1, 2018, created a problematic Unrelated Business Income Tax (UBIT) on Nonprofit Transportation expenses like bus and parking passes for employees.

Locally HANO introduced SB 1130 to non conform with this troublesome part of federal law, specifically 512(a)(7) of the Internal Revenue Code, which taxes an expense, not a revenue item. The bill is moving through the Legislature. It may head to Conference Committee to reconcile non substantive differences between Senate and House versions.

At the federal level, a nationwide coalition that HANO is a part of is working on a bi-partisan attempt to repeal this part of the Tax Cuts and Jobs Act. A sign-on letter asking for a repeal will go to the Hill next week. Click here to see the letter and signers.

Click here to participate in the sign-on letter by close of business on April 3.

Join nearly 500 other organizations, including HANO and our national organization, the National Council of Nonprofits, in asking Congress to repeal this part of existing law. Read the testimony of the National Council of Nonprofits before the US House of Representatives Ways and Means Committee.

It is uncertain which strategy will prevail or which one will happen first – our state level work or the national lobby before Congress. Either way, we hope these strategies will bring relief from this confusing law for nonprofits.

HB 944 HD 1, SD 1 – Nonprofit Governance (click to view)

This bill prohibits a public benefit corporation from purchasing its own memberships. Most important to us is that it also clarifies functions, duties, and composition of nonprofit boards of directors. It also permits boards to take action without a meeting through electronic means. It clarifies time limits for notice to the Attorney General for oversight purposes and makes housekeeping amendments. This bill heads to Conference Committee where non substantive differences will be reconciled between the House and the Senate.

HB 945, HD 1, SD 1 – Fundraising and Audit Requirements (click to view)

This bill clarifies requirements for submission of financial reports by professional solicitors and commercial co-venturers that raise funds for a charitable organization. A win for us is that it also eliminates audit report requirements for charitable organizations not otherwise subject to audit requirements. The bill also conforms language to that used by the Internal Revenue Service and other statutes.

This bill just passed out of its last referral committee and heads to the Conference Committee where the House and Senate will hash out any non substantive differences.

SB 412, SD 2, HD 1 – Automatic Voter Registration (click to view)

In support of reform efforts that ensure an active citizenry and open government, HANO has been tracking voter engagement/automatic voter registration initiatives led by community partners like Common Cause and the League of Women Voters.

This bill makes an application for voter registration, including an affidavit, part of all driver’s license and identification card applications. It automatically registers each applicant who elects to register for voting unless the applicant affirmatively declines to be registered to vote. It requires sharing of information among the counties, DOT, and election personnel.

This bill awaits Conference Committee.

HB 1153, SD 1 – Statewide Legislative Access (click to view)

This bill establishes the remote legislative access program, to be supervised by the joint Legislative Access Committee and specific requirements that the joint Legislative Access Committee must consider when developing the program. It requires each house of the Legislature to establish, by rule, procedures for the public to present oral testimony at legislative committee hearings through remote testimony.

As a statewide organization, HANO supports any and all mechanisms that enhance communication between islands, and facilitate greater participation by neighbor island constituents in the legislative process.

This bill is awaiting its final hearing in the Senate Ways and Means Committee.

SB 497, SD 1 – State Grants (click to view)

This bill clarifies the grant application process requirements for organizations that may receive a grant from the State. It further specifies additional grant application process requirements for nonprofit organizations.

This bill crossed over from the Senate but has not been heard yet in the House.


If you have any questions about any of these measures, please contact Lisa Maruyama.

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