SB3123

SECTION 1. The legislature finds that conditional gifts made for purposes to support private educational efforts, including both schooling and scholarships, promotes learning, access, and academic advancement, and are not intended to create contractual obligations. Treating such awards as contractual obligations may undermine donor intent, discourage charitable giving, and create uncertainty and inconsistent legal treatment of these awards.

The legislature further finds that donor-conditioned awards customarily include specified eligibility criteria, such as academic performance minimums, standards of conduct, and enrollment status, and require compliance with the donor's stated requirements for the continuation of the award.

The legislature further finds that recognizing and providing guidance about the nature and benefits of these conditional educational gifts is a public purpose, and will preserve and promote donors' intentions, will encourage flexibility, innovation, and additional philanthropic educational support across the State for students, and will promote uniform statewide treatment.

The legislature finds that private pre-schools and private K-12 schools in Hawaii have long played an important role in the community and that confirming that treating free education and scholarships as gifts will encourage private support for education.

The legislature further finds that establishing statewide uniformity in the treatment of private conditional gifts will be beneficial and avoid potentially conflicting treatment for private sponsors of educational programs.

The legislature also finds that through this approach, students in private pre-K and K-12 education institutions and students receiving scholarships for such schooling will enjoy stronger support and be able to benefit from these educational resources, opportunities, and activities without the fear of legal penalties for any perceived contractual obligations to the student or the institution.

The purpose of the Act is to clarify and establish uniformity regarding the relationship between private schools where no tuition is required, students, and donors concerning educational awards conditioned on donor-specified requirements, and to provide that such awards are considered conditional gifts rather than contractual obligations.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"CHAPTER

EDUCATIONAL GIFTS

§ -1 Donor-conditioned educational awards; conditional gift. (a) A donor-conditioned educational award for attendance at a private pre-school, elementary, middle, or high school for which no tuition or other monetary consideration is required or paid by the recipient shall be considered to be a conditional gift and not a contract, notwithstanding that the school operator may require the student or the student's parents or guardians to:

(1) Pay for any optional extra-curricular benefits, goods, or services;

(2) Permit use of the student's name, image, likeness, or work product for non-commercial purposes; or

(3) Sign waivers, consents, or similar agreements as a condition of participation in any school-related activity.

(b) A conditional gift under this section may be subject to reasonable conditions, including eligibility criteria, academic performance minimums, standards of conduct, enrollment status, or other donor-imposed or educational institution requirements, and the continuation of the award shall be contingent upon the satisfaction of those conditions.

(c) The modification or termination of a donor-conditioned educational award for failure to satisfy the applicable conditions shall not give rise to a contractual claim; provided that the conditions are applied in a manner consistent with the terms of the award and applicable law.

(d) As used in this section, "donor-conditioned educational award" means a scholarship, grant, tuition waiver, or similar educational benefit funded in whole or in part by a private donation, endowment, or charitable contribution and subject to donor-imposed conditions.

SECTION 3. This Act shall apply only to donor-conditioned educational awards made on or after its effective date.

SECTION 4. If any provision of this Act or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

BY REQUEST

THE SENATE	S.B. NO.	3123
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII