HB1810 HD1

SECTION 1. The legislature finds that individuals who donate tangible property using collection bins or receptacles may reasonably believe that the tangible property is donated directly to charitable organizations, and may also reasonably believe they are entitled to a federal income tax credit deduction for the value of the donated property.

The legislature further finds that in some cases, the entities operating collection bins or receptacles on behalf of the charity will pay the charity based on the weight of the donated items received, which can be as low as two to five cents per pound, and then resell the donated property at for-profit retail locations. Most donors are not aware of these arrangements between the collection bin operator and associated charitable organizations.

The legislature further finds that existing law does not adequately address this charitable solicitation business model.

The purpose of this Act is to:

(1) Establish prompt payment and financial reporting requirements for professional solicitors that sell donated or collected non-perishable tangible property on behalf of charitable organization; and

(2) Prohibit professional solicitors that sell donated or collected non-perishable tangible property from failing to visibly display certain signage; comply with prompt payment, financial reporting, and contract term requirements; or prominently disclose certain information on any collection bin, container, or receptacle used to receive donated property.

SECTION 2. Section 467B-1, Hawaii Revised Statutes, is amended as follows:

1. By amending the definition of "contribution" to read:

""Contribution" means the promise or grant of any money or property of any kind or value, including [~~the~~] non-perishable tangible property, or a promise to pay[,] or pledge, except payments by members of a charitable organization for membership fees, dues, fines, or assessments, or for services rendered to individual members, if membership in the charitable organization confers a bona fide right, privilege, professional standing, honor, or other direct benefit, other than the right to vote, elect officers, or hold offices, and except money or property received from any governmental authority, or a grant or subsidy from any organization exempt from taxation under section 501(c)(3) of the Internal Revenue Code."

2. By amending the definition of "solicit" and "solicitation" to read:

""Solicit" and "solicitation" mean a request directly or indirectly for money, credit, property, financial assistance, or thing of value on the plea or representation that the money, credit, property, financial assistance, or thing of value, or any portion thereof, will be used for a charitable purpose or to benefit a charitable organization. [~~These terms~~] "Solicit" and "solicitation" shall include the following:

(1) Any oral or written request;

(2) The making of any announcement to any organization for the purpose of further dissemination, including announcements to the press, over the radio or television, or by telephone, telegraph, or facsimile, concerning an appeal or campaign by or for any charitable organization or purpose;

(3) The distribution, circulation, posting, or publishing of any handbill, written advertisement, or other publication that directly or by implication seeks to obtain public support;

(4) Where the sale or offer or attempted sale, of any advertisement, advertising space, book, card, tag, coupon, device, magazine, membership, merchandise, subscription, flower, ticket, candy, cookies, or other tangible item in connection with which any appeal is made for any charitable organization or purpose; or where the name of any charitable organization is used or referred to in any appeal as an inducement or reason for making any sale; or where in connection with any sale, any statement is made that the whole or any part of the proceeds from any sale will be used for any charitable purpose or to benefit any charitable organization; and

(5) A request made through the use of receptacles for contributions, including non-perishable tangible property, such as honor boxes, vending machines, wishing wells, contribution boxes, [~~and~~] novelty machines, and collection bins or containers, where a charitable appeal is used or referred to or implied as an inducement or reason to contribute.

A solicitation occurs whether or not the person making the solicitation receives any contribution. However, [~~the term~~] solicitation shall not include the submission of a grant or subsidy proposal or application to a governmental authority or any organization exempt from taxation under section 501(c)(3) of the Internal Revenue Code."

SECTION 3. Section 467B-2.5, Hawaii Revised Statutes, is amended to read as follows:

"§467B-2.5 Professional solicitor financial reports; contribution account[.]; disclosure; payment; charitable organizations. (a) A professional solicitor 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, or an authorized officer or agent of the professional solicitor 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 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 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 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 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 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.

(f) If the professional solicitor, directly or indirectly, sells donated or collected non-perishable tangible property, the professional solicitor shall deposit the full amount owed to the charitable organization by the professional solicitor in an account at a bank or other federally insured financial institution, which shall be in the name of that charitable organization, within forty-five days after the sale.

(g) If the professional solicitor, directly or indirectly, sells donated or collected non-perishable tangible property and compensates a charitable organization based on the weight of donor contributions, the professional solicitor's financial report shall include:

(1) The amount paid by the professional solicitor to any charitable organization during the applicable period;

(2) The gross weight of all contributions by donors to the professional solicitor, on behalf of each respective charitable organization, during the applicable period; and

(3) The dollar amount of compensation per pound or other weight measurement paid by the professional solicitor to each charitable organization.

(h) No professional solicitor, who directly or indirectly sells any donated non-perishable tangible property, shall fail to:

(1) Prominently disclose in writing on any collection bin, container, or receptacle used by a professional solicitor to receive donated non-perishable tangible property that:

(A) The bin, container, or receptacle is operated and used by a paid professional solicitor;

(B) The professional solicitor resells the donated property at retail stores and that a charitable organization is either paid a percentage of the sale proceeds or an amount based on the weight of the donated tangible property, whichever is applicable;

(C) Donated non-perishable tangible property is not a tax-deductible charitable contribution under the Internal Revenue Code of 1986, as amended, if applicable;

(D) The professional solicitor is registered with the attorney general; and

(E) The professional solicitor's registration form and contracts with the charity benefited by the collection is available for public inspection and copying;

(2) Visibly display a sign on the collection bin, container, or receptacle that states, by percentage, how much of the donated non-perishable tangible property is donated to charitable organizations;

(3) Provide complete and timely payment of the amount owed to a charitable organization within forty-five days after the sale of non-perishable tangible property;

(4) Provide complete and timely annual financial reports to the charitable organization and the attorney general, as required by section 467B-6.5; and

(5) Include in the contract with the charitable organization the terms required by section 467B-12.5."

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

SECTION 5. This Act shall take effect on July 1, 3000; provided that sections 2 and 3 shall take effect on January 1, 2027.

HOUSE OF REPRESENTATIVES	H.B. NO.	1810
THIRTY-THIRD LEGISLATURE, 2026		H.D. 1
STATE OF HAWAII