THE SENATE

S.B. NO.

3123

THIRTY-THIRD LEGISLATURE, 2026

S.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO PRIVATE SUPPORT OF EDUCATION.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     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 these 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 these gifts customarily include specified eligibility criteria, including 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 the State 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 this 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:

     (1)  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

     (2)  To provide that the schooling and awards are considered conditional gifts rather than contractual obligations unless the parties agree otherwise in writing.

     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  Conditional gift.  (a)  Unless the parties agree otherwise in writing, any donor-conditioned educational award for attendance at a private pre-school, elementary, middle, or high school or any school-conditioned enrollment at any private school where 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 donor or school operator may require the student or the student's parents or guardians to:

     (1)  Pay for any optional extracurricular benefits, goods, or services;

     (2)  Allow the 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 any donor‑conditioned educational award or any school-conditioned enrollment 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)  For the purposes of 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 and school-conditioned enrollments 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.

 

 

 

 

Report Title:

Educational Gifts; Donor-Conditioned Educational Awards; Conditional Gifts; School-Conditioned Enrollment; Contractual Relationships

 

Description:

Clarifies that free tuition at private educational institutions or school-conditioned enrollment at private educational institutions where no tuition or other monetary consideration is required or paid by the recipient are to be considered conditional gifts that support educational advancements rather than contractual obligations unless the parties agree otherwise in writing.  (SD1)

 

 

 

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