STAND. COM. REP. NO. 1310-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2205
                                     S.D. 1



Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred S.B. No. 2205, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO NONPROFIT CORPORATIONS,"

begs leave to report as follows:

     The purpose of this bill is to:

     (1)  Prohibit a nonprofit corporation (nonprofit) that is a
          private foundation, as defined in the Internal Revenue
          Code, from:

          (A)  Engaging in any act of self-dealing;

          (B)  Retaining any excess business holdings;

          (C)  Making any investments that would subject it to a
               federal income tax; and

          (D)  Making any taxable expenditures; and

     (2)  Require the nonprofit to distribute, as permitted in
          its charter of incorporation, amounts necessary to
          avoid a federal income tax.

     Testimony was received in support of this measure from the
Department of Commerce and Consumer Affairs and a private
attorney.

 
 
 
 
                                 STAND. COM. REP. NO. 1310-00
                                 Page 2

 

     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee is in accord with the intent and
purpose of S.B. No. 2205, S.D. 1, and recommends that it pass
Second Reading and be placed on the calendar for Third Reading.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Consumer
                                   Protection and Commerce,



                                   ______________________________
                                   RON MENOR, Chair