SB 3123

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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