FINAL BILL REPORT
SSB 5034
C 176 L 21
Synopsis as Enacted
Brief Description: Concerning nonprofit corporations.
Sponsors: Senate Committee on Law & Justice (originally sponsored by Senators Pedersen, Padden and Mullet; by request of Washington State Bar Association).
Senate Committee on Law & Justice
House Committee on Civil Rights & Judiciary
House Committee on Appropriations
Background:

The Washington Nonprofit Corporation Act (WNCA) was enacted in 1967 and establishes requirements regarding the organization and operation of nonprofit corporations.  Nonprofit corporations may be organized for any lawful purpose, including but not limited to charitable; benevolent; eleemosynary; educational; civic; patriotic; political; religious; social; fraternal; literary; cultural; athletic; scientific; agricultural; horticultural; animal husbandry; and for professional, commercial, industrial or trade associations.  Many of the provisions of the WNCA provide default rules that may be altered in the corporation's articles of incorporation or bylaws.  The articles of incorporation and the bylaws are the governing documents for the corporation and set forth rules for organizational and operational issues. 

 

The Nonprofit Corporations Committee (NCC) of the Business Law section of the Washington State Bar Association periodically reviews the WNCA and makes recommendations to keep it up to date with developments in the law and changes made to the American Bar Association's Model Nonprofit Corporations Act and to changes in other states' nonprofit corporations act.  The NCC recommends amendments to the WNCA to modernize the act.

Summary:

A more efficient process for electronic transmission of notices and meeting procedures is created.  Comprehensive rules governing members and directors, and updates to record keeping and filing requirements with the secretary of state are added.  Members, their rights and their powers, are defined and provisions for delegates acting in a representative capacity are included. 

 

Charitable assets of nonprofit corporations are protected and the authority of the attorney general to investigate and intervene to protect charitable assets is addressed.  The attorney general may not take action or investigate a religious corporation unless the attorney general:

  • knows of facts that property held by the religious corporation for charitable purposes is about to be distributed in violation of the act;
  • the board of directors of the religious corporation has requested the attorney general's involvement; or
  • knows of facts indicating the religious corporation has no directors in office.
Votes on Final Passage:
Senate 49 0
House 97 1 (House amended)
Senate 48 0 (Senate concurred)
Effective:

January 1, 2022

July 1, 2022 (Section 5204)