HOUSE BILL REPORT

HB 1909

BYRepresentatives Schoon, Vekich, Winsley, Doty, Moyer, Basich and Ferguson

Establishing a joint select committee on commercial activities.

House Committe on Trade & Economic Development

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass. (16)

      Signed by Representatives Wineberry, Vice Chair; Amondson, Beck, Braddock, Cantwell, Doty, Grant, Hargrove, Heavey, Holm, McLean, Moyer, Rasmussen, Schoon, B. Williams and J. Williams.

House Staff:Bonnie Austin (786-7107)

AS REPORTED BY COMMITTEE ON TRADE & ECONOMIC DEVELOPMENT

JANUARY 29, 1988

BACKGROUND:

Competition between nonprofit organizations and for-profit small businesses has increasingly become a prominent business concern. In response to this concern, the Small Business Improvement Council (SBIC) created a Profit/Not for Profit Competition Task Force to study the issues of unfair competition from: (1) Government (state and local governments, educational institutions, and institutional industries of the Department of Corrections), (2) private nonprofit organizations; and (3) regulated utilities.  Specific concerns included taxation, pricing comparisons and the effects of government subsidization of costs, and public support of social objectives versus profit objectives which result in preference legislation.

As a result of this study, the SBIC annual report for 1987 included a recommendation that a Joint Select Committee of the Washington State legislature be established to study the nature and scope of commercial activities by nonprofit entities and their affiliates and subsidiaries, the impact on small businesses in the state, and the current justification for their nonprofit status.

SUMMARY:

SUBSTITUTE BILL:  The Joint Select Committee on Commercial Activities (Committee) is established.  The Committee shall consist of three members of the House of Representatives, three members of the Senate, five members representing the small business community, five members representing nonprofit organizations, a representative from the department of revenue, and representative of the office of the secretary of state.

The Committee shall study the nature and scope of commercial activities by nonprofit organizations, assess their impact on small business in the state, and the current justification for their nonprofit status.  Staff support shall be provided by the House Trade and Economic Development Committee and the Senate Commerce and Labor Committee.  The Committee shall report its finding and recommendations to the legislature by January 1, 1989.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The term "nonprofit organization" shall not include institutions of higher education or their affiliates or subsidiaries.

Appropriation:    $45,000.00 to the Joint Select Committee on Commercial Activities.

Fiscal Note:      Requested January 29, 1988.

House Committee ‑ Testified For:    None Presented.

House Committee - Testified Against:      Sharon Foster, YMCA's of Washington; Collins Sprague, Association of Washington Business; and Theresa Schultheis,Students' Book Corporation of Washington State University.

House Committee - Testimony For:    None Presented.

House Committee - Testimony Against:      Institutions of higher education should not be included in this study.