SENATE BILL REPORT

SB 5543

BYSenators Lee, Smitherman, Kreidler and Niemi

Regulating annual reports of nonprofit corporations.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):February 9, 1989; February 14, 1989

Majority Report:  That Substitute Senate Bill No. 5543 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Lee, Chairman; Anderson, Vice Chairman; Murray, Saling, Smitherman, Warnke, Williams.

Senate Staff:Patrick Woods (786-7430)

                  February 15, 1989

AS REPORTED BY COMMITTEE ON ECONOMIC DEVELOPMENT & LABOR, FEBRUARY 14, 1989

BACKGROUND:

The issue of nonprofit corporations competing with the private sector has received legislative attention during recent years.  In testimony before legislative committees, it was reported that nonprofit corporations were "unfairly" competing with private sector businesses in providing goods and services.

During 1988 a select committee on nonprofit competition was established to provide the Legislature with a careful and comprehensive review of the issue, upon which public policy decisions could then be made.  The committee was comprised of members from the Senate, nonprofit community, business community and state agencies.  The committee published a report which included a recommendation that the existing annual reporting requirements of nonprofit corporations should be expanded to provide a more detailed description of the corporation's activities and any modifications to its stated purposes.

SUMMARY:

The existing annual reporting requirements of nonprofit corporations are expanded to include:  a listing of any modification in the corporation's purpose and the reason for the change; an indication that the corporation has filed an annual tax exempt form (990) with the Internal Revenue Service which, if filed, may be requested by the Secretary of State's office; and the gross revenue of any unrelated business income as required to be reported under federal law.

EFFECT OF PROPOSED SUBSTITUTE:

The term "corporation" is substituted for "organization" and the annual reporting requirements are expanded to include a corporation's unified business identifier number issued by the Department of Revenue.

Appropriation:    none

Revenue:    none

Fiscal Note:      requested February 6, 1989

Senate Committee - Testified: Ben Lindekugel, United Way of King County (pro); Sharon Foster, YMCAs of Washington (pro); Dave Dougherty, BAC (pro); Michael Doctor, Sheltered Workshop (pro); Doug Bohlke, ESTA (pro)