SENATE BILL REPORT

                                    HB 1708

          AS REPORTED BY COMMITTEE ON COMMERCE & LABOR, APRIL 3, 1991

Brief Description:  Revising provisions for employee cooperative corporations.

SPONSORS:Representatives Cantwell, Forner, Sheldon, Jacobsen, Pruitt and Wineberry; by request of Department of Community Development.

HOUSE COMMITTEE ON TRADE & ECONOMIC DEVELOPMENT

SENATE COMMITTEE ON COMMERCE & LABOR

Majority Report:  Do pass.

      Signed by Senators Matson, Chairman; Anderson, Vice Chairman; Bluechel, McCaslin, McMullen, Moore, Murray, and Skratek. 

Staff:  Traci Anderson (786‑7452)

Hearing Dates:April 1, 1991; April 3, 1991

BACKGROUND:

Employee cooperatives can be formed as corporations under state law.

Typically, a corporation's board of directors can amend the corporations by-laws without shareholder action when the articles of incorporation or state law does not prohibit the directors from doing so.

The shareholders, or members, of an employee cooperative corporation must change the corporation's by-laws; the directors cannot.

SUMMARY:

The directors of an employee cooperative corporation can change the corporation's by-laws if specifically authorized to do so by a vote of the members or by the articles of incorporation.

Appropriation:  none

Revenue:  none

Fiscal Note:  none requested

TESTIMONY FOR:

This bill eliminates a significant policy and management obstacle for employee cooperative corporations which other corporations do not face.  It brings the Employee Cooperative Corporations Act into agreement with the Business Corporation Act of 1990.

TESTIMONY AGAINST:  None

TESTIFIED:  Don Krupp, Dept. of Community Development (pro)