SENATE BILL REPORT

SB 5869

BYSenator Lee

Regarding unemployment compensation.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):February 28, 1989; March 1, 1989

Majority Report:  That Substitute Senate Bill No. 5869 be substituted therefor, and the substitute bill do pass.

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

Senate Staff:Steve Boruchowitz (786-7429)

                  March 1, 1989

AS REPORTED BY COMMITTEE ON ECONOMIC DEVELOPMENT & LABOR, MARCH 1, 1989

BACKGROUND:

Currently, nonprofit organizations classified as 501(c)(3) are excluded from regular unemployment compensation insurance provisions and operate under a reimbursable system.

Some fraternal organizations, which are classified as 501(c)(10) provide services, such as nursing homes, identical to other nonprofits.  These organizations have indicated a desire to participate in the reimbursement system for unemployment compensation.

SUMMARY:

Fraternal associations classified as 501(c)(10) are included in the exemption that allows employer contributions instead of tax payments for unemployment compensation.

EFFECT OF PROPOSED SUBSTITUTE:

A federal "savings" clause is added.

Appropriation:    none

Revenue:    yes

Fiscal Note:      requested February 27, 1989

Senate Committee - Testified: Graeme Sakrison, Department of Employment Security