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Senate changes laws on non-profits in hospital fight

OLYMPIA -- The Legislature came closer to stepping between two feuding hospital organizations in Spokane by changing laws that govern what happens when the board of a non-profit corporation deadlocks.

House Bill 3046 allows a superior court judge more lattitude in solving an impasse on a non-profit board. Under current law, the judge's options were essentially limited to dissolving the corporation.

The bill was was spawned by a dispute by the corporations that run Deaconess and Providence Sacred Heart medical center and set up Inland Northwest Health Services to share a variety of operations, from medical records to air ambulance. Both hospital corporations were non-profits when INHS was set up, but Deaconess has since been purchased by a for-profit organization and disagreements over the use of INHS have arisen.

It's the first change in the state's non-profit laws since 1967, Sen. Adam Kline, D-Seattle said. It would allow judges to use the same rules for trying to solve a dispute on a for-profit corporation.

Rep. Jim Honeyford, R-Sunnyside, tried unsuccessfully to strip a emergency clause from the bill: "We haven't acted in 43 years, I don't see an emergency to act now."

But Sen. Lisa Brown, D-Spokane, said a Spokane "health-care related non-profit" -- she didn't mention INHS specifically on the Senate floor -- could be in a sitaution soon where it needed this assistance.

Sen. Chris Marr, D-Spokane, said a deadlock on the INHS board could imperil 1,000 jobs in Spokane.

The bill passed 44-1 with all Spokane area legislators voting yes. It now heads back to the House of Representatives, which passed a similar version 97-0 three weeks ago.

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