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Hospital feud prompts legislation

Wed., March 3, 2010, midnight

Bill gives judges more options to solve nonprofit board disputes

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 nonprofit corporation deadlocks.

House Bill 3046 gives a Superior Court judge more latitude in solving an impasse on any nonprofit board. Under current law, the judge essentially is limited to dissolving the corporation.

The bill was drafted by Rep. John Driscoll, D-Spokane, because of a dispute between the corporations that run Deaconess and Providence Sacred Heart medical centers. Those two hospitals set up Inland Northwest Health Services to share a variety of operations, from medical records to air ambulance. Both hospital corporations were local nonprofits when INHS was set up; Deaconess has since been purchased by a national for-profit organization and disagreements over the use of INHS have arisen.

It’s the first change in the state’s nonprofit laws since 1967, said Sen. Adam Kline, D-Seattle, and would allow judges to solve nonprofit disputes the way they do with for-profit corporations.

Rep. Jim Honeyford, R-Sunnyside, tried to remove an 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 nonprofit” – she didn’t mention INHS specifically on the Senate floor – could be in a situation where it soon 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, which passed a similar version 97-0 three weeks ago.

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