Indiana Senate Bill SB0278

Indiana 2023 Regular Session

• Introduced: 1/11/23
• Refer: 1/11/23
• Report Pass: 2/16/23
• Engrossed: 3/1/23
• Refer: 3/6/23

Caption

Nonprofit corporations.

Impact

The impact of SB 278 on Indiana's nonprofit landscape is substantial as it tightens the requirements for accountability, particularly for corporations classified as public benefit organizations. Courts are authorized to dissolve these organizations under specific circumstances, such as illegal activities or gross mismanagement of assets. Additionally, the Attorney General is granted extended powers to intervene before court actions, allowing for the appointment of receivers or custodians to manage nonprofits in distress. This development is expected to promote a higher level of compliance and integrity among nonprofit organizations.

Summary

Senate Bill 278 pertains to the regulation of nonprofit corporations in the state of Indiana. It establishes guidelines for the Attorney General's oversight of these entities, especially in cases of mismanagement or wrongdoing. The bill defines 'public benefit corporation' more inclusively, adding that such entities must now demonstrate an operating budget supported by public funds or authorized to spend public funds to further their mission. This aims to enhance scrutiny and accountability for nonprofits operating with significant public involvement.

Sentiment

The reception of the bill among legislators appears to be largely supportive, as indicated by a unanimous vote (49-0) in favor of its passage. Supporters argue that the bill is essential for ensuring effective governance within the nonprofit sector, fostering public trust that these organizations are operating within legal and ethical boundaries. However, some concerns were raised about the potential for increased regulatory burden on nonprofits, particularly smaller organizations that may struggle to meet heightened compliance demands.

Contention

Notable points of contention surrounding SB 278 revolve around the balance of regulatory oversight versus operational autonomy for nonprofits. Critics have voiced that while the bill aims to increase accountability, it might inadvertently stifle the mission-driven work of smaller groups that lack the resources to navigate more stringent regulations. Furthermore, there are concerns regarding the discretion given to the Attorney General in conflict resolution processes and the implications of dissolving organizations without exhaustive measures to address issues collaboratively.