Plain English Breakdown
The official source material does not provide specific details on what happens if a nonprofit is close to losing its appointment rights but quickly fixes the issue, leaving this as an open question.
Economic Development Districts and Nonprofit Entities
This act changes the rules for nonprofit entities that appoint members to economic development district boards in large cities, requiring them to maintain good standing with the state or lose their appointment rights.
What This Bill Does
- Requires nonprofits to stay in good standing with the secretary of state for three consecutive years to keep appointing board members.
- Forbids nonprofits from making appointments if they are not in good standing for three consecutive years.
- States that even if a nonprofit gets back into good standing, it cannot make new appointments for at least two more years.
Who It Names or Affects
- Nonprofit entities that appoint members to economic development district boards in large cities.
- Economic development districts located in municipalities with over 300,000 people.
Terms To Know
- good standing
- Being up-to-date and compliant with all state requirements.
- economic development district
- A special area designated to promote economic growth through various initiatives.
Limits and Unknowns
- The law only applies to nonprofits in large cities, not smaller towns or rural areas.
- It does not specify what happens if a nonprofit is close to losing its appointment rights but quickly fixes the issue.
- The act becomes effective on August 1, 2026.