"Unfair Competition"

10/16/07 House Introduces bill prohibiting nonprofit competition with for-profits. On October 16, 2007, Rep. Creighton introduced the Free Enterprise and Taxpayer Protection bill (HB1923) that would prohibit State funding for charities that compete with private enterprise. Existing levels of competition would be grandfathered. Remedies include permanent injunction and damages against the competing charity.

Unfair competition bills like SB480 and now HB1923 represent a marked shift from the policies underlying Act 55 and pose a very real threat to the sector. While Act 55 addresses competition, the Act’s language is vague. As a result, Act 55 challenge litigation (while less frequent since the passage of Act 55) has in fact continued. For litigants to these suits, competition with for-profit entities is by no means a settled matter. PANO has actively opposed unfair competition bills such as SB930 and HB 2572 of 2005. We will continue to actively oppose SB480 and HB1923 as well. HB1923 was referred to the House Commerce Committee on 10/16/07

Bill History: http://www.legis.state.pa.us/WU01/LI/BI/BH/2007/0/HB1923.HTM.

4/25/07 New State Bill Cuts-Off State Funding for Charities that Compete. The Free Enterprise and Taxpayer Protection Act was introduced on March 29, 2007 by Senators Browne and others. Senate Bill 480 would prohibit the State from funding nonprofits that compete with for-profit entities. While current levels of competition and certain essential services would be grandfathered, this bill could eliminate a major source of funding from the charitable nonprofit sector. SB480: http://capwiz.com/pano/issues/bills/?bill=9632911 

5/10/06 State Bill Would Ban State Grants for Nonprofits Competing with Private Companies. On April 26, the Pennsylvania Senate Finance Committee held a hearing to discuss the new bill SB 930.  The UNFAIR COMPETITION bills (SB 930 / HB 2572) before the House and the Senate, would prohibit State government funds from funding Nonprofit activities where those funds would be used for expand the scope of activity (beyond current levels) if a for-profit competitor exists.  While the bill is designed to prevent Government competition with private enterprise, the bill’s broad language would impact nonprofits.   The Senate Finance Committee has not stated when it plans to move this bill out of committee.  The House bill is currently in the House Commerce Committee. PANO submitted a written opinion on this matter.