The Diet passed a revised bill March 19 that will give corporate status to volunteer and other citizens' groups for the first time by recognizing them as official nonprofit organizations.

The new legislation is expected to take effect within the next 13 months, according to government officials. During a Lower House plenary session March 19, lawmakers backed a unanimous decision March 17 by the chamber's Cabinet Committee to approve the bill.

Sponsored by a group of legislators rather than the government, the bill was conceived when volunteer groups emerged as key players in relief efforts in the aftermath of the Great Hanshin Earthquake in January 1995.

The NPO Law, as it is called, is intended to foster society's "third sector," following the public and business sectors, to allow democracy to mature in the nation, according to lawmakers who pushed for the bill.

Although the original bill passed the Lower House in June, it was sent back to the chamber after some revisions were made by the Upper House. The revisions ease regulations on citizens' groups whose members share religious or political ideals.

In the original bill, citizens' groups conducting any activities related to politics or religion would not be given corporate status. The revised version tones down that provision, saying that citizens' groups that primarily serve political or religious purposes will not be granted the status.

With the amendment, Komei in the Upper House and Shinto Heiwa (New Peace Party) in the Lower House -- both backed by Soka Gakkai, the nation's largest lay Buddhist organization -- and the Japanese Communist Party decided to approve the revised bill.

Under the legislation, corporate status would be given to groups whose activities fit under the following 12 areas: health and welfare; social education; community development; culture, arts and sports; environmental protection; disaster relief; community safety; human rights advocacy and peace promotion; international cooperation; gender equality in social participation; youth programs; and work helping citizens' groups that fall into the categories above.

If recognized as an official NPO, it will become easier for a group to make infrastructural preparations for its activities, including renting offices, setting up telephone lines and opening bank accounts.

Without corporate status, a citizens' group must pay inheritance tax if the person under whose name the group is registered dies.

Although all major political parties decided to support the revised bill, calling it "a step forward," the Democratic Party of Japan, Komei, Shinto Heiwa, the Liberal Party and JCP pointed out that there are still some defects in the legislation, particularly the lack of any tax incentives to strengthen the financial bases of NPOs.