00 HOUSE BILL NO. 346 01 "An Act relating to corporations, including public benefit corporations; and providing 02 for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04  * Section 1. AS 10 is amended by adding a new chapter to read: 05 Chapter 60. Public Benefit Corporations.  06 Article 1. Establishment and Termination.  07 Sec. 10.60.010. Establishment of public benefit corporation. A corporation 08 that is organized under AS 10.06 may become a public benefit corporation by 09 (1) including, at the time of the corporation's organization under 10 AS 10.06, in the corporation's articles of incorporation a statement that the corporation 11 is a public benefit corporation under this chapter; or  12 (2) amending its articles of incorporation to contain a statement that 13 the corporation is a public benefit corporation under this chapter; the amendment shall 14 be adopted by at least the minimum vote required under AS 10.60.700 for a status 01 change. 02 Sec. 10.60.020. Approval where organic change. If an entity that was formed 03 under the laws of this state is not a public benefit corporation but is a party to a 04 merger, consolidation, conversion, or interest or share exchange under AS 10.06 or 05 AS 10.55, and the surviving, new, or resulting entity in the merger, consolidation, 06 conversion, or interest or share exchange is a public benefit corporation, the domestic 07 entity shall approve, by at least the minimum vote required under AS 10.60.700 for a 08 status change, the plan of merger, consolidation, conversion, or interest or share 09 exchange. 10 Sec. 10.60.030. General public benefit purpose. (a) A public benefit 11 corporation shall have a purpose of creating general public benefit from the business 12 and operations of the public benefit corporation. That purpose is in addition to the 13 public benefit corporation's purpose under AS 10.06.005. 14 (b) The achievement of the general public benefit purpose under (a) of this 15 section is determined after all of the effects of the business and operations of the 16 public benefit corporation are considered. 17 (c) The creation of general public benefit under (a) of this section is in the best 18 interests of the public benefit corporation. 19 Sec. 10.60.040. Specific public benefit purpose. (a) In addition to its general 20 public benefit purpose, a public benefit corporation may identify in its articles of 21 incorporation one or more specific public benefit purposes. 22 (b) A public benefit corporation may amend its articles of incorporation to 23 add, amend, or delete a specific public benefit purpose. The public benefit corporation 24 shall adopt the amendment by at least the minimum vote required under AS 10.60.700 25 for a status change. 26 (c) The identification of a specific public benefit purpose under (a) of this 27 section does not limit the public benefit corporation's general public benefit purpose. 28 (d) A public benefit corporation may further a specific public benefit by 29 (1) providing low-income or underserved individuals, families, or 30 communities with beneficial products, services, or educational opportunities; 31 (2) promoting economic opportunity for individuals or communities 01 beyond the creation of jobs in the normal course of business; 02 (3) improving human health; 03 (4) promoting the arts, sciences, or advancement of knowledge; 04 (5) increasing the flow of capital to entities with a purpose to benefit 05 the public; or 06 (6) conferring another type of benefit on society or the environment. 07 (e) Pursuing a specific public benefit identified under this section is in the best 08 interests of the public benefit corporation. 09 Sec. 10.60.050. Professional corporations. A professional corporation under 10 AS 10.45 that is a public benefit corporation does not violate AS 10.45 by having a 11 general public benefit purpose or a specific public benefit purpose. 12 Sec. 10.60.060. Termination of public benefit corporation status. (a) A 13 public benefit corporation may terminate its status as a public benefit corporation and 14 cease to be subject to this chapter by amending its articles of incorporation to delete 15 the statement required by AS 10.60.010 to be in the articles of incorporation. The 16 public benefit corporation shall adopt the amendment by at least the minimum vote 17 required under AS 10.60.700 for a status change. 18 (b) If a public benefit corporation is a party to merger, consolidation, 19 conversion, or interest or share exchange that would have the effect of terminating the 20 status of a public benefit corporation, the public benefit corporation shall approve, by 21 at least the minimum vote required under AS 10.60.700 for a status change, the plan of 22 merger, consolidation, conversion, or interest or share exchange. 23 Sec. 10.60.070. Disposition of assets. If a public benefit corporation transacts 24 a sale, lease, exchange, or other disposition of all or substantially all of the assets of 25 the public benefit corporation, unless the transaction is in the usual and regular course 26 of business, the public benefit corporation shall approve the sale, lease, exchange, or 27 other disposition of all or substantially all of the assets of the public benefit 28 corporation by at least the minimum vote required under AS 10.60.700 for a status 29 change. 30 Article 2. Directors.  31 Sec. 10.60.100. Standard of conduct for directors. In discharging their duties 01 and in considering the best interests of a public benefit corporation, the board of 02 directors, committees of the board, and individual directors of the public benefit 03 corporation 04 (1) shall consider the effects of an action or inaction on 05 (A) the shareholders of the public benefit corporation; 06 (B) the employees and workforce of the public benefit 07 corporation, its subsidiaries, and its suppliers; 08 (C) the interests of customers to the extent they are 09 beneficiaries of the general public benefit purpose or specific public benefit 10 purpose of the public benefit corporation; 11 (D) community and societal factors, including the interests of 12 each community in which offices or facilities of the public benefit corporation, 13 its subsidiaries, or its suppliers are located; 14 (E) local and global health; 15 (F) the short-term and long-term interests of the public benefit 16 corporation, including benefits that may accrue to the public benefit 17 corporation from its long-term plans and the possibility that those interests may 18 be best served by the continued independence of the public benefit corporation; 19 and 20 (G) the ability of the public benefit corporation to accomplish 21 its general public benefit purpose and specific public benefit purpose, if any; 22 (2) may consider 23 (A) the resources, intent, and conduct of a person seeking to 24 acquire control of the public benefit corporation; and 25 (B) other pertinent factors or the interests of other groups the 26 directors consider appropriate; 27 (3) are not required to give priority to a particular interest or factor 28 referred to in (1) or (2) of this section over another interest or factor unless the public 29 benefit corporation has stated in its articles of incorporation its intention to give 30 priority to certain interests or factors related to its accomplishment of its general 31 public benefit purpose or of a specific public benefit purpose identified in its articles. 01 Sec. 10.60.110. Coordination with other corporate board requirements.  02 The consideration of interests and factors in the manner required by AS 10.60.100 03 does not constitute a violation of AS 10.06.450. 04 Sec. 10.60.120. Exoneration from personal liability. Except as provided in 05 the articles of incorporation, a director is not personally liable for monetary damages 06 for 07 (1) an action or inaction in the course of performing the duties of a 08 director under AS 10.60.100 if the director performed the duties of office in 09 compliance with AS 10.06.450 and AS 10.60.100 - 10.60.140; or 10 (2) a failure of the public benefit corporation to pursue or create a 11 general public benefit or a specific public benefit. 12 Sec. 10.60.130. No duty to beneficiary. A director of a public benefit 13 corporation does not have a duty arising from the person's status as a beneficiary to a 14 person who is a beneficiary of the general public benefit purpose or a specific public 15 benefit purpose of the public benefit corporation. 16 Sec. 10.60.140. Business judgments. (a) A director of a public benefit 17 corporation who makes a business judgment in good faith fulfills the duty under 18 AS 10.60.100 - 10.60.140 if the director 19 (1) is disinterested in the subject of the business judgment; 20 (2) is informed with respect to the subject of the business judgment to 21 the extent the director reasonably believes to be appropriate under the circumstances; 22 and 23 (3) reasonably believes that the business judgment is in the best 24 interests of the public benefit corporation; in this paragraph, "best interests" includes 25 the creation of the general public benefit purpose and any specific public benefit 26 purpose. 27 (b) When making a determination under (a) of this section, the director shall 28 consider the interests and factors listed in AS 10.60.100. 29 Article 3. Benefit Director.  30 Sec. 10.60.150. Benefit director. The board of directors of a public benefit 31 corporation must include a director who 01 (1) is designated the benefit director; and 02 (2) has, in addition to the powers, duties, rights, and immunities of the 03 other directors of the public benefit corporation, the powers, duties, rights, and 04 immunities provided in AS 10.60.150 - 10.60.220. 05 Sec. 10.60.160. Election of benefit director. The board of directors shall elect 06 and may remove the benefit director in the manner provided by AS 10.06.453 - 07 10.06.463. 08 Sec. 10.60.170. Qualifications of benefit director. (a) The benefit director of 09 a public benefit corporation, except as provided in AS 10.60.210, shall be an 10 individual who does not have a material relationship under AS 10.60.220 with the 11 public benefit corporation or a subsidiary of the public benefit corporation. The benefit 12 director may serve as the benefit officer at the same time as serving as the benefit 13 director. The articles of incorporation or bylaws of a public benefit corporation may 14 prescribe additional qualifications of the benefit director not inconsistent with this 15 subsection. 16 (b) Serving as benefit director of a public benefit corporation does not 17 establish that an individual has a material relationship with the public benefit 18 corporation or a subsidiary of the public benefit corporation. 19 Sec. 10.60.180. Annual compliance statement. The benefit director shall 20 prepare, and the public benefit corporation shall include in the annual benefit report to 21 shareholders required by AS 10.60.500, 22 (1) the opinion of the benefit director on whether the public benefit 23 corporation acted in accordance with its general public benefit purpose and any 24 specific public benefit purpose in all material respects during the period covered by 25 the report; 26 (2) the opinion of the benefit director on whether the directors and 27 officers complied with AS 10.60.100 and 10.60.230 during the period covered by the 28 report; and 29 (3) if the benefit director believes the public benefit corporation or its 30 directors or officers failed to act or comply in the manner described in (1) or (2) of this 31 section, a description of the ways in which the public benefit corporation or its 01 directors or officers failed to act or comply. 02 Sec. 10.60.190. Status of actions. The action or inaction of a benefit director 03 in the capacity of a benefit director constitutes for all purposes an action or inaction of 04 that individual in the capacity of a director of the public benefit corporation. 05 Sec. 10.60.200. Exoneration from personal liability. Regardless of whether 06 the articles of incorporation of a public benefit corporation include a provision 07 eliminating or limiting the personal liability of directors under AS 10.06.210, a benefit 08 director is not personally liable for an action or omission when done in the capacity of 09 a benefit director unless the action or omission constitutes self-dealing, willful 10 misconduct, or a knowing violation of law. 11 Sec. 10.60.210. Professional corporations. The benefit director of a public 12 benefit corporation that is a professional corporation is not prohibited from having a 13 material relationship under AS 10.60.220 with the public benefit corporation or a 14 subsidiary of the public benefit corporation. 15 Sec. 10.60.220. Material relationship. When determining under 16 AS 10.60.170 whether a benefit director of a public benefit corporation has a material 17 relationship with the public benefit corporation or a subsidiary of the public benefit 18 corporation, a material relationship is conclusively presumed to exist if 19 (1) the individual is, or has been within the last three years, an 20 employee other than a benefit officer of the public benefit corporation or a subsidiary; 21 (2) an immediate family member of the individual is, or has been 22 within the last three years, an executive officer other than a benefit officer of the 23 public benefit corporation or a subsidiary; 24 (3) there is beneficial or record ownership of five percent or more of 25 the outstanding shares of the public benefit corporation, calculated as if all outstanding 26 rights to acquire equity interests in the public benefit corporation had been exercised, 27 by 28 (A) the individual; or 29 (B) an entity 30 (i) of which the individual is a director, an officer, or a 31 manager; or 01 (ii) in which the individual owns beneficially or of 02 record five percent or more of the outstanding equity interests, 03 calculated as if all outstanding rights to acquire equity interests in the 04 entity had been exercised. 05 Article 4. Officers.  06 Sec. 10.60.230. Standard of conduct for officers. An officer of a public 07 benefit corporation shall consider the interests and factors under AS 10.60.100 if the 08 officer 09 (1) has discretion to act with respect to a matter; and 10 (2) reasonably believes that the matter identified under (1) of this 11 section may have a material effect on the creation by the public benefit corporation of 12 general public benefit or a specific public benefit identified in the articles of 13 incorporation of the public benefit corporation. 14 Sec. 10.60.240. Coordination with other corporate officer requirements.  15 The consideration of interests and factors under AS 10.60.230 by an officer of a public 16 benefit corporation does not constitute a violation of AS 10.06.483. 17 Sec. 10.60.250. Exoneration from personal liability. Except as provided in 18 the articles of incorporation, an officer of a public benefit corporation is not personally 19 liable for monetary damages for 20 (1) an action or inaction as an officer in the course of performing the 21 duties of an officer under AS 10.60.230 - 10.60.270 if the officer performs the duties 22 of the position in compliance with AS 10.06.483 and this section; or 23 (2) a failure of the public benefit corporation to pursue or create a 24 general public benefit or a specific public benefit. 25 Sec. 10.60.260. No duty to beneficiary. An officer of a public benefit 26 corporation does not have a duty arising from the person's status as a beneficiary to a 27 person who is a beneficiary of the general public benefit purpose or a specific public 28 benefit purpose of the public benefit corporation. 29 Sec. 10.60.270. Business judgment. An officer who makes a business 30 judgment in good faith fulfills the duty under AS 10.60.230 - 10.60.270 if the officer 31 (1) is disinterested in the subject of the business judgment; 01 (2) is informed with respect to the subject of the business judgment to 02 the extent the officer reasonably believes to be appropriate under the circumstances; 03 and 04 (3) reasonably believes that the business judgment is in the best 05 interests of the public benefit corporation; in this paragraph, "best interests" includes 06 the creation of the general public benefit purpose and any specific public benefit 07 purpose. 08 Sec. 10.60.280. Benefit officer. A public benefit corporation may designate an 09 officer as the benefit officer of the public benefit corporation. A benefit officer has the 10 powers and duties of the public benefit corporation that relate to the creation of a 11 general public benefit and a specific public benefit, as the powers and duties are 12 provided in the bylaws, or, absent controlling provisions in the bylaws, by resolutions 13 or orders of the board of directors. A benefit officer shall prepare the benefit report 14 required by AS 10.60.500. 15 Article 5. Actions and Claims.  16 Sec. 10.60.300. Actions and claims. Unless another provision of this chapter 17 limits liability, a person identified under AS 10.60.320 may bring an action or assert a 18 claim against a public benefit corporation or its directors or officers with respect to 19 (1) a failure to pursue or create general public benefit or a specific 20 public benefit set out in its articles of incorporation; or 21 (2) a violation of an obligation, duty, or standard of conduct under this 22 chapter. 23 Sec. 10.60.310. Limitation on liability of corporation. Notwithstanding 24 AS 10.60.300, a public benefit corporation is not liable for monetary damages under 25 this chapter for a failure of the public benefit corporation to pursue or create a general 26 public benefit or a specific public benefit. 27 Sec. 10.60.320. Right to bring action. (a) An action under AS 10.60.300 may 28 be commenced or maintained only 29 (1) directly by the public benefit corporation; or 30 (2) derivatively under AS 10.06.435 by 31 (A) a person or group of persons that owned beneficially or of 01 record at least two percent of the total number of the shares of the public 02 benefit corporation of a class or series outstanding at the time of the act or 03 omission complained of; 04 (B) a director of the public benefit corporation; 05 (C) a person or group of persons who owned beneficially or of 06 record five percent or more of the outstanding equity interests in a person of 07 which the public benefit corporation is a subsidiary at the time of the act or 08 omission complained of; or 09 (D) another person specified in the articles of incorporation or 10 bylaws of the public benefit corporation. 11 (b) In this section, a person is the beneficial owner of shares or equity interests 12 if the shares or equity interests are held in a voting trust or by a nominee on behalf of 13 the person. 14 Article 6. Reporting.  15 Sec. 10.60.500. Benefit report. In addition to the biennial report required by 16 AS 10.06.805, a public benefit corporation shall prepare an annual benefit report. 17 Sec. 10.60.510. Contents of report. The benefit report required by 18 AS 10.60.500 must contain 19 (1) a description of 20 (A) the ways in which the public benefit corporation pursued 21 the general public benefit during the year being reported and the extent to 22 which the public benefit corporation created general public benefit; 23 (B) the ways in which the public benefit corporation pursued 24 each specific public benefit identified in the articles of incorporation and the 25 extent to which the public benefit corporation created the specific public 26 benefit; 27 (C) any circumstances that have hindered the creation by the 28 public benefit corporation of general public benefit or specific public benefit; 29 (D) the process and rationale for selecting or changing the 30 third-party standard used to prepare the benefit report; 31 (2) an assessment of the overall performance of the general public 01 benefit purpose by the public benefit corporation against a third-party standard 02 (A) applied consistently with any application of that standard in 03 prior benefit reports; or 04 (B) accompanied by an explanation of the reasons for 05 (i) any inconsistent application; or 06 (ii) the change to that standard from the one used in the 07 immediately prior report; 08 (3) the name of the benefit director and the benefit officer, if any, and 09 the address to which correspondence to each of them may be directed; 10 (4) the compensation paid by the public benefit corporation during the 11 year to each director in the capacity of a director; 12 (5) the statement of the benefit director described in AS 10.60.180; and 13 (6) a statement of any connection between the organization that 14 established the third-party standard or its directors, officers, or any holder of five 15 percent or more of the governance interests in the organization and the public benefit 16 corporation or its directors, officers, or any holder of five percent or more of the 17 outstanding shares of the public benefit corporation, including any financial or 18 governance relationship that might materially affect the credibility of the use of the 19 third-party standard. 20 Sec. 10.60.520. Correspondence relating to change of benefit director. If, 21 during the year covered by a benefit report, a benefit director resigned from or refused 22 to stand for reelection to the position of benefit director, or was removed from the 23 position of benefit director, and the benefit director furnished the public benefit 24 corporation with written correspondence concerning the circumstances surrounding 25 the resignation, refusal, or removal, the benefit report must include that 26 correspondence as an exhibit. 27 Sec. 10.60.530. Audit not required. A public benefit corporation is not 28 required to have the benefit report, including the assessment of the performance of the 29 public benefit corporation in the benefit report required by AS 10.60.510(2), audited 30 or certified by a person without a connection to the public benefit corporation. 31 Sec. 10.60.540. Delivery of annual benefit report to shareholders. A public 01 benefit corporation shall send its annual benefit report to each shareholder not later 02 than the earlier of the date 03 (1) that is 120 days after the end of the fiscal year of the public benefit 04 corporation; or 05 (2) the same date as the date that the public benefit corporation 06 delivers any other annual report to its shareholders. 07 Sec. 10.60.550. Internet website posting. If a public benefit corporation has 08 an Internet website, the public benefit corporation shall post all of its benefit reports 09 on the public portion of the website. The public benefit corporation may omit from the 10 benefit reports posted on the website the compensation paid to directors and financial 11 or proprietary information included in the benefit report.  12 Sec. 10.60.560. Availability of copies of benefit report. If a public benefit 13 corporation does not have an Internet website, the public benefit corporation shall 14 provide a copy of its most recent benefit report, without charge, to any person who 15 requests a copy, but the public benefit corporation may omit the compensation paid to 16 directors and financial or proprietary information included in the benefit report from 17 the copy of the benefit report provided to the person. 18 Sec. 10.60.570. Filing of report. Concurrently with the delivery of the benefit 19 report to shareholders under AS 10.60.540, a public benefit corporation shall deliver a 20 copy of the benefit report to the department for filing by the department, but the public 21 benefit corporation may omit the compensation paid to directors and financial or 22 proprietary information included in the benefit report from the benefit report delivered 23 to the department. The department shall charge a fee established by the department for 24 filing a benefit report. 25 Article 7. Miscellaneous Provisions.  26 Sec. 10.60.700. Status change approval. In addition to any other required 27 approval or vote, to accomplish a status change of a public benefit corporation, 28 (1) the shareholders of each class or series may vote as a separate 29 voting group on the status change, regardless of a limitation stated in the articles of 30 incorporation or bylaws on the voting rights of a class or series; 31 (2) the shareholders shall approve the status change by a vote of each 01 class or series entitled to cast at least two-thirds of the votes that all shareholders of 02 the class or series are entitled to cast on the action. 03 Sec. 10.60.710. Shareholder dissent. In addition to the corporate actions to 04 which a shareholder may dissent under AS 10.06.574(a), a shareholder of a 05 corporation organized under AS 10.06 may dissent under AS 10.06.574 - 10.06.582 if 06 the corporation amends its articles under AS 10.60.010(2) to become a public benefit 07 corporation. 08 Sec. 10.60.720. Third-party standard. In this chapter, whenever a third-party 09 standard is used, the standard refers to a recognized standard for defining, reporting, 10 and assessing corporate performance 11 (1) that is comprehensive because it assesses the effect of the public 12 benefit corporation and its operations on the interests listed in AS 10.60.100(1)(B) - 13 (E); 14 (2) that is developed by a person that is not controlled by the public 15 benefit corporation; 16 (3) that is credible because it is developed by a person that 17 (A) has access to the expertise necessary to assess overall 18 corporate performance; and 19 (B) uses an approach, including a reasonable public comment 20 period, to develop the standard that is balanced and considers multiple 21 concerns and interests; 22 (4) for which the following information about the standard is publicly 23 available: 24 (A) the criteria considered when measuring the overall 25 performance of a business; 26 (B) the relative weightings, if any, of the criteria in (A) of this 27 paragraph; 28 (5) for which the following information about the development and 29 revision of the standard is publicly available: 30 (A) the identity of the directors, officers, material owners, and 31 governing body of the entity that developed and controls revisions to the 01 standard; 02 (B) the process by which revisions to the standard and changes 03 to the membership of the governing body are made; 04 (C) an accounting of the revenue and sources of financial 05 support for the entity, with sufficient detail to disclose any relationships that 06 could reasonably be considered to present a potential conflict of interest. 07 Sec. 10.60.730. Tax exemptions. A public benefit corporation may not claim a 08 tax exemption under AS 43.20 (Alaska Net Income Tax Act) if the tax exemption is 09 not also available to corporations that are not public benefit corporations. 10 Sec. 10.60.740. Interpretation. The authorization under AS 10.60.010 to form 11 a public benefit corporation for a general public benefit purpose and the authorization 12 under AS 10.60.040 for a public benefit corporation to identify a specific public 13 benefit purpose may not be interpreted to prevent a business entity that is formed 14 under another law of this state from including in its general powers the consideration 15 of, or donation to, a general public benefit purpose or a specific public benefit 16 purpose. 17 Article 8. General Provisions.  18 Sec. 10.60.910. Regulations. The department may adopt regulations under 19 AS 44.62 (Administrative Procedure Act) to implement this chapter. 20 Sec. 10.60.920. Application to business corporations generally. The 21 existence of a provision of this chapter does not, by itself, suggest that a contrary or 22 different rule of law applies to a business corporation that is not a public benefit 23 corporation. This chapter does not affect a statute or other law that applies to a 24 business corporation that is not a public benefit corporation. 25 Sec. 10.60.930. Applicable laws. Except as otherwise provided in this chapter, 26 AS 10.06 applies to a public benefit corporation. A public benefit corporation may be 27 simultaneously subject to this chapter and AS 10.45. The provisions of AS 10.06 and 28 AS 10.45 are subject to this chapter. 29 Sec. 10.60.940. Consistency with chapter. A provision of the articles of 30 incorporation or bylaws of a public benefit corporation may not limit, be inconsistent 31 with, or supersede a provision of this chapter. 01 Sec. 10.60.990. Definitions. In this chapter, 02 (1) "benefit director" means the director designated as the benefit 03 director of a public benefit corporation under AS 10.60.150; 04 (2) "benefit officer" means the individual designated as the benefit 05 officer of a public benefit corporation under AS 10.60.280; 06 (3) "benefit report" means the report required by AS 10.60.500; 07 (4) "business corporation" means a corporation organized under 08 AS 10.06, including a professional corporation under AS 10.45; 09 (5) "general public benefit" means a material positive effect on society 10 or the environment, taken as a whole, assessed against a third-party standard; 11 (6) "general public benefit purpose" means the public benefit purpose 12 under AS 10.60.030; 13 (7) "public benefit corporation" means a corporation that elects under 14 AS 10.60.010 to become subject to this chapter; 15 (8) "specific public benefit" means a benefit that serves a public 16 welfare, religious, charitable, scientific, literary, or educational purpose, or another 17 purpose beyond the strict interest of the shareholders of the public benefit corporation; 18 (9) "specific public benefit purpose" means a specific public benefit 19 purpose that is identified as a public benefit purpose by a public benefit corporation 20 under AS 10.60.040(a) or (b); 21 (10) "status change" means 22 (A) an amendment of the articles of incorporation under 23 AS 10.60.010; 24 (B) an election of an existing corporation to become a public 25 benefit corporation under AS 10.60.010; 26 (C) the approval of a plan of merger, consolidation, conversion, 27 or interest or share exchange under AS 10.60.020; 28 (D) the termination of public benefit corporation status under 29 AS 10.60.060; or 30 (E) a disposition of assets under AS 10.60.070; 31 (11) "subsidiary" means an entity in which a person owns beneficially 01 or of record 50 percent or more of the outstanding equity interests calculated as if all 02 outstanding rights to acquire equity interests in the entity had been exercised. 03  * Sec. 2. The uncodified law of the State of Alaska is amended by adding a new section to 04 read: 05 TRANSITION: REGULATIONS. The Department of Commerce, Community, and 06 Economic Development may adopt regulations under AS 10.60.910, enacted by sec. 1 of this 07 Act, necessary to implement this Act. The regulations take effect under AS 44.62 08 (Administrative Procedure Act), but not before July 1, 2015. 09  * Sec. 3. Section 2 of this Act takes effect immediately under AS 01.10.070(c). 10  * Sec. 4. Except as provided in sec. 3 of this Act, this Act takes effect July 1, 2015.