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CSHB 124(FIN): "An Act relating to corporations, including benefit corporations, and other entities; and providing for an effective date."

00                       CS FOR HOUSE BILL NO. 124(FIN)                                                                    
01 "An Act relating to corporations, including benefit corporations, and other entities; and                               
02 providing for an effective date."                                                                                       
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1. AS 10.06.633(a) is amended to read:                                                                   
05            (a)  A corporation may be dissolved involuntarily by the commissioner if                                     
06                 (1)  the corporation is delinquent six months in filing its biennial report                             
07       or in paying its biennial corporation tax or a penalty;                                                           
08                 (2)  the corporation has failed for 30 days to appoint and maintain a                                   
09       registered agent in the state;                                                                                    
10                 (3)  the corporation has failed for 30 days after change of its registered                              
11       office or registered agent to file in the office of the commissioner a statement of the                           
12       change;                                                                                                           
13                 (4)  the corporation has failed for two years to complete dissolution                                   
14       under a certificate of election under AS 10.06.608 to dissolve;                                                   
01                 (5)  a vacancy on the board of the corporation is not filled within six                                 
02       months or the next annual meeting, whichever occurs first;                                                        
03                 (6)  a misrepresentation of material facts has been made in the                                         
04       application, report, affidavit, or other document submitted under this chapter; [OR]                              
05                 (7)  the corporation is 90 days delinquent in filing notice of change of                                
06       an officer, director, alien affiliate, or five percent shareholder, as required by this                           
07       chapter; or                                                                                                   
08                 (8)  the corporation, if a benefit corporation, is delinquent six                                   
09       months or more in including its benefit report in its biennial report under                                   
10 AS 10.60.570 or in paying the fee established under AS 10.60.570 for including                                      
11 the benefit report in the biennial report; in this paragraph, "benefit corporation"                                 
12       and "benefit report" have the meanings given in AS 10.60.990.                                                 
13    * Sec. 2. AS 10 is amended by adding a new chapter to read:                                                        
14                      Chapter 60. Benefit Corporations.                                                                
15                   Article 1. Establishment and Termination.                                                           
16 Sec. 10.60.010. Establishment of benefit corporation. A business                                                      
17       corporation may become a benefit corporation by                                                                   
18 (1)  including, at the time of the business corporation's organization                                                  
19 under AS 10.06 or AS 10.45, in the business corporation's articles of incorporation a                                   
20       statement that the business corporation is a benefit corporation under this chapter; or                         
21 (2)  amending its articles of incorporation to contain a statement that                                                 
22 the business corporation is a benefit corporation under this chapter; the amendment                                     
23 shall be adopted by at least the minimum vote required under AS 10.60.700(a) for a                                      
24       status change.                                                                                                    
25 Sec. 10.60.020. Approval where organic change. If an entity that was formed                                           
26 under the laws of this state is not a benefit corporation but is a party to a merger,                                   
27 consolidation, conversion, or interest or share exchange under AS 10.06 or AS 10.55,                                    
28 and the surviving, new, or resulting entity in the merger, consolidation, conversion, or                                
29 interest or share exchange is a benefit corporation, the domestic entity shall approve,                                 
30 by at least the minimum vote required under AS 10.60.700(b) for a status change, the                                    
31       plan of merger, consolidation, conversion, or interest or share exchange.                                         
01 Sec. 10.60.030. General public benefit purpose. (a) A benefit corporation                                             
02 shall have a purpose of creating general public benefit from the business and                                           
03 operations of the benefit corporation. That purpose is in addition to the benefit                                       
04       corporation's purpose under AS 10.06.005.                                                                         
05            (b)  The achievement of the general public benefit purpose under (a) of this                                 
06       section is determined after all of the effects of the business and operations of the                              
07       benefit corporation are considered.                                                                               
08            (c)  The creation of general public benefit under (a) of this section is in the best                         
09       interests of the benefit corporation.                                                                             
10 Sec. 10.60.040. Specific public benefit purpose. (a) In addition to its general                                       
11 public benefit purpose, a benefit corporation may identify in its articles of                                           
12       incorporation one or more specific public benefit purposes.                                                       
13 (b)  A benefit corporation may amend its articles of incorporation to add,                                              
14 amend, or delete a specific public benefit purpose. The benefit corporation shall adopt                                 
15 the amendment by at least the minimum vote required under AS 10.60.700(a) for a                                         
16       status change.                                                                                                    
17 (c)  The identification of a specific public benefit purpose under (a) of this                                          
18       section does not limit the benefit corporation's general public benefit purpose.                                  
19            (d)  A benefit corporation may further a specific public benefit by                                          
20 (1)  providing low-income or underserved individuals, families, or                                                      
21       communities with beneficial products, services, or educational opportunities;                                     
22 (2)  promoting economic opportunity for individuals or communities                                                      
23       beyond the creation of jobs in the normal course of business;                                                     
24                 (3)  improving human health;                                                                            
25                 (4)  promoting the arts, sciences, or advancement of knowledge;                                         
26 (5)  increasing the flow of capital to entities with a purpose to benefit                                               
27       the public; or                                                                                                    
28                 (6)  conferring another type of benefit on people or their surroundings.                                
29 (e)  Pursuing a specific public benefit identified under this section is in the best                                    
30       interests of the benefit corporation.                                                                             
31 Sec. 10.60.050. Professional corporations. A professional corporation under                                           
01 AS 10.45 that is a benefit corporation does not violate AS 10.45 by having a general                                    
02       public benefit purpose or a specific public benefit purpose.                                                      
03 Sec. 10.60.060. Termination of benefit corporation status. (a) A benefit                                              
04 corporation may terminate its status as a benefit corporation and cease to be subject to                                
05 this chapter by amending its articles of incorporation to delete the statement required                                 
06 by AS 10.60.010 to be in the articles of incorporation. The benefit corporation shall                                   
07 adopt the amendment by at least the minimum vote required under AS 10.60.700(a)                                         
08       for a status change.                                                                                              
09 (b)  If a benefit corporation is a party to merger, consolidation, conversion, or                                       
10 interest or share exchange that would have the effect of terminating the status of a                                    
11 benefit corporation, the benefit corporation shall approve, by at least the minimum                                     
12 vote required under AS 10.60.700(a) for a status change, the plan of merger,                                            
13       consolidation, conversion, or interest or share exchange.                                                         
14 Sec. 10.60.070. Disposition of assets. If a benefit corporation transacts a sale,                                     
15 lease, exchange, or other disposition of all or substantially all of the assets of the                                  
16 benefit corporation, unless the transaction is in the usual and regular course of                                       
17 business, the benefit corporation shall approve the sale, lease, exchange, or other                                     
18 disposition of all or substantially all of the assets of the benefit corporation by at least                            
19       the minimum vote required under AS 10.60.700(a) for a status change.                                              
20                           Article 2. Directors.                                                                       
21 Sec. 10.60.100. Standard of conduct for directors. In discharging their duties                                        
22 and in considering the best interests of a benefit corporation, the board of directors,                                 
23       committees of the board, and individual directors of the benefit corporation                                      
24                 (1)  shall consider the effects of an action or inaction on                                             
25                      (A)  the shareholders of the benefit corporation;                                                  
26 (B)  the employees and workforce of the benefit corporation, its                                                        
27            subsidiaries, and its suppliers;                                                                             
28 (C)  the interests of customers to the extent they are                                                                  
29 beneficiaries of the general public benefit purpose or specific public benefit                                          
30            purpose of the benefit corporation;                                                                          
31 (D)  community and societal factors, including the interests of                                                         
01            each community in which offices or facilities of the benefit corporation, its                                
02            subsidiaries, or its suppliers are located;                                                                  
03                      (E)  local and global health;                                                                      
04 (F)  the short-term and long-term interests of the benefit                                                              
05 corporation, including benefits that may accrue to the benefit corporation from                                         
06 its long-term plans and the possibility that those interests may be best served                                         
07            by the continued independence of the benefit corporation; and                                                
08                      (G)  the ability of the benefit corporation to accomplish its                                      
09            general public benefit purpose and specific public benefit purpose, if any;                                  
10                 (2)  may consider                                                                                       
11 (A)  the resources, intent, and conduct of a person seeking to                                                          
12            acquire control of the benefit corporation; and                                                              
13 (B)  other pertinent factors or the interests of other groups the                                                       
14            directors consider appropriate;                                                                              
15 (3)  are not required to give priority to a particular interest or factor                                               
16 referred to in (1) or (2) of this section over another interest or factor unless the benefit                            
17 corporation has stated in its articles of incorporation its intention to give priority to                               
18 certain interests or factors related to its accomplishment of its general public benefit                                
19       purpose or of a specific public benefit purpose identified in its articles.                                       
20 Sec. 10.60.110. Coordination with other corporate board requirements.                                                 
21 The consideration of interests and factors in the manner required by AS 10.60.100                                       
22       does not constitute a violation of AS 10.06.450.                                                                  
23 Sec. 10.60.120. Exoneration from personal liability. Except as provided in                                            
24 the articles of incorporation, a director is not personally liable for monetary damages                                 
25       for                                                                                                               
26 (1)  an action or inaction in the course of performing the duties of a                                                  
27 director under AS 10.60.100 if the director performed the duties of office in                                           
28       compliance with AS 10.06.450 and AS 10.60.100 - 10.60.140; or                                                     
29 (2)  a failure of the benefit corporation to pursue or create general                                                   
30       public benefit or a specific public benefit.                                                                      
31 Sec. 10.60.130. No duty to beneficiary. A director of a benefit corporation                                           
01       does not have a duty arising from the person's status as a beneficiary to a person who                            
02       is a beneficiary of the general public benefit purpose or a specific public benefit                               
03       purpose of the benefit corporation.                                                                               
04            Sec. 10.60.140. Business judgment. (a) A director of a benefit corporation                                 
05       who makes a business judgment in good faith fulfills the duty under AS 10.60.100 -                                
06       10.60.140 if the director                                                                                         
07                 (1)  is disinterested in the subject of the business judgment;                                          
08                 (2)  is informed with respect to the subject of the business judgment to                                
09       the extent the director rationally believes to be appropriate under the circumstances;                            
10       and                                                                                                               
11 (3)  rationally believes that the business judgment is in the best interests                                            
12 of the benefit corporation; in this paragraph, "best interests" includes the creation of                                
13       general public benefit and any specific public benefit.                                                           
14 (b)  When making a determination under (a) of this section, the director shall                                          
15       consider the interests and factors listed in AS 10.60.100.                                                        
16                        Article 3. Benefit Director.                                                                   
17 Sec. 10.60.150. Benefit director. The board of directors of a benefit                                                 
18       corporation may include a director who                                                                            
19                 (1)  is designated the benefit director; and                                                            
20 (2)  has, in addition to the powers, duties, rights, and immunities of the                                              
21 other directors of the benefit corporation, the powers, duties, rights, and immunities                                  
22       provided in AS 10.60.150 - 10.60.220.                                                                             
23 Sec. 10.60.160. Election of benefit director. The board of directors shall elect                                      
24 and may remove the benefit director in the manner provided by AS 10.06.453 -                                            
25       10.06.463.                                                                                                        
26 Sec. 10.60.170. Qualifications of benefit director. (a) The benefit director of                                       
27 a benefit corporation, except as provided in AS 10.60.210, shall be an individual who                                   
28 does not have a material relationship under AS 10.60.220 with the benefit corporation                                   
29 or a subsidiary of the benefit corporation. The benefit director may serve as the benefit                               
30 officer at the same time as serving as the benefit director. The articles of incorporation                              
31 or bylaws of a benefit corporation may prescribe additional qualifications of the                                       
01       benefit director not inconsistent with this subsection.                                                           
02            (b)  Serving as benefit director of a benefit corporation does not establish that                            
03       an individual has a material relationship with the benefit corporation or a subsidiary of                         
04       the benefit corporation.                                                                                          
05            Sec. 10.60.180. Compliance statement. The benefit director shall prepare, and                              
06       the benefit corporation shall include in the benefit report to shareholders required by                           
07       AS 10.60.500,                                                                                                     
08                 (1)  the opinion of the benefit director on whether the benefit                                         
09       corporation acted in accordance with its general public benefit purpose and any                                   
10 specific public benefit purpose in all material respects during the period covered by                                   
11       the report;                                                                                                       
12 (2)  the opinion of the benefit director on whether the directors and                                                   
13 officers complied with AS 10.60.100 and 10.60.230 during the period covered by the                                      
14       report; and                                                                                                       
15 (3)  if the benefit director believes the benefit corporation or its                                                    
16 directors or officers failed to act or comply in the manner described in (1) or (2) of this                             
17 section, a description of the ways in which the benefit corporation or its directors or                                 
18       officers failed to act or comply.                                                                                 
19 Sec. 10.60.190. Status of actions. The action or inaction of a benefit director                                       
20 in the capacity of a benefit director constitutes for all purposes an action or inaction of                             
21       that individual in the capacity of a director of the benefit corporation.                                         
22 Sec. 10.60.200. Exoneration from personal liability. Regardless of whether                                            
23 the articles of incorporation of a benefit corporation include a provision eliminating or                               
24 limiting the personal liability of directors under AS 10.06.210, a benefit director is not                              
25 personally liable for an action or omission when done in the capacity of a benefit                                      
26 director unless the action or omission constitutes self-dealing, willful misconduct, or a                               
27       knowing violation of law.                                                                                         
28 Sec. 10.60.210. Professional corporations. The benefit director of a benefit                                          
29 corporation that is a professional corporation under AS 10.45 is not prohibited from                                    
30 having a material relationship under AS 10.60.220 with the benefit corporation or a                                     
31       subsidiary of the benefit corporation.                                                                            
01 Sec. 10.60.220. Material relationship. When determining under                                                         
02 AS 10.60.170 whether a benefit director of a benefit corporation has a material                                         
03 relationship with the benefit corporation or a subsidiary of the benefit corporation, a                                 
04       material relationship is conclusively presumed to exist if                                                        
05                 (1)  the individual is, or has been within the last three years, an                                     
06       employee other than a benefit officer of the benefit corporation or a subsidiary;                                 
07                 (2)  an immediate family member of the individual is, or has been                                       
08       within the last three years, an executive officer other than a benefit officer of the                             
09       benefit corporation or a subsidiary;                                                                              
10 (3)  there is beneficial or record ownership of five percent or more of                                                 
11 the outstanding shares of the benefit corporation, calculated as if all outstanding rights                              
12       to acquire equity interests in the benefit corporation had been exercised, by                                     
13                      (A)  the individual; or                                                                            
14                      (B)  an entity                                                                                     
15 (i)  of which the individual is a director, an officer, or a                                                            
16                 manager; or                                                                                             
17 (ii)  in which the individual owns beneficially or of                                                                   
18 record five percent or more of the outstanding equity interests,                                                        
19 calculated as if all outstanding rights to acquire equity interests in the                                              
20                 entity had been exercised.                                                                              
21                           Article 4. Officers.                                                                        
22 Sec. 10.60.230. Standard of conduct for officers. An officer of a benefit                                             
23       corporation shall consider the interests and factors under AS 10.60.100 if the officer                            
24                 (1)  has discretion to act with respect to a matter; and                                                
25 (2)  reasonably believes that the matter identified under (1) of this                                                   
26 section may have a material effect on the creation by the benefit corporation of general                                
27 public benefit or a specific public benefit identified in the articles of incorporation of                              
28       the benefit corporation.                                                                                          
29 Sec. 10.60.240. Coordination with other corporate officer requirements.                                               
30 The consideration of interests and factors under AS 10.60.230 by an officer of a                                        
31       benefit corporation does not constitute a violation of AS 10.06.483.                                              
01            Sec. 10.60.250. Exoneration from personal liability. Except as provided in                                 
02       the articles of incorporation, an officer of a benefit corporation is not personally liable                       
03       for monetary damages for                                                                                          
04                 (1)  an action or inaction as an officer in the course of performing the                                
05       duties of an officer under AS 10.60.230 - 10.60.270 if the officer performs the duties                            
06       of the position in compliance with AS 10.06.483 and this section; or                                              
07                 (2)  a failure of the benefit corporation to pursue or create general                                   
08       public benefit or a specific public benefit.                                                                      
09            Sec. 10.60.260. No duty to beneficiary. An officer of a benefit corporation                                
10 does not have a duty arising from the person's status as a beneficiary to a person who                                  
11 is a beneficiary of the general public benefit purpose or a specific public benefit                                     
12       purpose of the benefit corporation.                                                                               
13 Sec. 10.60.270. Business judgment. An officer who makes a business                                                    
14       judgment in good faith fulfills the duty under AS 10.60.230 - 10.60.270 if the officer                            
15                 (1)  is disinterested in the subject of the business judgment;                                          
16 (2)  is informed with respect to the subject of the business judgment to                                                
17 the extent the officer rationally believes to be appropriate under the circumstances;                                   
18       and                                                                                                               
19 (3)  rationally believes that the business judgment is in the best interests                                            
20 of the benefit corporation; in this paragraph, "best interests" includes the creation of                                
21       general public benefit and any specific public benefit.                                                           
22 Sec. 10.60.280. Benefit officer. A benefit corporation may designate an officer                                       
23 as the benefit officer of the benefit corporation. A benefit officer has the powers and                                 
24 duties of the benefit corporation that relate to the creation of general public benefit and                             
25 a specific public benefit, as the powers and duties are provided in the bylaws, or,                                     
26 absent controlling provisions in the bylaws, by resolutions or orders of the board of                                   
27       directors. A benefit officer shall prepare the benefit report required by AS 10.60.500.                           
28                       Article 5. Actions and Claims.                                                                  
29 Sec. 10.60.300. Actions and claims. Unless another provision of this chapter                                          
30 limits liability, a person identified under AS 10.60.320 may bring an action or assert a                                
31       claim against a benefit corporation or its directors or officers with respect to                                  
01                 (1)  a failure to pursue or create general public benefit or a specific                                 
02       public benefit set out in its articles of incorporation; or                                                       
03                 (2)  a violation of an obligation, duty, or standard of conduct under this                              
04       chapter.                                                                                                          
05 Sec. 10.60.310. Limitation on liability of benefit corporation.                                                       
06 Notwithstanding AS 10.60.300, a benefit corporation is not liable for monetary                                          
07 damages under this chapter for a failure of the benefit corporation to pursue or create                                 
08       general public benefit or a specific public benefit.                                                              
09            Sec. 10.60.320. Right to bring action. (a) An action under AS 10.60.300 may                                
10       be commenced or maintained only                                                                                   
11                 (1)  directly by the benefit corporation; or                                                            
12                 (2)  derivatively under AS 10.06.435 by                                                                 
13 (A)  a person or group of persons that owned beneficially or of                                                         
14 record at least two percent of the total number of the shares of the benefit                                            
15 corporation of a class or series outstanding at the time of the act or omission                                         
16            complained of;                                                                                               
17                      (B)  a director of the benefit corporation;                                                        
18 (C)  a person or group of persons who owned beneficially or of                                                          
19 record five percent or more of the outstanding equity interests in a person of                                          
20 which the benefit corporation is a subsidiary at the time of the act or omission                                        
21            complained of; or                                                                                            
22 (D)  another person specified in the articles of incorporation or                                                       
23            bylaws of the benefit corporation.                                                                           
24 (b)  In this section, a person is the beneficial owner of shares or equity interests                                    
25 if the shares or equity interests are held in a voting trust or by a nominee on behalf of                               
26       the person.                                                                                                       
27                          Article 6. Reporting.                                                                        
28 Sec. 10.60.500. Benefit report. As part of the biennial report required by                                            
29       AS 10.06.805, a benefit corporation shall prepare a biennial benefit report.                                      
30 Sec. 10.60.510. Contents of report. The benefit report required by                                                    
31       AS 10.60.500 must contain, for the period covered by the benefit report,                                          
01                 (1)  a description of                                                                                   
02                      (A)  the ways in which the benefit corporation pursued general                                     
03            public benefit and the extent to which the benefit corporation created general                               
04            public benefit;                                                                                              
05                      (B)  the ways in which the benefit corporation pursued each                                        
06            specific public benefit identified in the articles of incorporation and the extent                           
07            to which the benefit corporation created the specific public benefit;                                        
08                      (C)  any circumstances that have hindered the creation by the                                      
09            benefit corporation of general public benefit or specific public benefit;                                    
10 (D)  the process and rationale for selecting or changing the                                                            
11            third-party standard used to prepare the benefit report;                                                     
12 (2)  an assessment of the overall performance of the general public                                                     
13       benefit purpose by the benefit corporation against a third-party standard                                         
14 (A)  applied consistently with any application of that standard in                                                      
15            prior benefit reports; or                                                                                    
16                      (B)  accompanied by an explanation of the reasons for                                              
17                           (i)  any inconsistent application; or                                                         
18 (ii)  the change to that standard from the one used in the                                                              
19                 immediately prior report;                                                                               
20 (3)  the name of the benefit director, if any, and the benefit officer, if                                              
21       any, and the address to which correspondence to each of them may be directed;                                     
22 (4)  the compensation paid by the benefit corporation to each director in                                               
23       the capacity of a director;                                                                                       
24                 (5)  the statement of the benefit director described in AS 10.60.180; and                               
25 (6)  a statement of any connection between the organization that                                                        
26 established the third-party standard or its directors, officers, or any holder of five                                  
27 percent or more of the governance interests in the organization and the benefit                                         
28 corporation or its directors, officers, or any holder of five percent or more of the                                    
29 outstanding shares of the benefit corporation, including any financial or governance                                    
30 relationship that might materially affect the credibility of the use of the third-party                                 
31       standard.                                                                                                         
01 Sec. 10.60.520. Correspondence relating to change of benefit director. If,                                            
02 during the period covered by a benefit report, a benefit director resigned from or                                      
03 refused to stand for reelection to the position of benefit director, or was removed from                                
04 the position of benefit director, and the benefit director furnished the benefit                                        
05 corporation with written correspondence concerning the circumstances surrounding                                        
06 the resignation, refusal, or removal, the benefit report must include that                                              
07       correspondence as an exhibit.                                                                                     
08 Sec. 10.60.530. Audit not required. A benefit corporation is not required to                                          
09 have the benefit report, including the assessment of the performance of the benefit                                     
10 corporation in the benefit report required by AS 10.60.510(2), audited or certified by a                                
11       person without a connection to the benefit corporation.                                                           
12 Sec. 10.60.540. Delivery of benefit report to shareholders. A benefit                                                 
13 corporation shall send its benefit report to each shareholder not later than the date that                              
14       is 120 days after the end of the period covered by the benefit report.                                            
15 Sec. 10.60.550. Internet website posting. If a benefit corporation has an                                             
16 Internet website, the benefit corporation shall post all of its benefit reports on the                                  
17 public portion of the website. The benefit corporation may omit from the benefit                                        
18 reports posted on the website the compensation paid to directors and financial or                                       
19       proprietary information included in the benefit report.                                                         
20 Sec. 10.60.560. Availability of copies of benefit report. If a benefit                                                
21 corporation does not have an Internet website, the benefit corporation shall provide a                                  
22 copy of its most recent benefit report, without charge, to any person who requests a                                    
23 copy, but the benefit corporation may omit the compensation paid to directors and                                       
24 financial or proprietary information included in the benefit report from the copy of the                                
25       benefit report provided to the person.                                                                            
26 Sec. 10.60.570. Filing of report; delinquency. (a) A benefit corporation shall                                        
27 include its benefit report in the biennial report that it files under AS 10.06.805, but the                             
28 benefit corporation may omit the compensation paid to directors and financial or                                        
29 proprietary information included in the benefit report from the benefit report included                                 
30 in the biennial report. The department shall charge a fee established by the department                                 
31       for including the benefit report in the biennial report of the benefit corporation.                               
01 (b)  If a benefit corporation is delinquent six months or more in including its                                         
02 benefit report in its biennial report under AS 10.60.570 or in paying the fee established                               
03 under this section for including the benefit report in the biennial report, the                                         
04 delinquency constitutes a basis for involuntary dissolution of the benefit corporation                                  
05       under AS 10.06.633.                                                                                               
06            (c)  A benefit corporation may submit its benefit report to the department                                   
07       electronically. The department may file in paper form, rather than electronic form, the                           
08       benefit report portion of a biennial report filed with the department.                                            
09                     Article 7. Miscellaneous Provisions.                                                              
10 Sec. 10.60.700. Status change approval. (a) In addition to any other approval                                         
11 or vote required for the status change, to accomplish a status change of a benefit                                      
12       corporation,                                                                                                      
13 (1)  the benefit corporation shall allow all of the shareholders of each                                                
14 class or series to vote as a separate voting group on the status change, regardless of a                                
15 limitation stated in the articles of incorporation or bylaws on the voting rights of a                                  
16       class or series; and                                                                                              
17 (2)  in each class or series, at least two-thirds of all votes that the                                                 
18 shareholders of that class or series are entitled to cast under (1) of this subsection on                               
19       the status change must approve the status change.                                                                 
20 (b)  In addition to any other approval, vote, or consent required for the status                                        
21 change, to accomplish a status change of a domestic entity other than a business                                        
22       corporation,                                                                                                      
23 (1)  the domestic entity shall allow all of the equity holders to vote on                                               
24 or consent to the status change regardless of any otherwise applicable limitation on the                                
25       voting or consent rights of a class or series of equity interests; and                                            
26 (2)  in each class or series of equity interest, at least two-thirds of all of                                          
27 the votes that the equity holders of that class or series are entitled to cast under (1) of                             
28       this subsection must approve the status change.                                                                   
29 (c)  In (b) of this section, "equity holder" means a person who holds any class                                         
30 or series of equity interest in a domestic entity if the person is entitled to receive a                                
31       distribution of any kind arising out of the equity interest.                                                      
01 Sec. 10.60.710. Shareholder dissent. In addition to the corporate actions to                                          
02 which a shareholder may dissent under AS 10.06.574(a), a shareholder of a business                                      
03 corporation may dissent under AS 10.06.574 - 10.06.582 if the business corporation                                      
04       amends its articles under AS 10.60.010(2) to become a benefit corporation.                                        
05            Sec. 10.60.720. Third-party standard. In this chapter, whenever a third-party                              
06       standard is used, the standard refers to a recognized standard for defining, reporting,                           
07       and assessing corporate performance                                                                               
08                 (1)  that is comprehensive because it assesses the effect of the benefit                                
09       corporation and its operations on the interests listed in AS 10.60.100(1)(B) - (E);                               
10 (2)  that is developed by a person that is not controlled by the benefit                                                
11       corporation;                                                                                                      
12                 (3)  that is credible because it is developed by a person that                                          
13 (A)  has access to the expertise necessary to assess overall                                                            
14            corporate performance; and                                                                                   
15 (B)  uses an approach, including a reasonable public comment                                                            
16 period, to develop the standard that is balanced and considers multiple                                                 
17            concerns and interests;                                                                                      
18 (4)  for which the following information about the standard is publicly                                                 
19       available:                                                                                                        
20 (A)  the criteria considered when measuring the overall                                                                 
21            performance of a business;                                                                                   
22 (B)  the relative weightings, if any, of the criteria in (A) of this                                                    
23            paragraph;                                                                                                   
24 (5)  for which the following information about the development and                                                      
25       revision of the standard is publicly available:                                                                   
26 (A)  the identity of the directors, officers, material owners, and                                                      
27 governing body of the entity that developed and controls revisions to the                                               
28            standard;                                                                                                    
29 (B)  the process by which revisions to the standard and changes                                                         
30            to the membership of the governing body are made;                                                            
31 (C)  an accounting of the revenue and sources of financial                                                              
01 support for the entity, with sufficient detail to disclose any relationships that                                       
02            could reasonably be considered to present a potential conflict of interest.                                  
03 Sec. 10.60.725. Reliance by third parties. (a) A person who, in good faith,                                           
04 enters into a transaction with a benefit corporation may assume without inquiry that                                    
05 the transaction, and each action or inaction by any director or officer of the benefit                                  
06 corporation giving effect to the transaction, does not conflict with the benefit                                        
07       corporation's general public benefit purpose or specific public benefit purpose.                                  
08 (b)  Nothing in this section exempts a covered financial institution from                                               
09 identifying and verifying the beneficial owner of a legal entity that is a customer as                                  
10 required under a federal or state law or regulation. In this subsection, "covered                                       
11       financial institution" has the meaning given in 31 C.F.R. 1010.605.                                               
12 Sec. 10.60.730. Tax exemptions. A benefit corporation may not claim a tax                                             
13 exemption under AS 43.20 (Alaska Net Income Tax Act) if the tax exemption is not                                        
14       also available to corporations that are not benefit corporations.                                                 
15 Sec. 10.60.740. Interpretation. The authorization under AS 10.60.010 to form                                          
16 a benefit corporation and the authorization under AS 10.60.040 for a benefit                                            
17 corporation to identify a specific public benefit purpose may not be interpreted to                                     
18 prevent a business entity that is formed under another law of this state from including                                 
19 in its general powers the consideration of, or donation to, the general public benefit or                               
20       a specific public benefit.                                                                                        
21                       Article 8. General Provisions.                                                                  
22 Sec. 10.60.910. Regulations. The department may adopt regulations under                                               
23       AS 44.62 (Administrative Procedure Act) to implement this chapter.                                                
24 Sec. 10.60.920. Application to business corporations generally. The                                                   
25 existence of a provision of this chapter does not, by itself, suggest that a contrary or                                
26 different rule of law applies to a business corporation that is not a benefit corporation.                              
27 This chapter does not affect a statute or other law that applies to a business corporation                              
28       that is not a benefit corporation.                                                                                
29 Sec. 10.60.930. Applicable laws. Except as otherwise provided in this chapter,                                        
30 AS 10.06 applies to a benefit corporation. A benefit corporation may be                                                 
31 simultaneously subject to this chapter and AS 10.45. The provisions of AS 10.06 and                                     
01       AS 10.45 are subject to this chapter.                                                                             
02            Sec. 10.60.940. Consistency with chapter. A provision of the articles of                                   
03       incorporation or bylaws of a benefit corporation may not limit, be inconsistent with, or                          
04       supersede a provision of this chapter.                                                                            
05            Sec. 10.60.990. Definitions. In this chapter,                                                              
06                 (1)  "benefit corporation" means a business corporation that elects                                     
07       under AS 10.60.010 to become subject to this chapter;                                                             
08                 (2)  "benefit director" means the director designated as the benefit                                    
09       director of a benefit corporation under AS 10.60.150;                                                             
10 (3)  "benefit officer" means the individual designated as the benefit                                                   
11       officer of a benefit corporation under AS 10.60.280;                                                              
12                 (4)  "benefit report" means the benefit report required by AS 10.60.500;                                
13 (5)  "business corporation" means a corporation organized under                                                         
14       AS 10.06 or AS 10.45;                                                                                             
15 (6)  "department" means the Department of Commerce, Community,                                                          
16       and Economic Development;                                                                                         
17 (7)  "general public benefit" means a material positive effect on people                                                
18       and their surroundings, taken as a whole, assessed against a third-party standard;                                
19 (8)  "general public benefit purpose" means the public benefit purpose                                                  
20       under AS 10.60.030;                                                                                               
21 (9)  "specific public benefit" means a benefit that serves a public                                                     
22 welfare, religious, charitable, scientific, literary, or educational purpose, or another                                
23       purpose beyond the strict interest of the shareholders of the benefit corporation;                                
24 (10)  "specific public benefit purpose" means a specific public benefit                                                 
25 purpose that is identified as a public benefit purpose by a benefit corporation under                                   
26       AS 10.60.040(a) or (b);                                                                                           
27                 (11)  "status change" means                                                                             
28 (A)  an amendment of the articles of incorporation of a business                                                        
29            corporation under AS 10.60.010(2);                                                                           
30 (B)  the approval of a plan of merger, consolidation, conversion,                                                       
31            or interest or share exchange under AS 10.60.020;                                                            
01                      (C)  an amendment of the articles of incorporation of a benefit                                    
02            corporation under AS 10.60.040(b);                                                                           
03                      (D)  the termination of benefit corporation status under                                           
04            AS 10.60.060; or                                                                                             
05                      (E)  a disposition of assets under AS 10.60.070;                                                   
06                 (12)  "subsidiary" means an entity in which a person owns beneficially                                  
07       or of record 50 percent or more of the outstanding equity interests calculated as if all                          
08       outstanding rights to acquire equity interests in the entity had been exercised.                                  
09    * Sec. 3. The uncodified law of the State of Alaska is amended by adding a new section to                          
10 read:                                                                                                                   
11 TRANSITION: REGULATIONS. The Department of Commerce, Community, and                                                     
12 Economic Development may adopt regulations necessary to implement this Act. The                                         
13 regulations take effect under AS 44.62 (Administrative Procedure Act), but not before July 1,                           
14 2018.                                                                                                                   
15    * Sec. 4. Section 3 of this Act takes effect immediately under AS 01.10.070(c).                                    
16    * Sec. 5. Except as provided in sec. 4 of this Act, this Act takes effect July 1, 2018.