Legislature(2017 - 2018)BARNES 124

04/01/2017 01:00 PM LABOR & COMMERCE

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as
Download Video part 1. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 3:00 PM --
*+ HB 124 BENEFIT CORPORATIONS TELECONFERENCED
Heard & Held
-- Public Testimony --
*+ HB 36 TAX: INCOME FROM NON C CORP ENTITIES TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 103 OPTOMETRY & OPTOMETRISTS TELECONFERENCED
Moved CSHB 103(L&C) Out of Committee
                  HB 124-BENEFIT CORPORATIONS                                                                               
                                                                                                                                
3:38:48 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that  the next order  of business  would be                                                               
HOUSE BILL NO.  124, "An Act relating  to corporations, including                                                               
benefit corporations,  and other  entities; and providing  for an                                                               
effective date."                                                                                                                
                                                                                                                                
CHAIR  KITO, sponsor,  stated that  his  interest in  introducing                                                               
this bill is to modify  Alaska's corporate structure to allow for                                                               
the  ability  of  a  corporation   to  establish  itself  with  a                                                               
charitable component  as opposed to being  fiducially responsible                                                               
to shareholders.  A corporation would  be able to use some of its                                                               
profits,  earnings,   or  other   assets  to  benefit   other  or                                                               
charitable  or nonprofit  organizations.   This would  allow many                                                               
corporations  that would  like to  provide some  type of  support                                                               
outside  their  primary  business  mode,  or  even  within  their                                                               
business mode, that  is not reflective of  expending profits, and                                                               
allow  them   to  do  that  without   violating  their  fiduciary                                                               
responsibility.                                                                                                                 
                                                                                                                                
CHAIR  KITO drew  attention to  the sponsor  statement and  noted                                                               
that  the first  paragraph might  need to  be amended  because it                                                               
appears to be a carryover from another bill.                                                                                  
                                                                                                                                
3:40:20 PM                                                                                                                    
                                                                                                                                
BIANCA CARPENETI,  Staff, Representative  Sam Kito,  Alaska State                                                               
Legislature,  explained  the  purpose  of HB  124  on  behalf  of                                                               
Representative Kito, sponsor.  She spoke as follows:                                                                            
                                                                                                                                
     The  purpose of  HB 124  is to  expand the  options for                                                                    
     Alaskan entrepreneurs  and investors  by placing  a new                                                                    
     type  of corporate  entity -  Benefit Corporation  or B                                                                    
     Corp - in  Alaska statute.  A benefit  corporation is a                                                                    
     for-profit  corporation that  includes public  benefits                                                                    
     and   community   improvements  into   their   business                                                                    
     practices,   no  matter   the  principal   services  or                                                                    
     products provided.                                                                                                         
                                                                                                                                
     Corporate  law   generally  requires   corporations  to                                                                    
     consider the financial impact  to their shareholders as                                                                    
     the  top priority  when making  decisions.   Maximizing                                                                    
     corporate  returns can  interfere with  other corporate                                                                    
     goals, such as electing  to do something beneficial for                                                                    
     the  community by  enhancing social  benefit.   Some of                                                                    
     the defining  characteristics of a  benefit corporation                                                                    
     include expanded purpose  beyond maximizing share value                                                                    
     to  explicitly  include  general  and  specific  public                                                                    
     benefit.   A  benefit  corporation  also considers  and                                                                    
     balances  the impacts  of their  decisions not  only on                                                                    
     shareholders but also on  their stakeholders. … Benefit                                                                    
     corporations  must  make  available  to  the  public  a                                                                    
     regular  benefit  report  that assesses  their  overall                                                                    
     social and  environmental performance against  a third-                                                                    
     party standard.                                                                                                            
                                                                                                                                
     Three arguments in support  of laws establishing public                                                                    
     benefit  corporations are:    First,  it creates  legal                                                                    
     requirements  that  regulate corporations  claiming  to                                                                    
     work   toward  social   good.     Becoming  a   benefit                                                                    
     corporation  as a  legal entity  means a  business that                                                                    
     says it  is dedicated to  the public good will  have to                                                                    
     substantiate this  claim, similar to how  qualifying as                                                                    
     tax-exempt  helps  define  non-profits  as  charitable.                                                                    
     Moreover, benefit  corporations' reporting requirements                                                                    
     to shareholders,  the state,  and the public  provide a                                                                    
     degree   of   transparency   the   corporations   could                                                                    
     otherwise  refuse  to  provide.    Second,  these  laws                                                                    
     promote  societal  benefits   by  clarifying  fiduciary                                                                    
     duty.   Entrepreneurs are more  likely to  pursue lines                                                                    
     of business in  a socially beneficial way  when the law                                                                    
     ensures that the pursuit of  profit does not need to be                                                                    
     the  highest priority.   Likewise,  investors concerned                                                                    
     with the public good are  given an alternative.  Third,                                                                    
     this provides legal protection  for companies that seek                                                                    
     purpose-driven   partnerships.     Benefit  corporation                                                                    
     legislation   allows  them   to  undertake   beneficial                                                                    
     partnerships that conventional  corporations might shun                                                                    
     out of  fear that  shareholders would not  see it  as a                                                                    
     venture likely to be profitable.                                                                                           
                                                                                                                                
3:43:33 PM                                                                                                                    
                                                                                                                                
MS. CARPENETI  turned to a  discussion of  the bill itself.   She                                                               
said  Section   1  amends   Alaska  Statute   (AS)  10.06.633(a),                                                               
regarding how  corporations may be dissolved,  to include benefit                                                               
corporations.                                                                                                                   
                                                                                                                                
MS.  CARPENETI stated  that Section  2  adds to  AS 10,  Alaska's                                                               
corporation  code,  a  new   chapter,  Chapter  60,  establishing                                                               
benefit corporations.  Article 1,  she continued, establishes how                                                               
a  new  business corporation  or  existing  entity may  become  a                                                               
benefit corporation,  and it also  declares that an  amendment of                                                               
an existing corporation  must be adopted by at  least the minimum                                                               
two-thirds vote.   She said  Article 2 establishes  seven factors                                                               
that  the  board  of  directors and  individual  directors  of  a                                                               
benefit  corporation  shall   consider  while  discharging  their                                                               
duties.    She   pointed  out  that  directors   of  the  benefit                                                               
corporation are  not required  to give priority  to any  of these                                                               
listed factors unless  the intention to prioritize  them has been                                                               
identified   in    the   benefit   corporation's    articles   of                                                               
incorporation.                                                                                                                  
                                                                                                                                
MS. CAPENETI  continued to address  Section 2 and said  Article 3                                                               
allows  the  board to  include  a  benefit  director who  is  not                                                               
financially liable if  acting in good faith.   She explained that                                                               
Article  4  directs  an  officer  of  a  benefit  corporation  to                                                               
consider  the  factors  enumerated  by the  board  of  directors.                                                               
Article 4 also states that  an officer of the benefit corporation                                                               
is not  personally liable for  monetary damages if  the officer's                                                               
duties  are performed  in compliance  with Alaska  statute.   She                                                               
said Article 5 identifies who  may bring action or claims against                                                               
a  benefit  corporation  for  a  failure  to  pursue  general  or                                                               
specific public benefit.                                                                                                        
                                                                                                                                
MS.  CARPENETI stated  that Article  6  of Section  2 requires  a                                                               
benefit  corporation  to  file   a  biennial  benefit  report  in                                                               
addition to the biennial report,  and it also provides details of                                                               
what  must  be in  that  report.    She  related that  Article  7                                                               
establishes  a status  change for  a  merger or  amendment for  a                                                               
benefit corporation  or a domestic  entity other than  a business                                                               
corporation, which  must be approved  by at least  two-thirds the                                                               
vote  of all  shareholders  entitled  to vote.    Article 7  also                                                               
establishes statutory  guidelines for third-party  standards used                                                               
as an  assessment tool in  the required benefit report  to ensure                                                               
that  the general  or specific  public benefits  are being  done.                                                               
She  said Article  8 provides  for general  provisions, including                                                               
regulations, definitions, and applicability.                                                                                    
                                                                                                                                
MS. CARPENETI  advised that  the remaining  sections of  the bill                                                               
deal with regulations and effective date.                                                                                       
                                                                                                                                
3:45:47 PM                                                                                                                    
                                                                                                                                
MS. CARPENETI added  that it is important to  note the following:                                                               
First,   that  benefit   corporations  are   voluntarily  formed.                                                               
Second, that  benefit corporations  have the  same tax  status as                                                               
for-profit corporations.   Third,  that benefit corporation  is a                                                               
legal  designation,   not  a  marketing  label.     Fourth,  this                                                               
legislation specifies  the requirements for the  biennial benefit                                                               
report, which does two things:   1) It provides accountability to                                                               
the shareholders  who will be  able to track and  direct benefit,                                                               
and 2) it  provides transparency to investors who  will know what                                                               
the benefits are.                                                                                                               
                                                                                                                                
MS.  CARPENETI concluded  by stating  that HB  124 establishes  a                                                               
solid  foundation  for  long-term  mission  alignment  and  value                                                               
creation.    It  protects  mission  through  capital  raises  and                                                               
leadership changes, and creates  more flexibility when evaluating                                                               
potential  sale and  liquidity options.   Further,  she said,  it                                                               
prepares businesses to lead a mission-driven life.                                                                              
                                                                                                                                
3:46:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  brought attention  to page 3  where the                                                               
types of benefits that could be  provided are laid out.  He asked                                                               
what would  constrain the legislation from  becoming politicized;                                                               
for example, a debate about what a public benefit was.                                                                          
                                                                                                                                
MS. CARPENETI  replied that a  benefit corporation  is responsive                                                               
to its shareholders.  She  inquired whether the question is about                                                               
abuse of this system or what might happen in that event.                                                                        
                                                                                                                                
REPRESENTATIVE JOSEPHSON said he  assumes shareholders would know                                                               
that if they  have invested in Ben and Jerry's  they are going to                                                               
get  a  certain  benefit  corporation  investment,  and  if  they                                                               
invested in Dow Chemical they might get a different one.                                                                        
                                                                                                                                
MS. CARPENETI  responded that  that is the  point of  the benefit                                                               
report - it outlines what the  company is doing.  In its articles                                                               
of   incorporation,   a   corporation  outlines   any   potential                                                               
priorities that  it might  have for the  corporation.   Those are                                                               
publically  available,  so  as informed  consumers  [people]  can                                                               
decide if that is  the company they want to invest  in.  In terms                                                               
of holding the  company accountable, she said she  would point to                                                               
the biennial report as being  the mechanism by which shareholders                                                               
would be  able to track  what the corporation  is doing and  if a                                                               
shareholder has concerns  about the action, or  concerns that the                                                               
corporation is  not conforming to its  previously stated benefits                                                               
or  mission, then  a shareholder  would potentially  have grounds                                                               
for bringing claim against the directors or the board.                                                                          
                                                                                                                                
3:48:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  related  that   he  once  invested  in                                                               
Calvert Investment  Funds, an  ethics fund  that was  supposed to                                                               
have  a benign  impact on  the world,  at least  as perceived  by                                                               
Calvert Investments.   He said  he is mentioning that  because he                                                               
knew going in with his small  investment that the return might be                                                               
6 percent  instead of 10  percent.   He inquired whether  that is                                                               
something [benefit corporation] shareholders would understand.                                                                  
                                                                                                                                
MS. CARPENETI  answered that  the way  it is set  up it  is often                                                               
called  the double  bottom line.   So,  instead of  the board  of                                                               
directors being  responsible for  only making decisions  based on                                                               
the financial impact, the board  could also base its decisions on                                                               
other factors, including social good.                                                                                           
                                                                                                                                
3:49:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KNOPP asked  whether public  benefit corporations                                                               
exist today.                                                                                                                    
                                                                                                                                
MS.  CARPENETI replied  that Alaska  is  not groundbreaking  with                                                               
this legislation.   Thirty-one other states  have adopted similar                                                               
legislation and other states are considering it.                                                                                
                                                                                                                                
REPRESENTATIVE KNOPP requested Ms.  Carpeneti to provide examples                                                               
of benefit corporations.                                                                                                        
                                                                                                                                
MS. CARPENETI responded by first  clarifying that Ben and Jerry's                                                               
is not technically a benefit  corporation, but rather a Certified                                                               
B  Corp, which  means the  company has  gone through  third party                                                               
analysis that says  the company provides this good.   Examples of                                                               
current benefit  corporations include  Patagonia and  King Arthur                                                               
Flour, the oldest flour producer in America.                                                                                    
                                                                                                                                
REPRESENTATIVE  KNOPP  asked  what public  benefit  services  are                                                               
provided by the aforementioned corporations.                                                                                    
                                                                                                                                
MS. CARPENETI answered  that she would get back  to the committee                                                               
with a list  of all the public benefits  that Patagonia provides,                                                               
but that Patagonia is dedicated to outdoor recreation.                                                                          
                                                                                                                                
REPRESENTATIVE KNOPP inquired whether  this is talking about only                                                               
publicly  traded corporations,  given  not  all corporations  are                                                               
publicly  traded.   He further  inquired whether  there is  a tax                                                               
benefit to the  corporation to do this.  Lastly,  he inquired why                                                               
any  publicly traded  corporation could  not in  its articles  of                                                               
incorporation or  in its prospectus  to shareholders  list itself                                                               
as public benefit.                                                                                                              
                                                                                                                                
MS.  CARPENETI  replied that  corporate  law  says a  corporation                                                               
could become liable if its  shareholders disagree with doing this                                                               
and bring suit against the  corporation for not deciding based on                                                               
the financial  impact of its  decisions in expanding to  a public                                                               
benefit good.   It  therefore provides  legal protection  for the                                                               
corporation to  include those  benefits into  its decision-making                                                               
process.                                                                                                                        
                                                                                                                                
REPRESENTATIVE KNOPP  reiterated his question about  whether this                                                               
is  talking only  about publicly  traded corporations  that trade                                                               
stock on an exchange.                                                                                                           
                                                                                                                                
MS. CARPENETI offered her belief that the answer is yes.                                                                        
                                                                                                                                
CHAIR  KITO interjected  that  he would  get  this clarified  and                                                               
provide the information  to the committee.  He said  it is in the                                                               
corporation  statutes and  offered  his belief  that any  company                                                               
filing  an incorporation  notice with  the state  could become  a                                                               
benefit corporation.  The corporation  would still be required to                                                               
file  its   articles  of  incorporation,  but   the  articles  of                                                               
incorporation may provide  a public benefit as opposed  to just a                                                               
fiduciary responsibility.                                                                                                       
                                                                                                                                
3:52:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH asked  what  the genesis  is  for this  and                                                               
whether someone requested that it be done.                                                                                      
                                                                                                                                
CHAIR KITO replied it was  a proposal put forth by Representative                                                               
Seaton in a  past session.  He  said he thought the  bill a great                                                               
idea and  so took  it forward  with the idea  that a  Native for-                                                               
profit  corporation  might  want  to  try  doing  something  that                                                               
benefits  heritage.   Right  now many  corporations  have a  for-                                                               
profit as  well as a  non-profit heritage group,  which sometimes                                                               
share  boards of  directors.   However,  he  continued, the  for-                                                               
profit  has to  make its  decisions in  supporting some  of those                                                               
other  organizations based  on what  is  a responsible  fiduciary                                                               
manner as  opposed to,  say, what  might be  culturally desirable                                                               
for a Native corporation.  Whether  or not it gets used that way,                                                               
he  said,  he saw  the  opportunity  to  strongly link,  or  more                                                               
strongly link, the  for-profit motive of a  Native corporation or                                                               
any  other corporation  to  the values  of  the shareholders  and                                                               
allow a  corporation to provide  opportunities and benefits  to a                                                               
cultural group or charity.  It  is a voluntary choice, he pointed                                                               
out, but  if it  is chosen  then the  corporation has  to outline                                                               
everything  it  is going  to  be  doing  in its  articles,  which                                                               
thereby allows  the corporation to  not have  to make all  of its                                                               
goals fiduciary goals.                                                                                                          
                                                                                                                                
REPRESENTATIVE  BIRCH  reiterated  his  question  as  to  whether                                                               
someone specifically came to Chair Kito.                                                                                        
                                                                                                                                
CHAIR KITO  answered that  nobody came to  him specifically.   He                                                               
further  offered his  belief that  nobody went  to Representative                                                               
Seaton specifically.                                                                                                            
                                                                                                                                
REPRESENTATIVE BIRCH  said he is  familiar with  non-profits that                                                               
are set  up with public  charitable purpose  and while he  is not                                                               
opposed to the bill he doesn't fully understand the need for it.                                                                
                                                                                                                                
CHAIR KITO responded  that the purpose is to  get the information                                                               
out and discover who might be interested in utilizing it.                                                                       
                                                                                                                                
REPRESENTATIVE BIRCH stated he is  more used to someone coming to                                                               
a  legislator with  a  problem that  needs  solving, rather  than                                                               
throwing  something out  there and  asking whether  anyone has  a                                                               
problem with it.                                                                                                                
                                                                                                                                
MS.  CARPENETI noted  that there  is correspondence  accompanying                                                               
Representative Seaton's  previous iteration  of the bill  from an                                                               
individual  with  the business  Earth  Friendly  Coffees who  had                                                               
expressed interest.   Additionally, she advised,  Stephen Trimble                                                               
of Anchorage  will be testifying  today that he is  interested in                                                               
gaining benefit corporation status for his business.                                                                            
                                                                                                                                
3:56:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  offered his understanding that  the proposed                                                               
concept would allow  a corporation to make a  decision that isn't                                                               
totally financial  as a benefit  for something else,  rather than                                                               
being required  to give top  priority to financial.   He surmised                                                               
that this  concept changes how  a corporation would  practice its                                                               
business as opposed to what it does with its profits.                                                                           
                                                                                                                                
MS. CARPENETI  replied yes, this establishes  a legal designation                                                               
for  a corporation  that  wants  to be  recognized  as a  benefit                                                               
corporation.   It  doesn't  change  how traditional  corporations                                                               
operate; it just sets up  the standards for benefit corporations.                                                               
She added  that it allows a  great deal of latitude  to the board                                                               
of directors of  the company to decide what that  balance is.  It                                                               
doesn't provide any sort of table  or schedule saying this is how                                                               
the company must allocate its profits  or this is how the company                                                               
must  act  as  a  benefit   corporation.    It  just  allows  the                                                               
flexibility for  a corporation to  decide how to operate  as best                                                               
suits its mission and what it is trying to do.                                                                                  
                                                                                                                                
REPRESENTATIVE WOOL  offered his understanding that  for Newman's                                                               
Own  all  profits go  to  charity.    He  surmised this  is  what                                                               
Newman's Own does  with its profit and is not  necessarily how it                                                               
operates  its business.    He  asked whether  Newman's  Own is  a                                                               
benefit corporation  or whether it  is more a  corporate decision                                                               
as to what Newman's Own does with its profits.                                                                                  
                                                                                                                                
MS. CARPENETI  responded that she  would look at Newman's  Own to                                                               
see whether it  is established as a benefit  corporation and will                                                               
get back to the committee with an answer.                                                                                       
                                                                                                                                
CHAIR KITO pointed  out that his intent is not  to change the way                                                               
the corporation would operate, but  just to allow the corporation                                                               
to have more flexibility with what it does with its profits.                                                                    
                                                                                                                                
3:58:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH  inquired whether a  traditional corporation                                                               
could transition  to a benefit  corporation and whether  it would                                                               
take a shareholder vote.                                                                                                        
                                                                                                                                
MS. CARPENETI answered yes, a  corporation can start as a regular                                                               
corporation and then  if HB 124 became law  the corporation could                                                               
opt to change through a two-thirds vote of its shareholders.                                                                    
                                                                                                                                
3:59:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KNOPP  asked whether  there  is  anything in  the                                                               
Internal Revenue Service (IRS) code  as far as tax structures, or                                                               
in  states that  have benefit  corporations, that  allow benefit.                                                               
For example,  he asked,  whether the  benefits that  are expended                                                               
are taxable benefits to the corporation.                                                                                        
                                                                                                                                
MS. CARPENETI replied that benefit  corporations do not enjoy any                                                               
special tax status, they are taxed the same as corporations.                                                                    
                                                                                                                                
4:00:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL offered  his  understanding  that a  benefit                                                               
corporation would  not get any  special tax status.   He observed                                                               
that  next on  the  committee's  calendar is  a  bill related  to                                                               
taxing   [non-C  corporations].     He   asked  whether   benefit                                                               
corporations could  in theory avoid  a tax given that  they would                                                               
have a different designation than other types of corporations.                                                                  
                                                                                                                                
MS.   CARPENETI  responded   she  is   hesitant  to   comment  on                                                               
legislation  she hasn't  seen  and how  it  would impact  benefit                                                               
corporations.   She  deferred  an answer  to  someone with  legal                                                               
expertise and tax expertise.                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL surmised  that if there are  certain tax laws                                                               
that  affect  certain  types  of corporations  and  this  is  yet                                                               
another type  of corporation, then  he would expect that  the law                                                               
would have to address that  type of corporation, which hasn't yet                                                               
happened.                                                                                                                       
                                                                                                                                
MS. CARPENETI replied that that is a reasonable expectation.                                                                    
                                                                                                                                
4:01:53 PM                                                                                                                    
                                                                                                                                
CHAIR KITO opened public testimony on HB 124.                                                                                   
                                                                                                                                
4:02:14 PM                                                                                                                    
                                                                                                                                
STEPHEN  TRIMBLE, Founder  and  Chief  Executive Officer,  Arctic                                                               
Solar Ventures, speaking  on behalf of his  company, testified in                                                               
support of HB 124, which  would authorize the creation of benefit                                                               
corporations in Alaska  law.  He said Arctic Solar  Ventures is a                                                               
residential and commercial solar  design and installation company                                                               
that  operates statewide.    He  noted that  his  company is  the                                                               
second Certified B Corp in the history of Alaska.                                                                               
                                                                                                                                
MR. TRIMBLE explained  that the difference between  a Certified B                                                               
Corp and  benefit corporation  is that  a certified  B Corp  is a                                                               
third-party  global standardized  certification that  is sort  of                                                               
like a  fair-trade certification  for coffee for  businesses that                                                               
incorporate social and environmental  benefit into their mission.                                                               
He said benefit corporation legislation  is a compendium piece to                                                               
certified  B Corp  status that  allows companies  like his  to be                                                               
able  to also  acknowledge  that commitment  to  society and  the                                                               
environment within the structure of state law.                                                                                  
                                                                                                                                
MR.  TRIMBLE  advised  that  his   company,  a  leading  socially                                                               
responsible business in Alaska,  plans on becoming Alaska's first                                                               
benefit  corporation after  the passage  of HB  124 and  has been                                                               
actively working  on it.   During the  previous iteration  of the                                                               
bill  by  Representative  Seaton,  he continued,  he  called  and                                                               
expressed  interest in  the bill  and urged  it be  passed.   His                                                               
company has been  following this for the past two  to three years                                                               
and  has  been  pressing  for its  adoption  because  the  entire                                                               
company believes this  is an incredibly valuable  tool for Alaska                                                               
businesses to be able to differentiate themselves.                                                                              
                                                                                                                                
MR. TRIMBLE  stated that this  is uniquely critical to  the "DNA"                                                               
of his  business and it  will also present many  other businesses                                                               
the opportunity  to codify  their commitment  to society  and the                                                               
environment  within  their  bylaws.   Differentiating  businesses                                                               
within  their  communities and  within  the  global community  at                                                               
large sends  a clear message that  Alaska is a leading  place for                                                               
socially  responsible businesses  to  form and  thrive, he  said.                                                               
Profit,  societal  benefit,  and  environmental  stewardship  can                                                               
powerfully  coexist within  business.   He  urged  that the  full                                                               
legislature support  the enabling  of Alaska businesses  to fully                                                               
commit  themselves to  making the  world a  better place  through                                                               
their practices and policies.                                                                                                   
                                                                                                                                
4:06:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KNOPP  asked  whether Mr.  Trimble's  company  is                                                               
publicly traded on an exchange and whether it issues shares.                                                                    
                                                                                                                                
MR. TRIMBLE responded  that his is a  privately held corporation.                                                               
He  advised it  is not  required  that a  benefit corporation  be                                                               
publicly traded.                                                                                                                
                                                                                                                                
REPRESENTATIVE KNOPP inquired  as to the number  of board members                                                               
for Mr. Trimble's company.                                                                                                      
                                                                                                                                
MR. TRIMBLE replied that his corporation has five board members.                                                                
                                                                                                                                
REPRESENTATIVE KNOPP  asked why  Mr. Trimble's  corporation would                                                               
need  to  be   a  benefit  corporation  if  the   purpose  is  to                                                               
disseminate information about the  purpose of the corporation and                                                               
the company only has board members and no shareholders.                                                                         
                                                                                                                                
MR.  TRIMBLE  answered that  this  legislation  would enable  his                                                               
corporation to consider, as a  company, other aspects of societal                                                               
and  environmental benefit  as opposed  to merely  profit as  its                                                               
predominant driver and  measure of business success.   This is an                                                               
incredibly   powerful  tool   for  businesses   to  be   able  to                                                               
differentiate   themselves  within   the   local  community,   he                                                               
reiterated,  because making  those commitments  public and  being                                                               
upheld  to those  commitments in  the form  of reporting  is very                                                               
powerful.   It goes far  above and  beyond just saying  a company                                                               
does good - the company has to  actually show it does good.  That                                                               
is also  the reason why  his corporation has already  pursued the                                                               
extremely  stringent  third-party  B Corp  certification.    It's                                                               
different than simply just being  able to report to the company's                                                               
shareholders or board.                                                                                                          
                                                                                                                                
4:08:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH inquired as to  what the distinction is that                                                               
this would offer Mr. Trimble  and his business aspirations versus                                                               
a conventional configuration.                                                                                                   
                                                                                                                                
MR.  TRIMBLE replied  that this  would allow  his corporation  to                                                               
volunteer  to a  higher level  of scrutiny  and obligation  to do                                                               
good in its business practices.   It is a voluntary thing, but to                                                               
be  able  to offer  yourself  to  be  held  up to  the  reporting                                                               
requirements  to a  broader mission  beyond  profit is  something                                                               
that every Alaskan  company should want to  do because businesses                                                               
are here  to make Alaska  a better place.   As founder  of Arctic                                                               
Solar Ventures, he said, this is  his company's DNA.  To have the                                                               
state  acknowledge that  and join  his company  in its  voluntary                                                               
reporting of that is hugely important.                                                                                          
                                                                                                                                
4:10:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  asked whether  Mr. Trimble's  business could                                                               
still operate  the same way it  does and make the  same decisions                                                               
without  the  benefit  corporation  designation  other  than  the                                                               
recognition of it.                                                                                                              
                                                                                                                                
MR.  TRIMBLE responded  that his  business, through  its internal                                                               
practices,  does that  now,  but he  can't  guarantee that  other                                                               
companies will do  the same.  If a company  is volunteering to be                                                               
held to that standard and  wanting to receive the public relation                                                               
benefits that  are associated with  being in a business  that has                                                               
considerations above  and outside of  pure profit, he  said, then                                                               
the company needs  to be held to a standard.   This structure has                                                               
been designed and implemented by  other states so that businesses                                                               
can't claim societal  benefit without a standard  and proof under                                                               
the state's corporate structure.                                                                                                
                                                                                                                                
MR. TRIMBLE  addressed the  committee's earlier  discussion about                                                               
the use of  profits and how that  plays in.  He  pointed out that                                                               
there is no  requirement under HB 124 that profits  be donated to                                                               
a non-profit  or used  for a  non-profit, which  is the  case for                                                               
benefit corporation  structure anywhere.   It  has nothing  to do                                                               
with  how profits  are  dispersed  or where  they  should go,  he                                                               
advised,  rather  it  has  to  do  with  internal  practices  and                                                               
policies  of  the business.    For  example, his  company  firmly                                                               
believes  that one  of its  public  benefits is  that it  deploys                                                               
clean  energy  and  the  deployment  of  clean  energy  has  many                                                               
societal  benefits.   His  company  is  creating local  jobs  and                                                               
stimulating  the  local  economy,  as  well  as  reducing  carbon                                                               
footprints of people  and cleaning the air.  It's  not only about                                                               
being  able  to  be  acknowledged  for being  held  to  a  higher                                                               
standard, he reiterated, but that  the company is volunteering to                                                               
be held to that standard, and that is why HB 124 is important.                                                                  
                                                                                                                                
4:14:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL  offered  his  understanding that  it  is  a                                                               
standard of corporate  behavior that a company  would be adhering                                                               
to,  as well  as  the  public recognition  and  benefit that  the                                                               
company  would  get  from  being   identified  as  that  type  of                                                               
corporation.                                                                                                                    
                                                                                                                                
MR. TRIMBLE confirmed that that is a very fair assessment.                                                                      
                                                                                                                                
4:14:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP  inquired whether B Corp  certification is a                                                               
federal certification.                                                                                                          
                                                                                                                                
MR. TRIMBLE  answered that it  is an  international certification                                                               
with over 4,000 corporations now  certified throughout the world,                                                               
and that this certification is  administered by the organization,                                                               
B Lab.   He explained that B Lab is  the organization that helped                                                               
states develop  the first benefit  corporation legislation.   The                                                               
idea behind B  Corp certification and the B  Lab organization was                                                               
to create  a global framework  where businesses can  volunteer to                                                               
be  a part  of this  very rigorous  assessment and  to work  with                                                               
states  to  then  develop  the  benefit  corporation  designation                                                               
within  their  corporate state  structure,  so  it completes  the                                                               
puzzle.  The benefit corporation  piece is a U.S. specific piece,                                                               
he said, but the B Corp certification is a global certification.                                                                
                                                                                                                                
4:15:49 PM                                                                                                                    
                                                                                                                                
CHAIR KITO held over HB 124.                                                                                                    
                                                                                                                                

Document Name Date/Time Subjects
HB124 Fiscal Note DCCED-CBPL 3.24.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 124
HB124 Sponsor Statement 3.22.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 124
HB036 Fiscal Note DOR-TAX 3.24.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 36
HB036 Sponsor Statement version I 2.28.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 36
HB036 Sectional Analysis version I 2.28.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 36
HB036 Brief Explanation of Changes ver J to ver I 2.28.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 36
HB036 Supporting Documents-Alaska Journal of Commerce Article 3.29.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 36
HB036 Supporting Documents-Current Oil Tax Apportionment 3.29.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 36
HB036 Supporting Documents-Legislative Research Report 04.131 Corp Taxation in AK 3.29.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 36
HB036 Supporting Documents-Side by Side Comparison Current Corporate Tax and HB 36 3.29.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 36
HB036 Supporting Documents-Taxes in Other States 3.29.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 36
HB036 version E 3.29.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 36
HB036 Brief explanation of changes version I to version E 3.29.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 36
HB036 Sectional Analysis version E 3.31.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 36
HB036 Sponsor Statement version E 3.29.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 36
HB036 Presentation-Sponsor 4.1.17.pptx HL&C 4/1/2017 1:00:00 PM
HB 36
HB124 Sectional Analysis 4.4.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 124
HB103 Supporting Documents-Letters of Opposition 4.1.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 103
HB103 Supporting Documents-Letters of Support 4.1.17.pdf HL&C 4/1/2017 1:00:00 PM
HB 103