Legislature(2017 - 2018)BELTZ 105 (TSBldg)
01/30/2018 01:00 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB126 | |
| HB124 | |
| HB208 | |
| HB102 | |
| HB114 | |
| HB121 | |
| HB86 | |
| HCR8 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 126 | TELECONFERENCED | |
| + | HB 208 | TELECONFERENCED | |
| += | HB 102 | TELECONFERENCED | |
| + | HB 114 | TELECONFERENCED | |
| + | HB 121 | TELECONFERENCED | |
| + | HB 124 | TELECONFERENCED | |
| + | HB 86 | TELECONFERENCED | |
| + | HCR 8 | TELECONFERENCED | |
HB 124-BENEFIT CORPORATIONS
1:12:03 PM
CHAIR COSTELLO announced the consideration of HB 124. [CSHB
124(FIN) was before the committee.]
1:12:22 PM
REPRESENTATIVE SAM KITO III, Alaska State Legislature, Juneau,
Alaska, sponsor of HB 124, stated that the purpose of the
legislation is to modify Alaska's corporation structure to allow
a corporation to add a beneficial component to its business.
This allows owners and boards to take actions that positively
impact their communities and business without fear of violating
their fiduciary responsibility to shareholders.
1:15:10 PM
CATLYN ELLIS, Staff, Representative Sam Kito III, Alaska State
Legislature, Juneau, Alaska, explained that benefit corporations
work towards two goals. They have the fiduciary responsibility
to achieve the best profits for their shareholders while they
incorporate public benefits and community improvement into their
day-to-day business practices. A benefit corporation is
protected by its legal framework and is taxed the same as other
corporations. The business develops its own articles of
incorporation and is held accountable through biannual reports
to shareholders, the state, and the public. Failure to produce
these reports could result in the Department of Commerce,
Community and Economic Development (DCCED) dissolving the
corporation.
MS. ELLIS reported that 31 states have a similar designation for
benefit corporations. She noted that a few Alaskan businesses
have gone through the process of becoming certified through the
international benefit corporation structure. This would work in
tandem and provide statewide legal protection.
1:18:49 PM
CHAIR COSTELLO asked if a business could form solely as a
benefit corporation.
MS. ELLIS answered yes, and an existing corporation could vote
to convert to a benefit corporation
SENATOR GARDNER asked 1) the genesis of the bill and if a
business could form as a benefit corporation if the state
doesn't participate by licensure, and 2) if a benefit
corporation is subject to penalty if it fails to meet its
beneficial goal but does meet its fiduciary responsibility to
shareholders.
REPRESENTATIVE KITO explained that the bill was originally
requested by Alaskan businesses because state law prohibits a
corporation from using the beneficial component without
violating its fiduciary responsibility to shareholders. A
benefit corporation must identify its beneficial use in the
articles of incorporation and biannually report on its
beneficial and fiduciary responsibility. The department will
review the reports and he imagined the corporation would have
the flexibility to scale up or down its beneficial use.
MS. ELLIS cited Patagonia as an example of a beneficial
corporation; the bylaws direct the corporation to deliver
products that don't impact the community, but it isn't specific.
She confirmed that Alaska businesses could form as a beneficial
corporation, but they wouldn't have legal protection if
shareholders said the corporation failed to meet its fiduciary
responsibilities.
CHAIR COSTELLO noted the individuals available to answer
questions.
1:24:28 PM
SENATOR MEYER asked for an example of an Alaska business that
has formed as a beneficial corporation.
MS. ELLIS said Arctic Solar Ventures in Anchorage is one of
three businesses that have gone through the international
certification process.
SENATOR MEYER asked if the social benefit would be the solar
panels.
MS. ELLIS replied they listed environmental and social benefits
in the bylaws.
SENATOR MEYER asked how social benefit is defined and who makes
the determination.
MS. ELLIS replied the corporation makes the determination in its
bylaws.
SENATOR MICCICHE commented that citing Patagonia as an example
isn't a good lead-off since it opposes many of the important
industries in Alaska. He acknowledged the bottom-line benefit of
the legislation was that the corporation identifies itself as a
socially responsible entity.
1:26:22 PM
CHAIR COSTELLO opened public testimony on HB 124 and closed it
after ascertaining that no one wished to testify.
1:26:57 PM
At ease
1:27:15 PM
CHAIR COSTELLO reconvened the meeting and again opened public
testimony on HB 124. Finding none, she closed it.
SENATOR GARDNER pointed out that the supporting documents
include a letter from a coffee company that talks about the
social value of empowering indigenous farmers and helping them
earn up to 50 percent more of the specialty coffee dollars.
SENATOR MICCICHE reviewed the $22,500 DCCED fiscal note that
does not have a negative impact to the state. He paraphrased the
last paragraph of the analysis. "Corporation filing fees are
General Fund/Program Receipts fund source 1005 GF/Prgm (DGF).
Corporation filing fees are set in regulation per AS 10 and 32,
and revenue in excess of authorized budgeted expenses reverts to
the State of Alaska general fund."
1:29:39 PM
SENATOR MICCICHE moved to report HB 124 from committee with
individual recommendations and attached fiscal note(s).
1:29:52 PM
CHAIR COSTELLO announced that without objection, CSHB 124(FIN)
moved from the Senate Labor and Commerce Standing Committee.