House Passes Bill to Allow a New Type of Corporation in Alaska
House Bill 124 Allows the Creation of Benefit Corporations
Juneau – Today, the Alaska House of Representatives approved legislation to allow benefit corporations to operate in Alaska. Benefit corporations are for profit organizations that incorporate public benefits and community improvements into their business model. House Bill 124, sponsored by Representative Sam Kito (D-Juneau), would bring Alaska’s corporate law in line with thirty-one other states that have passed benefit corporation legislation.
“Passage of this bill in the House is a big step towards allowing boards and shareholders to consider more than just their fiscal bottom line when making business decisions,” said Rep. Kito. “I believe there will be benefits to Alaska if corporations have the freedom to make decision that will benefit the public and their community without fear of violating the long-held fiduciary duty of corporations to make the financial impact to their shareholders the top priority.”
HB 124 inserts language into state statute allowing the creation of benefit corporations with specific measures to ensure transparency and accountability. All benefit corporations will be required to publish biennial reports describing actions taken for the general public benefit.
There are currently over 1,700 benefit corporations in the United States including Kickstarter, Patagonia, and the King Arthur Flour Company, which is the oldest flour company in the U.S.
“Corporations are made up of people, and many of those people care deeply about their community. I want those people to have a tool available to them to use the might of the private sector for good rather than just seeking profit,” said Rep. Kito. “Over $6 trillion is invested annually in corporations that make business decisions for the public benefit and I am hopeful passage of this bill will allow many of those dollars to be invested in Alaska. Such investments will be good for corporate shareholders and good for the people of Alaska.”
House Bill 124 was passed by the Alaska House of Representatives today by a vote of 28-11. The bill will now be sent to the Alaska State Senate for consideration.
For more information, please contact Alaska House Majority Coalition Press Secretary Mike Mason at (907) 444-0889.