The Nevada Senate Committee on Judiciary spoke on three bills from the Assembly Tuesday. AB 89, one of the bills discussed, would form benefit corporations, which are corporations that spend money on community outreach programs and if legislation passed, would allow investors to put money into causes that they care about while also possibly getting a financial gain.
Assemblyman David Bobzien introduced the bill to the Senate Committee, stating, “Most people are surprised to hear that they’re faced the choice of doing the right thing and the profitable thing. The officers of traditional corporations are often legally bound to maximize profits for shareholders and make business decisions that choose the most profitable courses of action even if those choices may have negative effects on society and the environment.”
According to Bobzien, benefit corporation legislation has already passed in 12 states and the District of Columbia. He also said that this legislation would not cost Nevada anything because benefit corporations would be taxed the same as other corporations.
Senator Tick Segerblom asked Assemblyman Bobzien for an example of a benefit corporation and Bobzien responded that Warby Parker, an eyeglasses company, gives away a pair of eyeglasses to someone in need in a developing country for every pair sold.
Bobzien said of Warby Parker, “Knowing that they’re a benefit corporation, I’m even more motivated to give them my business next time I need a pair of glasses.”
Senator Greg Brower said of AB 89, “I can see ‘B corporations’ as you call them, being ripe for an awful lot of litigation as to whether or not the supposed purpose of the corporation is being fulfilled.”
However, the bill states that only the company itself, the director, a person or group that holds 5 percent or more of equity interest or a shareholder who owns 2 percent of the company or more is eligible to bring litigation, but the bill would not allow for any money damages.
Several people testified in support of the bill and none in opposition, before Senator Segerblom closed the hearing on the bill and moved onto other items on the agenda.
