California 2011-2012 Regular Session Status: Enacted

AB 361 — Benefit corporations.

Last action — Chaptered by Secretary of State - Chapter 728, Statutes of 2011.

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  1. ✓
    Introduced
  2. ✓
    In Committee
  3. ✓
    Passed Assembly
  4. ✓
    Passed Senate
  5. ✓
    To Executive
  6. 6
    Enacted

This bill has been enacted into law. Introduced February 14, 2011. Enacted.

Prognosis

Likely to advance 78% · moderate confidence

Where this bill stands today.

Odds of enactment

High

How often bills like it became law.

  • Enacted

    Current position in the legislative process.

  • 5 sponsors

    1 primary, 4 co-sponsors signed on.

  • Cleared a recorded vote

    Passed 7 recorded votes so far.

Prognosis reads this bill's own signals — stage, sponsorship breadth, committee status, recorded votes and cross-state momentum. Odds come from a model trained on which bills have become law.

Summary

Existing law, the General Corporation Law, authorizes and regulates the formation and governance of general corporations. The Nonprofit Corporation Law authorizes the formation and governance of nonprofit public benefit corporations, nonprofit mutual benefit corporations, and nonprofit religious corporations, and specifies the respective purposes for which those corporations may lawfully be formed. Existing law specifies the duties of corporate directors and the rights of shareholders. Existing law does not provide for the formation and governance of benefit corporations. This bill would authorize and regulate the formation and governance of a new form of corporate entity known as a benefit corporation. The bill would also permit an existing corporation to become a benefit corporation by amendment to its articles of incorporation, as specified, adopted by at least a minimum status vote, as defined, and would permit a corporation to become a benefit corporation through a merger, reorganization, or conversion, or domestic other business entity, as specified. This bill would define "benefit corporation" to mean a corporation that has been organized under the General Corporation Law and has elected to become subject to the provisions of the bill, as specified. The bill would provide that a benefit corporation may be formed for the purpose of creating general public benefit, defined as a material positive impact on society and the environment, taken as a whole, as assessed against a 3rd-party standard, as defined, that satisfies certain requirements. The bill would also provide that a benefit corporation may identify one or more specific public benefits, as defined, as an additional purpose of the corporation, including, without limitation, providing low-income or underserved individuals or communities with beneficial products or services, promoting economic opportunity for individuals or communities beyond the creation of jobs in the ordinary course of business, preserving the environment, and improving human health. This bill would require directors to consider the impacts of any action or proposed action upon specified considerations, including, among others, the shareholders and employees, and of customers who are beneficiaries of the general or specific public benefit purposes, and the environment, and would allow directors to consider the impacts of those actions on, among other things, the resources, intent, and conduct of any person seeking to acquire control of the benefit corporation. This bill would require the board of directors to prepare a specified statement relating to the public benefit purposes of the corporation. The bill would require the benefit corporation to prepare an annual benefit report to include, among other things, a statement indicating whether, in the board's opinion, the benefit corporation failed to pursue its general public benefit and any specific public benefit, a description of the ways in which the benefit corporation pursued those benefits, the extent to which those benefits were created, and the process and rationale for selecting the 3rd-party standard used to prepare the benefit reports, and would require the benefit corporation to file with the Secretary of State a copy of the benefit report together with a filing fee in a specified amount to cover the reasonable regulatory costs associated with maintaining those filings. This bill would include provisions governing the fiduciary duty and liability of an officer or director of a benefit corporation. The bill would provide that the duties of a director or officer, and the general, and any specific, public benefit purpose of a benefit corporation, may be enforced only in a benefit enforcement proceeding, as defined, that would be permitted to be commenced or maintained only as specified.

Bill Text

Action History

  1. Chaptered by Secretary of State - Chapter 728, Statutes of 2011.

  2. Approved by the Governor.

  3. Enrolled and presented to the Governor at 3:30 p.m.

  4. Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 57. Noes 17. Page 2647.).

  5. In Assembly. Concurrence in Senate amendments pending. May be considered on or after August 24 pursuant to Assembly Rule 77.

  6. Read third time. Passed. Ordered to the Assembly. (Ayes 23. Noes 7. Page 2008.).

  7. Read second time. Ordered to third reading.

  8. From committee: Be placed on second reading file pursuant to Senate Rule 28.8.

  9. Read second time and amended. Re-referred to Com. on APPR.

  10. From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 4. Noes 0.) (July 5).

  11. From committee: Do pass and re-refer to Com. on JUD. (Ayes 5. Noes 1.) (June 29). Re-referred to Com. on JUD.

  12. In committee: Hearing postponed by committee.

  13. Referred to Coms. on B. & F.I. and JUD.

  14. In Senate. Read first time. To Com. on RLS. for assignment.

  15. Read third time. Passed. Ordered to the Senate. (Ayes 58. Noes 17. Page 1560.)

  16. Read second time. Ordered to third reading.

  17. Read second time and amended. Ordered to second reading.

  18. From committee: Do pass as amended. (Ayes 12. Noes 5.) (May 18).

  19. Re-referred to Com. on APPR.

  20. Read second time and amended.

  21. From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 7. Noes 2.) (May 3).

  22. Re-referred to Com. on JUD.

  23. From committee chair, with author's amendments: Amend, and re-refer to Com. on JUD. Read second time and amended.

  24. In committee: Set, first hearing. Hearing canceled at the request of author.

  25. Re-referred to Com. on JUD.

  26. From committee chair, with author's amendments: Amend, and re-refer to Com. on JUD. Read second time and amended.

  27. Referred to Com. on JUD.

  28. From printer. May be heard in committee March 17.

  29. Read first time. To print.

Sponsors

  • Blumenfield · Cosponsor
  • Dickinson · Cosponsor
  • Hancock · Cosponsor
  • Huffman · Primary
  • Leno · Cosponsor

Sponsorship breakdown

Export CSV (upgrade) →

1 sponsors · 4 co-sponsors · 117 not signed on · 5 voted No

Sponsors (1)

  • Huffman

Co-sponsors (4)

  • Blumenfield
  • Dickinson
  • Hancock
  • Leno

Not signed on (117)

117 members have not signed on to this bill.

Show all 117 →

"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

AB 361 HUFFMAN Concurrence in Senate Amendments

Passed 57 Yea · 17 Nay · 6 Other
Party YeaNayPresentNot Voting
Unaffiliated 561506
Democratic 1000
Republican 0200
Total 571706
% of votes cast 71%21%0%8%
How each member voted (80)
Member Party Vote
Gordon — Yea
Gorell — Not Voting
Feuer — Yea
Fong — Yea
Furutani — Yea
Allen — Yea
Galgiani — Yea
Gatto — Yea
Hagman — Yea
Butler — Yea
Portantino — Yea
John A. Pérez — Yea
Mitchell — Yea
Hall — Yea
Fletcher — Yea
Hill — Yea
Campos — Yea
Bonilla — Yea
Atkins — Yea
Huber — Yea
Beall — Yea
Huffman — Yea
Carter — Yea
Cedillo — Yea
Chesbro — Yea
Conway — Yea
Davis — Yea
Dickinson — Yea
Lara — Yea
Ma — Yea
Mendoza — Yea
Monning — Yea
Nestande — Yea
Olsen — Yea
Perea — Yea
Skinner — Yea
Solorio — Yea
Torres — Yea
Wieckowski — Yea
Williams — Yea
Harkey — Nay
Yamada — Not Voting
Halderman — Nay
Cook — Not Voting
Donnelly — Nay
Knight — Nay
Logue — Nay
Miller — Nay
Morrell — Nay
Nielsen — Nay
Norby — Nay
Valadao — Nay
Achadjian — Not Voting
Alejo — Yea
Ammiano — Yea
Block — Yea
Blumenfield — Yea
Bradford — Yea
Brownley — Yea
Buchanan — Yea
Hayashi — Yea
Hueso — Yea
Jeffries — Not Voting
Mansoor — Nay
Pan — Yea
Silva — Nay
Smyth — Yea
Swanson — Yea
Wagner — Nay
Eng — Yea
Fuentes — Yea
Garrick — Nay
Beth Gaines — Nay
Bill Berryhill — Not Voting
Bonnie Lowenthal — Yea
Roger Hernández — Yea
V. Manuel Pérez — Yea
Calderon, Lisa Democratic Yea
Grove, Shannon Republican Nay
Jones, Brian W. Republican Nay

Official roll call →

3rd Reading AB361 Huffman By Leno

Passed 23 Yea · 7 Nay · 10 Other
Party YeaNayPresentNot Voting
Unaffiliated 22708
Republican 0001
Democratic 1001
Total 237010
% of votes cast 58%18%0%25%
How each member voted (40)
Member Party Vote
Yee — Yea
Wyland — Not Voting
Evans — Yea
Lowenthal — Yea
De León — Yea
Fuller — Not Voting
Hancock — Yea
Rubio — Yea
Cannella — Not Voting
Corbett — Not Voting
Runner — Nay
Harman — Yea
Negrete McLeod — Not Voting
Huff — Not Voting
Blakeslee — Yea
Dutton — Nay
Leno — Yea
Lieu — Yea
Price — Yea
Simitian — Yea
Steinberg — Yea
Vargas — Yea
Wolk — Yea
Alquist — Yea
Anderson — Nay
Hernandez — Yea
Kehoe — Yea
Liu — Yea
Pavley — Yea
Walters — Nay
Wright — Nay
Emmerson — Not Voting
Correa — Yea
DeSaulnier — Yea
Beth Gaines — Nay
Bill Berryhill — Not Voting
La Malfa — Nay
Calderon, Lisa Democratic Not Voting
Padilla, Stephen C. Democratic Yea
Strickland, Tony Republican Not Voting

Official roll call →

AB 361 HUFFMAN Assembly Third Reading

Passed 58 Yea · 17 Nay · 5 Other
Party YeaNayPresentNot Voting
Unaffiliated 571604
Republican 0101
Democratic 1000
Total 581705
% of votes cast 73%21%0%6%
How each member voted (80)
Member Party Vote
Gordon — Yea
Halderman — Nay
Feuer — Yea
Butler — Yea
Carter — Yea
Hill — Yea
Fong — Yea
Allen — Yea
Cook — Yea
Olsen — Yea
Yamada — Yea
Fuentes — Yea
Furutani — Yea
Garrick — Nay
Campos — Yea
Portantino — Yea
John A. Pérez — Yea
Mitchell — Yea
Fletcher — Yea
Gatto — Yea
Gorell — Not Voting
Cedillo — Not Voting
Bonilla — Yea
Atkins — Yea
Hagman — Yea
Chesbro — Yea
Hall — Yea
Hayashi — Yea
Ammiano — Yea
Block — Yea
Conway — Yea
Davis — Not Voting
Donnelly — Nay
Hueso — Yea
Huffman — Yea
Knight — Nay
Lara — Yea
Logue — Nay
Mendoza — Yea
Miller — Nay
Monning — Yea
Morrell — Nay
Nestande — Yea
Norby — Not Voting
Pan — Yea
Silva — Nay
Skinner — Yea
Solorio — Yea
Swanson — Yea
Valadao — Nay
Wagner — Nay
Achadjian — Nay
Alejo — Yea
Beall — Yea
Blumenfield — Yea
Bradford — Yea
Brownley — Yea
Buchanan — Yea
Harkey — Nay
Huber — Yea
Jeffries — Yea
Ma — Yea
Mansoor — Nay
Nielsen — Nay
Perea — Yea
Smyth — Yea
Torres — Yea
Wieckowski — Yea
Williams — Yea
Eng — Yea
Dickinson — Yea
Galgiani — Yea
Beth Gaines — Nay
Bill Berryhill — Nay
Bonnie Lowenthal — Yea
Roger Hernández — Yea
V. Manuel Pérez — Yea
Calderon, Lisa Democratic Yea
Grove, Shannon Republican Nay
Jones, Brian W. Republican Not Voting

Official roll call →

Do pass as amended.

Passed 12 Yea · 5 Nay
Party YeaNayPresentNot Voting
Unaffiliated 11500
Democratic 1000
Total 12500
% of votes cast 71%29%0%0%
How each member voted (17)
Member Party Vote
Campos — Yea
Hill — Yea
Davis — Yea
Mitchell — Yea
Donnelly — Nay
Hall — Yea
Harkey — Nay
Nielsen — Nay
Smyth — Nay
Solorio — Yea
Wagner — Nay
Blumenfield — Yea
Bradford — Yea
Lara — Yea
Fuentes — Yea
Gatto — Yea
Calderon, Lisa Democratic Yea

Official roll call →

Subjects

finance environment labor
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Frequently asked questions

What does AB 361 do?
Existing law, the General Corporation Law, authorizes and regulates the formation and governance of general corporations. The Nonprofit Corporation Law authorizes the formation and governance of nonprofit public benefit corporations, nonprofit mutual benefit corporations, and nonprofit religious corporations, and specifies the respective purposes for which those corporations may lawfully be formed. Existing law specifies the duties of corporate directors and the rights of shareholders. Existing law does not provide for the formation and governance of benefit corporations. This bill would authorize and regulate the formation and governance of a new form of corporate entity known as a benefit corporation. The bill would also permit an existing corporation to become a benefit corporation by amendment to its articles of incorporation, as specified, adopted by at least a minimum status vote, as defined, and would permit a corporation to become a benefit corporation through a merger, reorganization, or conversion, or domestic other business entity, as specified. This bill would define "benefit corporation" to mean a corporation that has been organized under the General Corporation Law and has elected to become subject to the provisions of the bill, as specified. The bill would provide that a benefit corporation may be formed for the purpose of creating general public benefit, defined as a material positive impact on society and the environment, taken as a whole, as assessed against a 3rd-party standard, as defined, that satisfies certain requirements. The bill would also provide that a benefit corporation may identify one or more specific public benefits, as defined, as an additional purpose of the corporation, including, without limitation, providing low-income or underserved individuals or communities with beneficial products or services, promoting economic opportunity for individuals or communities beyond the creation of jobs in the ordinary course of business, preserving the environment, and improving human health. This bill would require directors to consider the impacts of any action or proposed action upon specified considerations, including, among others, the shareholders and employees, and of customers who are beneficiaries of the general or specific public benefit purposes, and the environment, and would allow directors to consider the impacts of those actions on, among other things, the resources, intent, and conduct of any person seeking to acquire control of the benefit corporation. This bill would require the board of directors to prepare a specified statement relating to the public benefit purposes of the corporation. The bill would require the benefit corporation to prepare an annual benefit report to include, among other things, a statement indicating whether, in the board's opinion, the benefit corporation failed to pursue its general public benefit and any specific public benefit, a description of the ways in which the benefit corporation pursued those benefits, the extent to which those benefits were created, and the process and rationale for selecting the 3rd-party standard used to prepare the benefit reports, and would require the benefit corporation to file with the Secretary of State a copy of the benefit report together with a filing fee in a specified amount to cover the reasonable regulatory costs associated with maintaining those filings. This bill would include provisions governing the fiduciary duty and liability of an officer or director of a benefit corporation. The bill would provide that the duties of a director or officer, and the general, and any specific, public benefit purpose of a benefit corporation, may be enforced only in a benefit enforcement proceeding, as defined, that would be permitted to be commenced or maintained only as specified.
Who sponsors AB 361?
AB 361 is sponsored by Blumenfield, Dickinson, Hancock, Huffman, and Leno.
What is the current status of AB 361?
This bill has been enacted into law. Introduced February 14, 2011. Enacted.
Where can I track AB 361?
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