Bipartisan effort forming to create new class of corporations aimed at social benefits
12/06/2013 11:47 AM
Within a 24-hour period last month, Kentucky’s only Republican statewide elected official in Frankfort made a speech extolling the virtues of benefit corporations and one of the most progressive Democratic lawmakers pre-filed a bill to allow such entities to form.
Benefit corporations would be a new class of companies that are as focused on making certain social changes as they are making money. Active in 19 states, these benefit corporations also offer an early opportunity for bipartisan agreement in the 2014 General Assembly that is expected to have its share of fights over state spending and health care issues.
Democratic Rep. Kelly Flood of Lexington has pre-filed a draft of her bill to create the benefit corporations, or B-Corporations for short. It simply allows the entities to form and provides no tax incentives.
Flood said she heard about similar entities while she was running for the House for the first time in 2008. Since then, B-Corporations emerged and have sprung up in 19 states that allow them to form.
“There were these donors who were looking to invest who didn’t need a significant profit,” Flood said. Instead, they were equally interested in producing products or doing work in environmentally friendly ways even if it cut into the company’s bottom line. Or, she said, they might “target a key social ailment, like unemployment of former convicts” and hire ex-felons. Or it could mean offering more maternity or paternity time off for employees, Flood added.
The B-Lab, which monitors and certifies benefit corporations, describes the companies like this: “By voluntarily meeting higher standards of transparency, accountability, and performance, Certified B Corps are distinguishing themselves in a cluttered marketplace by offering a positive vision of a better way to do business.”
And that idea has appealed to Republican Agriculture Commissioner James Comer, who told Pure Politics’ political producer Jacqueline Pitts that he plans to make allowing companies to form as benefit corporations his top legislative priority in 2014.
Comer said Republican Sen. Joe Bowen of Owensboro plans to file a bill in the Senate similar to what Flood has pre-filed. Senate Republican Floor Leader Damon Thayer of Georgetown also plans to lead on the effort, Comer said.
Flood said she has spoken with a member of Comer’s staff and said she has been pleasantly surprised at the enthusiasm for the idea coming from both sides of the aisle.
“It’s lined up a lot of things,” she said. “I thought I was just going to drop a pretty little bill and take two or three sessions to get enough support.”
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