HOUSE BILL NO. 6310

October 14, 2020, Introduced by Reps. Hood, Greig, Ellison, Sowerby, Koleszar, Bolden, Pohutsky, Kuppa, Chirkun, Vaupel, Brixie, Sheppard and Hoadley and referred to the Committee on Government Operations.

"Business corporation act,"

(MCL 450.1101 to 450.2098) by adding section 961 to chapter 9A.

the people of the state of michigan enact:

CHAPTER 9A

BENEFIT CORPORATIONS

Sec. 961. (1) A benefit corporation shall prepare an annual benefit report. An annual benefit report must include all of the following:

(a) A narrative description of the ways in which the benefit corporation pursued the corporation's general public benefit purpose during the year and the extent to which general public benefit was created.

(b) A narrative description of the ways in which the benefit corporation pursued any specific public benefit included in the purposes of the corporation in the articles of incorporation and the extent to which that specific public benefit was created.

(c) A narrative description of any circumstances that have hindered the creation by the benefit corporation of general public benefit or a specific public benefit described in subdivision (a) or (b).

(d) The process and rationale for selecting or changing the third-party standard used to prepare the benefit report.

(e) An assessment of the overall social and environmental performance of the benefit corporation that meets 1 of the following:

(i) Is prepared in accordance with a third-party standard applied consistently with any application of that standard in previous benefit reports.

(ii) If the assessment is prepared by applying a third-party standard in a manner inconsistent with that standard as applied in previous benefit reports, is accompanied by an explanation of the reasons for the inconsistent application of the standard applied.

(f) The compensation paid by the benefit corporation during the year to each director in his or her capacity as a director.

(g) A statement of any connection between the organization that developed the third-party standard, or its directors, officers, or material owners, and the benefit corporation, or its directors, officers, or material owners, including any financial or governance relationship that might materially affect the credibility of the objective assessment of the third-party standard.

(2) A benefit corporation is not required to use a third party to perform, audit, or certify an assessment included in an annual benefit report under subsection (1)(e).

(3) A benefit corporation shall distribute to each shareholder a copy of the annual benefit report, either within 120 days following the end of the fiscal year of the benefit corporation or at the same time that the benefit corporation distributes any other annual report to its shareholders. The benefit corporation may distribute the annual benefit report to a shareholder electronically, either by electronic transmission of the report or by making the report available for electronic transmission. If the report is distributed electronically under this subsection, the corporation shall provide the report in written form to a shareholder on request.

(4) A benefit corporation shall post its most recent annual benefit report on the public portion of its internet website, if any, but the corporation may omit the compensation paid to directors and any financial or proprietary information included in the benefit report from the benefit report posted on its website.

(5) If a benefit corporation does not have an internet website, the benefit corporation shall provide a copy of its most recent annual benefit report, without charge, to a person that requests a copy, but the benefit corporation may omit the amount of compensation paid to directors and any financial or proprietary information included in the benefit report from the benefit report provided to the person.

(6) A benefit corporation shall include its annual benefit report with the report it is required to file with the administrator under section 911, but the corporation may omit the amount of compensation paid to directors and any financial or proprietary information included in the benefit report from the benefit report filed with the administrator.

Enacting section 1. This amendatory act takes effect 90 days after the date it is enacted into law.

Enacting section 2. This amendatory act does not take effect unless all of the following bills of the 100th Legislature are enacted into law:

(a) Senate Bill No. ____ or House Bill No. 6309(request no. 00862'19).

(b) Senate Bill No. ____ or House Bill No. 6311(request no. 00863'19).