Benefit corporations, or "B-Corps," are a hybrid of standard for-profit and nonprofit corporations. They allow the corporation, while making a profit, to serve a primary "public benefit" purpose other than maximizing profit for shareholders.
Sponsor Rep. Chuck McGrady, R-Henderson, said "web chatter" on the bill alleges that it's part of a secret conspiracy to promote the United Nations' "Agenda 21" sustainability efforts, which conspiracy theorists allege is actually a socialist plot.
"What I just find amazing is that there’s some perspective that this bill some sort of hidden 'Agenda 21' bill," McGrady said.
"This is not a conservative or liberal bill at all. It’s actually an entrepreneurial bill," he said, noting that similar laws in 14 states have been supported by Republicans, including the governors of South Carolina, Virginia, Louisiana and Pennsylvania.
"Those coming up younger than us – they want to make a profit, but they want to be about good things," he said. "This lets them do that."
"I think you’re seeing that capitalism would like to help those areas where it can," said Rep. Leo Daughtry, R-Johnston. "People want to do good things."
But critics of the bill said its goal is to move the corporate system and capitalism in general toward socialism by suggesting that there's a higher, better purpose than maximizing profit. Members also received a handout from free-market think-tank Civitas Institute reinforcing that point.
Rep. Tim Moore, R-Cleveland, said it's also unnecessary. He said the state's current corporations law already allows for a public-benefit purpose. "You can have a shareholder agreement that defines what the corporation is going to do."
Moore suggested the force behind the B-Corp push is B-Lab, a company that charges up to $25,000 to certify benefit corporations.
"This bill is being promoted all around the country by a third-party group that wants to be the clearinghouse that determines if corporations meet the criteria," Moore said. "The bottom line is, you don’t need a B-Corp."
The measure was defeated 60-52.
Shortly after the vote, Moore moved to reverse the vote "out of respect for the member," promising to re-refer the bill to a committee. The motion succeeded, and the resurrected bill was sent to the House Commerce Committee.