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Text: HF00502                           Text: HF00504
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House File 503

Partial Bill History

Bill Text

PAG LIN
  1  1    Section 1.  Section 499.30, subsection 5, Code 1995, is
  1  2 amended to read as follows:
  1  3    5.  Notwithstanding an association's articles of
  1  4 incorporation, for each taxable year of the association, the
  1  5 association shall allocate all remaining net earnings to the
  1  6 account of each member, including subscribers described in
  1  7 section 499.16, ratably in proportion to the business the
  1  8 member did with the association during that year.  The
  1  9 directors shall determine, or the articles of incorporation or
  1 10 bylaws of the association may specify, the percentage or the
  1 11 amount of the allocation that to be currently shall be paid in
  1 12 cash.  However, so long as there are unpaid local deferred
  1 13 patronage dividends of deceased members for prior years for a
  1 14 cooperative association other than a public utility as defined
  1 15 in section 476.1, the amount to be currently payable in cash
  1 16 shall not exceed twenty percent of the allocation during any
  1 17 period when unpaid local deferred patronage dividends of
  1 18 deceased members for prior years are outstanding.  All the
  1 19 remaining allocation not paid in cash shall be transferred to
  1 20 a revolving fund as provided in section 499.33 and credited to
  1 21 the members and subscribers.  The credits in the revolving
  1 22 fund are referred to in this chapter as deferred patronage
  1 23 dividends.
  1 24    Sec. 2.  Section 499.33, Code 1995, is amended to read as
  1 25 follows:
  1 26    499.33  USE OF REVOLVING FUND.
  1 27    1.  The directors may use the a revolving fund to pay the
  1 28 obligations or add to the capital of the association or retire
  1 29 its preferred stock.  In that event the deferred patronage
  1 30 dividends credited to members constitute a charge on the
  1 31 revolving fund, on future additions to the revolving fund, and
  1 32 on the corporate assets, subordinate to existing or future
  1 33 creditors and preferred stockholders.  Deferred Except as
  1 34 otherwise provided in subsection 2, deferred patronage
  1 35 dividends for any year have priority over those for subsequent
  2  1 years.  However, prior
  2  2    2.  a.  Prior to other payments of deferred patronage
  2  3 dividends or redemption of preferred stock held by members,
  2  4 the directors of cooperative associations a cooperative
  2  5 association, other than those cooperative associations a
  2  6 cooperative association which are is a public utilities
  2  7 utility as defined in section 476.1, shall pay local deferred
  2  8 patronage dividends and redeem local deferred patronage
  2  9 preferred stock of deceased natural persons who were members,
  2 10 and may pay deferred patronage dividends or may redeem
  2 11 preferred stock of deceased natural persons who were members
  2 12 or of members who become ineligible, without reference to the
  2 13 order of priority.  Directors
  2 14    b.  The directors of cooperative associations a cooperative
  2 15 association which are is a public utilities utility as defined
  2 16 in section 476.1 may pay deferred patronage dividends and
  2 17 redeem preferred stock of deceased natural persons who were
  2 18 members, and may pay all other deferred patronage dividends or
  2 19 redeem preferred stock of members who become ineligible
  2 20 without reference to priority.
  2 21    3.  Payment of deferred patronage dividends or the
  2 22 redemption of preferred stock of ineligible members shall be
  2 23 carried out to the extent and in the manner specified in the
  2 24 bylaws of the association.  
  2 25                           EXPLANATION
  2 26    This bill amends several provisions in chapter 499 which
  2 27 regulates the organization and administration of cooperative
  2 28 associations, which are utilities which furnish gas,
  2 29 electricity, water, or telephone service.
  2 30    Section 499.30 provides for the annual distribution of
  2 31 earnings.  After earnings are distributed for purposes of
  2 32 building or maintaining reserves, paying debts and expenses,
  2 33 special purposes and the payment of dividends, remaining
  2 34 earnings are deposited into the account of each member,
  2 35 ratably in proportion to the business the member did with the
  3  1 association during that year.  The section provides that the
  3  2 board of directors determine, or the articles of incorporation
  3  3 or bylaws of the association may specify, the percentage or
  3  4 the amount of the allocation to be paid in cash.  However, so
  3  5 long as there are unpaid local deferred patronage dividends of
  3  6 deceased members for prior years, the amount payable in cash
  3  7 cannot exceed 20 percent of the allocation.  The bill provides
  3  8 that the 20 percent requirement does not apply to cooperative
  3  9 associations which are utilities.
  3 10    Section 499.30 provides that the remaining allocation not
  3 11 paid in cash must be transferred to a revolving fund and
  3 12 credited to the members and subscribers.  The credits in the
  3 13 revolving fund are referred to as deferred patronage
  3 14 dividends.  Section 499.33 provides for the use of the
  3 15 revolving fund.  The section provides that deferred patronage
  3 16 dividends for a current year have priority over those for
  3 17 subsequent years.  The section also provides for cases where
  3 18 the priority rule does not apply.  In cases not involving
  3 19 public utilities, prior to other payments of deferred
  3 20 patronage dividends or redemption of preferred stock held by
  3 21 members, the directors of a cooperative association must pay
  3 22 local deferred patronage dividends and redeem local deferred
  3 23 patronage preferred stock of deceased natural persons who were
  3 24 members, and may pay deferred patronage dividends or may
  3 25 redeem preferred stock of deceased natural persons who were
  3 26 members or of members who become ineligible.  In cases
  3 27 involving a cooperative association which is a utility, the
  3 28 directors may set aside the rule of priority to pay deferred
  3 29 patronage dividends and redeem preferred stock of deceased
  3 30 natural persons who were members, and may pay deferred
  3 31 patronage dividends or redeem preferred stock of members who
  3 32 become ineligible without reference to priority.  This bill
  3 33 provides that the directors may pay all deferred patronage
  3 34 dividends or redeem preferred stock of members without
  3 35 reference to priority.  
  4  1 LSB 2193HV 76
  4  2 da/jw/5
     
Text: HF00502                           Text: HF00504
Text: HF00500 - HF00599                 Text: HF Index
Bills and Amendments: General Index     Bill History: General Index
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