Text: SSB00260 Text: SSB00262 Text: SSB00200 - SSB00299 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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 allocationthatto be currentlyshall bepaid in 1 12 cash. However,so long as there are unpaid local deferred1 13patronage dividends of deceased members for prior yearsfor 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 usethea 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.DeferredExcept 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, prior2 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 ofcooperative associationsa cooperative 2 5 association, other thanthose cooperative associationsa 2 6 cooperative association whichareis a publicutilities2 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.Directors2 14 b. The directors ofcooperative associationsa cooperative 2 15 association whichareis a publicutilitiesutility 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 memberswho become ineligible2 20 without reference to priority. 2 21 3. Payment of deferred patronage dividends or the 2 22 redemption of preferred stockof ineligible membersshall 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 2193SC 76 4 2 da/jw/5
Text: SSB00260 Text: SSB00262 Text: SSB00200 - SSB00299 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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