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Text: HF00537                           Text: HF00539
Text: HF00500 - HF00599                 Text: HF Index
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House File 538

Partial Bill History

Bill Text

PAG LIN
  1  1    Section 1.  Section 501.501, subsection 2, Code 1997, is
  1  2 amended to read as follows:
  1  3    2.  A member may shall not sell or otherwise transfer
  1  4 stock, other than voting stock, to any other member or to any
  1  5 person who has been approved by the board for membership,
  1  6 subject to the limitations in the articles or bylaws on the
  1  7 amount of each class of stock that may be owned by one member.
  1  8 A member may be restricted or limited from selling or
  1  9 otherwise transferring any other class of stock of the
  1 10 cooperative as provided by the cooperative's articles of
  1 11 incorporation or bylaws or an agreement executed between the
  1 12 cooperative and the member.
  1 13    Sec. 2.  Section 501.502, subsection 5, Code 1997, is
  1 14 amended to read as follows:
  1 15    5.  The cooperative shall redeem, without interest, all of
  1 16 the terminated member's allocated patronage refunds and
  1 17 preferred stock originally issued as allocated patronage
  1 18 refunds for the issue price.  A cooperative shall make this
  1 19 payment within one year five years after the termination of
  1 20 the membership.  However, if a terminated member's current
  1 21 equity equals or exceeds two percent of the cooperative's
  1 22 total members' equity, the cooperative shall redeem the
  1 23 terminated member's equity in annual amounts of not less than
  1 24 fifteen percent of the total amount provided that the entire
  1 25 amount must be redeemed within seven years.
  1 26    Sec. 3.  Section 501.604, Code 1997, is amended to read as
  1 27 follows:
  1 28    501.604  DISSOLUTION.
  1 29    The provisions of sections 490.1401 through 490.1440 shall
  1 30 apply to cooperatives a cooperative in the same manner as they
  1 31 apply to corporations a corporation organized under chapter
  1 32 490.  However, notwithstanding any provision in those sections
  1 33 to the contrary, upon the cooperative's dissolution, the
  1 34 cooperative's assets shall first be used to pay expenses
  1 35 necessary to carry out the dissolution and liquidation of
  2  1 assets, then be used to pay the cooperative's obligations
  2  2 other than the payment of patronage dividends or stock issued
  2  3 as patronage dividends, and the remainder shall be paid in the
  2  4 manner set forth in the cooperative's articles of
  2  5 incorporation.  
  2  6                           EXPLANATION
  2  7    In 1996, the general assembly enacted Senate File 2135
  2  8 which provided for the organization of cooperative
  2  9 corporations.  This bill amends several of those provisions.
  2 10    Code section 501.501 provides that a member may transfer
  2 11 stock, other than voting stock, to any other member or to any
  2 12 person who has been approved by the board for membership,
  2 13 subject to the limitations in the articles or bylaws.  This
  2 14 bill amends the provision to prohibit the member from
  2 15 transferring voting stock.  It also provides that a member may
  2 16 be restricted or limited from selling or otherwise
  2 17 transferring any other class of stock of the cooperative as
  2 18 provided by the cooperative's articles of incorporation or
  2 19 bylaws or an agreement executed between the cooperative and
  2 20 the member.
  2 21    Code section 501.502 provides for the termination of a
  2 22 membership.  The section requires a cooperative to redeem all
  2 23 of the terminated member's allocated patronage refunds and
  2 24 preferred stock originally issued as allocated patronage
  2 25 refunds for the issue price.  The cooperative is required to
  2 26 make this payment within a certain period of time, usually one
  2 27 year after the termination of the membership, unless the
  2 28 terminated member's current equity equals or exceeds 2 percent
  2 29 of the cooperative's total members' equity.  In that case, the
  2 30 cooperative must redeem the terminated member's equity
  2 31 according to a schedule in seven years.  This bill increases
  2 32 the period of time required to make an unscheduled payment
  2 33 from one to five years.
  2 34    Code section 501.604 provides for the dissolution of a
  2 35 cooperative.  The section provides that the dissolution must
  3  1 proceed as if it were a corporation organized under Code
  3  2 chapter 490.  This bill provides that the provisions in Code
  3  3 chapter 490 do not apply in certain circumstances.
  3  4 Specifically, the bill provides that upon the cooperative's
  3  5 dissolution, the cooperative's assets must first be used to
  3  6 pay expenses necessary to carry out the dissolution and
  3  7 liquidation of assets, then to pay the cooperative's
  3  8 obligations other than the payment of patronage dividends or
  3  9 stock issued as patronage dividends, and finally, the
  3 10 remainder must be paid as provided in the cooperative's
  3 11 articles of incorporation.  
  3 12 LSB 2304HV 77
  3 13 da/jw/5
     
Text: HF00537                           Text: HF00539
Text: HF00500 - HF00599                 Text: HF Index
Bills and Amendments: General Index     Bill History: General Index
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