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House File 563

Partial Bill History

Bill Text

PAG LIN
  1  1    Section 1.  NEW SECTION.  490.1109  QUALIFIED MERGER.
  1  2    A corporation and a cooperative association organized under
  1  3 chapter 499 may merge as provided in section 499.69A.
  1  4    Sec. 2.  Section 499.13, Code 1997, is amended to read as
  1  5 follows:
  1  6    499.13  MEMBERSHIP – ELIGIBILITY.
  1  7    No A membership or share of common stock shall ever not be
  1  8 issued to, or held by, any party not person unless the person
  1  9 is eligible to for membership in the association under its
  1 10 articles.  Individuals A person may be made eligible only if
  1 11 they are the person is engaged in producing products a product
  1 12 marketed by the association, or if they the person customarily
  1 13 consume consumes or use uses the supplies or commodities it
  1 14 that the association handles, or use the person uses the
  1 15 services it that the association renders.  Farm tenants, and
  1 16 landlords A farm tenant or landlord who receive receives a
  1 17 share of agricultural products as rent, may be made eligible
  1 18 to for membership in an agricultural associations association
  1 19 as producers a producer.  Other associations A cooperative
  1 20 association engaged in any directly or indirectly related
  1 21 activity may be made eligible to for membership.  Federated
  1 22 associations An association may be formed whose membership is
  1 23 restricted which includes among its members cooperative
  1 24 associations or restricts its membership to cooperative
  1 25 associations.
  1 26    Sec. 3.  Section 499.16, Code 1997, is amended to read as
  1 27 follows:
  1 28    499.16  SUBSCRIPTIONS – ISSUING CERTIFICATES.
  1 29    If permitted by the association's articles permit of
  1 30 incorporation, any eligible subscriber for common stock or
  1 31 membership may vote and be treated as a member, after making
  1 32 part payment therefor for the common stock or membership in
  1 33 cash and, giving the subscriber's note for the balance, and
  1 34 satisfying any other requirement for the subscription as set
  1 35 forth in the articles.  Such subscriptions A subscription may
  2  1 be forfeited as provided in section 499.32.  No stock Stock or
  2  2 a membership certificate shall not be issued until payment for
  2  3 the stock or membership certificate is fully paid for made.
  2  4 No A subscriber shall not hold office until the subscriber's
  2  5 certificate has been issued.
  2  6    Sec. 4.  Section 499.22, Code 1997, is amended to read as
  2  7 follows:
  2  8    499.22  CAPITAL STOCK.
  2  9    Associations An association with capital stock may divide
  2 10 the shares into common and preferred stock.  Par value stock
  2 11 shall not be issued for less than par.  The general
  2 12 corporation laws shall govern the consideration for which no-
  2 13 par stock is issued.  If the articles so provide, common stock
  2 14 may be issued in two classes, voting and nonvoting.  Voting
  2 15 stock shall be issued to all agricultural producers and
  2 16 nonvoting stock to all other members.  Voting stock or
  2 17 nonvoting stock may be issued to a cooperative association as
  2 18 provided in the cooperative association's articles of
  2 19 incorporation.  Nonvoting stock shall have all privileges of
  2 20 membership except the right to vote.  Preferred stock held by
  2 21 nonmembers shall not exceed in amount that held by members.
  2 22    Sec. 5.  Section 499.36, subsections 1 and 2, Code 1997,
  2 23 are amended to read as follows:
  2 24    1.  The affairs of each association shall be managed by a
  2 25 board of not less than five directors, who.
  2 26    1A.  a.  A director must be members a member of the
  2 27 association or officers an officer or members a member of a
  2 28 member-association.  They A director shall be elected by the
  2 29 members as prescribed by the association's articles prescribe
  2 30 of incorporation.
  2 31    b.  At least five directors shall serve on the
  2 32 association's board.  The number of directors shall be
  2 33 established in accordance with the association's articles of
  2 34 incorporation or bylaws.  If a board has the power to fix or
  2 35 change the number of directors, the board may increase or
  3  1 decrease by thirty percent or less the number of directors
  3  2 last approved by the members.  Only the members may increase
  3  3 or decrease by more than thirty percent the number of
  3  4 directors last approved by the members.
  3  5    c.  The articles of incorporation may establish a variable
  3  6 range for the size of the board by fixing a minimum and
  3  7 maximum number of directors.  If a variable range is
  3  8 established, the number of directors may be fixed or changed
  3  9 from time to time, within the minimum and maximum number, by
  3 10 the members or the board.  After shares are issued, only the
  3 11 members may change the range for the size of the board, change
  3 12 from a fixed to a variable-range-size board, or change from a
  3 13 variable-size to a fixed-size board.
  3 14    2.  a.  Unless the articles or bylaws otherwise provide,
  3 15 vacancies in if a vacancy occurs on the board shall, including
  3 16 a vacancy resulting from an increase in the number of
  3 17 directors, the vacancy may be filled by the remaining
  3 18 directors, the director thus selected to serve for the
  3 19 remainder of the vacant term. any of the following:
  3 20    (1)  The shareholders.
  3 21    (2)  The board.
  3 22    (3)  If the directors remaining in office constitute fewer
  3 23 than a quorum of the board, the directors may fill the vacancy
  3 24 by the affirmative vote of all the directors remaining in
  3 25 office.
  3 26    b.  A vacancy that will occur at a specific later date, by
  3 27 reason of a resignation effective at a later date, may be
  3 28 filled before the vacancy occurs.  The new director shall not
  3 29 take office until the vacancy occurs.
  3 30    Sec. 6.  Section 499.40, subsection 5, Code 1997, is
  3 31 amended to read as follows:
  3 32    5.  The following information regarding the directors:
  3 33    a.  Their number of directors, their.
  3 34    b.  Whether there is a fixed number or a variable range as
  3 35 provided in section 499.36.  If a variable range is
  4  1 established, the information shall include the minimum and
  4  2 maximum number.
  4  3    c.  Their qualifications and.
  4  4    d.  Their terms of office, and how.
  4  5    e.  How they shall be chosen and removed from office.
  4  6    Sec. 7.  Section 499.61, Code 1997, is amended by adding
  4  7 the following new subsections:
  4  8    NEW SUBSECTION.  3A.  "Qualified corporation" means a
  4  9 corporation organized and existing under chapter 490, which is
  4 10 structured and operated on a cooperative basis pursuant to 26
  4 11 U.S.C. } 1381(a)(2) and which meets the definitional
  4 12 requirements of an association as provided in 12 U.S.C. }
  4 13 1141j(a) or 7 U.S.C. } 291.
  4 14    NEW SUBSECTION.  3B.  "Qualified merger" means the uniting
  4 15 of one or more cooperative associations with one or more
  4 16 qualified corporations to form one cooperative association or
  4 17 qualified corporation, in such a manner that one entity
  4 18 participating in the merger continues to exist and absorbs the
  4 19 others, with the others ceasing to exist as cooperative or
  4 20 corporate entities.
  4 21    NEW SUBSECTION.  3C.  "Qualified survivor" means the
  4 22 cooperative association or qualified corporation which
  4 23 continues to exist after a qualified merger.
  4 24    Sec. 8.  Section 499.64, unnumbered paragraph 1, Code 1997,
  4 25 is amended to read as follows:
  4 26    The board of directors of each a cooperative association,
  4 27 upon approving a plan of merger or consolidation, shall, by
  4 28 motion or resolution, direct that the plan be submitted to a
  4 29 vote at a meeting of members, which may be either an annual or
  4 30 special meeting.  Written notice shall be given not less than
  4 31 twenty days prior to the meeting, either personally or by mail
  4 32 to each voting member and shareholder of record.  The notice
  4 33 shall state the time, place, and purpose of the meeting, and a
  4 34 summary of the plan of merger or consolidation shall be
  4 35 included in or enclosed with the notice.
  5  1    Sec. 9.  NEW SECTION.  499.69A  QUALIFIED MERGERS.
  5  2    1.  One or more cooperative associations and one or more
  5  3 qualified corporations may participate in a qualified merger
  5  4 as provided in this section.
  5  5    2.  Each participating cooperative association and
  5  6 qualified corporation must approve a written plan of qualified
  5  7 merger.
  5  8    a.  The plan shall set forth all of the following:
  5  9    (1)  The name of each qualified corporation and cooperative
  5 10 association participating in the qualified merger, and the
  5 11 name of the qualified survivor.
  5 12    (2)  The terms and conditions of the qualified merger.
  5 13    (3)  The manner and basis of converting the interests,
  5 14 including shares or other securities, and obligations in each
  5 15 nonsurviving cooperative association or qualified corporation
  5 16 into the interests and obligations of the qualified survivor.
  5 17    (4)  Any amendments to the articles of incorporation of the
  5 18 qualified survivor as are desired to be effected by the
  5 19 qualified merger, or a statement that no amendment is desired.
  5 20    (5)  The date that the qualified merger becomes effective,
  5 21 if the date is different than the date when a certificate of
  5 22 merger is to be issued for a cooperative association, or if
  5 23 the date is different than the date when the articles of
  5 24 merger are filed with the secretary of state for a qualified
  5 25 corporation.
  5 26    (6)  Other provisions relating to the qualified merger as
  5 27 are deemed necessary or desirable.
  5 28    b.  A proposed plan for a qualified merger complying with
  5 29 the requirements of this section shall be approved as follows:
  5 30    (1)  For a cooperative association which is a party to the
  5 31 proposed qualified merger, the cooperative association shall
  5 32 approve the plan as provided in this chapter.
  5 33    (2)  For a qualified corporation which is a party to the
  5 34 proposed qualified merger, the qualified corporation shall
  5 35 approve the plan as provided in chapter 490.
  6  1    c.  After the proposed plan for the qualified merger is
  6  2 approved, a cooperative association or qualified corporation
  6  3 may abandon the merger in the manner provided in the plan,
  6  4 prior to the filing of the articles of merger.
  6  5    3.  After a proposed plan of the qualified merger is
  6  6 approved, the qualified survivor shall deliver articles of
  6  7 merger for the qualified merger to the secretary of state for
  6  8 filing.  The articles of merger shall be executed by each
  6  9 cooperative association and qualified corporation which is a
  6 10 party to the qualified merger.  The articles of merger shall
  6 11 set forth all of the following:
  6 12    a.  The name of each cooperative association and qualified
  6 13 corporation which is a party to the qualified merger.
  6 14    b.  The plan for the qualified merger.
  6 15    c.  The effective date of the qualified merger, if later
  6 16 than the date of filing the articles of merger.
  6 17    d.  The name of the qualified survivor.
  6 18    e.  A statement that the plan for the qualified merger was
  6 19 approved by each participating cooperative association and
  6 20 qualified corporation in a manner required for the cooperative
  6 21 association and qualified corporation as provided in this
  6 22 section.
  6 23    4.  For a surviving cooperating association, a qualified
  6 24 merger becomes effective upon the filing of the articles of
  6 25 merger with the secretary of state and the issuance of a
  6 26 certificate of merger pursuant to sections 499.68 and 499.69A
  6 27 or the date stated in the articles of merger, whichever is
  6 28 later.  For a surviving qualified cooperation, a qualified
  6 29 merger becomes effective upon the filing of the articles of
  6 30 merger with the secretary of state or the date stated in the
  6 31 articles, whichever is later.
  6 32    5.  The effect of a qualified merger for a qualified
  6 33 survivor which is a cooperative association shall be as
  6 34 provided for in this chapter.  The effect of a qualified
  6 35 merger for a qualified survivor which is a qualified
  7  1 corporation shall be as provided for corporations under
  7  2 chapter 490.
  7  3    6.  The provisions governing the right of a shareholder or
  7  4 member of a cooperative association to object to a merger or
  7  5 the right of a member to dissent and obtain payment of the
  7  6 fair value of an interest in the cooperative association in
  7  7 the case of a merger as provided in this chapter shall apply
  7  8 to a qualified merger.  The provisions governing the right of
  7  9 a shareholder of a corporation to dissent from and obtain
  7 10 payment of the fair value of the shareholder's shares in the
  7 11 case of a merger as provided in division XIII of chapter 490
  7 12 shall apply to a qualified merger.
  7 13    7.  A foreign cooperative association may participate in a
  7 14 qualified merger as provided in this section, if the foreign
  7 15 cooperative association complies with the requirements for a
  7 16 cooperative association under this section and the
  7 17 requirements for a foreign cooperative association under
  7 18 section 499.69.  A foreign corporation may participate in a
  7 19 qualified merger as provided in this section if it complies
  7 20 with the requirements of a qualified corporation under this
  7 21 section and the requirements for a foreign corporation under
  7 22 section 490.1107.
  7 23    Sec. 10.  EFFECTIVE DATE.  This Act, being deemed of
  7 24 immediate importance, takes effect upon enactment.  
  7 25                           EXPLANATION
  7 26    Code chapter 499 governs the organization and regulation of
  7 27 cooperative associations.  This bill amends a number of
  7 28 provisions in the chapter, including the following:
  7 29    Code section 499.13 provides for membership eligibility.
  7 30 The bill amends a provision which allows associations to
  7 31 become members of other associations, including federated
  7 32 associations.  The bill changes this provision by providing
  7 33 that a cooperative association may be a member of an
  7 34 association and that an association may be formed which
  7 35 includes among its members cooperative associations.
  8  1    Code section 499.16 provides requirements for subscribers
  8  2 purchasing common stock or membership interest in an
  8  3 association.  The bill provides that the subscriber must
  8  4 satisfy any requirement set forth in the association's
  8  5 articles of incorporation in order to be eligible to make the
  8  6 purchase.
  8  7    Code section 499.22 provides for an association's capital
  8  8 stock requirements.  The bill amends this section by providing
  8  9 that voting stock or nonvoting stock may be issued to a
  8 10 cooperative association as provided in the cooperative
  8 11 association's articles of incorporation.
  8 12    Code section 499.36 provides for an association's board of
  8 13 directors.  The bill contains provisions similar to provisions
  8 14 contained in Code chapter 490 providing for the organization
  8 15 and regulation of corporations.  The bill authorizes a board
  8 16 of directors to increase or decrease the number of directors
  8 17 sitting on the board but not by more than 30 percent of the
  8 18 number last approved by the membership.  The bill provides
  8 19 that the articles of incorporation may establish a variable
  8 20 range for the size of the board, with membership changing
  8 21 within limits set in the articles.  The bill provides that,
  8 22 after shares are issued, only the membership may change the
  8 23 range for the size of the board, change from a fixed to a
  8 24 variable-range-size board, or change from a variable-size to a
  8 25 fixed-size board.  The bill amends provisions relating to
  8 26 vacancies by providing that a vacancy may be filled by the
  8 27 shareholders, the board, or the unanimous vote of board
  8 28 members constituting less than a quorum.  The bill also
  8 29 provides for filling vacancies occurring at a future time
  8 30 because of a resignation.
  8 31    Code section 499.40 relates to information required to be
  8 32 included in an association's articles of incorporation.  The
  8 33 bill provides that information regarding the board of
  8 34 directors must include whether there is a fixed number or a
  8 35 variable range and the minimum and maximum numbers that the
  9  1 board may have.
  9  2    Code section 499.64 provides for voting by members and
  9  3 shareholders on a plan of merger or consolidation.  The bill
  9  4 provides that notice of a meeting for the vote must be
  9  5 delivered to voting members and shareholders rather than all
  9  6 members and shareholders.
  9  7    New Code section 499.69A and definitions added to Code
  9  8 section 499.61 provide that a cooperative association may
  9  9 merge with a certain type of corporation referred to in the
  9 10 bill as a qualified corporation.  A qualified corporation must
  9 11 be structured and operated on a cooperative basis pursuant to
  9 12 federal law.  The merger involves the union of two or more
  9 13 entities into one cooperative association or qualified
  9 14 corporation, in such manner that one entity involved in the
  9 15 merger retains its existence and absorbs the others.
  9 16    The Code section provides that a cooperative association
  9 17 and a qualified corporation may unite in a qualified merger.
  9 18 The bill provides that each cooperative association and
  9 19 qualified corporation wishing to merge must approve a written
  9 20 plan of qualified merger setting forth information regarding
  9 21 the entities and the merger.  The entities must approve the
  9 22 plan as required for other mergers under their respective
  9 23 chapters.  After the plan for the qualified merger is
  9 24 approved, a cooperative association or qualified corporation
  9 25 may abandon the merger in the manner provided in the plan,
  9 26 prior to the filing of the articles of merger.  After the plan
  9 27 is approved, the surviving entity must deliver articles of
  9 28 merger to the secretary of state for filing.  The new Code
  9 29 section provides information required to be included in the
  9 30 articles regarding the entities, the plan, the name of the
  9 31 survivor, and how the plan was approved.  The new Code section
  9 32 provides for when the merger becomes effective.  The new Code
  9 33 section provides that the effect of a qualified merger is as
  9 34 provided for the surviving entity in the chapter of its
  9 35 organization.  The new Code section requires that provisions
 10  1 governing the right of a shareholder or member to object or
 10  2 dissent from and obtain payment of the fair value of the
 10  3 shareholder's shares or member's interest is the same as a
 10  4 merger between cooperative associations or corporations under
 10  5 an ordinary merger.  The new Code section provides that the
 10  6 cooperative association or corporation may be a foreign
 10  7 cooperative association or corporation which complies with
 10  8 sections applicable to those entities under their respective
 10  9 chapters.
 10 10    The bill takes effect upon enactment.  
 10 11 LSB 2023HV 77
 10 12 da/jw/5
     
Text: HF00562                           Text: HF00564
Text: HF00500 - HF00599                 Text: HF Index
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