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Bills and Amendments: General Index     Bill History: General Index

Senate File 2404

Partial Bill History

Bill Text

PAG LIN
  1  1                                        SENATE FILE 2404     
  1  2 
  1  3                             AN ACT
  1  4 RELATING TO COOPERATIVES ORGANIZED UNDER CODE CHAPTER 501
  1  5    AND PROVIDING AN EFFECTIVE DATE.  
  1  6 
  1  7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  1  8 
  1  9    Section 1.  Section 501.101, subsection 1, Code 1997, is
  1 10 amended to read as follows:
  1 11    1.  "Articles" means the cooperative's articles of
  1 12 incorporation association.
  1 13    Sec. 2.  Section 501.101, subsection 2, paragraph b, Code
  1 14 1997, is amended to read as follows:
  1 15    b.  An individual or general partnership that A person who
  1 16 owns at least one hundred fifty acres of agricultural land and
  1 17 receives as rent a share of the crops or the animals raised on
  1 18 the land if those crops or animals are a significant component
  1 19 of the cooperative's business operations that person is a
  1 20 natural person or a general partnership as organized under
  1 21 chapter 486 in which all partners are natural persons.
  1 22    Sec. 3.  Section 501.101, subsection 4, Code 1997, is
  1 23 amended to read as follows:
  1 24    4.  "Cooperative" means a cooperative corporation
  1 25 association organized under this chapter or converted to this
  1 26 chapter pursuant to section 501.601.
  1 27    Sec. 4.  Section 501.101, subsection 6, Code 1997, is
  1 28 amended by adding the following new paragraph:
  1 29    NEW PARAGRAPH.  c.  A general partnership as organized
  1 30 under chapter 486 in which all the partners are natural
  1 31 persons actively engaged in farming as provided in section
  1 32 9H.1.
  1 33    Sec. 5.  Section 501.101, subsections 7 through 9, Code
  1 34 1997, are amended to read as follows:
  1 35    7.  "Member" means a person who owns a voting stock
  2  1 interest in a cooperative.
  2  2    8.  "Shareholder" "Interest holder" means a person who owns
  2  3 stock an interest in a cooperative, whether or not that stock
  2  4 interest has voting rights.
  2  5    9.  "Voting stock interest" means stock an interest in a
  2  6 cooperative that has voting rights.
  2  7    Sec. 6.  Section 501.101, Code 1997, is amended by adding
  2  8 the following new subsections:
  2  9    NEW SUBSECTION.  6A.  "Interest" means a voting interest or
  2 10 other interest in a cooperative as described in the
  2 11 cooperative's articles of association.
  2 12    NEW SUBSECTION.  7A.  "Membership" means the interest
  2 13 established by a member owning a voting interest.
  2 14    Sec. 7.  Section 501.102, subsection 2, Code 1997, is
  2 15 amended to read as follows:
  2 16    2.  Unless its articles provide otherwise, a cooperative
  2 17 has perpetual duration and succession in its corporate
  2 18 cooperative name and has the same powers as an individual to
  2 19 do all things necessary or convenient to carry out its
  2 20 business and affairs, including, without limitation, all of
  2 21 the powers enumerated in sections 490.302 and 490.303 but not
  2 22 limited to, all of the following:
  2 23    a.  Sue and be sued, complain, and defend in its name.
  2 24    b.  Have a seal, which may be altered at will, and use it,
  2 25 or a facsimile of it, by impressing or affixing it or in any
  2 26 other manner reproducing it.
  2 27    c.  Make and amend bylaws, not inconsistent with its
  2 28 articles of association or with the laws of this state, for
  2 29 managing the business and regulating the affairs of the
  2 30 cooperative.
  2 31    d.  Purchase, receive, lease, or otherwise acquire, and
  2 32 own, hold, improve, use, and otherwise deal with, real or
  2 33 personal property, or any legal or equitable interest in
  2 34 property, wherever located.
  2 35    e.  Sell, convey, mortgage, pledge, lease, exchange, and
  3  1 otherwise dispose of all or any part of its property.
  3  2    f.  Purchase, receive, subscribe for, or otherwise acquire,
  3  3 own, hold, vote, use, sell, mortgage, lend, pledge, or
  3  4 otherwise dispose of, and deal in and with shares or other
  3  5 interests in, or obligations of, any other entity.
  3  6    g.  Make contracts and guarantees, incur liabilities,
  3  7 borrow money, issue its notes, bonds, and other obligations,
  3  8 which may be convertible into or include the option to
  3  9 purchase other interests of the cooperative, and secure any of
  3 10 its obligations by mortgage or pledge of any of its property,
  3 11 franchises, or income.
  3 12    h.  Lend money, invest and reinvest its funds, and receive
  3 13 and hold real and personal property as security for repayment.
  3 14    i.  Be a promoter, partner, member, associate, or manager
  3 15 of any partnership, joint venture, trust, or other entity.
  3 16    j.  Conduct its business, locate offices, and exercise the
  3 17 powers granted by this chapter within or without this state.
  3 18    k.  Elect directors and appoint officers, employees, and
  3 19 agents of the cooperative, define their duties, fix their
  3 20 compensation, and lend them money and credit.
  3 21    l.  Pay pensions and establish pension plans, pension
  3 22 trusts, profit-sharing plans, bonus plans, and benefit or
  3 23 incentive plans for any or all of its current or former
  3 24 directors, officers, employees, and agents.
  3 25    m.  Make donations for the public welfare or for
  3 26 charitable, scientific, or educational purposes.
  3 27    n.  Transact any lawful business that will aid governmental
  3 28 policy.
  3 29    o.  Make payments or donations, or do any other act, not
  3 30 inconsistent with law, that furthers the business and affairs
  3 31 of the cooperative.
  3 32    Sec. 8.  Section 501.103, subsections 1, 2, and 5, Code
  3 33 Supplement 1997, are amended to read as follows:
  3 34    1.  Notwithstanding section 9H.4, any person or entity,
  3 35 subject to the limitations set forth in section 501.305, and
  4  1 subject to the cooperative's articles and bylaws, is permitted
  4  2 to own stock interests, including voting stock interests, in a
  4  3 cooperative.
  4  4    2.  Notwithstanding section 9H.4, a cooperative may,
  4  5 directly or indirectly, acquire or otherwise obtain or lease
  4  6 agricultural land in this state, for as long as the
  4  7 cooperative continues to meet the following requirements:
  4  8    a.  Farming entities own sixty percent of the stock
  4  9 interests and are eligible to cast sixty percent of the votes
  4 10 at member meetings.
  4 11    b.  Authorized persons own at least seventy-five percent of
  4 12 the stock interests and are eligible to cast at least seventy-
  4 13 five percent of the votes at member meetings.
  4 14    c.  The cooperative does not, either directly or
  4 15 indirectly, acquire or otherwise obtain or lease agricultural
  4 16 land, if the total agricultural land either directly or
  4 17 indirectly owned or leased by the cooperative would then
  4 18 exceed six hundred forty acres.
  4 19    5.  In the event of a transfer of stock an interest in a
  4 20 cooperative by operation of law as a result of death, divorce,
  4 21 bankruptcy, or pursuant to a security interest, the
  4 22 cooperative may disregard the transfer for purposes of
  4 23 determining compliance with subsection 2 for a period of two
  4 24 years after the transfer.
  4 25    Sec. 9.  Section 501.105, subsection 2, Code 1997, is
  4 26 amended to read as follows:
  4 27    2.  Articles must be signed by all of the incorporators
  4 28 organizers; and all other documents filed with the secretary
  4 29 of state must be signed by one of the cooperative's officers.
  4 30 The printed name and capacity of each signatory must appear in
  4 31 proximity to the signatory's signature.  The secretary of
  4 32 state may accept a document containing a copy of the
  4 33 signature.  A document is not required to contain a corporate
  4 34 seal, an acknowledgment, or a verification.
  4 35    Sec. 10.  Section 501.106, subsection 2, unnumbered
  5  1 paragraph 1, Code 1997, is amended to read as follows:
  5  2    A corporation cooperative may change its registered office
  5  3 or registered agent by delivering to the secretary of state
  5  4 for filing a statement of change that sets forth all of the
  5  5 following:
  5  6    Sec. 11.  Section 501.106, Code 1997, is amended by adding
  5  7 the following new subsections:
  5  8    NEW SUBSECTION.  5.  a.  A registered agent may resign the
  5  9 agent's agency appointment by signing and delivering to the
  5 10 secretary of state for filing the signed original statement of
  5 11 resignation.  The statement may include a statement that the
  5 12 registered office is also discontinued.  The registered agent
  5 13 shall send a copy of the statement of resignation by certified
  5 14 mail to the cooperative at its principal office and to the
  5 15 registered office, if not discontinued.  The registered agent
  5 16 shall certify to the secretary of state that the copies have
  5 17 been sent to the cooperative, including the date the copies
  5 18 were sent.
  5 19    b.  The agency appointment is terminated, and the
  5 20 registered office discontinued if so provided, on the date on
  5 21 which the statement was filed.
  5 22    NEW SUBSECTION.  6.  a.  A cooperative's registered agent
  5 23 is the cooperative's agent for service of process, notice, or
  5 24 demand required or permitted by law to be served on the
  5 25 cooperative.
  5 26    b.  If a cooperative has no registered agent, or the agent
  5 27 cannot with reasonable diligence be served, the cooperative
  5 28 may be served by registered or certified mail, return receipt
  5 29 requested, addressed to the secretary of the cooperative at
  5 30 its principal office.  Service is perfected under this
  5 31 paragraph at the earliest of any of the following:
  5 32    (1)  The date that the cooperative receives the mail.
  5 33    (2)  The date shown on the return receipt, if signed on
  5 34 behalf of the cooperative.
  5 35    (3)  Five days after its deposit in the United States mail,
  6  1 as evidenced by the postmark, if mailed postpaid and correctly
  6  2 addressed.
  6  3    c.  A cooperative may be served pursuant to this section or
  6  4 as provided in other provisions of this chapter, unless the
  6  5 manner of service is otherwise specifically provided for by
  6  6 statute.
  6  7    Sec. 12.  Section 501.202, subsection 1, paragraph a, Code
  6  8 1997, is amended to read as follows:
  6  9    a.  The name, address, and occupation of each incorporator
  6 10 organizer.
  6 11    Sec. 13.  Section 501.202, subsection 2, paragraph d, Code
  6 12 1997, is amended to read as follows:
  6 13    d.  The classes of stock interests and the authorized
  6 14 number of shares interests of each class.
  6 15    Sec. 14.  Section 501.306, Code 1997, is amended to read as
  6 16 follows:
  6 17    501.306  NUMBER OF VOTES.
  6 18    A person who is a member or shareholder shall not own more
  6 19 than one membership or share of voting stock.  The person
  6 20 shall be entitled to cast not more than one vote regarding any
  6 21 matter in which a vote is conducted, including any matter
  6 22 subject to a vote during a cooperative meeting.
  6 23    Sec. 15.  Section 501.403, subsection 2, paragraph e, Code
  6 24 1997, is amended to read as follows:
  6 25    e.  Action required or permitted by this chapter to be
  6 26 taken at a board meeting may be taken without a meeting if the
  6 27 action is taken by all members of the board.  The action must
  6 28 be evidenced by one or more written consents describing the
  6 29 action taken, signed by each director, and included in the
  6 30 minutes or filed with the corporate cooperative's records
  6 31 reflecting the action taken.  Action taken under this section
  6 32 is effective when the last director signs the consent, unless
  6 33 the consent specifies a different effective date.  A consent
  6 34 signed under this section has the effect of a meeting vote and
  6 35 may be described as such in any document.
  7  1    Sec. 16.  Section 501.403, subsection 3, Code 1997, is
  7  2 amended to read as follows:
  7  3    3.  A director may waive any notice required by this
  7  4 chapter, the articles, or the bylaws before or after the date
  7  5 and time stated in the notice.  The waiver must be in writing,
  7  6 signed by the director entitled to the notice, and filed with
  7  7 the minutes or corporate records of the cooperative.  A
  7  8 director's attendance at or participation in a meeting waives
  7  9 any required notice to that director of the meeting unless the
  7 10 director at the beginning of the meeting or promptly upon the
  7 11 director's arrival objects to holding the meeting or
  7 12 transacting business at the meeting and does not thereafter
  7 13 vote for or assent to action taken at the meeting.
  7 14    Sec. 17.  Section 501.404, subsection 1, paragraph b, Code
  7 15 Supplement 1997, is amended to read as follows:
  7 16    b.  The material facts of the transaction and the
  7 17 director's interest were disclosed or known to the
  7 18 shareholders members entitled to vote and they authorized,
  7 19 approved, or ratified the transaction.  For purposes of this
  7 20 paragraph, a conflict of interest transaction is authorized,
  7 21 approved, or ratified if it receives a majority of the votes
  7 22 entitled to be counted under this paragraph.  Shares Voting
  7 23 interests owned by or voted under the control of a director
  7 24 who has a direct or indirect interest in the transaction, and
  7 25 shares voting interests owned by or voted under the control of
  7 26 an entity described in subsection 2, paragraph "a", shall not
  7 27 be counted in a vote of members to determine whether to
  7 28 authorize, approve, or ratify a conflict of interest
  7 29 transaction under this paragraph.  The vote of those shares
  7 30 voting interests, however, is counted in determining whether
  7 31 the transaction is approved under other sections of this
  7 32 chapter.  A majority of the votes, whether or not the
  7 33 shareholders members are present, that are entitled to be
  7 34 counted in a vote on the transaction under this paragraph
  7 35 constitutes a quorum for the purpose of taking action under
  8  1 this paragraph.
  8  2    Sec. 18.  Section 501.407, unnumbered paragraph 1, Code
  8  3 1997, is amended to read as follows:
  8  4    The articles may contain a provision eliminating or
  8  5 limiting the personal liability of a director, officer, or
  8  6 shareholder interest holder of the cooperative for monetary
  8  7 damages for breach of a fiduciary duty as a director, officer,
  8  8 or shareholder interest holder, provided that the provision
  8  9 does not eliminate or limit liability for any of the
  8 10 following:
  8 11    Sec. 19.  Section 501.407, subsections 1 and 3, Code 1997,
  8 12 are amended to read as follows:
  8 13    1.  A breach of the duty of loyalty to the cooperative or
  8 14 its shareholders interest holders.
  8 15    3.  A transaction from which the director, officer, or
  8 16 shareholder interest holder derives an improper personal
  8 17 benefit.  
  8 18                             PART B
  8 19                         INDEMNIFICATION
  8 20    Sec. 20.  NEW SECTION.  501.411  DEFINITIONS.
  8 21    As used in this part, unless the context otherwise
  8 22 requires:
  8 23    1.  "Cooperative" includes any domestic or foreign
  8 24 predecessor entity of a cooperative in a merger or other
  8 25 transaction in which the predecessor's existence ceased upon
  8 26 consummation of the transaction.
  8 27    2.  "Director" means an individual who is or was a director
  8 28 of a cooperative or an individual who, while a director of a
  8 29 cooperative, is or was serving at the cooperative's request as
  8 30 a director, officer, partner, trustee, employee, or agent of
  8 31 another foreign or domestic cooperative, corporation,
  8 32 partnership, joint venture, trust, employee benefit plan, or
  8 33 other enterprise.  A director is considered to be serving an
  8 34 employee benefit plan at the cooperative's request if the
  8 35 director's duties to the cooperative also impose duties on, or
  9  1 otherwise involve services by, that director to the plan or to
  9  2 participants in or beneficiaries of the plan.  "Director"
  9  3 includes, unless the context requires otherwise, the estate or
  9  4 personal representative of a director.
  9  5    3.  "Expenses" include counsel fees.
  9  6    4.  "Liability" means the obligation to pay a judgment,
  9  7 settlement, penalty, fine, including an excise tax assessed
  9  8 with respect to an employee benefit plan, or reasonable
  9  9 expenses incurred with respect to a proceeding.
  9 10    5.  "Official capacity" means:
  9 11    a.  When used with respect to a director, the office of
  9 12 director in a cooperative.
  9 13    b.  When used with respect to an individual other than a
  9 14 director, as contemplated in section 501.417, the office in a
  9 15 cooperative held by the officer or the employment or agency
  9 16 relationship undertaken by the employee or agent on behalf of
  9 17 the cooperative.
  9 18    "Official capacity" does not include service for any other
  9 19 foreign or domestic cooperative or any corporation,
  9 20 partnership, joint venture, trust, employee benefit plan, or
  9 21 other enterprise.
  9 22    6.  "Party" includes an individual who was, is, or is
  9 23 threatened to be made a named defendant or respondent in a
  9 24 proceeding.
  9 25    7.  "Proceeding" means any threatened, pending, or
  9 26 completed action, suit, or proceeding, whether civil,
  9 27 criminal, administrative, or investigative and whether formal
  9 28 or informal.
  9 29    Sec. 21.  NEW SECTION.  501.412  AUTHORITY TO INDEMNIFY.
  9 30    1.  Except as provided in subsection 4, a cooperative may
  9 31 indemnify an individual made a party to a proceeding because
  9 32 the individual is or was a director against liability incurred
  9 33 in the proceeding if all of the following apply:
  9 34    a.  The individual acted in good faith.
  9 35    b.  The individual reasonably believed either of the
 10  1 following:
 10  2    (1)  In the case of conduct in the individual's official
 10  3 capacity with the cooperative, that the individual's conduct
 10  4 was in the cooperative's best interests.
 10  5    (2)  In all other cases, that the individual's conduct was
 10  6 at least not opposed to the cooperative's best interests.
 10  7    c.  In the case of any criminal proceeding, the individual
 10  8 had no reasonable cause to believe the individual's conduct
 10  9 was unlawful.
 10 10    2.  A director's conduct with respect to an employee
 10 11 benefit plan for a purpose the director reasonably believed to
 10 12 be in the interests of the participants in and beneficiaries
 10 13 of the plan is conduct that satisfies the requirement of
 10 14 subsection 1, paragraph "b", subparagraph (2).
 10 15    3.  The termination of a proceeding by judgment, order,
 10 16 settlement, conviction, or upon a plea of nolo contendere or
 10 17 its equivalent is not, of itself, determinative that the
 10 18 director did not meet the standard of conduct described in
 10 19 this section.
 10 20    4.  A cooperative shall not indemnify a director under this
 10 21 section in either of the following circumstances:
 10 22    a.  In connection with a proceeding by or in the right of
 10 23 the cooperative in which the director was adjudged liable to
 10 24 the cooperative.
 10 25    b.  In connection with any other proceeding charging
 10 26 improper personal benefit to the director, whether or not
 10 27 involving action in the director's official capacity, in which
 10 28 the director was adjudged liable on the basis that personal
 10 29 benefit was improperly received by the director.
 10 30    5.  Indemnification permitted under this section in
 10 31 connection with a proceeding by or in the right of the
 10 32 cooperative is limited to reasonable expenses incurred in
 10 33 connection with the proceeding.
 10 34    Sec. 22.  NEW SECTION.  501.413  MANDATORY INDEMNIFICATION.
 10 35    Unless limited by its articles of association, a
 11  1 cooperative shall indemnify a director who was wholly
 11  2 successful, on the merits or otherwise, in the defense of any
 11  3 proceeding to which the director was a party because the
 11  4 director is or was a director of the cooperative against
 11  5 reasonable expenses incurred by the director in connection
 11  6 with the proceeding.
 11  7    Sec. 23.  NEW SECTION.  501.414  ADVANCE FOR EXPENSES.
 11  8    1.  A cooperative may pay for or reimburse the reasonable
 11  9 expenses incurred by a director who is a party to a proceeding
 11 10 in advance of final disposition of the proceeding if any of
 11 11 the following apply:
 11 12    a.  The director furnishes the cooperative a written
 11 13 affirmation of the director's good faith belief that the
 11 14 director has met the standard of conduct described in section
 11 15 501.412.
 11 16    b.  The director furnishes the cooperative a written
 11 17 undertaking, executed personally or on the director's behalf,
 11 18 to repay the advance if it is ultimately determined that the
 11 19 director did not meet the standard of conduct described in
 11 20 section 501.412.
 11 21    c.  A determination is made pursuant to section 501.416
 11 22 that the facts then known to those making the determination
 11 23 would not preclude indemnification under this part.
 11 24    2.  The undertaking required by subsection 1, paragraph
 11 25 "b", must be an unlimited general obligation of the director
 11 26 but need not be secured and may be accepted without reference
 11 27 to financial ability to make repayment.
 11 28    3.  Determinations and authorizations of payments under
 11 29 this section shall be made in the manner specified in section
 11 30 501.416.
 11 31    Sec. 24.  NEW SECTION.  501.415  COURT-ORDERED
 11 32 INDEMNIFICATION.
 11 33    Unless a cooperative's articles of association provide
 11 34 otherwise, a director of the cooperative who is a party to a
 11 35 proceeding may apply for indemnification to the court
 12  1 conducting the proceeding or to another court of competent
 12  2 jurisdiction.  On receipt of an application, the court after
 12  3 giving any notice the court considers necessary may order
 12  4 indemnification if it determines either of the following:
 12  5    1.  The director is entitled to mandatory indemnification
 12  6 under section 501.413, in which case the court shall also
 12  7 order the cooperative to pay the director's reasonable
 12  8 expenses incurred to obtain court-ordered indemnification.
 12  9    2.  The director is fairly and reasonably entitled to
 12 10 indemnification in view of all the relevant circumstances,
 12 11 whether or not the director met the standard of conduct set
 12 12 forth in section 501.412 or was adjudged liable as described
 12 13 in section 501.412, subsection 4, but if the director was
 12 14 adjudged so liable the director's indemnification is limited
 12 15 to reasonable expenses incurred.
 12 16    Sec. 25.  NEW SECTION.  501.416  DETERMINATION AND
 12 17 AUTHORIZATION OF INDEMNIFICATION.
 12 18    1.  A cooperative shall not indemnify a director under
 12 19 section 501.412 unless authorized in the specific case after a
 12 20 determination has been made that indemnification of the
 12 21 director is permissible in the circumstances because the
 12 22 director has met the standard of conduct set forth in section
 12 23 501.412.
 12 24    2.  The determination shall be made by any of the
 12 25 following:
 12 26    a.  By the board of directors by majority vote of a quorum
 12 27 consisting of directors not at the time parties to the
 12 28 proceeding.
 12 29    b.  If a quorum cannot be obtained under paragraph "a", by
 12 30 majority vote of a committee duly designated by the board of
 12 31 directors, in which designation directors who are parties may
 12 32 participate, consisting solely of two or more directors not at
 12 33 the time parties to the proceeding.
 12 34    c.  By special legal counsel.
 12 35    (1)  The special legal counsel shall be selected by the
 13  1 board of directors or its committee in the manner prescribed
 13  2 in paragraph "a" or "b".
 13  3    (2)  If a quorum of the board of directors cannot be
 13  4 obtained under paragraph "a" and a committee cannot be
 13  5 designated under paragraph "b", the special legal counsel
 13  6 shall be selected by majority vote of the full board of
 13  7 directors, in which selection directors who are parties may
 13  8 participate.
 13  9    d.  By the members, but voting interests owned by or voted
 13 10 under the control of directors who are at the time parties to
 13 11 the proceeding shall not be voted on the determination.
 13 12    3.  Authorization of indemnification and evaluation as to
 13 13 reasonableness of expenses shall be made in the same manner as
 13 14 the determination that indemnification is permissible, except
 13 15 that if the determination is made by special legal counsel,
 13 16 authorization of indemnification and evaluation as to
 13 17 reasonableness of expenses shall be made by those entitled
 13 18 under subsection 2, paragraph "c", to select counsel.
 13 19    Sec. 26.  NEW SECTION.  501.417  INDEMNIFICATION OF
 13 20 OFFICERS, EMPLOYEES, AND AGENTS.
 13 21    Unless a cooperative's articles of association provide
 13 22 otherwise, all of the following apply:
 13 23    1.  An officer of the cooperative who is not a director is
 13 24 entitled to mandatory indemnification under section 501.413,
 13 25 and is entitled to apply for court-ordered indemnification
 13 26 under section 501.415, in each case to the same extent as a
 13 27 director.
 13 28    2.  The cooperative may indemnify and advance expenses
 13 29 under this part to an officer, employee, or agent of the
 13 30 cooperative who is not a director to the same extent as to a
 13 31 director.
 13 32    3.  A cooperative may also indemnify and advance expenses
 13 33 to an officer, employee, or agent who is not a director to the
 13 34 extent consistent with law that may be provided by its
 13 35 articles of association, bylaws, general or specific action of
 14  1 its board of directors, or contract.
 14  2    Sec. 27.  NEW SECTION.  501.418  INSURANCE.
 14  3    A cooperative may purchase and maintain insurance on behalf
 14  4 of an individual who is or was a director, officer, employee,
 14  5 or agent of the cooperative, or who, while a director,
 14  6 officer, employee, or agent of the cooperative, is or was
 14  7 serving at the request of the cooperative as a director,
 14  8 officer, partner, trustee, employee, or agent of another
 14  9 foreign or domestic cooperative, corporation, partnership,
 14 10 joint venture, trust, employee benefit plan, or other
 14 11 enterprise, against liability asserted against or incurred by
 14 12 that individual in that capacity or arising from the
 14 13 individual's status as a director, officer, employee, or
 14 14 agent, whether or not the cooperative would have power to
 14 15 indemnify that individual against the same liability under
 14 16 section 501.412 or 501.413.
 14 17    Sec. 28.  NEW SECTION.  501.419  APPLICATION OF THIS PART.
 14 18    Except as limited in section 501.412, subsection 4,
 14 19 paragraph "a", and subsection 5 with respect to proceedings by
 14 20 or in the right of the cooperative, the indemnification and
 14 21 advancement of expenses provided by, or granted pursuant to,
 14 22 sections 501.411 through 501.418 are not exclusive of any
 14 23 other rights to which persons seeking indemnification or
 14 24 advancement of expenses are entitled under a provision in the
 14 25 articles of association or bylaws, agreements, vote of the
 14 26 members or disinterested directors, or otherwise, both as to
 14 27 action in a person's official capacity and as to action in
 14 28 another capacity while holding the office.  However, such
 14 29 provisions, agreements, votes, or other actions shall not
 14 30 provide indemnification for a breach of a director's duty of
 14 31 loyalty to the cooperative or its interest holders, for acts
 14 32 or omissions not in good faith or which involve intentional
 14 33 misconduct or knowing violation of the law, or for a
 14 34 transaction from which the person seeking indemnification
 14 35 derives an improper personal benefit.
 15  1    Sec. 29.  Section 501.501, Code Supplement 1997, is amended
 15  2 to read as follows:
 15  3    501.501  ISSUANCE AND TRANSFER OF STOCK INTERESTS.
 15  4    1.  A cooperative may issue the number of shares interests
 15  5 of each class authorized by its articles.  A cooperative may
 15  6 issue fractional shares interests.  Stock Interests may be
 15  7 represented by certificates or by entry on the cooperative's
 15  8 stock interest record books.
 15  9    2.  A member shall not sell or otherwise transfer voting
 15 10 stock interests to any person.  A member may be restricted or
 15 11 limited from selling or otherwise transferring any other class
 15 12 of stock interests of the cooperative as provided by the
 15 13 cooperative's articles of incorporation association or bylaws
 15 14 or an agreement executed between the cooperative and the
 15 15 member.
 15 16    3.  A cooperative may acquire its own stock interests, and
 15 17 shares interests so acquired constitute authorized but
 15 18 unissued shares interests.
 15 19    Sec. 30.  Section 501.502, subsection 2, paragraph a, Code
 15 20 Supplement 1997, is amended to read as follows:
 15 21    a.  The member has attempted to transfer stock any interest
 15 22 to a person who is not a member and has not been approved for
 15 23 membership.
 15 24    Sec. 31.  Section 501.502, subsection 4, Code Supplement
 15 25 1997, is amended to read as follows:
 15 26    4.  The cooperative shall redeem, without interest, the
 15 27 voting stock interest of a terminated member within one year
 15 28 after the termination of the membership for the fair market
 15 29 value of the stock interest.  If the amount originally paid by
 15 30 the member for the voting stock interest was less than ten
 15 31 percent of the total amount the member paid for all classes of
 15 32 stock interests, the cooperative may redeem the voting stock
 15 33 interest for its issue price if the cooperative's articles of
 15 34 incorporation association grant the cooperative this
 15 35 authority.
 16  1    Sec. 32.  Section 501.502, subsection 5, unnumbered
 16  2 paragraph 1, Code Supplement 1997, is amended to read as
 16  3 follows:
 16  4    The cooperative shall redeem, without interest, all of the
 16  5 terminated member's allocated patronage refunds and preferred
 16  6 stock interests originally issued as allocated patronage
 16  7 refunds for the issue price as follows:
 16  8    Sec. 33.  Section 501.503, subsections 1 and 4, Code 1997,
 16  9 are amended to read as follows:
 16 10    1.  If the articles authorize the payment of dividends
 16 11 distributions on a class of stock interests, then the
 16 12 directors may declare dividends a distribution pursuant to the
 16 13 articles.  Dividends may Distributions shall not exceed eight
 16 14 percent of the value of the stock interest in each fiscal
 16 15 year.  The members may control the amount that is allocated
 16 16 under this subsection.
 16 17    4.  The cooperative shall have an unconditional binding
 16 18 obligation to distribute to the members all remaining net
 16 19 savings as determined under the United States Internal Revenue
 16 20 Code.  These net savings shall be allocated to each member in
 16 21 proportion to the business the member did with the cooperative
 16 22 during the preceding fiscal year.  The net savings may be
 16 23 separately calculated for two or more categories of business,
 16 24 and allocated to the members on the basis of business done
 16 25 within each of these categories.  Net savings shall be
 16 26 distributed in the form of cash or stock interests, or a
 16 27 combination of cash and stock interests, as determined by the
 16 28 board.
 16 29    Sec. 34.  Section 501.603, subsection 2, Code 1997, is
 16 30 amended to read as follows:
 16 31    2.  A cooperative may sell, lease, exchange, or otherwise
 16 32 dispose of all, or substantially all, of its property, with or
 16 33 without the good will, on the terms and conditions and for the
 16 34 consideration determined by the board, which consideration may
 16 35 include the preferred stock interests of another cooperative,
 17  1 if the board recommends the proposed transaction to the
 17  2 members, and the members approve it by the vote of two-thirds
 17  3 of the votes cast on a ballot in which a majority of all votes
 17  4 are cast.  The board may condition its submission of the
 17  5 proposed transaction on any basis.  
 17  6                             PART B
 17  7          MERGER AND CONSOLIDATION BETWEEN COOPERATIVES
 17  8                  ORGANIZED UNDER THIS CHAPTER
 17  9    Sec. 35.  NEW SECTION.  501.611  DEFINITIONS.
 17 10    When used in this part, unless the context otherwise
 17 11 requires:
 17 12    1.  "Consolidation" means the uniting of two or more
 17 13 cooperatives organized under this chapter into one cooperative
 17 14 organized under this chapter, in such manner that a new
 17 15 cooperative is formed, and the new cooperative absorbs the
 17 16 others, which cease to exist as separate entities.
 17 17    2.  "Dissenting member" means a voting member who votes in
 17 18 opposition to the plan of merger or consolidation and who
 17 19 makes a demand for payment of the fair value under section
 17 20 501.615.
 17 21    3.  "Fair value" means the cash price that would be paid by
 17 22 a willing buyer to a willing seller, neither being under any
 17 23 compulsion to buy or sell.
 17 24    4.  "Issue price" means the amount paid for an interest in
 17 25 the old cooperative or the amount stated in a notice of
 17 26 allocation of patronage distributions.
 17 27    5.  "Merger" means the uniting of two or more cooperatives
 17 28 organized under this chapter into one cooperative organized
 17 29 under this chapter, in such manner that one of the merging
 17 30 associations continues to exist and absorbs the others, which
 17 31 cease to exist as entities.  "Merger" does not include the
 17 32 acquisition, by purchase or otherwise, of the assets of one
 17 33 cooperative by another, unless the acquisition only becomes
 17 34 effective by the filing of articles of merger by the
 17 35 cooperatives and the issuance of a certificate of merger
 18  1 pursuant to sections 501.617 and 501.618.
 18  2    6.  "New cooperative" is the cooperative resulting from the
 18  3 consolidation of two or more cooperatives organized under this
 18  4 chapter.
 18  5    7.  "Old cooperative" means the cooperative in which the
 18  6 member owns or owned a membership prior to merger or
 18  7 consolidation.
 18  8    8.  "Surviving cooperative" is the cooperative resulting
 18  9 from the merger of two or more cooperatives organized under
 18 10 this chapter.
 18 11    Sec. 36.  NEW SECTION.  501.612  MERGER.
 18 12    Any two or more cooperatives may merge into one cooperative
 18 13 in the manner provided in this section.  The board of
 18 14 directors of each cooperative shall, by resolution adopted by
 18 15 a majority vote of all members of each board, approve a plan
 18 16 of merger which shall set forth all of the following:
 18 17    1.  The names of the cooperatives proposing to merge and
 18 18 the name of the surviving cooperative.
 18 19    2.  The terms and conditions of the proposed merger.
 18 20    3.  A statement of any changes in the articles of
 18 21 association of the surviving cooperative.
 18 22    4.  Other provisions deemed necessary or desirable.
 18 23    Sec. 37.  NEW SECTION.  501.613  CONSOLIDATION.
 18 24    Any two or more cooperatives may be consolidated into a new
 18 25 cooperative as provided in this section.  The board of
 18 26 directors of each cooperative shall, by resolution adopted by
 18 27 a majority vote of all members of each board, approve a plan
 18 28 of consolidation setting forth:
 18 29    1.  The names of the cooperatives proposing to consolidate
 18 30 and the name of the new cooperative.
 18 31    2.  The terms and conditions of the proposed consolidation.
 18 32    3.  With respect to the new cooperative, all of the
 18 33 statements required to be set forth in articles of association
 18 34 for cooperatives.
 18 35    4.  Other provisions deemed necessary or desirable.
 19  1    Sec. 38.  NEW SECTION.  501.614  VOTE OF MEMBERS.
 19  2    1.  The board of directors of a cooperative, upon approving
 19  3 a plan of merger or consolidation, shall, by motion or
 19  4 resolution, direct that the plan be submitted to a vote at a
 19  5 meeting of members, which may be either an annual or special
 19  6 meeting.  Written notice shall be given not less than twenty
 19  7 days prior to the meeting, either personally or by mail, to
 19  8 each voting member of record.  The notice shall state the
 19  9 time, place, and purpose of the meeting, and a summary of the
 19 10 plan of merger or consolidation shall be included in or
 19 11 enclosed with the notice.
 19 12    2.  At the meeting, a ballot of the members who are
 19 13 entitled to vote in the affairs of the association shall be
 19 14 taken on the proposed plan of merger or consolidation.  The
 19 15 plan of merger or consolidation shall be approved if two-
 19 16 thirds of the members vote affirmatively on a ballot in which
 19 17 a majority of all voting members participate.  Voting may be
 19 18 by mail ballot notwithstanding any contrary provision in the
 19 19 articles of association or bylaws.
 19 20    Sec. 39.  NEW SECTION.  501.615  OBJECTION OF MEMBERS –
 19 21 PURCHASE OF INTERESTS UPON DEMAND.
 19 22    1.  If a member of a cooperative which is a party to a
 19 23 merger or consolidation files with the cooperative, prior to
 19 24 or at the meeting of members at which the plan is submitted to
 19 25 a vote, a written objection to the plan of merger or
 19 26 consolidation, and votes in opposition to the plan, and the
 19 27 member, within twenty days after the merger or consolidation
 19 28 is approved by the other members, makes written demand on the
 19 29 surviving or new cooperative for payment of the fair value of
 19 30 that member's interest as of the day prior to the date on
 19 31 which the vote was taken approving the merger or
 19 32 consolidation, the surviving or new cooperative shall pay to
 19 33 the member, upon surrender of that person's certificate of
 19 34 membership or interests in the cooperative, the fair value of
 19 35 that person's interest as provided in section 501.616.  A
 20  1 member who fails to make demand within the twenty-day period
 20  2 is conclusively presumed to have consented to the merger or
 20  3 consolidation and is bound by its terms.
 20  4    2.  In the event that a dissenting member does business
 20  5 with the surviving or new cooperative before payment has been
 20  6 made for that person's membership, the dissenting member is
 20  7 deemed to have consented to the merger or consolidation and to
 20  8 have waived all further rights as a dissenting member.
 20  9    Sec. 40.  NEW SECTION.  501.616  VALUE DETERMINED.
 20 10    1.  Within twenty days after the merger or consolidation is
 20 11 effected, the surviving or new cooperative shall make a
 20 12 written offer to each dissenting member to pay a specified sum
 20 13 deemed by the surviving or new cooperative to be the fair
 20 14 value of that dissenting member's interest in the old
 20 15 cooperative.  This offer shall be accompanied by a balance
 20 16 sheet of the old cooperative as of the latest available date,
 20 17 a profit and loss statement of the old cooperative for the
 20 18 twelve-month period ending on the date of the balance sheet,
 20 19 and a list of the dissenting member's interests in the old
 20 20 cooperative.  If the dissenting member does not agree that the
 20 21 sum stated in the notice represents the fair value of the
 20 22 member's interest, then the member may file a written
 20 23 objection with the surviving or new cooperative within twenty
 20 24 days after receiving the notice.  A dissenting member who
 20 25 fails to file the objection within the twenty-day period is
 20 26 conclusively presumed to have consented to the fair value
 20 27 stated in the notice.
 20 28    2.  If the surviving or new cooperative receives any
 20 29 objections to fair values, then within ninety days after the
 20 30 merger or consolidation is effected, the surviving or new
 20 31 cooperative shall file a petition in district court asking for
 20 32 a finding and determination of the fair value of each type of
 20 33 equity.  The action shall be tried as an equitable action.
 20 34    3.  The fair value of a dissenting member's interest in the
 20 35 old cooperative shall be determined as of the day preceding
 21  1 the merger or consolidation by taking the lesser of either the
 21  2 issue price of the dissenting member's membership, deferred
 21  3 patronage, and any other interests in the cooperative, or the
 21  4 amount determined by subtracting the old cooperative's debts
 21  5 from the fair market value of the old cooperative's assets,
 21  6 dividing the remainder by the total issue price of all
 21  7 memberships, deferred patronage and all other interests, and
 21  8 then multiplying the quotient from this division by the total
 21  9 issue price of a dissenting member's membership, deferred
 21 10 patronage, and other interests.
 21 11    4.  The surviving or new cooperative shall pay to each
 21 12 dissenting member in cash within sixty days after the merger
 21 13 or consolidation the amount paid in cash by the dissenting
 21 14 member for that member's interest in the old cooperative.  The
 21 15 surviving or new cooperative shall pay the remainder of each
 21 16 dissenting member's fair value in ten annual equal payments.
 21 17 The final payment must be made not later than fifteen years
 21 18 after the merger or consolidation.  The value of the deferred
 21 19 patronage or interests issued to evidence deferred patronage
 21 20 shall be considered a liability of the surviving or new
 21 21 cooperative as reflected in the accounts of the surviving or
 21 22 new cooperative until the value of the deferred patronage or
 21 23 interests issued to evidence deferred patronage is paid in
 21 24 full to the dissenting member.  A dissenting member who is a
 21 25 natural person who dies before receiving the fair value shall
 21 26 have all of the person's fair value paid with the same
 21 27 priority as if the person was a member at the time of death.
 21 28    Sec. 41.  NEW SECTION.  501.617  ARTICLES OF MERGER OR
 21 29 CONSOLIDATION.
 21 30    Upon approval, articles of merger or articles of
 21 31 consolidation shall be executed by each cooperative as
 21 32 provided in section 501.105.  The articles must include the
 21 33 following:
 21 34    1.  The plan of merger or the plan of consolidation.
 21 35    2.  As to each cooperative, the number of members.
 22  1    3.  As to each cooperative, the number of members who voted
 22  2 for and against the plan at the meeting called for that
 22  3 purpose.
 22  4    The articles of merger or articles of consolidation shall
 22  5 be delivered to the secretary of state for filing.
 22  6    The secretary of state, upon the filing of articles of
 22  7 merger or articles of consolidation, shall issue a certificate
 22  8 of merger or a certificate of consolidation and send the
 22  9 certificate to the surviving or new cooperative, or to its
 22 10 representative.
 22 11    Sec. 42.  NEW SECTION.  501.618  WHEN EFFECTIVE – EFFECT.
 22 12    A merger or consolidation shall become effective upon the
 22 13 date that the certificate of merger or the certificate of
 22 14 consolidation is issued by the secretary of state, or the
 22 15 effective date specified in the articles of merger or articles
 22 16 of consolidation, whichever is later.
 22 17    When a merger or consolidation has become effective:
 22 18    1.  The several cooperatives which are parties to the plan
 22 19 of merger or consolidation shall be a single cooperative,
 22 20 which, in the case of a merger, shall be that cooperative
 22 21 designated in the plan of merger as the surviving cooperative,
 22 22 and, in the case of consolidation, shall be that cooperative
 22 23 designated in the plan of consolidation as the new
 22 24 cooperative.
 22 25    2.  The separate existence of all cooperatives which are
 22 26 parties to the plan of merger or consolidation, except the
 22 27 surviving or new cooperative, shall cease.
 22 28    3.  The surviving or new cooperative shall have all the
 22 29 rights, privileges, immunities, and powers and shall be
 22 30 subject to all the duties and liabilities of a cooperative
 22 31 organized under this chapter.
 22 32    4.  The surviving or new cooperative shall possess all the
 22 33 rights, privileges, immunities, and franchises, public as well
 22 34 as private, of each of the merging or consolidating
 22 35 cooperatives.
 23  1    5.  All property, real, personal, and mixed, and all debts
 23  2 due on whatever account, including all choses in action, and
 23  3 all and every other interest, of or belonging to or due to
 23  4 each of the cooperatives merged or consolidated, shall be
 23  5 transferred to and vested in the surviving or new cooperative
 23  6 without further act or deed.  The title to any real estate, or
 23  7 any interest in real estate vested in any of the cooperatives
 23  8 merged or consolidated, shall not revert or be in any way
 23  9 impaired by reason of the merger or consolidation.
 23 10    6.  A surviving or new cooperative shall be responsible and
 23 11 liable for all obligations and liabilities of each of the
 23 12 cooperatives merged or consolidated.
 23 13    7.  Any claim existing or action or proceeding pending by
 23 14 or against any of the cooperatives merged or consolidated may
 23 15 be prosecuted as if the merger or consolidation had not taken
 23 16 place, or the surviving or new cooperative may be substituted
 23 17 for the merged or consolidated cooperative.  Neither the
 23 18 rights of creditors nor any liens upon the property of any
 23 19 cooperative shall be impaired by a merger or consolidation.
 23 20    8.  In the case of a merger, the articles of association of
 23 21 the surviving cooperative shall be deemed to be amended to the
 23 22 extent that changes in its articles of association are stated
 23 23 in the plan of merger.  In the case of a consolidation, the
 23 24 statements set forth in the articles of consolidation which
 23 25 are required or permitted to be set forth in the articles of
 23 26 association of a cooperative shall be deemed to be the
 23 27 original articles of association of the new cooperative.
 23 28    9.  The aggregate amount of the net assets of the merging
 23 29 or consolidating cooperative which was available for the
 23 30 payment of distributions immediately prior to the merger or
 23 31 consolidation, to the extent that the amount is not
 23 32 transferred to stated capital by the issuance of interests or
 23 33 otherwise, shall continue to be available for the payment of
 23 34 distributions by the surviving or new cooperative.
 23 35    Sec. 43.  NEW SECTION.  501.619  ABANDONMENT BEFORE FILING.
 24  1    At any time prior to the filing of the articles of merger
 24  2 or consolidation, the merger or consolidation may be abandoned
 24  3 pursuant to provisions set forth in the plan of merger or
 24  4 consolidation.  
 24  5                         SUBCHAPTER VII
 24  6                       RECORDS AND REPORTS
 24  7                             PART A
 24  8                             RECORDS
 24  9    Sec. 44.  NEW SECTION.  501.701  RECORDS.
 24 10    1.  A cooperative shall keep as permanent records minutes
 24 11 of all meetings of its members and board of directors, a
 24 12 record of all actions taken by the members or board of
 24 13 directors without a meeting, and a record of all actions taken
 24 14 by a committee of the board of directors in place of the board
 24 15 of directors on behalf of the cooperative.
 24 16    2.  A cooperative shall maintain appropriate accounting
 24 17 records.
 24 18    3.  A cooperative or its agent shall maintain a record of
 24 19 its interest holders in a form that permits preparation of a
 24 20 list of the names and addresses of all interest holders in
 24 21 alphabetical order by class of interests showing the number
 24 22 and class of interests held by each.
 24 23    4.  A cooperative shall maintain its records in written
 24 24 form or in another form capable of conversion into written
 24 25 form within a reasonable time.
 24 26    5.  A cooperative shall keep a copy of the following
 24 27 records:
 24 28    a.  Its articles or restated articles of association and
 24 29 all amendments to them currently in effect.
 24 30    b.  Its bylaws or restated bylaws and all amendments to
 24 31 them currently in effect.
 24 32    c.  Resolutions adopted by its board of directors creating
 24 33 one or more classes or series of interests, and fixing their
 24 34 relative rights, preferences, and limitations, if the
 24 35 interests issued pursuant to those resolutions are
 25  1 outstanding.
 25  2    d.  The minutes of all members' meetings, and records of
 25  3 all action taken by members without a meeting, for the past
 25  4 three years.
 25  5    e.  All written communications to interest holders
 25  6 generally within the past three years, including the financial
 25  7 statements furnished for the past three years under section
 25  8 501.711.
 25  9    f.  A list of the names and business addresses of its
 25 10 current directors and officers.
 25 11    g.  Its most recent biennial report delivered to the
 25 12 secretary of state under section 501.713.
 25 13    Sec. 45.  NEW SECTION.  501.702  INSPECTION OF RECORDS BY
 25 14 INTEREST HOLDERS.
 25 15    1.  An interest holder of a cooperative is entitled to
 25 16 inspect and copy, during regular business hours at the
 25 17 cooperative's principal office, any of the records of the
 25 18 cooperative described in section 501.701, subsection 5, if the
 25 19 interest holder gives the cooperative written notice of the
 25 20 interest holder's demand at least five business days before
 25 21 the date on which the interest holder wishes to inspect and
 25 22 copy.
 25 23    2.  An interest holder of a cooperative is entitled to
 25 24 inspect and copy, during regular business hours at a
 25 25 reasonable location specified by the cooperative, any of the
 25 26 following records of the cooperative if the interest holder
 25 27 meets the requirements of subsection 3 and gives the
 25 28 cooperative written notice of the interest holder's demand at
 25 29 least five business days before the date on which the interest
 25 30 holder wishes to inspect and copy any of the following:
 25 31    a.  Excerpts from minutes of any meeting of the board of
 25 32 directors, records of any action of a committee of the board
 25 33 of directors while acting in place of the board of directors
 25 34 on behalf of the cooperative, minutes of any meeting of the
 25 35 members, and records of action taken by the members or board
 26  1 of directors without a meeting, to the extent not subject to
 26  2 inspection under subsection 1 of this section.
 26  3    b.  Accounting records of the cooperative.
 26  4    c.  The record of interest holders.
 26  5    3.  An interest holder may inspect and copy the records
 26  6 described in subsection 2 only if:
 26  7    a.  The interest holder's demand is made in good faith and
 26  8 for a proper purpose.
 26  9    b.  The interest holder describes with reasonable
 26 10 particularity the interest holder's purpose and the records
 26 11 the interest holder desires to inspect.
 26 12    c.  The records are directly connected with the interest
 26 13 holder's purpose.
 26 14    4.  The right of inspection granted by this section shall
 26 15 not be abolished or limited by a cooperative's articles of
 26 16 association or bylaws.
 26 17    5.  This section does not affect either of the following:
 26 18    a.  The right of a member to obtain information under
 26 19 section 501.702 or the right of an interest holder to obtain
 26 20 information, if the interest holder is in litigation with the
 26 21 cooperative, to the same extent as any other litigant.
 26 22    b.  The power of a court, independently of this chapter, to
 26 23 compel the production of cooperative records for examination.
 26 24    Sec. 46.  NEW SECTION.  501.703  SCOPE OF INSPECTION RIGHT.
 26 25    1.  An interest holder's agent or attorney has the same
 26 26 inspection and copying rights as the interest holder the agent
 26 27 or attorney represents.
 26 28    2.  The right to copy records under section 501.702
 26 29 includes, if reasonable, the right to receive copies made by
 26 30 photographic, xerographic, or other technological means.
 26 31    3.  The cooperative may impose a reasonable charge,
 26 32 covering the costs of labor and material, for copies of any
 26 33 documents provided to the interest holder.  The charge shall
 26 34 not exceed the estimated cost of production or reproduction of
 26 35 the records.
 27  1    4.  The cooperative may comply with an interest holder's
 27  2 demand to inspect the record of interest holders under section
 27  3 501.702, subsection 2, paragraph "c", by providing the
 27  4 interest holder with a list of its interest holders that was
 27  5 compiled no earlier than the date of the interest holder's
 27  6 demand.
 27  7    Sec. 47.  NEW SECTION.  501.704  COURT-ORDERED INSPECTION.
 27  8    1.  If a cooperative does not allow an interest holder who
 27  9 complies with section 501.702, subsection 1, to inspect and
 27 10 copy any records required by that subsection to be available
 27 11 for inspection, the district court of the county where the
 27 12 cooperative's principal office or, if none in this state, its
 27 13 registered office is located may summarily order inspection
 27 14 and copying of the records demanded at the cooperative's
 27 15 expense upon application of the interest holder.
 27 16    2.  If a cooperative does not within a reasonable time
 27 17 allow an interest holder to inspect and copy any other
 27 18 records, the interest holder who complies with section
 27 19 501.702, subsections 2 and 3, may apply to the district court
 27 20 in the county where the cooperative's principal office or, if
 27 21 not in this state, its registered office is located for an
 27 22 order to permit inspection and copying of the records
 27 23 demanded.  The court shall dispose of an application under
 27 24 this subsection on an expedited basis.
 27 25    3.  If the court orders inspection and copying of the
 27 26 records demanded, it shall also order the cooperative to pay
 27 27 the interest holder's costs, including reasonable counsel
 27 28 fees, incurred to obtain the order unless the cooperative
 27 29 proves that it refused inspection in good faith because it had
 27 30 a reasonable basis for doubt about the right of the interest
 27 31 holder to inspect the records demanded.
 27 32    4.  If the court orders inspection and copying of the
 27 33 records demanded, it may impose reasonable restrictions on the
 27 34 use or distribution of the records by the demanding interest
 27 35 holder.  
 28  1                             PART B
 28  2                             REPORTS
 28  3    Sec. 48.  NEW SECTION.  501.711  FINANCIAL STATEMENTS FOR
 28  4 INTEREST HOLDERS.
 28  5    A cooperative shall prepare annual financial statements,
 28  6 which may be consolidated or combined statements of the
 28  7 cooperative and one or more of its subsidiaries, as
 28  8 appropriate, that include a balance sheet as of the end of the
 28  9 fiscal year and an income statement for that year.  Upon
 28 10 written request from an interest holder, a cooperative, at its
 28 11 expense, shall furnish to that interest holder the financial
 28 12 statements requested.  If the annual financial statements are
 28 13 reported upon by a public accountant, the report must
 28 14 accompany the financial statements.
 28 15    Sec. 49.  NEW SECTION.  501.712  OTHER REPORTS TO INTEREST
 28 16 HOLDERS.
 28 17    1.  If a cooperative indemnifies or advances expenses to a
 28 18 director under sections 501.412 through 501.415 in connection
 28 19 with a proceeding by or in the right of the cooperative, the
 28 20 cooperative shall report the indemnification or advance in
 28 21 writing to the members with or before the notice of the next
 28 22 members' meeting.
 28 23    2.  If a cooperative issues or authorizes the issuance of
 28 24 interests for promissory notes or for promises to render
 28 25 services in the future, the cooperative shall report in
 28 26 writing to the members the number of interests authorized or
 28 27 issued, and the consideration received by the cooperative,
 28 28 with or before the notice of the next members' meeting.
 28 29    Sec. 50.  NEW SECTION.  501.713  ANNUAL REPORT FOR
 28 30 SECRETARY OF STATE.
 28 31    1.  Each cooperative authorized to transact business in
 28 32 this state shall deliver to the secretary of state for filing
 28 33 an annual report that sets forth all of the following:
 28 34    a.  The name of the cooperative.
 28 35    b.  The address of its registered office and the name of
 29  1 its registered agent at that office in this state, together
 29  2 with the consent of any new registered agent.
 29  3    c.  The address of its principal office.
 29  4    d.  The names and addresses of the president, secretary,
 29  5 treasurer, and one member of the board of directors.
 29  6    2.  Information in the annual report must be current as of
 29  7 the first day of January of the year in which the report is
 29  8 due.  The report shall be executed on behalf of the
 29  9 cooperative and signed as provided in section 501.105 or by
 29 10 any other person authorized by the board of directors of the
 29 11 cooperative.
 29 12    3.  The first annual report shall be delivered to the
 29 13 secretary of state between January 1 and April 1 of the first
 29 14 even-numbered year following the calendar year in which a
 29 15 cooperative was organized.  Subsequent annual reports must be
 29 16 delivered to the secretary of state between January 1 and
 29 17 April 1 of the following calendar years.  A filing fee for the
 29 18 annual report shall be determined by the secretary of state.
 29 19    4.  If an annual report does not contain the information
 29 20 required by this section, the secretary of state shall
 29 21 promptly notify the reporting cooperative in writing and
 29 22 return the report to the cooperative for correction.
 29 23    5.  The secretary of state may provide for the change of
 29 24 registered office or registered agent on the form prescribed
 29 25 by the secretary of state for the annual report, provided that
 29 26 the form contains the information required in section 501.106.
 29 27 If the secretary of state determines that an annual report
 29 28 does not contain the information required by this section but
 29 29 otherwise meets the requirements of section 501.106 for the
 29 30 purpose of changing the registered office or registered agent,
 29 31 the secretary of state shall file the statement of change of
 29 32 registered office or registered agent, effective as provided
 29 33 in section 501.105, before returning the biennial report to
 29 34 the cooperative as provided in this section.  A statement of
 29 35 change of registered office or agent pursuant to this
 30  1 subsection shall be executed by a person authorized to execute
 30  2 the annual report.  
 30  3                          DIVISION VIII
 30  4                           DISSOLUTION
 30  5                             PART A
 30  6                             GENERAL
 30  7    Sec. 51.  NEW SECTION.  501.801  DISSOLUTION BY ORGANIZERS
 30  8 OR INITIAL DIRECTORS.
 30  9    A majority of the organizers or initial directors of a
 30 10 cooperative that has not issued interests or has not commenced
 30 11 business may dissolve the cooperative by delivering to the
 30 12 secretary of state for filing articles of dissolution that set
 30 13 forth all of the following:
 30 14    1.  The name of the cooperative.
 30 15    2.  The date of its organization.
 30 16    3.  Either of the following:
 30 17    a.  That none of the cooperative's interests have been
 30 18 issued.
 30 19    b.  That the cooperative has not commenced business.
 30 20    4.  That no debt of the cooperative remains unpaid.
 30 21    5.  That the net assets of the cooperative remaining after
 30 22 winding up have been distributed in accordance with this
 30 23 chapter and the articles of association of the cooperative.
 30 24    6.  That a majority of the organizers or initial directors
 30 25 authorized the dissolution.
 30 26    Sec. 52.  NEW SECTION.  501.802  DISSOLUTION BY BOARD OF
 30 27 DIRECTORS AND MEMBERS.
 30 28    1.  A cooperative's board of directors may propose
 30 29 dissolution for submission to the members.
 30 30    2.  For a proposal to dissolve to be adopted both of the
 30 31 following must apply:
 30 32    a.  The board of directors must recommend dissolution to
 30 33 the members unless the board of directors determines that
 30 34 because of conflict of interest or other special circumstances
 30 35 it should make no recommendation and communicates the basis
 31  1 for its determination to the members.
 31  2    b.  The members entitled to vote must approve the proposal
 31  3 to dissolve as provided in subsection 5.
 31  4    3.  The board of directors may condition its submission of
 31  5 the proposal for dissolution on any basis.
 31  6    4.  The cooperative shall notify each member of a meeting
 31  7 to consider dissolution in accordance with section 501.302.
 31  8 The notice must also state that the purpose, or one of the
 31  9 purposes, of the meeting is to consider dissolving the
 31 10 cooperative.
 31 11    5.  Unless the articles of association or the board of
 31 12 directors acting pursuant to subsection 3 require a greater
 31 13 vote or a vote by voting groups, the proposal to dissolve must
 31 14 be approved by a majority of all the votes entitled to be cast
 31 15 on that proposal in order to be adopted.
 31 16    Sec. 53.  NEW SECTION.  501.803  ARTICLES OF DISSOLUTION.
 31 17    1.  At any time after dissolution is authorized, the
 31 18 cooperative may dissolve by delivering to the secretary of
 31 19 state for filing articles of dissolution setting forth all of
 31 20 the following:
 31 21    a.  The name of the cooperative.
 31 22    b.  The date dissolution was authorized.
 31 23    c.  If dissolution was approved by the members, both of the
 31 24 following:
 31 25    (1)  The number of votes entitled to be cast on the
 31 26 proposal to dissolve.
 31 27    (2)  Either the total number of votes cast for and against
 31 28 dissolution or the total number of undisputed votes cast for
 31 29 dissolution and a statement that the number cast for
 31 30 dissolution was sufficient for approval.
 31 31    2.  A cooperative is dissolved upon the effective date of
 31 32 its articles of dissolution.
 31 33    Sec. 54.  NEW SECTION.  501.804  REVOCATION OF DISSOLUTION.
 31 34    1.  A cooperative may revoke its dissolution within one
 31 35 hundred twenty days of the effective date of the dissolution.
 32  1    2.  Revocation of dissolution must be authorized in the
 32  2 same manner as the dissolution was authorized unless that
 32  3 authorization permitted revocation by action of the board of
 32  4 directors alone, in which event the board of directors may
 32  5 revoke the dissolution without member action.
 32  6    3.  After the revocation of dissolution is authorized, the
 32  7 cooperative may revoke the dissolution by delivering to the
 32  8 secretary of state for filing articles of revocation of
 32  9 dissolution, together with a copy of its articles of
 32 10 dissolution, that set forth all of the following:
 32 11    a.  The name of the cooperative.
 32 12    b.  The effective date of the dissolution that was revoked.
 32 13    c.  The date that the revocation of dissolution was
 32 14 authorized.
 32 15    d.  If the cooperative's board of directors or organizers
 32 16 revoked the dissolution, a statement to that effect.
 32 17    e.  If the cooperative's board of directors revoked a
 32 18 dissolution authorized by the members, a statement that
 32 19 revocation was permitted by action by the board of directors
 32 20 alone pursuant to that authorization.
 32 21    f.  If member action was required to revoke the
 32 22 dissolution, the information required by section 501.803,
 32 23 subsection 1, paragraph "c".
 32 24    4.  Revocation of dissolution is effective upon the
 32 25 effective date of the articles of revocation of dissolution.
 32 26    5.  When the revocation of dissolution is effective, it
 32 27 relates back to and takes effect as of the effective date of
 32 28 the dissolution as if the dissolution had never occurred.
 32 29    Sec. 55.  NEW SECTION.  501.805  EFFECT OF DISSOLUTION.
 32 30    1.  A dissolved cooperative continues its existence but
 32 31 shall not carry on any business except that appropriate to
 32 32 wind up and liquidate its business and affairs, including any
 32 33 of the following:
 32 34    a.  Collecting its assets.
 32 35    b.  Disposing of its properties that will not be
 33  1 distributed in kind in accordance with this chapter and the
 33  2 cooperative's articles of association.
 33  3    c.  Discharging or making provision for discharging its
 33  4 liabilities.
 33  5    d.  Distributing its remaining property in accordance with
 33  6 this chapter and the cooperative's articles of association.
 33  7    e.  Doing every other act necessary to wind up and
 33  8 liquidate its business and affairs.
 33  9    2.  Dissolution of a cooperative does not do any of the
 33 10 following:
 33 11    a.  Transfer title to the cooperative's property.
 33 12    b.  Prevent transfer of its interests, although the
 33 13 authorization to dissolve may provide for closing the
 33 14 cooperative's interest transfer records.
 33 15    c.  Subject its directors or officers to standards of
 33 16 conduct different from those prescribed in section 501.406.
 33 17    d.  Change quorum or voting requirements for its board of
 33 18 directors or members; change provisions for selection,
 33 19 resignation, or removal of its directors or officers or both;
 33 20 or change provisions for amending its bylaws.
 33 21    e.  Prevent commencement of a proceeding by or against the
 33 22 cooperative in its name.
 33 23    f.  Abate or suspend a proceeding pending by or against the
 33 24 cooperative on the effective date of dissolution.
 33 25    g.  Terminate the authority of the registered agent of the
 33 26 cooperative.
 33 27    Sec. 56.  NEW SECTION.  501.805A  DISTRIBUTION OF ASSETS.
 33 28    Upon the cooperative's dissolution, the cooperative's
 33 29 assets shall first be used to pay expenses necessary to carry
 33 30 out the dissolution and liquidation of assets, then be used to
 33 31 pay the cooperative's obligations other than the payment of
 33 32 deferred patronage or interests issued as deferred patronage,
 33 33 and the remainder shall be paid in the manner set forth in the
 33 34 cooperative's articles of association.
 33 35    Sec. 57.  NEW SECTION.  501.806  KNOWN CLAIMS AGAINST
 34  1 DISSOLVED COOPERATIVE.
 34  2    1.  A dissolved cooperative may dispose of the known claims
 34  3 against it by following the procedure described in this
 34  4 section.
 34  5    2.  The dissolved cooperative shall notify its known
 34  6 claimants in writing of the dissolution at any time after the
 34  7 effective date of the dissolution.  The written notice must do
 34  8 all of the following:
 34  9    a.  Describe information that must be included in a claim.
 34 10    b.  Provide a mailing address where a claim may be sent.
 34 11    c.  State the deadline, which shall not be fewer than one
 34 12 hundred twenty days from the effective date of the written
 34 13 notice, by which the dissolved cooperative must receive the
 34 14 claim.
 34 15    d.  State that the claim will be barred if not received by
 34 16 the deadline.
 34 17    3.  A claim against the dissolved cooperative is barred if
 34 18 either of the following occur:
 34 19    a.  A claimant who was given written notice under
 34 20 subsection 2 does not deliver the claim to the dissolved
 34 21 cooperative by the deadline.
 34 22    b.  A claimant whose claim was rejected by the dissolved
 34 23 cooperative does not commence a proceeding to enforce the
 34 24 claim within ninety days from the effective date of the
 34 25 rejection notice.
 34 26    4.  For purposes of this section, "claim" does not include
 34 27 a contingent liability or a claim based on an event occurring
 34 28 after the effective date of dissolution.
 34 29    Sec. 58.  NEW SECTION.  501.807  UNKNOWN CLAIMS AGAINST
 34 30 DISSOLVED COOPERATIVE.
 34 31    1.  A dissolved cooperative may also publish notice of its
 34 32 dissolution and request that persons with claims against the
 34 33 cooperative present them in accordance with the notice.
 34 34    2.  The notice must meet all of the following requirements:
 34 35    a.  Be published one time in a newspaper of general
 35  1 circulation in the county where the dissolved cooperative's
 35  2 principal office or, if not in this state, its registered
 35  3 office is or was last located.
 35  4    b.  Describe the information that must be included in a
 35  5 claim and provide a mailing address where the claim may be
 35  6 sent.
 35  7    c.  State that a claim against the cooperative will be
 35  8 barred unless a proceeding to enforce the claim is commenced
 35  9 within five years after the publication of the notice.
 35 10    3.  If the dissolved cooperative publishes a newspaper
 35 11 notice in accordance with subsection 2, the claim of each of
 35 12 the following claimants is barred unless the claimant
 35 13 commences a proceeding to enforce the claim against the
 35 14 dissolved cooperative within five years after the publication
 35 15 date of the newspaper notice:
 35 16    a.  A claimant who did not receive written notice under
 35 17 section 501.806.
 35 18    b.  A claimant whose claim was timely sent to the dissolved
 35 19 cooperative but not acted on.
 35 20    c.  A claimant whose claim is contingent or based on an
 35 21 event occurring after the effective date of dissolution.
 35 22    4.  A claim may be enforced under this section in either of
 35 23 the following ways:
 35 24    a.  Against the dissolved cooperative, to the extent of its
 35 25 undistributed assets.
 35 26    b.  If the assets have been distributed in liquidation,
 35 27 against an interest holder of the dissolved cooperative to the
 35 28 extent of the interest holder's pro rata share of the claim or
 35 29 the cooperative assets distributed to the interest holder in
 35 30 liquidation, whichever is less, but an interest holder's total
 35 31 liability for all claims under this section shall not exceed
 35 32 the total amount of assets distributed to the interest holder
 35 33 in liquidation.  
 35 34                             PART B
 35 35                   ADMINISTRATIVE DISSOLUTION
 36  1    Sec. 59.  NEW SECTION.  501.811  GROUNDS FOR ADMINISTRATIVE
 36  2 DISSOLUTION.
 36  3    The secretary of state may commence a proceeding under
 36  4 section 501.812 to administratively dissolve a cooperative if
 36  5 any of the following apply:
 36  6    1.  The cooperative has not delivered an annual report to
 36  7 the secretary of state in a form that meets the requirements
 36  8 of section 501.713, within sixty days after it is due, or has
 36  9 not paid the filing fee as determined by the secretary of
 36 10 state, within sixty days after it is due.
 36 11    2.  The cooperative is without a registered agent or
 36 12 registered office in this state for sixty days or more.
 36 13    3.  The cooperative does not notify the secretary of state
 36 14 within sixty days that its registered agent or registered
 36 15 office has been changed, that its registered agent has
 36 16 resigned, or that its registered office has been discontinued.
 36 17    4.  The cooperative's period of duration stated in its
 36 18 articles of association expires.
 36 19    Sec. 60.  NEW SECTION.  501.812  PROCEDURE FOR AND EFFECT
 36 20 OF ADMINISTRATIVE DISSOLUTION.
 36 21    1.  If the secretary of state determines that one or more
 36 22 grounds exist under section 501.811 for dissolving a
 36 23 cooperative, the secretary of state shall serve the
 36 24 cooperative with written notice of the secretary of state's
 36 25 determination under section 501.106.
 36 26    2.  If the cooperative does not correct each ground for
 36 27 dissolution or demonstrate to the reasonable satisfaction of
 36 28 the secretary of state that each ground determined by the
 36 29 secretary of state does not exist within sixty days after
 36 30 service of the notice is perfected under section 501.106, the
 36 31 secretary of state shall administratively dissolve the
 36 32 cooperative by signing a certificate of dissolution that
 36 33 recites the ground or grounds for dissolution and its
 36 34 effective date.  The secretary of state shall file the
 36 35 original of the certificate and serve a copy on the
 37  1 cooperative under section 501.106.
 37  2    3.  A cooperative administratively dissolved continues its
 37  3 existence but shall not carry on any business except that
 37  4 necessary to wind up and liquidate its business and affairs
 37  5 under section 501.805 and notify claimants under sections
 37  6 501.806 and 501.807.
 37  7    4.  The administrative dissolution of a cooperative does
 37  8 not terminate the authority of its registered agent.
 37  9    5.  The secretary of state's administrative dissolution of
 37 10 a cooperative pursuant to this section appoints the secretary
 37 11 of state the cooperative's agent for service of process in any
 37 12 proceeding based on a cause of action which arose during the
 37 13 time the cooperative was authorized to transact business in
 37 14 this state.  Service of process on the secretary of state
 37 15 under this subsection is service on the cooperative.  Upon
 37 16 receipt of process, the secretary of state shall serve a copy
 37 17 of the process on the cooperative as provided in section
 37 18 501.106.  This subsection does not preclude service on the
 37 19 cooperative's registered agent, if any.
 37 20    Sec. 61.  NEW SECTION.  501.813  REINSTATEMENT FOLLOWING
 37 21 ADMINISTRATIVE DISSOLUTION.
 37 22    1.  A cooperative administratively dissolved under section
 37 23 501.812 may apply to the secretary of state for reinstatement
 37 24 within two years after the effective date of dissolution.  The
 37 25 application must meet all of the following requirements:
 37 26    a.  Recite the name of the cooperative at its date of
 37 27 dissolution and the effective date of its administrative
 37 28 dissolution.
 37 29    b.  State that the ground or grounds for dissolution have
 37 30 been eliminated.
 37 31    c.  State a name that satisfies the requirements of section
 37 32 501.104.
 37 33    d.  State the federal tax identification number of the
 37 34 cooperative.
 37 35    2.  a.  The secretary of state shall refer the federal tax
 38  1 identification number contained in the application for
 38  2 reinstatement to the department of revenue and finance.  The
 38  3 department of revenue and finance shall report to the
 38  4 secretary of state the tax status of the cooperative.  If the
 38  5 department reports to the secretary of state that a filing
 38  6 delinquency or liability exists against the cooperative, the
 38  7 secretary of state shall not cancel the certificate of
 38  8 dissolution until the filing delinquency or liability is
 38  9 satisfied.
 38 10    b.  If the secretary of state determines that the
 38 11 application contains the information required by subsection 1,
 38 12 and that a delinquency or liability reported pursuant to
 38 13 paragraph "a" has been satisfied, and that the information is
 38 14 correct, the secretary of state shall cancel the certificate
 38 15 of dissolution and prepare a certificate of reinstatement that
 38 16 recites the secretary of state's determination and the
 38 17 effective date of reinstatement, file the original of the
 38 18 certificate, and serve a copy on the cooperative under section
 38 19 501.106.  If the name of the cooperative as provided in
 38 20 subsection 1, paragraph "c", is different than the name in
 38 21 subsection 1, paragraph "a", the certificate of reinstatement
 38 22 shall constitute an amendment to the articles of association
 38 23 insofar as it pertains to the name.
 38 24    3.  When the reinstatement is effective, it relates back to
 38 25 and takes effect as of the effective date of the
 38 26 administrative dissolution as if the administrative
 38 27 dissolution had never occurred.
 38 28    Sec. 62.  NEW SECTION.  501.814  APPEAL FROM DENIAL OF
 38 29 REINSTATEMENT.
 38 30    1.  If the secretary of state denies a cooperative's
 38 31 application for reinstatement following administrative
 38 32 dissolution, the secretary of state shall serve the
 38 33 cooperative under section 501.106 with a written notice that
 38 34 explains the reason or reasons for denial.
 38 35    2.  The cooperative may appeal the denial of reinstatement
 39  1 to the district court within thirty days after service of the
 39  2 notice of denial is perfected.  The cooperative appeals by
 39  3 petitioning the court to set aside the dissolution and
 39  4 attaching to the petition copies of the secretary of state's
 39  5 certificate of dissolution, the cooperative's application for
 39  6 reinstatement, and the secretary of state's notice of denial.
 39  7    3.  The court may summarily order the secretary of state to
 39  8 reinstate the dissolved cooperative or may take other action
 39  9 the court considers appropriate.
 39 10    4.  The court's final decision may be appealed as in other
 39 11 civil proceedings.  
 39 12                             PART C
 39 13                      JUDICIAL DISSOLUTION
 39 14    Sec. 63.  NEW SECTION.  501.821  GROUNDS FOR JUDICIAL
 39 15 DISSOLUTION.
 39 16    The district court may dissolve a cooperative in any of the
 39 17 following ways:
 39 18    1.  A proceeding by the attorney general, if it is
 39 19 established that either of the following apply:
 39 20    a.  The cooperative obtained its articles of association
 39 21 through fraud.
 39 22    b.  The cooperative has continued to exceed or abuse the
 39 23 authority conferred upon it by law.
 39 24    2.  A proceeding by a member if it is established that any
 39 25 of the following conditions exist:
 39 26    a.  The directors are deadlocked in the management of the
 39 27 cooperative's affairs, the members are unable to break the
 39 28 deadlock, and either irreparable injury to the cooperative is
 39 29 threatened or being suffered, or the business and affairs of
 39 30 the cooperative can no longer be conducted to the advantage of
 39 31 the interest holders generally, because of the deadlock.
 39 32    b.  The directors or those in control of the cooperative
 39 33 have acted, are acting, or will act in a manner that is
 39 34 illegal, oppressive, or fraudulent.
 39 35    c.  The members are deadlocked in voting power and have
 40  1 failed, for a period that includes at least two consecutive
 40  2 annual meeting dates, to elect successors to directors whose
 40  3 terms have expired.
 40  4    d.  The cooperative's assets are being misapplied or
 40  5 wasted.
 40  6    3.  A proceeding by a creditor if it is established that
 40  7 either of the following apply:
 40  8    a.  The creditor's claim has been reduced to judgment, the
 40  9 execution on the judgment returned unsatisfied, and the
 40 10 cooperative is insolvent.
 40 11    b.  The cooperative has admitted in writing that the
 40 12 creditor's claim is due and owing and the cooperative is
 40 13 insolvent.
 40 14    4.  A proceeding by the cooperative to have its voluntary
 40 15 dissolution continued under court supervision.
 40 16    Sec. 64.  NEW SECTION.  501.822  PROCEDURE FOR JUDICIAL
 40 17 DISSOLUTION.
 40 18    1.  Venue for a proceeding by the attorney general to
 40 19 dissolve a cooperative lies in Polk county district court.
 40 20 Venue for a proceeding brought by any other party named in
 40 21 section 501.821 lies in the county where a cooperative's
 40 22 principal office or, if not in this state, its registered
 40 23 office is or was last located.
 40 24    2.  It is not necessary to make interest holders parties to
 40 25 a proceeding to dissolve a cooperative unless relief is sought
 40 26 against them individually.
 40 27    3.  A court in a proceeding brought to dissolve a
 40 28 cooperative may issue injunctions, appoint a receiver or
 40 29 custodian pendente lite with all powers and duties the court
 40 30 directs, take other action required to preserve the
 40 31 cooperative's assets wherever located, and carry on the
 40 32 business of the cooperative until a full hearing can be held.
 40 33    Sec. 65.  NEW SECTION.  501.823  RECEIVERSHIP OR
 40 34 CUSTODIANSHIP.
 40 35    1.  A court in a judicial proceeding brought to dissolve a
 41  1 cooperative may appoint one or more receivers to wind up and
 41  2 liquidate, or one or more custodians to manage, the business
 41  3 and affairs of the cooperative.  The court shall hold a
 41  4 hearing, after notifying all parties to the proceeding and any
 41  5 interested persons designated by the court, before appointing
 41  6 a receiver or custodian.  The court appointing a receiver or
 41  7 custodian has exclusive jurisdiction over the cooperative and
 41  8 all its property wherever located.
 41  9    2.  The court may appoint an individual or a domestic or
 41 10 foreign corporation authorized to transact business in this
 41 11 state as a receiver or custodian.  The court may require the
 41 12 receiver or custodian to post bond, with or without sureties,
 41 13 in an amount the court directs.
 41 14    3.  The court shall describe the powers and duties of the
 41 15 receiver or custodian in its appointing order, which may be
 41 16 amended from time to time.
 41 17    a.  Among other powers, the receiver may do any of the
 41 18 following:
 41 19    (1)  Dispose of all or any part of the assets of the
 41 20 cooperative wherever located, at a public or private sale, if
 41 21 authorized by the court.
 41 22    (2)  Sue and defend in the receiver's own name as receiver
 41 23 of the cooperative in all courts of this state.
 41 24    b.  The custodian may exercise all of the powers of the
 41 25 cooperative, through or in place of its board of directors or
 41 26 officers, to the extent necessary to manage the affairs of the
 41 27 cooperative in the best interests of its interest holders and
 41 28 creditors.
 41 29    4.  The court during a receivership may redesignate the
 41 30 receiver a custodian, and during a custodianship may
 41 31 redesignate the custodian a receiver, if doing so is in the
 41 32 best interests of the cooperative, its interest holders, and
 41 33 creditors.
 41 34    5.  The court from time to time during the receivership or
 41 35 custodianship may order compensation paid and expense
 42  1 disbursements or reimbursements made to the receiver or
 42  2 custodian and the receiver's or custodian's counsel from the
 42  3 assets of the cooperative or proceeds from the sale of the
 42  4 assets.
 42  5    Sec. 66.  NEW SECTION.  501.824  DECREE OF DISSOLUTION.
 42  6    1.  If after a hearing the court determines that one or
 42  7 more grounds for judicial dissolution described in section
 42  8 501.821 exist, it may enter a decree dissolving the
 42  9 cooperative and specifying the effective date of the
 42 10 dissolution, and the clerk of the district court shall deliver
 42 11 a certified copy of the decree to the secretary of state, who
 42 12 shall file it.
 42 13    2.  After entering the decree of dissolution, the court
 42 14 shall direct the winding up and liquidation of the
 42 15 cooperative's business and affairs in accordance with section
 42 16 501.805 and the notification of claimants in accordance with
 42 17 sections 501.806 and 501.807.  
 42 18                             PART D
 42 19                         STATE TREASURER
 42 20    Sec. 67.  NEW SECTION.  501.831  DEPOSIT WITH STATE
 42 21 TREASURER.
 42 22    Assets of a dissolved cooperative that should be
 42 23 transferred to a creditor, claimant, or interest holder of the
 42 24 cooperative who cannot be found or who is not competent to
 42 25 receive them shall be reduced to cash and deposited with the
 42 26 treasurer of state or other appropriate state official for
 42 27 safekeeping.  When the creditor, claimant, or interest holder
 42 28 furnishes satisfactory proof of entitlement to the amount
 42 29 deposited, the treasurer of state or other appropriate state
 42 30 official shall pay the creditor, claimant, or interest holder
 42 31 or that person's representative the amount.
 42 32    Sec. 68.  Sections 501.107 and 501.602, Code 1997, are
 42 33 repealed.  Sections 501.408 and 501.604, Code Supplement 1997,
 42 34 are repealed.
 42 35    Sec. 69.  EFFECTIVE DATE.  This Act, being deemed of
 43  1 immediate importance, takes effect upon enactment.  
 43  2 
 43  3 
 43  4                                                             
 43  5                               MARY E. KRAMER
 43  6                               President of the Senate
 43  7 
 43  8 
 43  9                                                             
 43 10                               RON J. CORBETT
 43 11                               Speaker of the House
 43 12 
 43 13    I hereby certify that this bill originated in the Senate and
 43 14 is known as Senate File 2404, Seventy-seventh General Assembly.
 43 15 
 43 16 
 43 17                                                             
 43 18                               MARY PAT GUNDERSON
 43 19                               Secretary of the Senate
 43 20 Approved                , 1998
 43 21 
 43 22 
 43 23                         
 43 24 TERRY E. BRANSTAD
 43 25 Governor
     
Text: SF02403                           Text: SF02405
Text: SF02400 - SF02499                 Text: SF Index
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