Text: SSB00174                          Text: SSB00176
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Senate Study Bill 175

Bill Text

PAG LIN
  1  1    Section 1.  Section 501.501, subsection 2, Code 1997, is
  1  2 amended to read as follows:
  1  3    2.  A member may shall not sell or otherwise transfer
  1  4 stock, other than voting stock, to any other member or to any
  1  5 person who has been approved by the board for membership,
  1  6 subject to the limitations in the articles or bylaws on the
  1  7 amount of each class of stock that may be owned by one member.
  1  8 A member may be restricted or limited from selling or
  1  9 otherwise transferring any other class of stock of the
  1 10 cooperative as provided by the cooperative's articles of
  1 11 incorporation or bylaws or an agreement executed between the
  1 12 cooperative and the member.
  1 13    Sec. 2.  Section 501.502, subsection 5, Code 1997, is
  1 14 amended by striking the subsection and inserting in lieu
  1 15 thereof the following:
  1 16    5.  In redeeming allocated patronage refunds, including
  1 17 refunds of nonstock patronage and preferred stock issued by
  1 18 the cooperative as patronage refunds, the cooperative shall
  1 19 first redeem the allocated patronage refunds issued to a
  1 20 deceased natural person and owned by the person at the time of
  1 21 death.
  1 22    Sec. 3.  Section 501.604, Code 1997, is amended to read as
  1 23 follows:
  1 24    501.604  DISSOLUTION.
  1 25    The provisions of sections 490.1401 through 490.1440 shall
  1 26 apply to cooperatives a cooperative in the same manner as they
  1 27 apply to corporations a corporation organized under chapter
  1 28 490.  However, notwithstanding any provision in those sections
  1 29 to the contrary, upon the cooperative's dissolution, the
  1 30 cooperative's assets shall first be used to pay expenses
  1 31 necessary to carry out the dissolution and liquidation of
  1 32 assets, then be used to pay the cooperative's obligations
  1 33 other than the payment of patronage dividends or stock issued
  1 34 as patronage dividends, and the remainder shall be paid in the
  1 35 manner set forth in the cooperative's articles of
  2  1 incorporation.  
  2  2                           EXPLANATION
  2  3    In 1996, the general assembly enacted Senate File 2135
  2  4 which provided for the organization of cooperative
  2  5 corporations.  This bill amends several of those provisions.
  2  6    Code section 501.501 provides that a member may transfer
  2  7 stock, other than voting stock, to any other member or to any
  2  8 person who has been approved by the board for membership,
  2  9 subject to the limitations in the articles or bylaws.  This
  2 10 bill amends the provision to prohibit the member from
  2 11 transferring voting stock.  It also provides that a member may
  2 12 be restricted or limited from selling or otherwise
  2 13 transferring any other class of stock of the cooperative as
  2 14 provided by the cooperative's articles of incorporation or
  2 15 bylaws or an agreement executed between the cooperative and
  2 16 the member.
  2 17    Code section 501.502 provides for the termination of a
  2 18 membership.  The section requires a cooperative to redeem all
  2 19 of the terminated member's allocated patronage refunds and
  2 20 preferred stock originally issued as allocated patronage
  2 21 refunds for the issue price.  The cooperative is required to
  2 22 make this payment within a certain period of time, usually one
  2 23 year after the termination of the membership, unless the
  2 24 terminated member's current equity equals or exceeds 2 percent
  2 25 of the cooperative's total members' equity.  In that case, the
  2 26 cooperative must redeem the terminated member's equity
  2 27 according to a schedule.  This bill strikes those provisions
  2 28 and provides that in redeeming allocated patronage refunds,
  2 29 including refunds of nonstock patronage and preferred stock
  2 30 issued by the cooperative as patronage refunds, the
  2 31 cooperative must first redeem the allocated patronage refunds
  2 32 issued to a deceased natural person and owned by the person at
  2 33 the time of death.
  2 34    Code section 501.604 provides for the dissolution of a
  2 35 cooperative.  The section provides that the dissolution must
  3  1 proceed as if it were a corporation organized under Code
  3  2 chapter 490.  This bill provides that the provisions in Code
  3  3 chapter 490 do not apply in certain circumstances.
  3  4 Specifically, the bill provides that upon the cooperative's
  3  5 dissolution, the cooperative's assets must first be used to
  3  6 pay expenses necessary to carry out the dissolution and
  3  7 liquidation of assets, then to pay the cooperative's
  3  8 obligations other than the payment of patronage dividends or
  3  9 stock issued as patronage dividends, and finally, the
  3 10 remainder must be paid as provided in the cooperative's
  3 11 articles of incorporation.  
  3 12 LSB 2304SC 77
  3 13 da/jw/5
     

Text: SSB00174                          Text: SSB00176
Text: SSB00100 - SSB00199               Text: SSB Index
Bills and Amendments: General Index     Bill History: General Index

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