Text: HF00620 Text: HF00622 Text: HF00600 - HF00699 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 9H.2, unnumbered paragraph 1, Code 1 2 1999, is amended to read as follows: 1 3 In order to preserve free and private enterprise, prevent 1 4 monopoly, and protect consumers,it is unlawful for anya 1 5 processor of beef or pork or limited partnership in which a 1 6 processor holds partnership shares as a general partner or 1 7 partnership shares as a limited partner, or limited liability 1 8 company in which a processor is a member,toshall not own, 1 9 control, or operate a feedlot in Iowa in which hogs or cattle 1 10 are fed for slaughter. In addition, a processor shall not 1 11 directly or indirectly control the manufacturing, processing, 1 12 or preparation for sale of pork products derived from swine if 1 13 the processor contracted for the care and feeding of the swine 1 14 in this state.However, this section does not apply to a1 15cooperative association organized under chapter 497, 498, or1 16499, if the cooperative association contracts for the care and1 17feeding of swine with a member of the cooperative association1 18who is actively engaged in farming. This section does not1 19apply to an association organized as a cooperative in which1 20another cooperative association organized under chapter 497,1 21498, or 499 is a member, if the association contracts with a1 22member which is a cooperative association organized under1 23chapter 497, 498, or 499, which contracts for the care and1 24feeding of swine with a member of the cooperative who is1 25actively engaged in farming.This section shall not preclude 1 26 a processor, limited partnership, or limited liability company 1 27 from contracting for the purchase of hogs or cattle, provided 1 28 that where the contract sets a date for delivery which is more 1 29 than twenty days after the making of the contract it shall: 1 30 Sec. 2. NEW SECTION. 497.36 COOPERATIVE ASSOCIATIONS 1 31 ENGAGED IN PRODUCTION CONTRACTS WITH MEMBERS. 1 32 A cooperative association executing a production contract 1 33 with a member shall comply with the same procedures as 1 34 required in section 499.81. 1 35 Sec. 3. NEW SECTION. 498.38 COOPERATIVE ASSOCIATIONS 2 1 ENGAGED IN PRODUCTION CONTRACTS WITH MEMBERS. 2 2 A cooperative association executing a production contract 2 3 with a member shall comply with the same procedures as 2 4 required in section 499.81. 2 5 Sec. 4. NEW SECTION. 499.81 COOPERATIVE ASSOCIATIONS 2 6 ENGAGED IN PRODUCTION CONTRACTS WITH MEMBERS. 2 7 1. As used in this section, "production contract" means a 2 8 contract executed by a cooperative association and a member 2 9 for the production of a farm product on land in which the 2 10 member holds a legal interest, if the cooperative association 2 11 owns the farm product during the production or makes 2 12 management decisions affecting the production of the farm 2 13 product. 2 14 2. A cooperative association shall not execute a 2 15 production contract with a member unless all of the following 2 16 apply: 2 17 a. The board of directors of the cooperative association 2 18 adopts a resolution authorizing contracting. Except as 2 19 provided in this section, the resolution shall become 2 20 effective thirty-one days after the date the resolution is 2 21 adopted. The cooperative association is not otherwise 2 22 required to comply with the procedures of this section for as 2 23 long as the resolution remains in effect. The resolution 2 24 shall contain all of the following: 2 25 (1) A declaration stating that the cooperative association 2 26 reserves the right to execute production contracts with its 2 27 members. 2 28 (2) A description of contracting planned by the 2 29 cooperative association, if any, including a description of 2 30 the following: 2 31 (a) Production contracts planned to be executed with 2 32 members, including the terms of the contracts and the number 2 33 of contracts to be executed. 2 34 (b) Production contracts planned to be executed with any 2 35 other association organized on a cooperative basis, including 3 1 the name of the association, and the terms of the contract. 3 2 (3) The date of the adoption of the resolution and the 3 3 date that the resolution will take effect. 3 4 3. a. Within five days after the date of adoption of the 3 5 resolution authorizing the cooperative association to execute 3 6 production contracts, the cooperative association must provide 3 7 notice of the resolution as provided in this section. The 3 8 notice shall be in the following form: 3 9 NOTICE 3 10 MEMBERS OF THE (INSERT NAME OF THE COOPERATIVE ASSOCIATION) 3 11 THE (INSERT NAME OF THE COOPERATIVE ASSOCIATION) IS 3 12 PLANNING ON EXECUTING PRODUCTION CONTRACTS WITH ITS MEMBERS 3 13 FOR THE PRODUCTION OF COMMODITIES, INCLUDING LIVESTOCK OR 3 14 CROPS. (INSERT NAME OF THE COOPERATIVE ASSOCIATION) HAS 3 15 PASSED A RESOLUTION AUTHORIZING CONTRACTING. WITHIN A LIMITED 3 16 TIME PERIOD: ALL DISSENTING MEMBERS OR HOLDERS OF MEMBERS' 3 17 EQUITY MAY DEMAND PAYMENT OF THE FAIR VALUE OF THEIR 3 18 INTERESTS. 3 19 b. The notice must be published in a newspaper having a 3 20 general circulation in the county where the cooperative 3 21 association is located as provided in section 618.3. The 3 22 notice shall be printed as provided in section 618.17. 3 23 c. The notice shall be delivered to all holders of 3 24 members' equity in the cooperative association, including 3 25 members and shareholders, by mailing the notice to the 3 26 holder's last known address as shown on the books of the 3 27 cooperative association. The notice shall be accompanied by a 3 28 copy of the resolution adopted by the board pursuant to this 3 29 section and a copy of this section. 3 30 4. Within thirty days after the date of the adoption of 3 31 the resolution authorizing the contracting, a holder of 3 32 members' equity, including a member or shareholder, may 3 33 dissent to the resolution adopted by the board of directors 3 34 under this section. The holder of members' equity shall 3 35 dissent by filing a demand with the board of directors. 4 1 a. If the holder of the equity interest does not surrender 4 2 the holder's interest in the cooperative association, the 4 3 cooperative association shall annually do all of the 4 4 following: 4 5 (1) Pay the holder of equity interest deferred patronage 4 6 dividends earned by the holder. 4 7 (2) Redeem deferred patronage dividend stock earned by the 4 8 holder. 4 9 (3) Pay any earnings attributable to the holder of equity 4 10 that would otherwise be added to surplus. 4 11 b. If the holder of the equity interest does surrender the 4 12 holder's interest in the cooperative association, the 4 13 cooperative association shall pay the holder the fair value of 4 14 that holder's interest as if the holder were a member 4 15 dissenting to a merger or consolidation, as provided in 4 16 section 499.66, upon surrender of the holder's evidence of 4 17 equity in the cooperative association, including a certificate 4 18 of membership or shares. 4 19 Sec. 5. EXISTING CONTRACTS – APPLICABILITY. This Act 4 20 shall not apply to a cooperative association organized under 4 21 chapter 497, 498, or 499 which would be prohibited from 4 22 contracting for the care and feeding of swine as provided in 4 23 section 9H.2 and which does not come under the exception 4 24 applying to cooperative associations as provided in that 4 25 section. However, a cooperative association shall not execute 4 26 a new contract or extend or renew an existing contract unless 4 27 the cooperative association complies with the requirements of 4 28 this Act. 4 29 Sec. 6. EFFECTIVE DATE. This Act, being deemed of 4 30 immediate importance, takes effect upon enactment. 4 31 EXPLANATION 4 32 This bill provides for contracting by a cooperative 4 33 association with its members. 4 34 Code chapter 9H prohibits a processor from contracting for 4 35 the care and feeding of swine in this state. The chapter, 5 1 however, contains an exception for cooperative associations 5 2 organized in this state that enter into contracts for the care 5 3 and feeding of swine with their members. Another association 5 4 organized on a cooperative basis may also contract with a 5 5 cooperative association organized in this state, if the 5 6 cooperative association organized in this state contracts with 5 7 one of its members. This bill provides that the cooperative 5 8 association organized in this state is prohibited from 5 9 contracting for the care and feeding of swine. 5 10 This bill provides that a cooperative association organized 5 11 under Code chapter 497, 498, or 499 is prohibited from 5 12 executing contracts for the production of farm products with 5 13 its members, unless the cooperative association adopts a 5 14 resolution authorizing contracting. 5 15 The bill provides that if the holder of the equity interest 5 16 does not surrender the holder's interest in the cooperative 5 17 association, the cooperative association must annually pay the 5 18 holder of equity interest deferred patronage dividends earned 5 19 by the holder; redeem deferred patronage dividend stock earned 5 20 by the holder; and pay any earnings attributable to the holder 5 21 of equity that would otherwise be added to surplus. The bill 5 22 provides that if the holder of the equity interest does 5 23 surrender the holder's interest in the cooperative 5 24 association, the cooperative association must pay the holder 5 25 the fair value of that holder's interest as if the holder were 5 26 a member dissenting to a merger or consolidation, as provided 5 27 in Code section 499.66. 5 28 The bill does not affect existing contracts that are not 5 29 renewed or extended. 5 30 A processor who contracts for the care and feeding of swine 5 31 in violation of the bill is subject to a civil penalty of not 5 32 more than $25,000. 5 33 The bill takes effect upon enactment. 5 34 LSB 2239HH 78 5 35 da/jw/5.1
Text: HF00620 Text: HF00622 Text: HF00600 - HF00699 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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