Text: HSB00681 Text: HSB00683 Text: HSB00600 - HSB00699 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 DIVISION I 1 2 ENACTMENT OF IOWA COOPERATIVE ASSOCIATIONS ACT 1 3 SUBCHAPTER 1 1 4 GENERAL PROVISIONS 1 5 Section 1. NEW SECTION. 501A.101 SHORT TITLE. 1 6 This chapter shall be known and may be cited as the "Iowa 1 7 Cooperative Associations Act". 1 8 Sec. 2. NEW SECTION. 501A.102 DEFINITIONS. 1 9 As used in this chapter, unless the context otherwise 1 10 requires: 1 11 1. "Address" means mailing address, including a zip code. 1 12 In the case of a registered address, the term means the 1 13 mailing address and the actual office location, which shall 1 14 not be a post office box. 1 15 2. "Alternative ballot" means a method of voting for a 1 16 candidate or issue prescribed by the board in advance of the 1 17 vote, and may include voting by electronic, telephonic, 1 18 internet, or other means that reasonably allow members the 1 19 opportunity to vote. 1 20 3. "Articles" means the articles of organization of a 1 21 cooperative as originally filed or subsequently amended as 1 22 provided in this chapter. 1 23 4. "Association" means a business entity on a cooperative 1 24 plan and organized under the laws of this state or another 1 25 state or that is chartered to conduct business under the laws 1 26 of another state. 1 27 5. "Board" means the board of directors of a cooperative. 1 28 6. "Business entity" means a person organized under 1 29 statute or common law in this state or another jurisdiction 1 30 for purposes of engaging in a commercial activity on a profit, 1 31 cooperative, or not-for-profit basis, including but not 1 32 limited to a corporation or entity taxed as a corporation 1 33 under the Internal Revenue Code, nonprofit corporation, 1 34 cooperative or cooperative association, partnership, limited 1 35 partnership, limited liability company, limited liability 2 1 partnership, investment company, joint stock company, joint 2 2 stock association, or trust, including but not limited to a 2 3 business trust. 2 4 7. "Cooperative" means a business association organized 2 5 under this chapter. 2 6 8. "Crop" means a plant used for food, animal feed, fiber, 2 7 or oil, if the plant is classified as a forage or cereal 2 8 plant, including but not limited to alfalfa, barley, 2 9 buckwheat, corn, flax, forage, millet, oats, popcorn, rye, 2 10 sorghum, soybeans, sunflowers, wheat, and grasses used for 2 11 forage or silage. 2 12 9. "Domestic business entity" means a business entity 2 13 organized under the laws of this state, including but not 2 14 limited to a corporation organized pursuant to chapter 490; a 2 15 nonprofit corporation organized under chapter 504A; a limited 2 16 liability company as defined in section 490A.102; a 2 17 partnership or limited liability partnership as provided in 2 18 chapter 486A or 487; or cooperative association or other 2 19 cooperative organized under this chapter or chapter 497, 498, 2 20 or 501. 2 21 10. "Domestic cooperative" means a cooperative association 2 22 or other cooperative organized under this chapter or chapter 2 23 497, 498, 499, or 501. 2 24 11. "Foreign business entity" means a business entity that 2 25 is not a domestic business entity. 2 26 12. "Foreign cooperative" means a foreign business entity 2 27 organized to conduct business consistent with this chapter or 2 28 chapter 497, 498, 499, or 501. 2 29 13. "Iowa limited liability company" means a limited 2 30 liability company governed by chapter 490A. 2 31 14. "Livestock" means the same as defined in section 2 32 717.1. 2 33 15. "Member" means a person or entity reflected on the 2 34 books of a cooperative as the owner of governance rights of a 2 35 membership interest of the cooperative and includes patron and 3 1 nonpatron members. 3 2 16. "Member control agreement" means an instrument which 3 3 controls the investment or governance of nonpatron members, 3 4 which may be executed by the board and one or more nonpatron 3 5 members and which may provide for their individual or 3 6 collective rights to elect directors or to participate in the 3 7 distribution or allocation of profits or losses. 3 8 17. "Membership interest" means a member's interest in a 3 9 cooperative consisting of a member's financial rights, a 3 10 member's right to assign financial rights, a member's 3 11 governance rights, and a member's right to assign governance 3 12 rights. "Membership interest" includes patron membership 3 13 interests and nonpatron membership interests. 3 14 18. "Members' meeting" means a regular or special members' 3 15 meeting. 3 16 19. "Nonpatron member" means a member who holds a 3 17 nonpatron membership interest. 3 18 20. "Nonpatron membership interest" means a membership 3 19 interest that does not require the holder to conduct patronage 3 20 for or with the cooperative to receive financial rights or 3 21 distributions. 3 22 21. "Patron" means a person or entity who conducts 3 23 patronage with the cooperative, regardless of whether the 3 24 person is a member. 3 25 22. "Patronage" means business, transactions, or services 3 26 done for or with the cooperative as defined by the 3 27 cooperative. 3 28 23. "Patron member" means a member holding a patron 3 29 membership interest. 3 30 24. "Patron membership interest" means the membership 3 31 interest requiring the holder to conduct patronage for or with 3 32 the cooperative, as specified by the cooperative to receive 3 33 financial rights or distributions. 3 34 25. "Secretary" means the secretary of state. 3 35 26. "Traditional cooperative" means a cooperative or 4 1 cooperative association organized under chapter 497, 498, 499, 4 2 or this chapter. 4 3 Sec. 3. NEW SECTION. 501A.103 REQUIREMENTS FOR DOCUMENTS 4 4 – FILING AND SIGNATURES. 4 5 A document is signed when a person has written on a 4 6 document. A person authorized to do so by this chapter, the 4 7 articles or bylaws, or by a resolution approved by the 4 8 directors or the members must sign the document. A signature 4 9 on a document may be a facsimile affixed, engraved, printed, 4 10 placed, stamped with indelible ink, transmitted by facsimile 4 11 or electronically, or in any other manner reproduced on the 4 12 document. 4 13 SUBCHAPTER 2 4 14 FILING 4 15 PART A 4 16 GENERAL REQUIREMENTS 4 17 Sec. 4. NEW SECTION. 501A.201 GENERAL FILING 4 18 REQUIREMENTS. 4 19 1. A document must satisfy the requirements of this 4 20 section, and of any other section that adds to or varies these 4 21 requirements, to be entitled to filing. 4 22 2. The document must be one that this chapter requires or 4 23 permits to be filed with the secretary. 4 24 3. The document must contain the information required by 4 25 this chapter. The document may contain other information as 4 26 well. 4 27 4. The document must be typewritten or printed. The 4 28 typewritten or printed portion shall be in black ink. 4 29 Manually signed photocopies, or other reproduced copies, 4 30 including facsimiles and other electronically or computer- 4 31 generated copies of typewritten or printed documents may be 4 32 filed. 4 33 5. The document must be in the English language. A 4 34 cooperative's name need not be in English if written in 4 35 English letters or Arabic or Roman numerals. The articles, 5 1 duly authenticated by the official having custody of the 5 2 applicable records in the state or country under whose law the 5 3 cooperative is formed, which are required of cooperatives, 5 4 need not be in English if accompanied by a reasonably 5 5 authenticated English translation. 5 6 6. The document must be executed by one of the following 5 7 persons: 5 8 a. An officer of the cooperative, or if no officer has 5 9 been selected, by any patron member of the cooperative. 5 10 b. If the cooperative has not been organized, by the 5 11 organizers of the cooperative as provided in subchapter 5. 5 12 c. If the cooperative is in the hands of a receiver, 5 13 trustee, or other court-appointed fiduciary, that fiduciary. 5 14 7. The person executing the document shall sign the 5 15 document and state beneath or opposite the person's signature, 5 16 the person's name, and the capacity in which the person signs. 5 17 8. If, pursuant to any provision of this chapter, the 5 18 secretary has prescribed a mandatory form for the document, 5 19 the document shall be in or on the prescribed form. 5 20 9. The document must be delivered to the secretary for 5 21 filing and must be accompanied by the correct filing fee as 5 22 provided in this subchapter. 5 23 Sec. 5. NEW SECTION. 501A.202 FILING DUTY OF SECRETARY 5 24 OF STATE. 5 25 1. If a document delivered to the secretary for filing 5 26 satisfies the requirements of section 501A.201, the secretary 5 27 shall file it and issue any necessary certificate. 5 28 2. The secretary files a document by stamping or otherwise 5 29 endorsing "filed", together with the secretary's name and 5 30 official title and the date and time of receipt, on both the 5 31 document and the receipt for the filing fee, and recording the 5 32 document in the records of the secretary. After filing a 5 33 document, and except as provided in section 501A.204, the 5 34 secretary shall deliver the document, with the filing fee 5 35 receipt, or acknowledgment of receipt if no fee is required, 6 1 attached to the domestic cooperative or foreign cooperative or 6 2 its representative. 6 3 3. If the secretary refuses to file a document, the 6 4 secretary shall return it to the domestic cooperative or 6 5 foreign cooperative or its representative within ten days 6 6 after the document was received by the secretary, together 6 7 with a brief, written explanation of the reason for the 6 8 refusal. 6 9 4. The secretary's duty to file documents under this 6 10 section is ministerial. Filing or refusing to file a document 6 11 does not do any of the following: 6 12 a. Affect the validity or invalidity of the document in 6 13 whole or in part. 6 14 b. Relate to the correctness or incorrectness of 6 15 information contained in the document. 6 16 c. Create a presumption that the document is valid or 6 17 invalid or that information contained in the document is 6 18 correct or incorrect. 6 19 Sec. 6. NEW SECTION. 501A.203 EFFECTIVE TIME AND DATE OF 6 20 DOCUMENTS. 6 21 1. Except as provided in subsection 2 and section 6 22 501A.204, subsection 3, a document accepted for filing is 6 23 effective at the later of the following times: 6 24 a. At the time of filing on the date the document is 6 25 filed, as evidenced by the secretary's date and time 6 26 endorsement on the original document. 6 27 b. At the time specified in the document as its effective 6 28 time on the date the document is filed. 6 29 2. A document may specify a delayed effective time and 6 30 date, and if the document does so, the document becomes 6 31 effective at the time and date specified. If a delayed 6 32 effective date but no time is specified, the document is 6 33 effective at the close of business on that date. A delayed 6 34 effective date for a document shall not be later than the 6 35 ninetieth day after the date the document is filed. 7 1 Sec. 7. NEW SECTION. 501A.204 CORRECTING FILED 7 2 DOCUMENTS. 7 3 1. A domestic cooperative or foreign cooperative may 7 4 correct a document filed by the secretary if the document 7 5 satisfies any of the following requirements: 7 6 a. Contains an incorrect statement. 7 7 b. Was defectively executed, attested, sealed, verified, 7 8 or acknowledged. 7 9 2. A document is corrected by complying with all of the 7 10 following: 7 11 a. By preparing articles of correction that satisfy all of 7 12 the following requirements: 7 13 (1) Describe the document, including its filing date, or 7 14 attach a copy of the document to the articles. 7 15 (2) Specify the incorrect statement and the reason the 7 16 statement is incorrect or the manner in which the execution 7 17 was defective. 7 18 (3) Correct the incorrect statement or defective 7 19 execution. 7 20 b. By delivering the articles of correction to the 7 21 secretary for filing. 7 22 3. Articles of correction are effective on the effective 7 23 date of the document the articles correct, except as to 7 24 persons relying on the uncorrected document and adversely 7 25 affected by the correction. As to those persons, articles of 7 26 correction are effective when filed. 7 27 Sec. 8. NEW SECTION. 501A.205 FEES. 7 28 1. The secretary shall collect the following fees when 7 29 documents described in this subsection are delivered to the 7 30 secretary's office for filing: 7 31 a. Articles of organization ............................. $50 7 32 b. Application for use of indistinguishable name ........ $10 7 33 c. Application for reserved name ........................ $10 7 34 d. Notice of transfer of reserved name .................. $10 7 35 e. Application for registered name per month 8 1 or part thereof ............................................. $ 2 8 2 f. Application for renewal of registered name ........... $20 8 3 g. Statement of change of registered agent or 8 4 registered office or both ................................ No fee 8 5 h. Agent's statement of change of registered 8 6 office for each affected cooperative ..................... No fee 8 7 i. Agent's statement of resignation .................. No fee 8 8 j. Amendment of articles of organization ............... $ 50 8 9 k. Restatement of articles of organization with 8 10 amendment of articles ...................................... $ 50 8 11 l. Articles of merger .................................. $ 50 8 12 m. Articles of dissolution ............................. $ 5 8 13 n. Articles of revocation of dissolution ............... $ 5 8 14 o. Certificate of administrative dissolution ......... No fee 8 15 p. Application for reinstatement following 8 16 administrative dissolution ................................ $ 5 8 17 q. Certificate of reinstatement ...................... No fee 8 18 r. Certificate of judicial dissolution ............... No fee 8 19 s. Application for certificate of authority ............ $100 8 20 t. Application for amended certificate of authority .... $100 8 21 u. Application for certificate of cancellation ......... $ 10 8 22 v. Certificate of revocation of authority to transact 8 23 business ................................................. No fee 8 24 w. Articles of correction .............................. $ 5 8 25 x. Application for certificate of existence or 8 26 authorization .............................................. $ 5 8 27 y. Any other document required or permitted to 8 28 be filed by this chapter ................................... $ 5 8 29 2. The secretary shall collect a fee of five dollars each 8 30 time process is served on the secretary under this chapter. 8 31 The party to a proceeding causing service of process is 8 32 entitled to recover this fee as costs if the party prevails in 8 33 the proceeding. 8 34 3. The secretary shall collect the following fees for 8 35 copying and certifying the copy of any filed document relating 9 1 to a domestic cooperative or foreign cooperative: 9 2 a. One dollar a page for copying. 9 3 b. Five dollars for the certificate. 9 4 Sec. 9. NEW SECTION. 501A.206 FORMS. 9 5 1. The secretary may prescribe and furnish on request 9 6 forms, including but not limited to the following: 9 7 a. An application for a certificate of existence. 9 8 b. A foreign cooperative's application for a certificate 9 9 of authority to transact business in this state. 9 10 c. A foreign cooperative's application for a certificate 9 11 of withdrawal. 9 12 If the secretary so requires, use of these listed forms 9 13 prescribed by the secretary is mandatory. 9 14 2. The secretary may prescribe and furnish on request 9 15 forms, for other documents required or permitted to be filed 9 16 by this chapter but their use is not mandatory. 9 17 Sec. 10. NEW SECTION. 501A.207 APPEAL FROM SECRETARY OF 9 18 STATE'S REFUSAL TO FILE DOCUMENT. 9 19 1. If the secretary refuses to file a document delivered 9 20 to the secretary's office for filing, the domestic cooperative 9 21 or foreign cooperative may appeal the refusal, within thirty 9 22 days after the return of the document, to the district court 9 23 for the county in which the cooperative's principal office or, 9 24 if none in this state, where its registered office is or will 9 25 be located. The appeal is commenced by petitioning the court 9 26 to compel filing the document and by attaching to the petition 9 27 the document and the secretary's explanation of the refusal to 9 28 file. 9 29 2. The court may summarily order the secretary to file the 9 30 document or take other action the court considers appropriate. 9 31 3. The court's final decision may be appealed as in other 9 32 civil proceedings. 9 33 Sec. 11. NEW SECTION. 501A.208 EVIDENTIARY EFFECT OF 9 34 COPY OF FILED DOCUMENT. 9 35 A certificate attached to a copy of a document filed by the 10 1 secretary, bearing the secretary's signature, which may be in 10 2 facsimile, and the seal of the secretary, is conclusive 10 3 evidence that the original document is on file with the 10 4 secretary. 10 5 Sec. 12. NEW SECTION. 501A.209 CERTIFICATE OF EXISTENCE. 10 6 1. Anyone may apply to the secretary to furnish a 10 7 certificate of existence for a domestic cooperative or a 10 8 certificate of authorization for a foreign cooperative. 10 9 2. A certificate of existence or certificate of 10 10 authorization must set forth all of the following: 10 11 a. The domestic cooperative's name or the foreign 10 12 cooperative's name used in this state. 10 13 b. That one of the following applies: 10 14 (1) If it is a domestic cooperative, that it is duly 10 15 organized under the law of this state, the date of its 10 16 organization, and the period of its duration. 10 17 (2) If it is a foreign cooperative, that it is authorized 10 18 to transact business in this state. 10 19 c. That all fees required by this subchapter have been 10 20 paid. 10 21 d. That articles of dissolution have not been filed. 10 22 e. Other facts of record in the office of the secretary 10 23 that may be requested by the applicant. 10 24 3. Subject to any qualification stated in the certificate, 10 25 a certificate of existence or certificate of authorization 10 26 issued by the secretary may be relied upon as conclusive 10 27 evidence that the domestic cooperative or foreign cooperative 10 28 is in existence or is authorized to transact business in this 10 29 state. 10 30 Sec. 13. NEW SECTION. 501A.210 PENALTY FOR SIGNING FALSE 10 31 DOCUMENT. 10 32 1. A person commits an offense if that person signs a 10 33 document the person knows is false in any material respect 10 34 with intent that the document be delivered to the secretary 10 35 for filing. 11 1 2. An offense under this section is a serious misdemeanor 11 2 punishable by a fine of not to exceed one thousand dollars. 11 3 Sec. 14. NEW SECTION. 501A.211 SECRETARY OF STATE – 11 4 POWERS. 11 5 The secretary has the power reasonably necessary to perform 11 6 the duties required of the secretary by this chapter. 11 7 PART B 11 8 FOREIGN COOPERATIVES 11 9 Sec. 15. NEW SECTION. 501A.221 CERTIFICATE OF AUTHORITY. 11 10 A foreign cooperative may apply for a certificate of 11 11 authority to transact business in this state by delivering an 11 12 application to the secretary for filing. An application for 11 13 registration as a foreign cooperative shall set forth all of 11 14 the following: 11 15 1. The name of the foreign cooperative and, if different, 11 16 the name under which the foreign cooperative proposes to 11 17 register and transact business in this state. 11 18 2. The state or other jurisdiction in which the foreign 11 19 cooperative was formed and the date of its formation. 11 20 3. The street address of the registered office of the 11 21 foreign cooperative in this state, the name of the registered 11 22 agent at the office, and a statement that the registered 11 23 office and registered agent comply with the requirements of 11 24 section 501A.401. 11 25 4. The address of the office required to be maintained in 11 26 the state or other jurisdiction of its formation by the law of 11 27 that state or jurisdiction or, if not so required, of the 11 28 principal office of the foreign cooperative. 11 29 5. A copy of the articles of organization filed in the 11 30 foreign cooperative's state or other jurisdiction of formation 11 31 authorizing the foreign cooperative to do business in that 11 32 state or other jurisdiction, duly authenticated by the proper 11 33 officer of the state or other jurisdiction of its formation. 11 34 Sec. 16. NEW SECTION. 501A.222 CANCELLATION OF 11 35 CERTIFICATE OF AUTHORITY. 12 1 1. A foreign cooperative may cancel its certificate of 12 2 authority by delivering to the secretary for filing a 12 3 certificate of cancellation which shall set forth all of the 12 4 following: 12 5 a. The name of the foreign cooperative and the name of the 12 6 state or other jurisdiction under whose jurisdiction the 12 7 foreign cooperative was formed. 12 8 b. That the foreign cooperative is not transacting 12 9 business in this state and that the foreign cooperative 12 10 surrenders its registration to transact business in this 12 11 state. 12 12 c. That the foreign cooperative revokes the authority of 12 13 its registered agent to accept service on its behalf and 12 14 appoints the secretary as its agent for service of process in 12 15 any proceeding based on a cause of action arising during the 12 16 time the foreign cooperative was authorized to transact 12 17 business in this state. 12 18 d. A mailing address to which the secretary may mail a 12 19 copy of any process served on the secretary under paragraph 12 20 "c". 12 21 e. A commitment to notify the secretary in the future of 12 22 any change in the mailing address of the foreign cooperative. 12 23 2. The certificate of registration shall be canceled upon 12 24 the filing of the certificate of cancellation by the 12 25 secretary. 12 26 SUBCHAPTER 3 12 27 NAMES 12 28 Sec. 17. NEW SECTION. 501A.301 NAME. 12 29 1. A cooperative name must contain the word "cooperative". 12 30 2. Except as authorized by subsections 4 and 5, a 12 31 cooperative name must be distinguishable upon the records of 12 32 the secretary from all of the following: 12 33 a. The name of a cooperative, a traditional cooperative, a 12 34 limited liability company, limited partnership, or corporation 12 35 organized under the laws of this state or registered as a 13 1 foreign cooperative, foreign limited liability company, 13 2 foreign limited partnership, or foreign corporation in this 13 3 state. 13 4 b. A name reserved in the manner provided under the laws 13 5 of this state. 13 6 c. The fictitious name adopted by a foreign cooperative, 13 7 foreign limited liability company, foreign limited 13 8 partnership, or foreign corporation authorized to transact 13 9 business in this state because its real name is unavailable. 13 10 d. The corporate name of a nonprofit corporation 13 11 incorporated or authorized to transact business in this state. 13 12 4. A cooperative may apply to the secretary for 13 13 authorization to use a name that is not distinguishable upon 13 14 the secretary's records from one or more of the names 13 15 described in subsection 3. The secretary shall authorize use 13 16 of the name applied for if one of the following conditions 13 17 applies: 13 18 a. The other entity consents to the use in writing and 13 19 submits an undertaking in a form satisfactory to the secretary 13 20 to change the entity's name to a name that is distinguishable 13 21 upon the records of the secretary from the name of the 13 22 applying cooperative. 13 23 b. The applicant delivers to the secretary a certified 13 24 copy of the final judgment of a court of competent 13 25 jurisdiction establishing the applicant's right to use the 13 26 name applied for in this state. 13 27 5. A cooperative may use the name, including the 13 28 fictitious name, of another business entity that is used in 13 29 this state if the other business entity is formed under the 13 30 laws of this state or is authorized to transact business in 13 31 this state and the proposed user cooperative meets one of the 13 32 following conditions: 13 33 a. Has merged with the other business entity. 13 34 b. Has been formed by reorganization of the other business 13 35 entity. 14 1 c. Has acquired all or substantially all of the assets, 14 2 including the name, of the other business entity. 14 3 6. This chapter does not control the use of fictitious 14 4 names; however, if a cooperative uses a fictitious name in 14 5 this state, the cooperative shall deliver to the secretary for 14 6 filing a certified copy of the resolution of the cooperative 14 7 adopting the fictitious name. 14 8 Sec. 18. NEW SECTION. 501A.302 RESERVED NAME. 14 9 1. A person may reserve the exclusive use of a cooperative 14 10 name, including a fictitious name for a foreign cooperative 14 11 whose cooperative name is not available, by delivering an 14 12 application to the secretary for filing. The application must 14 13 set forth the name and address of the applicant and the name 14 14 proposed to be reserved. If the secretary finds that the 14 15 cooperative name applied for is available, the secretary shall 14 16 reserve the name for the applicant's exclusive use for a 14 17 nonrenewable one-hundred-twenty-day period. 14 18 2. The owner of a reserved cooperative name may transfer 14 19 the reservation to another person by delivering to the 14 20 secretary a signed notice of the transfer that states the name 14 21 and address of the transferee. 14 22 SUBCHAPTER 4 14 23 REGISTERED OFFICE AND AGENT 14 24 Sec. 19. NEW SECTION. 501A.401 REGISTERED OFFICE AND 14 25 REGISTERED AGENT. 14 26 A cooperative must continuously maintain in this state each 14 27 of the following: 14 28 1. A registered office that may be the same as any of its 14 29 places of business. 14 30 2. A registered agent who may be any of the following: 14 31 a. An individual who is a resident of this state and whose 14 32 business office is identical with the registered office. 14 33 b. A cooperative, domestic corporation, domestic limited 14 34 liability company, or not-for-profit domestic corporation 14 35 whose business office is identical with the registered office. 15 1 c. A foreign cooperative, foreign corporation, foreign 15 2 limited liability company, or not-for-profit foreign 15 3 corporation authorized to transact business in this state 15 4 whose business office is identical with the registered office. 15 5 Sec. 20. NEW SECTION. 501A.402 CHANGE OF REGISTERED 15 6 OFFICE OR REGISTERED AGENT. 15 7 1. A cooperative may change its registered office or 15 8 registered agent by delivering to the secretary for filing a 15 9 statement of change that sets forth the following: 15 10 a. The name of the domestic cooperative or foreign 15 11 cooperative. 15 12 b. If the current registered office is to be changed, the 15 13 street address of the new registered office. 15 14 c. If the current registered agent is to be changed, the 15 15 name of the new registered agent and the new agent's written 15 16 consent either on the statement or attached to the statement, 15 17 to the appointment. 15 18 d. That after the change or changes are made, the street 15 19 address of its registered office and the business office of 15 20 its registered agent will be identical. 15 21 2. A statement of change shall forthwith be filed in the 15 22 office of the secretary by a cooperative whenever its 15 23 registered agent dies, resigns, or ceases to satisfy the 15 24 requirements of section 501A.401. 15 25 3. If a registered agent changes the registered agent's 15 26 business address to another place, the registered agent may 15 27 change the business address and the address of the registered 15 28 agent by filing a statement as required in subsection 1 for 15 29 each cooperative, or a single statement for all cooperatives 15 30 named in the notice, except that the statement need be signed 15 31 only by the registered agent or agents and need not be 15 32 responsive to subsection 1, paragraph "c", and must recite 15 33 that a copy of the statement has been mailed to each 15 34 cooperative named in the notice. 15 35 4. The change of address of a registered office or the 16 1 change of registered agent becomes effective upon the filing 16 2 of such statement by the secretary. 16 3 Sec. 21. NEW SECTION. 501A.403 RESIGNATION OF REGISTERED 16 4 AGENT – DISCONTINUANCE OF REGISTERED OFFICE – STATEMENT. 16 5 1. A registered agent may resign the agent's agency 16 6 appointment by signing and delivering to the secretary for 16 7 filing an original statement of resignation. The statement 16 8 may include a statement that the registered office is also 16 9 discontinued. The registered agent shall send a copy of the 16 10 statement of resignation to the registered office, if not 16 11 discontinued, and to the cooperative at its principal office. 16 12 The agent shall certify to the secretary that the copy has 16 13 been sent to the cooperative, including the date the copy was 16 14 sent. 16 15 2. The agency appointment is terminated, and the 16 16 registered office discontinued if so provided, on the date on 16 17 which the statement is filed by the secretary. 16 18 Sec. 22. NEW SECTION. 501A.404 SERVICE ON DOMESTIC 16 19 COOPERATIVES. 16 20 1. A domestic cooperative's registered agent is the 16 21 cooperative's agent for service of process, notice, or demand 16 22 required or permitted by law to be served on the cooperative. 16 23 2. If a cooperative has no registered agent, or the agent 16 24 cannot with reasonable diligence be served, the cooperative 16 25 may be served by certified or restricted certified mail 16 26 addressed to the cooperative at its principal office. Service 16 27 is perfected under this subsection at the earliest of any of 16 28 the following: 16 29 a. The date the cooperative receives the mail. 16 30 b. The date shown on the return receipt for the restricted 16 31 certified mail, if signed on behalf of the cooperative. 16 32 c. Five days after its deposit in the United States mail, 16 33 as evidenced by the postmark, if mailed postpaid and correctly 16 34 addressed. 16 35 3. This section does not prescribe the only means, or 17 1 necessarily the required means, of serving a domestic 17 2 cooperative or foreign cooperative. 17 3 Sec. 23. NEW SECTION. 501A.405 SERVICE ON FOREIGN 17 4 COOPERATIVE. 17 5 1. The registered agent of a foreign cooperative 17 6 authorized to transact business in this state is the foreign 17 7 cooperative's agent for service of process, notice, or demand 17 8 required or permitted by law to be served on the foreign 17 9 cooperative. 17 10 2. A foreign cooperative may be served by certified mail 17 11 or restricted certified mail addressed to the foreign 17 12 cooperative at its principal office shown in its application 17 13 for a certificate of authority if the foreign cooperative 17 14 meets any of the following conditions: 17 15 a. Has no registered agent or its registered agent cannot 17 16 with reasonable diligence be served. 17 17 b. Has withdrawn from transacting business in this state. 17 18 c. Has had its certificate of authority revoked. 17 19 3. Service is perfected under subsection 2 at the earliest 17 20 of any of the following: 17 21 a. The date the foreign cooperative receives the mail. 17 22 b. The date shown on the return receipt for the restricted 17 23 certified mail, if signed on behalf of the foreign 17 24 cooperative. 17 25 c. Five days after its deposit in the United States mail, 17 26 as evidenced by the postmark, if mailed postpaid and correctly 17 27 addressed. 17 28 4. A foreign cooperative may also be served in any other 17 29 manner permitted by law. 17 30 SUBCHAPTER 5 17 31 ORGANIZATION 17 32 Sec. 24. NEW SECTION. 501A.501 ORGANIZATIONAL PURPOSE. 17 33 A cooperative may be formed and organized for any lawful 17 34 purpose for the benefit of its members, including but not 17 35 limited to any of the following purposes: 18 1 1. To store or market agricultural commodities, including 18 2 crops and livestock. 18 3 2. To market, process, or otherwise change the form or 18 4 marketability of agricultural commodities. The cooperative 18 5 may provide for the manufacturing or processing of those 18 6 commodities into products. 18 7 3. To accomplish other purposes that are necessary or 18 8 convenient to facilitate the production or marketing of 18 9 agricultural commodities or agricultural products by patron 18 10 members, other patrons, and other persons, and for other 18 11 purposes that are related to the business of the cooperative. 18 12 4. To provide products, supplies, and services to its 18 13 patron members, other patrons, and others. 18 14 5. For any other purpose that a cooperative is authorized 18 15 by law under chapter 499 or 501. 18 16 Sec. 25. NEW SECTION. 501A.502 ORGANIZERS. 18 17 1. QUALIFICATION. A cooperative may be organized by one 18 18 or more organizers who shall be adult natural persons, and who 18 19 may act for themselves as individuals or as the agents of 18 20 other entities. The organizers forming the cooperative need 18 21 not be members of the cooperative. 18 22 2. ROLE OF ORGANIZERS. If the first board of directors is 18 23 not named in the articles of organization, the organizers may 18 24 elect the first board or may act as directors with all of the 18 25 powers, rights, duties, and liabilities of directors, until 18 26 directors are elected or until a contribution is accepted, 18 27 whichever occurs first. 18 28 3. MEETING. After the filing of articles of organization, 18 29 the organizers or the directors named in the articles of 18 30 organization shall either hold an organizational meeting at 18 31 the call of a majority of the organizers or of the directors 18 32 named in the articles, or take written action for the purposes 18 33 of transacting business and taking actions necessary or 18 34 appropriate to complete the organization of the cooperative, 18 35 including but not limited to all of the following: 19 1 a. Amending the articles. 19 2 b. Electing directors. 19 3 c. Adopting bylaws. 19 4 d. Authorizing or ratifying the purchase, lease, or other 19 5 acquisition of suitable space, furniture, furnishings, 19 6 supplies, or materials. 19 7 e. Adopting a fiscal year. 19 8 f. Contracting to receive and accept contributions. 19 9 g. Making appropriate tax elections. 19 10 If a meeting is held, the person or persons calling the 19 11 meeting shall give at least three days' notice of the meeting 19 12 to each organizer or director named, stating the date, time, 19 13 and place of the meeting. Organizers and directors may waive 19 14 notice of an organizational meeting in the same manner that a 19 15 director may waive notice of meetings of the board. 19 16 Sec. 26. NEW SECTION. 501A.503 ARTICLES OF ORGANIZATION. 19 17 1. a. The articles of organization for the cooperative 19 18 shall include all of the following: 19 19 (1) The name of the cooperative. 19 20 (2) The purpose of the cooperative. 19 21 (3) The name and address of each organizer. 19 22 (4) The period of duration for the cooperative, if the 19 23 duration is not to be perpetual. 19 24 b. The articles may contain any other lawful provision. 19 25 2. EFFECT OF FILING. When the articles of organization or 19 26 an application for a certificate of authority has been filed 19 27 pursuant to subchapter 2, the designation of the cooperative's 19 28 registered office and agent under subchapter 4 has been filed 19 29 with the secretary and the required fee has been paid to the 19 30 secretary under section 501A.205, all of the following shall 19 31 be presumed: 19 32 a. All conditions precedent that are required to be 19 33 performed by the organizers have been complied with. 19 34 b. The organization of the cooperative has been organized 19 35 under the laws of this state as a separate legal entity. 20 1 c. The secretary shall issue a certificate of organization 20 2 to the cooperative. 20 3 Sec. 27. NEW SECTION. 501A.504 AMENDMENT OF ARTICLES. 20 4 1. a. The articles of organization of a cooperative shall 20 5 be amended only as follows: 20 6 (1) The board, by majority vote, must pass a resolution 20 7 stating the text of the proposed amendment. The text of the 20 8 proposed amendment and an attached mail or alternative ballot, 20 9 if the board has provided for a mail or alternative ballot in 20 10 the resolution or alternative method approved by the board and 20 11 stated in the resolution, shall be mailed or otherwise 20 12 distributed with a regular or special meeting notice to each 20 13 member. The notice shall designate the time and place of the 20 14 meeting for the proposed amendment to be considered and voted 20 15 on. 20 16 (2) If a quorum of the members is registered as being 20 17 present or represented by alternative vote at the meeting, the 20 18 proposed amendment is adopted if any of the following occurs: 20 19 (a) If approved by a majority of the votes cast. 20 20 (b) For a cooperative with articles or bylaws requiring 20 21 more than majority approval or other conditions for approval, 20 22 the amendment is approved by a proportion of the votes cast or 20 23 a number of total members as required by the articles or 20 24 bylaws and the conditions for approval in the articles or 20 25 bylaws have been satisfied. 20 26 b. After an amendment has been adopted by the members, the 20 27 amendment must be signed by the chairperson, vice chairperson, 20 28 records officer, or assistant records officer and a copy of 20 29 the amendment filed in the office of the secretary. 20 30 2. CERTIFIED STATEMENT. 20 31 a. The board shall prepare a certified statement affirming 20 32 that all of the following are true: 20 33 (1) The vote and meeting of the board adopting a 20 34 resolution of the proposed amendment. 20 35 (2) The notice given to members of the meeting at which 21 1 the amendment was adopted. 21 2 (3) The quorum registered at the meeting. 21 3 (4) The vote cast adopting the amendment. 21 4 b. The certified statement shall be signed by the 21 5 chairperson, vice chairperson, records officer, or financial 21 6 officer and filed with the records of the cooperative. 21 7 3. AMENDMENT BY DIRECTORS. A majority of directors may 21 8 amend the articles if the cooperative does not have any 21 9 members with voting rights. 21 10 4. FILING. An amendment of the articles shall be filed 21 11 with the secretary as required in section 501A.503. The 21 12 amendment is effective as provided in subchapter 2. 21 13 Sec. 28. NEW SECTION. 501A.505 EXISTENCE. 21 14 1. COMMENCEMENT. The existence of a cooperative shall 21 15 commence on or after the filing of articles of organization as 21 16 provided in section 501A.503. 21 17 2. DURATION. A cooperative shall have a perpetual 21 18 duration unless the cooperative provides for a limited period 21 19 of duration in the articles. 21 20 Sec. 29. NEW SECTION. 501A.506 BYLAWS. 21 21 1. REQUIRED. A cooperative shall have bylaws governing 21 22 the cooperative's business affairs, structure, the 21 23 qualifications, classification, rights and obligations of 21 24 members, and the classifications, allocations, and 21 25 distributions of membership interests, which are not otherwise 21 26 provided in the articles or by this chapter. 21 27 2. CONTENTS. 21 28 a. If not stated in the articles, a cooperative's bylaws 21 29 must state all of the following: 21 30 (1) The purpose of the cooperative. 21 31 (2) The capital structure of the cooperative to the extent 21 32 not stated in the articles, including a statement of the 21 33 classes and relative rights, preferences, and restrictions 21 34 granted to or imposed upon each class of member interests, the 21 35 rights to share in profits or distributions of the 22 1 cooperative, and the authority to issue membership interests, 22 2 which may be designated to be determined by the board. 22 3 (3) A provision designating the voting and governance 22 4 rights, to the extent not stated in the articles, including 22 5 which membership interests have voting power and any 22 6 limitations or restrictions on the voting power, which shall 22 7 be in accordance with the provisions of this chapter. 22 8 (4) A statement that patron membership interests with 22 9 voting power shall be restricted to one vote for each member 22 10 regardless of the amount of patron membership interests held 22 11 in the affairs of the cooperative or a statement describing 22 12 the allocation of voting power allocated as prescribed in this 22 13 chapter. 22 14 (5) A statement that membership interests held by a member 22 15 are transferable only with the approval of the board or as 22 16 provided in the bylaws. 22 17 (6) If nonpatron membership interests are authorized, all 22 18 of the following: 22 19 (a) A statement as to how profits and losses will be 22 20 allocated and cash will be distributed between patron 22 21 membership interests collectively and nonpatron membership 22 22 interests collectively to the extent not stated in the 22 23 articles. 22 24 (b) A statement that net income allocated to a patron 22 25 membership interest as determined by the board in excess of 22 26 dividends and additions to reserves shall be distributed on 22 27 the basis of patronage. 22 28 (c) A statement that the records of the cooperative shall 22 29 include patron membership interests and, if authorized, 22 30 nonpatron membership interests, which may be further described 22 31 in the bylaws of any classes and in the reserves. 22 32 b. The bylaws may contain any provision relating to the 22 33 management or regulation of the affairs of the cooperative 22 34 that are not inconsistent with law or the articles, and shall 22 35 include all of the following: 23 1 (1) The number of directors and the qualifications, manner 23 2 of election, powers, duties, and compensation, if any, of 23 3 directors. 23 4 (2) The qualifications of members and any limitations on 23 5 their number. 23 6 (3) The manner of admission, withdrawal, suspension, and 23 7 expulsion of members. 23 8 (4) Generally, the governance rights, financial rights, 23 9 assignability of governance and financial rights, and other 23 10 rights, privileges, and obligations of members and their 23 11 membership interests, which may be further described in member 23 12 control agreements. 23 13 (5) Any provisions required by the articles to be in the 23 14 bylaws. 23 15 3. ADOPTION. 23 16 a. Bylaws shall be adopted before any distributions to 23 17 members, but if the articles or bylaws provide that rights of 23 18 contributors to a class of membership interest will be 23 19 determined in the bylaws, the bylaws must be adopted before 23 20 the acceptance of any contributions to that class. 23 21 b. Subject to subsections 4, 5, and 6, the bylaws of a 23 22 cooperative may be adopted or amended by the directors, or the 23 23 members may adopt or amend bylaws at a regular or special 23 24 members' meeting if all of the following apply: 23 25 (1) The notice of the regular or special meeting contains 23 26 a statement that the bylaws or restated bylaws will be voted 23 27 upon and copies are included with the notice, or copies are 23 28 available upon request from the cooperative and a summary 23 29 statement of the proposed bylaws or amendment is included with 23 30 the notice. 23 31 (2) A quorum is registered as being present or represented 23 32 by mail or alternative voting method if the mail or 23 33 alternative voting method is authorized by the board. 23 34 (3) The bylaws or amendment is approved by a majority vote 23 35 cast, or for a cooperative with articles or bylaws requiring 24 1 more than majority approval or other conditions for approval, 24 2 the bylaws or amendment is approved by a proportion of the 24 3 vote cast or a number of the total members as required by the 24 4 articles or bylaws and the conditions for approval in the 24 5 articles or bylaws have been satisfied. 24 6 c. Until the next annual or special members' meeting, the 24 7 majority of directors may adopt and amend bylaws for the 24 8 cooperative that are consistent with subsections 4, 5, and 6, 24 9 which may be further amended or repealed by the members at an 24 10 annual or special members' meeting. 24 11 4. AMENDMENT OF BYLAWS BY BOARD OR MEMBERS. 24 12 a. The board may amend the bylaws at any time to add, 24 13 change, or delete a provision, unless any of the following 24 14 applies: 24 15 (1) This chapter, the articles, or the bylaws reserve the 24 16 power exclusively to the members in whole or in part. 24 17 (2) A particular bylaw expressly prohibits the board from 24 18 doing so. 24 19 b. Any amendment of the bylaws adopted by the board must 24 20 be distributed to the members no later than ten days after 24 21 adoption and the notice of the annual meeting of the members 24 22 must contain a notice and summary or the actual amendments to 24 23 the bylaws adopted by the board. 24 24 c. The members may amend the bylaws even though the bylaws 24 25 may also be amended by the board. 24 26 5. BYLAW CHANGING QUORUM OR VOTING REQUIREMENT FOR 24 27 MEMBERS. 24 28 a. (1) The members may amend the bylaws to fix a greater 24 29 quorum or voting requirement for members, or voting groups of 24 30 members, than is required under this chapter. 24 31 (2) An amendment to the bylaws to add, change, or delete a 24 32 greater quorum or voting requirement for members shall meet 24 33 the same quorum requirement and be adopted by the same vote 24 34 and voting groups required to take action under the quorum and 24 35 voting requirements then in effect or proposed to be adopted, 25 1 whichever is greater. 25 2 b. A bylaw that fixes a greater quorum or voting 25 3 requirement for members under paragraph "a" shall not be 25 4 adopted and shall not be amended by the board. 25 5 6. BYLAW CHANGING QUORUM OR VOTING REQUIREMENT FOR 25 6 DIRECTORS. 25 7 a. A bylaw that fixes a greater quorum or voting 25 8 requirement for the board may be amended by any of the 25 9 following methods: 25 10 (1) If adopted by the members, only by the members. 25 11 (2) If adopted by the board, either by the members or by 25 12 the board. 25 13 b. A bylaw adopted or amended by the members that fixes a 25 14 greater quorum or voting requirement for the board may provide 25 15 that the bylaw may be amended only by a specified vote of 25 16 either the members or the board, but if the bylaw is to be 25 17 amended by a specified vote of the members, the bylaw must be 25 18 adopted by the same specified vote of the members. 25 19 c. Action by the board under paragraph "a", subparagraph 25 20 (2), to adopt or amend a bylaw that changes the quorum or 25 21 voting requirement for the board shall meet the same quorum 25 22 requirement and be adopted by the same vote required to take 25 23 action under the quorum and voting requirement then in effect 25 24 or proposed to be adopted, whichever is greater. 25 25 7. EMERGENCY BYLAWS. 25 26 a. Unless otherwise provided in the articles or bylaws, 25 27 the board may adopt bylaws to be effective only in an 25 28 emergency as defined in paragraph "d". The emergency bylaws, 25 29 which are subject to amendment or repeal by the members, may 25 30 include all provisions necessary for managing the cooperative 25 31 during the emergency, including any of the following: 25 32 (1) Procedures for calling a meeting of the board. 25 33 (2) Quorum requirements for the meeting. 25 34 (3) Designation of additional or substitute directors. 25 35 b. All provisions of the regular bylaws consistent with 26 1 the emergency bylaws shall remain in effect during the 26 2 emergency. The emergency bylaws shall not be effective after 26 3 the emergency ends. 26 4 c. All of the following shall apply to action taken in 26 5 good faith in accordance with the emergency bylaws: 26 6 (1) The action binds the cooperative. 26 7 (2) The action shall not be the basis for imposition of 26 8 liability on any director, officer, employee, or agent of the 26 9 cooperative on the grounds that the action was not authorized 26 10 cooperative action. 26 11 d. An emergency exists for the purposes of this section, 26 12 if a quorum of the directors cannot readily be obtained 26 13 because of some catastrophic event. 26 14 Sec. 30. NEW SECTION. 501A.507 COOPERATIVE RECORDS. 26 15 1. PERMANENT RECORDS REQUIRED TO BE KEPT. A cooperative 26 16 shall keep as permanent records minutes of all meetings of its 26 17 members and of the board, a record of all actions taken by the 26 18 members or the board without a meeting by a written unanimous 26 19 consent in lieu of a meeting, and a record of all waivers of 26 20 notices of meetings of the members and of the board. 26 21 2. ACCOUNTING RECORDS. A cooperative shall maintain 26 22 appropriate accounting records. 26 23 3. FORMAT. A cooperative shall maintain its records in 26 24 written form or in another form capable of conversion into 26 25 written form within a reasonable time. 26 26 4. COPIES. A cooperative shall keep a copy of each of the 26 27 following records at its principal office: 26 28 a. Its articles and other governing instruments. 26 29 b. Its bylaws or other similar instruments. 26 30 c. A record of the names and addresses of its members, in 26 31 a form that allows preparation of an alphabetical list of 26 32 members with each member's address. 26 33 d. The minutes of members' meetings, and records of all 26 34 actions taken by members without a meeting by unanimous 26 35 written consent in lieu of a meeting, for the past three 27 1 years. 27 2 e. All written communications within the past three years 27 3 to members as a group or to any class of members as a group. 27 4 f. A list of the names and business addresses of its 27 5 current board members and officers. 27 6 g. All financial statements prepared for periods ending 27 7 during the last fiscal year. 27 8 5. Except as otherwise limited by this chapter, the board 27 9 of a cooperative shall have discretion to determine what 27 10 records are appropriate for the purposes of the cooperative, 27 11 the length of time records are to be retained, and policies 27 12 relating to the confidentiality, disclosure, inspection, and 27 13 copying of the records of the cooperative. 27 14 SUBCHAPTER 6 27 15 POWERS AND AUTHORITIES 27 16 Sec. 31. NEW SECTION. 501A.601 POWERS. 27 17 1. GENERALLY. 27 18 a. In addition to other powers, a cooperative as an agent 27 19 or otherwise may do any of the following: 27 20 (1) Perform every act necessary or proper to the conduct 27 21 of the cooperative's business or the accomplishment of the 27 22 purposes of the cooperative. 27 23 (2) Enjoy other rights, powers, or privileges granted by 27 24 the laws of this state to other cooperatives, except those 27 25 that are inconsistent with the express provisions of this 27 26 chapter. 27 27 (3) Have the powers provided in section 501A.501 and in 27 28 this section. 27 29 b. This section does not give a cooperative the power or 27 30 authority to exercise the powers of a credit union under 27 31 chapter 533, a bank under chapter 524, or a savings and loan 27 32 association under chapter 534. 27 33 2. DEALING IN PRODUCTS. A cooperative may buy, sell, or 27 34 deal in its own commodities or products or those of another 27 35 person, including but not limited to those of its members, 28 1 patrons, or nonmembers; another cooperative organized under 28 2 this chapter or another cooperative association organized 28 3 under other law including a traditional cooperative, or 28 4 members or patrons of such cooperatives or cooperative 28 5 associations. A cooperative may negotiate the price at which 28 6 its commodities products may be sold. 28 7 3. CONTRACTS WITH MEMBERS. A cooperative may enter into 28 8 or become a party to a contract or agreement for the 28 9 cooperative or for the cooperative's members or patrons or 28 10 between the cooperative and its members or patrons. 28 11 4. HOLDING AND TRANSACTIONS OF REAL AND PERSONAL PROPERTY. 28 12 a. A cooperative may purchase and hold, lease, mortgage, 28 13 encumber, sell, exchange, and convey as a legal entity real, 28 14 personal, and intellectual property, including real estate, 28 15 buildings, personal property, patents, and copyrights as the 28 16 business of the cooperative may require, including but not 28 17 limited to the sale or other disposition of assets required by 28 18 the business of the cooperative as determined by the board. 28 19 b. A cooperative may take, receive, and hold real or 28 20 personal property, including the principal and interest of 28 21 money or other negotiable instruments and rights in a 28 22 contract, in trust for any purpose not inconsistent with the 28 23 purposes of the cooperative in its articles or bylaws. The 28 24 cooperative may exercise fiduciary powers in relation to 28 25 taking, receiving, and holding the real or personal property. 28 26 5. BUILDINGS. A cooperative may erect buildings or other 28 27 structures or facilities on the cooperative's owned or leased 28 28 property or on a right-of-way legally acquired by the 28 29 cooperative. 28 30 6. DEBT INSTRUMENTS. A cooperative may issue bonds, 28 31 debentures, or other evidence of indebtedness and may borrow 28 32 money, may secure any of its obligations by mortgage of or 28 33 creation of a security interest in or other encumbrances or 28 34 assignment of all or any of its property, franchises, or 28 35 income, and may issue guarantees for any legal purpose. The 29 1 cooperative may form special purpose business entities to 29 2 secure assets of the cooperative. 29 3 7. ADVANCES TO PATRONS. A cooperative may make advances 29 4 to its members or patrons on products delivered by the members 29 5 or patrons to the cooperative. 29 6 8. DEPOSITS. A cooperative may accept donations or 29 7 deposits of money or real or personal property from other 29 8 cooperatives or associations from which the cooperative is 29 9 constituted. 29 10 9. LENDING, BORROWING, AND INVESTING. A cooperative may 29 11 loan or borrow money to or from members, cooperatives, or 29 12 associations from which the cooperative is constituted with 29 13 security that the cooperative considers sufficient. A 29 14 cooperative may invest and reinvest its funds. 29 15 10. PENSIONS AND BENEFITS. A cooperative may pay 29 16 pensions, retirement allowances, and compensation for past 29 17 services to and for the benefit of, and establish, maintain, 29 18 continue, and carry out, wholly or partially at the expense of 29 19 the cooperative, employee, or incentive benefit plans, trusts, 29 20 and provisions to or for the benefit of any or all of its and 29 21 its related organizations' officers, managers, directors, 29 22 governors, employees, and agents; and in the case of a related 29 23 organization that is a cooperative, members who provide 29 24 services to the cooperative, and any of their families, 29 25 dependents, and beneficiaries. A cooperative may indemnify 29 26 and purchase and maintain insurance for and on behalf of a 29 27 fiduciary of any of these employee benefit and incentive 29 28 plans, trusts, and provisions. 29 29 11. INSURANCE. A cooperative may provide for its benefit 29 30 life insurance and other insurance with respect to the 29 31 services of any or all of its members, managers, directors, 29 32 employees, and agents, or on the life of a member for the 29 33 purpose of acquiring at the death of the member any or all 29 34 membership interests in the cooperative owned by the member. 29 35 12. OWNERSHIP INTERESTS IN OTHER ENTITIES. 30 1 a. A cooperative may purchase, acquire, hold, or dispose 30 2 of the ownership interests of another business entity or 30 3 organize business entities whether organized under the laws of 30 4 this state or another state or the United States and assume 30 5 all rights, interests, privileges, responsibilities, and 30 6 obligations arising out of the ownership interests, including 30 7 a business entity organized as any of the following: 30 8 (1) As a federation of associations. 30 9 (2) For the purpose of forming a district, state, or 30 10 national marketing sales or service agency. 30 11 (3) For the purpose of acquiring marketing facilities at 30 12 terminal or other markets in this state or other states. 30 13 b. A cooperative may purchase, own, and hold ownership 30 14 interests, including stock and other equity interests, 30 15 memberships, interests in nonstock capital, and evidences of 30 16 indebtedness of any domestic business entity or foreign 30 17 business entity. 30 18 13. FIDUCIARY POWERS. A cooperative may exercise any and 30 19 all fiduciary powers in relations with members, cooperatives, 30 20 or business entities from which the cooperative is 30 21 constituted. 30 22 Sec. 32. NEW SECTION. 501A.602 EMERGENCY POWERS. 30 23 1. In anticipation of or during an emergency as defined in 30 24 this section, the board may do any of the following: 30 25 a. Modify lines of succession to accommodate the 30 26 incapacity of any director, officer, employee, or agent. 30 27 b. Relocate the principal office, designate alternative 30 28 principal offices or regional offices, or authorize the 30 29 officers to do so. 30 30 2. During an emergency, unless emergency bylaws provide 30 31 otherwise, all of the following apply: 30 32 a. A notice of a meeting of the board need be given only 30 33 to those directors to whom it is practicable to reach and may 30 34 be given in any practicable manner, including by publication 30 35 or radio. 31 1 b. One or more officers of the cooperative present at a 31 2 meeting of the board may be deemed to be directors for the 31 3 meeting, in order of rank and within the same rank in order of 31 4 seniority, as necessary to achieve a quorum. 31 5 3. All of the following apply to cooperative action taken 31 6 in good faith during an emergency under this section to 31 7 further the ordinary business affairs of the cooperative: 31 8 a. The action binds the cooperative. 31 9 b. The action shall not be the basis for the imposition of 31 10 liability on any director, officer, employee, or agent of the 31 11 cooperative on the grounds that the action was not an 31 12 authorized cooperative action. 31 13 4. An emergency exists for purposes of this section if a 31 14 quorum of the directors cannot readily be obtained because of 31 15 a catastrophic event. 31 16 Sec. 33. NEW SECTION. 501A.603 AGRICULTURAL COMMODITIES 31 17 AND PRODUCTS – MARKETING CONTRACTS. 31 18 1. AUTHORITY. A cooperative and its patron member or 31 19 patron may make and execute a marketing contract, requiring 31 20 the patron member or patron to sell a specified portion of the 31 21 patron member's or patron's agricultural commodity or product 31 22 or specified commodity or product produced from a certain area 31 23 exclusively to or through the cooperative or facility 31 24 established by the cooperative. 31 25 2. TITLE TO COMMODITIES OR PRODUCTS. If a sale is 31 26 contracted to the cooperative, the sale shall transfer title 31 27 to the commodity or product absolutely, except for a recorded 31 28 lien or security interest against the agricultural commodity 31 29 or product of the patron member or patron as provided in 31 30 article 9 of chapter 554, and provisions in Title XIV, 31 31 subtitle 3, governing agricultural liens, and liens granted 31 32 against farm products under federal law, to the cooperative on 31 33 delivery of the commodity or product or at another specified 31 34 time if expressly provided in the contract. The contract may 31 35 allow the cooperative to sell or resell the commodity or 32 1 product of its patron member or patron with or without taking 32 2 title to the commodity or product, and pay the resale price to 32 3 the patron member or patron, after deducting all necessary 32 4 selling, overhead, and other costs and expenses, including 32 5 other proper reserves and interest. 32 6 3. TERM OF CONTRACT. A single term of a marketing 32 7 contract shall not exceed ten years, but a marketing contract 32 8 may be made self-renewing for periods not exceeding five years 32 9 each, subject to the right of either party to terminate by 32 10 giving written notice of the termination during a period of 32 11 the current term as specified in the contract. 32 12 4. DAMAGES FOR BREACH OF CONTRACT. The cooperative's 32 13 bylaws or marketing contract in which the cooperative is a 32 14 party may set a specific sum as liquidated damages to be paid 32 15 by the patron member or patron to the cooperative for breach 32 16 of any provision of the marketing contract regarding the sale 32 17 or delivery or withholding of a commodity or product and may 32 18 provide that the patron member or patron shall pay the costs, 32 19 premiums for bonds, expenses, and fees if an action is brought 32 20 on the contract by the cooperative. The remedies for breach 32 21 of contract are valid and enforceable in the courts of this 32 22 state. The provisions shall be enforced as liquidated damages 32 23 and are not considered a penalty. 32 24 5. INJUNCTION AGAINST BREACH OF CONTRACT. If there is a 32 25 breach or threatened breach of a marketing contract by a 32 26 patron member or patron, the cooperative is entitled to an 32 27 injunction to prevent the further breach of the contract and 32 28 to a decree of specific performance of the contract. Pending 32 29 the adjudication of the action after filing a complaint 32 30 showing the breach or threatened breach and filing a 32 31 sufficient bond, the cooperative is entitled to a temporary 32 32 restraining order and preliminary injunction against the 32 33 patron member or patron. 32 34 6. PENALTIES FOR CONTRACT INTERFERENCE AND FALSE REPORTS. 32 35 A person who knowingly induces or attempts to induce any 33 1 member or patron of a cooperative organized under this chapter 33 2 to breach a marketing contract with the cooperative, or who 33 3 maliciously and knowingly spreads false reports about the 33 4 cooperative's finances or management, is guilty of a simple 33 5 misdemeanor. 33 6 7. CIVIL DAMAGES FOR CONTRACT INTERFERENCE AND FALSE 33 7 REPORTS. In addition to the penalty provided in subsection 6, 33 8 the person may be liable to the cooperative for civil damages 33 9 for any violation of that subsection. Each violation shall 33 10 constitute a separate offense. 33 11 SUBCHAPTER 7 33 12 DIRECTORS AND OFFICERS 33 13 Sec. 34. NEW SECTION. 501A.701 BOARD GOVERNS 33 14 COOPERATIVE. 33 15 A cooperative shall be governed by its board of directors, 33 16 which shall take all action for and on behalf of the 33 17 cooperative, except those actions reserved or granted to 33 18 members. Board action shall be by the affirmative vote of a 33 19 majority of the directors voting at a duly called meeting 33 20 unless a greater majority is required by the articles or 33 21 bylaws. A director individually or collectively with other 33 22 directors does not have authority to act for or on behalf of 33 23 the cooperative unless authorized by the board. A director 33 24 may advocate interests of members or member groups to the 33 25 board, but the fiduciary duty of each director is to represent 33 26 the best interests of the cooperative and all members 33 27 collectively. 33 28 Sec. 35. NEW SECTION. 501A.702 NUMBER OF DIRECTORS. 33 29 The board shall not have less than five directors, except 33 30 that a cooperative with fifty or fewer members may have three 33 31 or more directors as prescribed in the cooperative's articles 33 32 or bylaws. 33 33 Sec. 36. NEW SECTION. 501A.703 ELECTION OF DIRECTORS. 33 34 1. FIRST BOARD. The organizers shall elect and obtain the 33 35 acknowledgment of the first board to serve until directors are 34 1 elected by members. Until election by members, the first 34 2 board shall appoint directors to fill any vacancies. 34 3 2. GENERALLY. 34 4 a. Directors shall be elected for the term, at the time, 34 5 and in the manner provided in this section and the bylaws. 34 6 b. A majority of the directors shall be members and a 34 7 majority of the directors shall be elected exclusively by the 34 8 members holding patron membership interests unless otherwise 34 9 provided in the articles or bylaws. 34 10 c. The voting authority of the directors may be allocated 34 11 according to equity classifications or allocation units of the 34 12 cooperative. If the cooperative authorizes nonpatron 34 13 membership interests, one of the following must apply: 34 14 (1) At least one-half of the voting power on matters of 34 15 the cooperative that are not specific to equity 34 16 classifications or allocation units shall be allocated to the 34 17 directors elected by members holding patron membership 34 18 interests. 34 19 (2) The directors elected by the members holding patron 34 20 membership interests shall have at least an equal voting power 34 21 or shall not have a minority voting power on general matters 34 22 of the cooperative that are not specific to equity 34 23 classifications or allocation units. 34 24 d. A director holds office for the term the director was 34 25 elected and until a successor is elected and has qualified, or 34 26 until the earlier death, resignation, removal, or 34 27 disqualification of the director. 34 28 e. The expiration of a director's term with or without 34 29 election of a qualified successor does not make the prior or 34 30 subsequent acts of the director or the board void or voidable. 34 31 f. Subject to any limitation in the articles or bylaws, 34 32 the board may set the compensation of directors. 34 33 g. Directors may be divided into or designated and elected 34 34 by class or other distinction as provided in the articles or 34 35 bylaws. 35 1 h. A director may resign by giving written notice to the 35 2 chairperson of the board or the board. The resignation is 35 3 effective without acceptance when the notice is given to the 35 4 chairperson of the board or the board unless a later effective 35 5 time is specified in the notice. 35 6 3. ELECTION AT REGULAR MEETING. Directors shall be 35 7 elected at the regular members' meeting for the terms of 35 8 office prescribed in the bylaws. Except for directors elected 35 9 at district meetings or special meetings to fill a vacancy, 35 10 all directors shall be elected at the regular members' 35 11 meeting. There shall be no cumulative voting for directors 35 12 except as provided in this chapter and the articles or bylaws. 35 13 4. DISTRICT OR LOCAL UNIT ELECTION OF DIRECTORS. For a 35 14 cooperative with districts or other units, members may elect 35 15 directors on a district or unit basis if provided in the 35 16 bylaws. The directors may be nominated or elected at district 35 17 meetings if provided in the bylaws. Directors who are 35 18 nominated at district meetings shall be elected at the annual 35 19 regular members' meeting by vote of the entire membership, 35 20 unless the bylaws provide that directors who are nominated at 35 21 district meetings are to be elected by vote of the members of 35 22 the district, at the district meeting, or the annual regular 35 23 members' meeting. 35 24 5. VOTE BY MAIL OR ALTERNATIVE BALLOT. The following 35 25 shall apply to voting by mail or alternative ballot voting: 35 26 a. A member shall not vote for a director other than by 35 27 being present at a meeting or by mail ballot or alternative 35 28 ballot authorized by the board. 35 29 b. The ballot shall be in a form prescribed by the board. 35 30 c. The member shall mark the ballot for the candidate 35 31 chosen and mail the ballot to the cooperative in a sealed 35 32 plain envelope inside another envelope bearing the member's 35 33 name, or shall vote designating the candidate chosen by 35 34 alternative ballot in the manner prescribed by the board. 35 35 d. If the ballot of the member is received by the 36 1 cooperative on or before the date of the regular members' 36 2 meeting or as otherwise prescribed for alternative ballots, 36 3 the ballot shall be accepted and counted as the vote of the 36 4 absent member. 36 5 6. BUSINESS ENTITY MEMBERS MAY NOMINATE PERSONS FOR 36 6 DIRECTOR. If a member of a cooperative is not a natural 36 7 person, and the bylaws do not provide otherwise, the member 36 8 may appoint or elect one or more natural persons to be 36 9 eligible for election as a director. 36 10 7. TERM. A director holds office for the term the 36 11 director was elected and until a successor is elected and has 36 12 qualified, or the earlier death, resignation, removal, or 36 13 disqualification of the director. 36 14 8. ACTS NOT VOID OR VOIDABLE. The expiration of a 36 15 director's term with or without the election of a qualified 36 16 successor does not make prior or subsequent acts of the 36 17 director void or voidable. 36 18 9. COMPENSATION. Subject to any limitation in the 36 19 articles or bylaws, the board may fix the compensation of the 36 20 directors. 36 21 10. CLASSIFICATION. Directors may be divided into classes 36 22 as provided in the articles or bylaws. 36 23 Sec. 37. NEW SECTION. 501A.704 FILLING VACANCIES. 36 24 1. PATRON DIRECTORS. If a patron member director's 36 25 position becomes vacant or a new director position is created 36 26 for a director that was or is to be elected by patron members, 36 27 the board, in consultation with the directors elected by 36 28 patron members, shall appoint a patron member of the 36 29 cooperative to fill the director's position until the next 36 30 regular or special members' meeting. If there are no 36 31 directors elected by patron members on the board at the time 36 32 of the vacancy, a special patron members' meeting shall be 36 33 called to fill the patron member director vacancy. 36 34 2. NONPATRON DIRECTORS. If the vacating director was not 36 35 elected by the patron members or a new director position is 37 1 created, unless otherwise provided in the articles or bylaws, 37 2 the board shall appoint a director to fill the vacant position 37 3 by majority vote of the remaining or then serving directors 37 4 even though less than a quorum. At the next regular or 37 5 special members' meeting, the members or patron members shall 37 6 elect a director to fill the unexpired term of the vacant 37 7 director's position. 37 8 Sec. 38. NEW SECTION. 501A.705 REMOVAL OF DIRECTORS. 37 9 1. MODIFICATION. The provisions of this section apply 37 10 unless modified by the articles or the bylaws. 37 11 2. REMOVAL OF DIRECTORS. A director may be removed at any 37 12 time, with or without cause, if all of the following apply: 37 13 a. The director was named by the board to fill a vacancy. 37 14 b. The members have not elected directors in the interval 37 15 between the time of the appointment to fill a vacancy and the 37 16 time of the removal. 37 17 c. A majority of the remaining directors present 37 18 affirmatively vote to remove the director. 37 19 3. REMOVAL BY MEMBERS. Any one or all of the directors 37 20 may be removed at any time, with or without cause, by the 37 21 affirmative vote of the holders of a majority of the voting 37 22 power of membership interests entitled to vote at an election 37 23 of directors, provided that if a director has been elected 37 24 solely by the patron members or the holders of a class or 37 25 series of membership interests as stated in the articles or 37 26 bylaws, then that director may be removed only by the 37 27 affirmative vote of the holders of a majority of the voting 37 28 power of the patron members for a director elected by the 37 29 patron members or of all membership interests of that class or 37 30 series entitled to vote at an election of that director. 37 31 4. ELECTION OF REPLACEMENTS. New directors may be elected 37 32 at a meeting at which directors are removed. 37 33 Sec. 39. NEW SECTION. 501A.706 BOARD OF DIRECTORS' 37 34 MEETINGS. 37 35 1. TIME AND PLACE. Meetings of the board may be held from 38 1 time to time as provided in the articles or bylaws at any 38 2 place within or without the state that the board may select or 38 3 by any means described in subsection 2. If the board fails to 38 4 select a place for a meeting, the meeting must be held at the 38 5 principal executive office, unless the articles or bylaws 38 6 provide otherwise. 38 7 2. ELECTRONIC COMMUNICATIONS. 38 8 a. A conference among directors by any means of 38 9 communication through which the directors may simultaneously 38 10 hear each other during the conference constitutes a board 38 11 meeting, if the same notice is given of the conference as 38 12 would be required by subsection 3 for a meeting, and if the 38 13 number of directors participating in the conference would be 38 14 sufficient to constitute a quorum at a meeting. Participation 38 15 in a meeting by that means constitutes presence in person at 38 16 the meeting. 38 17 b. A director may participate in a board meeting not 38 18 described in paragraph "a" by any means of communication 38 19 through which the director, other directors so participating, 38 20 and all directors physically present at the meeting may 38 21 simultaneously hear each other during the meeting. 38 22 Participation in a meeting by that means constitutes presence 38 23 in person at the meeting. 38 24 3. CALLING MEETINGS AND NOTICE. Unless the articles or 38 25 bylaws provide for a different time period, a director may 38 26 call a board meeting by giving at least ten days' notice or, 38 27 in the case of organizational meetings, at least three days' 38 28 notice to all directors of the date, time, and place of the 38 29 meeting. The notice need not state the purpose of the meeting 38 30 unless this chapter, the articles, or the bylaws require it. 38 31 4. PREVIOUSLY SCHEDULED MEETINGS. If the day or date, 38 32 time, and place of a board meeting have been provided in the 38 33 articles or bylaws, or announced at a previous meeting of the 38 34 board, no notice is required. Notice of an adjourned meeting 38 35 need not be given other than by announcement at the meeting at 39 1 which adjournment is taken. 39 2 5. WAIVER OF NOTICE. A director may waive notice of a 39 3 meeting of the board. A waiver of notice by a director 39 4 entitled to notice is effective whether given before, at, or 39 5 after the meeting, and whether given in writing, orally, or by 39 6 attendance. Attendance by a director at a meeting is a waiver 39 7 of notice of that meeting, except where the director objects 39 8 at the beginning of the meeting to the transaction of business 39 9 because the meeting is not lawfully called or convened and 39 10 does not participate in the meeting after the objection. 39 11 6. ABSENT DIRECTORS. If the articles or bylaws so 39 12 provide, a director may give advance written consent or 39 13 opposition to a proposal to be acted on at a board meeting. 39 14 If the director is not present at the meeting, consent or 39 15 opposition to a proposal does not constitute presence for 39 16 purposes of determining the existence of a quorum, but consent 39 17 or opposition must be counted as the vote of a director 39 18 present at the meeting in favor of or against the proposal and 39 19 must be entered in the minutes or other record of action at 39 20 the meeting, if the proposal acted on at the meeting is 39 21 substantially the same or has substantially the same effect as 39 22 the proposal to which the director has consented or objected. 39 23 Sec. 40. NEW SECTION. 501A.707 QUORUM. 39 24 A majority, or a larger or smaller portion or number 39 25 provided in the articles or bylaws, of the directors currently 39 26 holding office is a quorum for the transaction of business. 39 27 In the absence of a quorum, a majority of the directors 39 28 present may adjourn a meeting from time to time until a quorum 39 29 is present. If a quorum is present when a duly called or held 39 30 meeting is convened, the directors present may continue to 39 31 transact business until adjournment, even though the 39 32 withdrawal of a number of directors originally present leaves 39 33 less than the proportion of number otherwise required for a 39 34 quorum. 39 35 Sec. 41. NEW SECTION. 501A.708 ACT OF BOARD OF 40 1 DIRECTORS. 40 2 1. Except as provided in subsection 2, the board shall 40 3 only take action by the affirmative vote of the greater of any 40 4 of the following: 40 5 a. A majority of directors present at a duly held meeting 40 6 at the time the action is taken. 40 7 b. A majority of the minimum proportion or number of 40 8 directors that would constitute a quorum for the transaction 40 9 of business at the meeting. 40 10 2. The articles or bylaws may require the affirmative vote 40 11 of a larger proportion or number than provided in subsection 40 12 1. If the articles or bylaws require a larger proportion or 40 13 number than is required by this chapter for a particular 40 14 action, the articles or bylaws control. 40 15 Sec. 42. NEW SECTION. 501A.709 ACTION WITHOUT A MEETING. 40 16 1. METHOD. An action required or permitted to be taken at 40 17 a board meeting may be taken by written action signed by all 40 18 of the directors. If the articles or bylaws so provide, any 40 19 action, other than an action requiring member approval, may be 40 20 taken by written action signed by the number of directors that 40 21 would be required to take the same action at a meeting of the 40 22 board at which all directors were present. 40 23 2. EFFECTIVE TIME. The written action is effective when 40 24 signed by the required number of directors, unless a different 40 25 effective time is provided in the written action. 40 26 3. NOTICE AND LIABILITY. When written action is permitted 40 27 to be taken by less than all directors, all directors must be 40 28 notified immediately of its text and effective date. Failure 40 29 to provide the notice does not invalidate the written action. 40 30 A director who does not sign or consent to the written action 40 31 has no liability for the action or actions taken by the 40 32 written action. 40 33 Sec. 43. NEW SECTION. 501A.710 AUDIT COMMITTEE. 40 34 The board shall establish an audit committee to review the 40 35 financial information and accounting report of the 41 1 cooperative. The cooperative shall have the financial 41 2 information audited for presentation to the members unless the 41 3 cooperative's bylaws allow financial statements that are not 41 4 audited and the financial statements clearly state that they 41 5 are not audited and the difference between the financial 41 6 statements and audited financial statements that are prepared 41 7 according to generally accepted accounting procedures. The 41 8 directors shall elect members to the audit committee. The 41 9 audit committee shall ensure an independent review of the 41 10 cooperative's finances and audit. 41 11 Sec. 44. NEW SECTION. 501A.711 COMMITTEES. 41 12 1. GENERALLY. A resolution approved by the affirmative 41 13 vote of a majority of the board may establish committees 41 14 having the authority of the board in the management of the 41 15 business of the cooperative only to the extent provided in the 41 16 resolution. Committees may include a special litigation 41 17 committee consisting of one or more independent directors or 41 18 other independent persons to consider legal rights or remedies 41 19 of the cooperative and whether those rights and remedies 41 20 should be pursued. Committees other than special litigation 41 21 committees are subject at all times to the direction and 41 22 control of the board. 41 23 2. MEMBERSHIP. Committee members must be natural persons. 41 24 Unless the articles or bylaws provide for a different 41 25 membership or manner of appointment, a committee consists of 41 26 one or more persons, who need not be directors, appointed by 41 27 affirmative vote of a majority of the directors present. 41 28 3. PROCEDURE. The procedures for meetings of the board 41 29 apply to committees and members of committees to the same 41 30 extent as those sections apply to the board and individual 41 31 directors. 41 32 4. MINUTES. Minutes, if any, of committee meetings must 41 33 be made available upon request to members of the committee and 41 34 to any director. 41 35 5. STANDARD OF CONDUCT. The establishment of, delegation 42 1 of authority to, and action by a committee does not alone 42 2 constitute compliance by a director with the standard of 42 3 conduct set forth in section 501A.712. 42 4 6. COMMITTEE MEMBERS CONSIDERED DIRECTORS. Committee 42 5 members are considered to be directors for purposes of 42 6 sections 501A.712, 501A.713, and 501A.715. 42 7 Sec. 45. NEW SECTION. 501A.712 STANDARD OF CONDUCT. 42 8 1. STANDARD AND LIABILITY. A director shall discharge the 42 9 duties of the position of director in good faith, in a manner 42 10 the director reasonably believes to be in the best interests 42 11 of the cooperative, and with the care an ordinarily prudent 42 12 person in a like position would exercise under similar 42 13 circumstances. A person who so performs those duties is not 42 14 liable by reason of being or having been a director of the 42 15 cooperative. 42 16 2. RELIANCE. 42 17 a. A director is entitled to rely on information, 42 18 opinions, reports, or statements, including financial 42 19 statements and other financial data, in each case prepared or 42 20 presented by any of the following: 42 21 (1) One or more officers or employees of the cooperative 42 22 who the director reasonably believes to be liable and 42 23 competent in the matters presented. 42 24 (2) Counsel, public accountants, or other persons as to 42 25 matters that the director reasonably believes are within the 42 26 person's professional or expert competence. 42 27 (3) A committee of the board upon which the director does 42 28 not serve, duly established by the board, as to matters within 42 29 its designated authority, if the director reasonably believes 42 30 the committee to merit confidence. 42 31 b. Paragraph "a" does not apply to a director who has 42 32 knowledge concerning the matter in question that makes the 42 33 reliance otherwise permitted by paragraph "a" unwarranted. 42 34 3. PRESUMPTION OF ASSENT AND DISSENT. A director who is 42 35 present at a meeting of the board when an action is approved 43 1 by the affirmative vote of a majority of the directors present 43 2 is presumed to have assented to the action approved, unless 43 3 any of the following applies: 43 4 a. The director objects at the beginning of the meeting to 43 5 the transaction of business because the meeting is not 43 6 lawfully called or convened and does not participate in the 43 7 meeting after the objection, in which case the director is not 43 8 considered to be present at the meeting for any purpose of 43 9 this chapter. 43 10 b. The director votes against the action at the meeting. 43 11 c. The director is prohibited by a conflict of interest 43 12 from voting on the action. 43 13 4. CONSIDERATIONS. In discharging the duties of the 43 14 position of director, a director may, in considering the best 43 15 interests of the cooperative, consider the interests of the 43 16 cooperative's employees, customers, suppliers, and creditors, 43 17 the economy of the state, and long-term as well as short-term 43 18 interests of the cooperative and its patron members, including 43 19 the possibility that these interests may be best served by the 43 20 continued independence of the cooperative. 43 21 Sec. 46. NEW SECTION. 501A.713 DIRECTOR CONFLICTS OF 43 22 INTEREST. 43 23 1. CONFLICT AND PROCEDURE WHEN CONFLICT ARISES. 43 24 a. A contract or other transaction between a cooperative 43 25 and one or more of its directors, or between a cooperative and 43 26 a business entity in or of which one or more of its directors 43 27 are governors, directors, managers, officers, or legal 43 28 representatives or have a material financial interest, is not 43 29 void or voidable because the director or directors or the 43 30 other business entities are parties or because the director or 43 31 directors are present at the meeting of the members or the 43 32 board or a committee at which the contract or transaction is 43 33 authorized, approved, or ratified, if any of the following 43 34 applies: 43 35 (1) The contract or transaction was, and the person 44 1 asserting the validity of the contract or transaction sustains 44 2 the burden of establishing that the contract or transaction 44 3 was, fair and reasonable as to the cooperative at the time it 44 4 was authorized, approved, or ratified and all of the following 44 5 apply: 44 6 (a) The material facts as to the contract or transaction 44 7 and as to the director's or directors' interest are disclosed 44 8 or known to the members. 44 9 (b) The material facts as to the contract or transaction 44 10 and as to the director's or directors' interest are fully 44 11 disclosed or known to the board or a committee, and the board 44 12 or committee authorizes, approves, or ratifies the contract or 44 13 transaction in good faith by a majority of the board or 44 14 committee, but the interested director or directors are not 44 15 counted in determining the presence of a quorum and must not 44 16 vote. 44 17 (2) The contract or transaction is a distribution, 44 18 contract, or transaction that is made available to all members 44 19 or patron members as part of the cooperative's business. 44 20 b. If a committee is elected or appointed to authorize, 44 21 ratify, or approve a contract or transaction under this 44 22 section, the members of the committee must not have a conflict 44 23 of interest and must be charged with representing the best 44 24 interests of the cooperative. 44 25 2. MATERIAL FINANCIAL INTEREST. For purposes of this 44 26 section, all of the following apply: 44 27 a. A resolution fixing the compensation of a director or 44 28 fixing the compensation of another director as a director, 44 29 officer, employee, or agent of the cooperative is not void or 44 30 voidable or considered to be a contract or other transaction 44 31 between a cooperative and one or more of its directors for 44 32 purposes of this section even though the director receiving 44 33 the compensation fixed by the resolution is present and voting 44 34 at the meeting of the board or a committee at which the 44 35 resolution is authorized, approved, or ratified or even though 45 1 other directors voting upon the resolution are also receiving 45 2 compensation from the cooperative. 45 3 b. A director has a material financial interest in each 45 4 organization in which the director or a family member of the 45 5 director has a material financial interest. A contract or 45 6 other transaction between a cooperative and a family member of 45 7 a director is considered to be a transaction between the 45 8 cooperative and the director. A family member of a director 45 9 includes the spouse, parents, children and spouses of 45 10 children, brothers and sisters and spouses of brothers and 45 11 sisters, and the brothers and sisters of the spouse of the 45 12 director or any combination of them. 45 13 Sec. 47. NEW SECTION. 501A.714 LIMITATION OF DIRECTOR'S 45 14 LIABILITY. 45 15 Except as otherwise provided in this chapter, a director, 45 16 officer, employee, or member of the cooperative is not liable 45 17 for the cooperative's debts or obligations, and a director, 45 18 officer, member, or other volunteer is not personally liable 45 19 in that capacity, for a claim based upon any action taken, or 45 20 any failure to take action in the discharge of the person's 45 21 duties, except for the amount of a financial benefit received 45 22 by the person to which the person is not entitled, an 45 23 intentional infliction of harm to the cooperative or its 45 24 members or patrons, or an intentional violation of criminal 45 25 law. 45 26 Sec. 48. NEW SECTION. 501A.715 INDEMNIFICATION. 45 27 1. DEFINITIONS. As used in this section, all of the 45 28 following apply: 45 29 a. "Official capacity" means any of the following: 45 30 (1) With respect to a director, the position of director 45 31 in a cooperative. 45 32 (2) With respect to a person other than a director, the 45 33 elective or appointive office or position held by the person, 45 34 member of a committee of the board, the employment 45 35 relationship undertaken by an employee of the cooperative, or 46 1 the scope of the services provided by members of the 46 2 cooperative who provide services to the cooperative. 46 3 (3) With respect to a director, chief executive officer, 46 4 member, or employee of the cooperative who, while a director, 46 5 chief executive officer, or member or employee of the 46 6 cooperative, is or was serving at the request of the 46 7 cooperative or whose duties in that position involve or 46 8 involved service as a governor, director, manager, officer, 46 9 member, partner, trustee, employee, or agent of another 46 10 organization or employee benefit plan, the position of that 46 11 person as a governor, director, manager, officer, member, 46 12 partner, trustee, employee, or agent, as the case may be, of 46 13 the other organization or employee benefit plan. 46 14 b. "Predecessor entity" includes a domestic cooperative or 46 15 foreign cooperative that was the predecessor of the 46 16 cooperative referred to in this section in a merger or other 46 17 transaction in which the predecessor entity's existence ceased 46 18 upon consummation of the transaction. 46 19 c. "Proceeding" means a threatened, pending, or completed 46 20 civil, criminal, administrative, arbitration, or investigative 46 21 proceeding, including a proceeding by or in the right of the 46 22 cooperative. 46 23 d. "Special legal counsel" means counsel who has not 46 24 represented the cooperative or a related organization, or a 46 25 director, manager, member of a committee of the board, or 46 26 employee whose indemnification is in issue. 46 27 2. INDEMNIFICATION. 46 28 a. Subject to the provisions of subsection 4, a 46 29 cooperative shall indemnify a person made or threatened to be 46 30 made a party to a proceeding by reason of the former or 46 31 present official capacity of the person against judgments, 46 32 penalties, fines, including, without limitation, excise taxes 46 33 assessed against the person with respect to an employee 46 34 benefit plan, settlements, and reasonable expenses, including 46 35 attorney fees and disbursements incurred by the person in 47 1 connection with the proceeding, if, with respect to the acts 47 2 or omissions of the person complained of in the proceeding, 47 3 any of the following applies: 47 4 (1) All of the following apply: 47 5 (a) The person has not been indemnified by another 47 6 organization or employee benefit plan for the same judgments, 47 7 penalties, fines, including, without limitation, excise taxes 47 8 assessed against the person with respect to an employee 47 9 benefit plan, settlements, and reasonable expenses, including 47 10 attorney fees and disbursements incurred by the person in 47 11 connection with the proceeding with respect to the same acts 47 12 or omissions. 47 13 (b) The person acted in good faith. 47 14 (c) The person has not received an improper personal 47 15 benefit. 47 16 (d) The person has not committed an act for which 47 17 liability cannot be eliminated or limited under section 47 18 501A.714. 47 19 (e) In the case of a criminal proceeding, the person had 47 20 no reasonable cause to believe the conduct was unlawful. 47 21 (2) (a) In the case of an act or omission occurring in 47 22 the official capacity described in subsection 1, paragraph 47 23 "a", subparagraph (1) or (2), the person reasonably believed 47 24 that the conduct was in the best interests of the cooperative. 47 25 (b) In the case of an act or omission occurring in the 47 26 official capacity described in subsection 1, paragraph "a", 47 27 subparagraph (3), the person reasonably believed that the 47 28 conduct was not opposed to the best interests of the 47 29 cooperative. 47 30 If the person's acts or omissions complained of in the 47 31 proceeding relate to conduct as a director, officer, trustee, 47 32 employee, or agent of an employee benefit plan, the conduct is 47 33 not considered to be opposed to the best interests of the 47 34 cooperative if the person reasonably believed that the conduct 47 35 was in the best interests of the participants or beneficiaries 48 1 of the employee benefit plan. 48 2 b. The termination of a proceeding by judgment, order, 48 3 settlement, conviction, or upon a plea of nolo contendere or 48 4 its equivalent does not, of itself, establish that the person 48 5 did not meet the criteria set forth in this subsection. 48 6 3. ADVANCES. Subject to the provisions of subsection 4, 48 7 if a person is made or threatened to be made a party to a 48 8 proceeding, the person is entitled, upon written request to 48 9 the cooperative, to payment or reimbursement by the 48 10 cooperative of reasonable expenses, including attorney fees 48 11 and disbursements incurred by the person in advance of the 48 12 final disposition of the proceeding, as follows: 48 13 a. Upon receipt by the cooperative of a written 48 14 affirmation by the person of a good-faith belief that the 48 15 criteria for indemnification set forth in subsection 2 has 48 16 been satisfied, and a written undertaking by the person to 48 17 repay all amounts paid or reimbursed by the cooperative, if it 48 18 is ultimately determined that the criteria for indemnification 48 19 have not been satisfied. 48 20 b. After a determination that the facts then known to 48 21 those making the determination would not preclude 48 22 indemnification under this section. 48 23 The written undertaking required by this subsection is an 48 24 unlimited general obligation of the person making it, but need 48 25 not be secured and shall be accepted without reference to 48 26 financial ability to make the repayment. 48 27 4. PROHIBITION OR LIMIT ON INDEMNIFICATION OR ADVANCES. 48 28 The articles or bylaws either may prohibit indemnification or 48 29 advances of expenses otherwise required by this section or may 48 30 impose conditions on indemnification or advances of expenses 48 31 in addition to the conditions contained in subsection 2 or 3, 48 32 including, without limitation, monetary limits on 48 33 indemnification or advances of expenses if the conditions 48 34 apply equally to all persons or to all persons within a given 48 35 class. A prohibition or limit on indemnification or advances 49 1 of expenses shall not apply to or affect the right of a person 49 2 to indemnification or advances of expenses with respect to any 49 3 acts or omissions of the person occurring before the effective 49 4 date of a provision in the articles or the date of adoption of 49 5 a provision in the bylaws establishing the prohibition or 49 6 limit on indemnification or advances of expenses. 49 7 5. REIMBURSEMENT TO WITNESSES. This section does not 49 8 require, or limit the ability of, a cooperative to reimburse 49 9 expenses, including attorney fees and disbursements incurred 49 10 by a person in connection with an appearance as a witness in a 49 11 proceeding at a time when the person has not been made or 49 12 threatened to be made a party to a proceeding. 49 13 6. DETERMINATION OF ELIGIBILITY. 49 14 a. All determinations whether indemnification of a person 49 15 is required because the criteria set forth in subsection 2 49 16 have been satisfied and whether a person is entitled to 49 17 payment or reimbursement of expenses in advance of the final 49 18 disposition of a proceeding as provided in subsection 3 must 49 19 be made as follows: 49 20 (1) By the board by a majority of a quorum, if the 49 21 directors who are, at the time, parties to the proceeding are 49 22 not counted for determining either a majority or the presence 49 23 of a quorum. 49 24 (2) If a quorum under subparagraph (1) cannot be obtained 49 25 by a majority of a committee of the board consisting solely of 49 26 two or more directors not at the time parties to the 49 27 proceeding duly designated to act in the matter by a majority 49 28 of the full board, including directors who are parties. 49 29 (3) If a determination is not made under subparagraph (1) 49 30 or (2) by special legal counsel selected either by a majority 49 31 of the board or a committee by vote under subparagraph (1) or 49 32 (2) or if the requisite quorum of the full board cannot be 49 33 obtained and the committee cannot be established by a majority 49 34 of the full board, including directors who are parties. 49 35 (4) If a determination is not made under subparagraphs (1) 50 1 through (3) by the affirmative vote of the members, but the 50 2 membership interests held by parties to the proceeding must 50 3 not be counted in determining the presence of a quorum, and 50 4 are not considered to be present and entitled to vote on the 50 5 determination. 50 6 (5) If an adverse determination is made under 50 7 subparagraphs (1) through (4) or paragraph "b" or if a 50 8 determination is not made under subparagraphs (1) through (4) 50 9 or paragraph "b" within sixty days either after the later to 50 10 occur of the termination of a proceeding or a written request 50 11 for indemnification to the cooperative, or a written request 50 12 for an advance of expenses, as the case may be, by a court in 50 13 this state, which may be the same court in which the 50 14 proceeding involving the person's liability took place upon 50 15 application of the person and any notice the court requires. 50 16 The person seeking indemnification or payment or reimbursement 50 17 of expenses under this subparagraph has the burden of 50 18 establishing that the person is entitled to indemnification or 50 19 payment or reimbursement of expenses. 50 20 b. With respect to a person who is not, and was not at the 50 21 time of the act or omission complained of in the proceedings, 50 22 a director, chief executive officer, or person possessing, 50 23 directly or indirectly, the power to direct or cause the 50 24 direction of the management or policies of the cooperative, 50 25 the determination whether indemnification of this person is 50 26 required because the criteria set forth in subsection 2 have 50 27 been satisfied and whether such person is entitled to payment 50 28 or reimbursement of expenses in advance of the final 50 29 disposition of a proceeding as provided in subsection 3, may 50 30 be made by an annually appointed committee of the board, 50 31 having at least one member who is a director. The committee 50 32 shall report at least annually to the board concerning its 50 33 actions. 50 34 7. INSURANCE. A cooperative may purchase and maintain 50 35 insurance on behalf of a person in that person's official 51 1 capacity against any liability asserted against and incurred 51 2 by the person in or arising from that capacity, whether or not 51 3 the cooperative would have been required to indemnify the 51 4 person against the liability under the provisions of this 51 5 section. 51 6 8. DISCLOSURE. A cooperative that indemnifies or advances 51 7 expenses to a person in accordance with this section in 51 8 connection with a proceeding by or on behalf of the 51 9 cooperative shall report to the members in writing the amount 51 10 of the indemnification or advance and to whom and on whose 51 11 behalf it was paid not later than the next meeting of members. 51 12 9. INDEMNIFICATION OF OTHER PERSONS. Nothing in this 51 13 section must be construed to limit the power of the 51 14 cooperative to indemnify persons other than a director, chief 51 15 executive officer, member, employee, or member of a committee 51 16 of the board of the cooperative by contract or otherwise. 51 17 Sec. 49. NEW SECTION. 501A.716 OFFICERS. 51 18 1. REQUIRED OFFICERS. 51 19 a. The board shall elect all of the following: 51 20 (1) A chairperson. 51 21 (2) One or more vice chairpersons. 51 22 b. The board shall elect or appoint all of the following: 51 23 (1) A records officer. 51 24 (2) A financial officer. 51 25 c. The officers, other than the chief executive officer, 51 26 shall not have the authority to bind the cooperative except as 51 27 authorized by the board. 51 28 2. ADDITIONAL OFFICERS. The board may elect additional 51 29 officers as the articles or bylaws authorize or require. 51 30 3. RECORDS OFFICER AND FINANCIAL OFFICER MAY BE COMBINED. 51 31 The offices of records officer and financial officer may be 51 32 combined. 51 33 4. OFFICERS THAT MUST BE MEMBERS. The chairperson and 51 34 first vice chairperson shall be directors and members. The 51 35 financial officer, records officer, and additional officers 52 1 need not be directors or members. 52 2 5. CHIEF EXECUTIVE OFFICER. The board may employ a chief 52 3 executive officer to manage the day-to-day affairs and 52 4 business of the cooperative, and if a chief executive officer 52 5 is employed, the chief executive officer shall have the 52 6 authority to implement the functions, duties, and obligations 52 7 of the cooperative except as restricted by the board. The 52 8 chief executive officer shall not exercise authority reserved 52 9 to the board or the members under this chapter, the articles, 52 10 or the bylaws. 52 11 SUBCHAPTER 8 52 12 MEMBERS 52 13 Sec. 50. NEW SECTION. 501A.801 MEMBERS. 52 14 1. REQUIREMENT. A cooperative shall have one or more 52 15 patron members. 52 16 2. GROUPING OF MEMBERS. 52 17 a. A cooperative may group members and patron members in 52 18 districts, units, or on another basis if and as authorized in 52 19 its articles or bylaws. The articles or bylaws may include 52 20 authorization for the board to determine the groupings. 52 21 b. The board may implement the use of districts or units, 52 22 including setting the time and place and prescribing the rules 52 23 of conduct for holding meetings by districts or units to elect 52 24 delegates to members' meetings. 52 25 3. MEMBER VIOLATIONS. 52 26 a. A member who knowingly, intentionally, or repeatedly 52 27 violates a provision of this chapter, the articles or bylaws 52 28 of the cooperative, or a member control agreement or marketing 52 29 contract with the cooperative may be required by the board to 52 30 surrender the member's voting power or the financial rights of 52 31 membership interest of any class owned by the member, or both. 52 32 b. The cooperative shall refund to the member for the 52 33 surrendered financial rights of membership interest the lesser 52 34 of the book value or market value of the financial right of 52 35 the membership interest payable in not more than seven years 53 1 from the date of surrender or the board may transfer all of 53 2 any patron member's financial rights to a class of financial 53 3 rights held by members who are not patron members, or to a 53 4 certificate of interest, which carries liquidation rights on 53 5 par with membership interests and is redeemed within seven 53 6 years after the transfer as provided in the certificate. 53 7 c. Membership interests required to be surrendered may be 53 8 reissued or be retired and canceled by the board. 53 9 4. INSPECTION OF COOPERATIVE RECORDS BY MEMBER. 53 10 a. A member is entitled to inspect and copy, at the 53 11 member's expense, during regular business hours at a 53 12 reasonable location specified by the cooperative, any of the 53 13 records described in section 501A.507 if the member meets the 53 14 requirements of paragraph "b" and gives the cooperative 53 15 written demand at least five business days before the date on 53 16 which the member wishes to inspect and copy the records. 53 17 Notwithstanding the provisions of this subsection or any 53 18 provisions of section 501A.507, a member shall not have the 53 19 right to inspect or copy any records of the cooperative 53 20 relating to the amount of equity capital in the cooperative 53 21 held by any person or any accounts receivable or other amounts 53 22 due the cooperative from any person, or any personnel records 53 23 or employment records of any employee. 53 24 b. To be entitled to inspect and copy permitted records, 53 25 the member shall meet all of the following requirements: 53 26 (1) The member must have been a member for at least one 53 27 year immediately preceding the demand to inspect or copy or 53 28 must be a member holding at least five percent of all of the 53 29 outstanding equity interests in the cooperative as of the date 53 30 the demand is made. 53 31 (2) The demand is made in good faith and for a proper 53 32 cooperative business purpose. 53 33 (3) The member describes with reasonable particularity the 53 34 purpose and the records the member desires to inspect. 53 35 (4) The records are directly connected with the described 54 1 purpose. 54 2 c. The right of inspection granted by this subsection 54 3 shall not be abolished or limited by the articles, bylaws, or 54 4 any actions of the board or the members. 54 5 d. This subsection does not affect any of the following: 54 6 (1) The right of a member to inspect records to the same 54 7 extent as any other litigant if the member is in litigation 54 8 with the cooperative. 54 9 (2) The power of a court to compel the production of the 54 10 cooperative's records for examination. 54 11 e. Notwithstanding any other provision in this subsection, 54 12 if the records to be inspected or copied are in active use or 54 13 storage and, therefore, not available at the time otherwise 54 14 provided for inspection or copying, the cooperative shall 54 15 notify the member and shall set a date and hour within three 54 16 business days of the date otherwise set in this subsection for 54 17 the inspection or copying. 54 18 f. A member's agent or attorney has the same inspection 54 19 and copying rights as the member. The right to copy records 54 20 under this subsection includes, if reasonable, the right to 54 21 receive copies made by photographic copying, xerographic 54 22 copying, or other means. The cooperative may impose a 54 23 reasonable charge, covering the costs of labor and material, 54 24 for copies of any documents provided to the member. The 54 25 charge shall not exceed the estimated cost of production and 54 26 reproduction of the records. 54 27 g. If a cooperative refuses to allow a member, or the 54 28 member's agent or attorney, who complies with this subsection 54 29 to inspect or copy any records that the member is entitled to 54 30 inspect or copy within a prescribed time limit or, if none, 54 31 within a reasonable time, the district court of the county in 54 32 this state where the cooperative's principal office is located 54 33 or, if it has no principal office in this state, the district 54 34 court of the county in which its registered office is located 54 35 may, on application of the member, summarily order the 55 1 inspection or copying of the records demanded at the 55 2 cooperative's expense. 55 3 h. If a court orders inspection or copying of the records 55 4 demanded, unless the cooperative proves that it refused 55 5 inspection or copying in good faith because it had a 55 6 reasonable basis for doubt about the right of the member or 55 7 the member's agent or attorney to inspect or copy the records 55 8 demanded, all of the following shall apply: 55 9 (1) The court may order the losing party to pay the 55 10 prevailing party's reasonable costs, including reasonable 55 11 attorney fees. 55 12 (2) The court may order the losing party to pay the 55 13 prevailing party for any damages the prevailing party shall 55 14 have incurred by reason of the subject matter of the 55 15 litigation. 55 16 (3) If inspection or copying is ordered under this 55 17 paragraph "h", the court may order the cooperative to pay the 55 18 member's inspection and copying expenses. 55 19 (4) The court may grant either party any other remedy 55 20 provided by law. 55 21 (5) The court may impose reasonable restrictions on the 55 22 use or distribution of the records by the demanding member. 55 23 Sec. 51. NEW SECTION. 501A.802 MEMBER NOT LIABLE FOR 55 24 COOPERATIVE DEBTS. 55 25 A member is not, merely on the account of that status, 55 26 personally liable for the acts, debts, liabilities, or 55 27 obligations of a cooperative. A member is liable for any 55 28 unpaid subscription for the membership interest, unpaid 55 29 membership fees, or a debt for which the member has separately 55 30 contracted with the cooperative. 55 31 Sec. 52. NEW SECTION. 501A.803 REGULAR MEMBERS' 55 32 MEETINGS. 55 33 1. ANNUAL MEETING. Regular members' meetings shall be 55 34 held annually at a time determined by the board, unless 55 35 otherwise provided for in the bylaws. 56 1 2. LOCATION. The regular members' meeting shall be held 56 2 at the principal place of business of the cooperative or at 56 3 another conveniently located place as determined by the bylaws 56 4 or the board. 56 5 3. BUSINESS AND FISCAL REPORTS. The officers shall submit 56 6 reports to the members at the regular members' meeting 56 7 covering the business of the cooperative for the previous 56 8 fiscal year that show the condition of the cooperative at the 56 9 close of the fiscal year. 56 10 4. ELECTION OF DIRECTORS. All directors shall be elected 56 11 at the regular members' meeting for the terms of office 56 12 prescribed in the bylaws, except for directors elected at 56 13 district or unit meetings. 56 14 5. NOTICE. 56 15 a. The cooperative shall give notice of regular members' 56 16 meetings by mailing the regular members' meeting notice to 56 17 each member at the members' last known post office address or 56 18 by other notification approved by the board and agreed to by 56 19 the members. The regular members' meeting notice shall be 56 20 published or otherwise given by approved method at least two 56 21 weeks before the date of the meeting or mailed at least 56 22 fifteen days before the date of the meeting. 56 23 b. The notice shall contain a summary of any bylaw 56 24 amendments adopted by the board since the last annual meeting. 56 25 6. WAIVER AND OBJECTIONS. A member may waive notice of a 56 26 meeting of members. A waiver of notice by a member entitled 56 27 to notice is effective whether given before, at, or after the 56 28 meeting, and whether given in writing, orally, or by 56 29 attendance. Attendance by a member at a meeting is a waiver 56 30 of notice of that meeting, except where the member objects at 56 31 the beginning of the meeting to the transaction of business 56 32 because the meeting is not lawfully called or convened, or 56 33 objects before a vote on an item of business because the item 56 34 cannot lawfully be considered at that meeting and does not 56 35 participate in the consideration of the item at that meeting. 57 1 Sec. 53. NEW SECTION. 501A.804 SPECIAL MEMBERS' 57 2 MEETINGS. 57 3 1. CALLING MEETING. Special members' meetings of the 57 4 members may be called by any of the following: 57 5 a. A majority vote of the board. 57 6 b. The written petition of at least twenty percent of the 57 7 patron members and, if authorized by the articles or bylaws, 57 8 twenty percent of the nonpatron members, twenty percent of all 57 9 members, or members representing twenty percent of the 57 10 membership interests collectively submitted to the 57 11 chairperson. 57 12 2. NOTICE. The cooperative shall give notice of a special 57 13 members' meeting by mailing the special members' meeting 57 14 notice to each member personally at the person's last known 57 15 post office address or an alternative method approved by the 57 16 board and agreed to by the member individually or the members 57 17 generally. For a member that is an entity, notice mailed or 57 18 delivered by an alternative method shall be to an officer of 57 19 the entity. The special members' meeting notice shall state 57 20 the time, place, and purpose of the special members' meeting. 57 21 The special members' meeting notice shall be issued within ten 57 22 days from and after the date of the presentation of a members' 57 23 petition, and the special members' meeting shall be held 57 24 within thirty days after the date of the presentation of the 57 25 members' petition. 57 26 3. WAIVER AND OBJECTIONS. A member may waive notice of a 57 27 meeting of members. A waiver of notice by a member entitled 57 28 to notice is effective whether given before, at, or after the 57 29 meeting, and whether given in writing, orally, or by 57 30 attendance. Attendance by a member at a meeting is a waiver 57 31 of notice of that meeting, except where the member objects at 57 32 the beginning of the meeting to the transaction of business 57 33 because the meeting is not lawfully called or convened, or 57 34 objects before a vote on an item of business because the item 57 35 cannot lawfully be considered at that meeting and does not 58 1 participate in the consideration of the item at that meeting. 58 2 Sec. 54. NEW SECTION. 501A.805 CERTIFICATION OF MEETING 58 3 NOTICE. 58 4 1. CERTIFICATE OF MAILING. After mailing special or 58 5 regular members' meeting notices or otherwise delivering the 58 6 notices, the cooperative shall execute a certificate 58 7 containing the date of mailing or delivery of the notice and a 58 8 statement that the special or regular members' meeting notices 58 9 were mailed or delivered as prescribed by law. 58 10 2. MATTER OF RECORD. The certificate shall be made a part 58 11 of the record of the meeting. 58 12 3. FAILURE TO RECEIVE MEETING NOTICE. Failure of a member 58 13 to receive a special or regular members' meeting notice does 58 14 not invalidate an action taken by the members at a members' 58 15 meeting. 58 16 Sec. 55. NEW SECTION. 501A.806 QUORUM. 58 17 1. QUORUM. The quorum for a members' meeting to transact 58 18 business shall be by any of the following: 58 19 a. Ten percent of the total number of members of a 58 20 cooperative with five hundred or fewer members. 58 21 b. Fifty members for cooperatives with more than five 58 22 hundred members. 58 23 2. QUORUM FOR VOTING BY MAIL. In determining a quorum at 58 24 a meeting, on a question submitted to a vote by mail or an 58 25 alternative method, members present in person or represented 58 26 by mail vote or the alternative voting method shall be 58 27 counted. The attendance of a sufficient number of members to 58 28 constitute a quorum shall be established by a registration of 58 29 the members of the cooperative present at the meeting. The 58 30 registration shall be verified by the chairperson or the 58 31 records officer of the cooperative and shall be reported in 58 32 the minutes of the meeting. 58 33 3. MEETING ACTION INVALID WITHOUT QUORUM. An action by a 58 34 cooperative is not valid or legal in the absence of a quorum 58 35 at the meeting at which the action was taken. 59 1 Sec. 56. NEW SECTION. 501A.807 REMOTE COMMUNICATIONS FOR 59 2 MEMBERS' MEETINGS. 59 3 1. CONSTRUCTION AND APPLICATION. This section shall be 59 4 construed and applied to all of the following: 59 5 a. To facilitate remote communication consistent with 59 6 other applicable law. 59 7 b. To be consistent with reasonable practices concerning 59 8 remote communication and with the continued expansion of those 59 9 practices. 59 10 2. MEMBERS' MEETINGS HELD SOLELY BY MEANS OF REMOTE 59 11 COMMUNICATION. To the extent authorized in the articles, a 59 12 member control agreement, or the bylaws and determined by the 59 13 board, a regular or special meeting of members may be held 59 14 solely by any combination of means of remote communication 59 15 through which the members may participate in the meeting, if 59 16 notice of the meeting is given to every owner of membership 59 17 interests entitled to vote as would be required by this 59 18 chapter for a meeting, and if the membership interests held by 59 19 the members participating in the meeting would be sufficient 59 20 to constitute a quorum at a meeting. Participation by a 59 21 member by that means constitutes presence at the meeting in 59 22 person or by proxy if all the other requirements of this 59 23 chapter for the meeting are met. 59 24 3. PARTICIPATION IN MEMBERS' MEETINGS BY MEANS OF REMOTE 59 25 COMMUNICATION. To the extent authorized in the articles or 59 26 the bylaws and determined by the board, a member not 59 27 physically present in person or by proxy at a regular or 59 28 special meeting of members may, by means of remote 59 29 communication, participate in a meeting of members held at a 59 30 designated place. Participation by a member by that means 59 31 constitutes presence at the meeting in person or by proxy if 59 32 all the other requirements of this chapter for the meeting are 59 33 met. 59 34 4. REQUIREMENTS FOR MEETINGS HELD SOLELY BY MEANS OF 59 35 REMOTE COMMUNICATION AND FOR PARTICIPATION BY MEANS OF REMOTE 60 1 COMMUNICATION. In any meeting of members held solely by means 60 2 of remote communication under subsection 2 or in any meeting 60 3 of members held at a designated place in which one or more 60 4 members participate by means of remote communication under 60 5 subsection 3, all of the following shall apply: 60 6 a. The cooperative shall implement reasonable measures to 60 7 verify that each person deemed present and entitled to vote at 60 8 the meeting by means of remote communication is a member. 60 9 b. The cooperative shall implement reasonable measures to 60 10 provide each member participating by means of remote 60 11 communication with a reasonable opportunity to participate in 60 12 the meeting, including an opportunity to do all of the 60 13 following: 60 14 (1) Read or hear the proceedings of the meeting 60 15 substantially concurrently with those proceedings. 60 16 (2) If allowed by the procedures governing the meeting, 60 17 have the member's remarks heard or read by other participants 60 18 in the meeting substantially concurrently with the making of 60 19 those remarks. 60 20 (3) If otherwise entitled, vote on matters submitted to 60 21 the members. 60 22 5. NOTICE TO MEMBERS. 60 23 a. Any notice to members given by the cooperative under 60 24 any provision of this chapter, the articles, or the bylaws by 60 25 a form of electronic communication consented to by the member 60 26 to whom the notice is given is effective when given. The 60 27 notice is deemed given upon any of the following: 60 28 (1) If by facsimile communication, when directed to a 60 29 telephone number at which the member has consented to receive 60 30 notice. 60 31 (2) If by electronic mail, when directed to an electronic 60 32 mail address at which the member has consented to receive 60 33 notice. 60 34 (3) If by a posting on an electronic network on which the 60 35 member has consented to receive notice, together with separate 61 1 notice to the member of the specific posting, upon the later 61 2 of any of the following: 61 3 (a) The posting. 61 4 (b) The giving of the separate notice. 61 5 (4) If by any other form of electronic communication by 61 6 which the member has consented to receive notice, when 61 7 directed to the member. 61 8 b. An affidavit of the secretary, other authorized 61 9 officer, or authorized agent of the cooperative that the 61 10 notice has been given by a form of electronic communication 61 11 is, in the absence of fraud, prima facie evidence of the facts 61 12 stated in the affidavit. 61 13 c. Consent by a member to notice given by electronic 61 14 communication may be given in writing or by authenticated 61 15 electronic communication. The cooperative is entitled to rely 61 16 on any consent so given until revoked by the member, provided 61 17 that no revocation affects the validity of any notice given 61 18 before receipt by the cooperative of revocation of the 61 19 consent. 61 20 6. REVOCATION. Any ballot, vote, authorization, or 61 21 consent submitted by electronic communication under this 61 22 chapter may be revoked by the member submitting the ballot, 61 23 vote, authorization, or consent so long as the revocation is 61 24 received by a director or the chief executive officer of the 61 25 cooperative at or before the meeting or before an action 61 26 without a meeting is effective. 61 27 7. WAIVER. Waiver of notice by a member of a meeting by 61 28 means of authenticated electronic communication may be given 61 29 in the manner provided for the regular or special meeting. 61 30 Participation in a meeting by means of remote communication 61 31 described in subsections 2 and 3 is a waiver of notice of that 61 32 meeting, except where the member objects at the beginning of 61 33 the meeting to the transaction of business because the meeting 61 34 is not lawfully called or convened, or objects before a vote 61 35 on an item of business because the item cannot lawfully be 62 1 considered at the meeting and does not participate in the 62 2 consideration of the item at that meeting. 62 3 Sec. 57. NEW SECTION. 501A.808 ACT OF MEMBERS. 62 4 1. ACTION BY AFFIRMATIVE VOTE OF MEMBERS. 62 5 a. The members shall take action by the affirmative vote 62 6 of the members of the greater of any of the following: 62 7 (1) A majority of the voting power of the membership 62 8 interests present and entitled to vote on that item of 62 9 business. 62 10 (2) A majority of the voting power that would constitute a 62 11 quorum for the transaction of business at the meeting, except 62 12 where this chapter, the articles or bylaws, or a member 62 13 control agreement require a larger proportion. 62 14 b. If the articles, bylaws, or a member control agreement 62 15 require a larger proportion than is required by this chapter 62 16 for a particular action, the articles, bylaws, or the member 62 17 control agreement shall have control over the provisions of 62 18 this chapter. 62 19 2. CLASS OR SERIES OF MEMBERSHIP INTERESTS. In any case 62 20 where a class or series of membership interests is entitled by 62 21 this chapter, the articles, bylaws, a member control 62 22 agreement, or the terms of the membership interests to vote as 62 23 a class or series, the matter being voted upon must also 62 24 receive the affirmative vote of the owners of the same 62 25 proportion of the membership interests present of that class 62 26 or series; or of the total outstanding membership interests of 62 27 that class or series, as the proportion required under 62 28 subsection 1, unless the articles, bylaws, or the member 62 29 control agreement require a larger proportion. Unless 62 30 otherwise stated in the articles, bylaws, or a member control 62 31 agreement, in the case of voting as a class or series, the 62 32 minimum percentage of the total voting power of membership 62 33 interests of the class or series that must be present is equal 62 34 to the minimum percentage of all membership interests entitled 62 35 to vote required to be present under section 501A.707. 63 1 3. GREATER QUORUM OR VOTING REQUIREMENTS. 63 2 a. The articles or bylaws adopted by the members may 63 3 provide for a greater quorum or voting requirement for members 63 4 or voting groups than is provided for by this chapter. 63 5 b. An amendment to the articles or bylaws that adds, 63 6 changes, or deletes a greater quorum or voting requirement 63 7 shall meet the same quorum requirement and be adopted by the 63 8 same vote and voting groups required to take action under the 63 9 quorum and voting requirements then in effect or proposed to 63 10 be adopted, whichever is greater. 63 11 Sec. 58. NEW SECTION. 501A.809 ACTION WITHOUT A MEETING. 63 12 1. METHOD. An action required or permitted to be taken at 63 13 a meeting of the members may be taken by written action 63 14 signed, or consented to by authenticated electronic 63 15 communication, by all of the members. If the articles, 63 16 bylaws, or a member control agreement so provide, any action 63 17 may be taken by written action signed, or consented to by 63 18 authenticated electronic communication, by the members who own 63 19 voting power equal to the voting power that would be required 63 20 to take the same action at a meeting of the members at which 63 21 all members were present. 63 22 2. EFFECTIVE TIME. The written action is effective when 63 23 signed or consented to by authenticated electronic 63 24 communication by the required members, unless a different 63 25 effective time is provided in the written action. 63 26 3. NOTICE AND LIABILITY. When written action is permitted 63 27 to be taken by less than all members, all members must be 63 28 notified immediately of its text and effective date. Failure 63 29 to provide the notice does not invalidate the written action. 63 30 A member who does not sign or consent to the written action 63 31 has no liability for the action or actions taken by the 63 32 written action. 63 33 Sec. 59. NEW SECTION. 501A.810 MEMBER VOTING RIGHTS. 63 34 1. MEMBER HAS ONE VOTE OR PATRONAGE VOTING. A patron 63 35 member of a cooperative is only entitled to one vote on an 64 1 issue to be voted upon by members holding patron membership 64 2 interests. However, if authorized in the cooperative's 64 3 articles or bylaws, a patron member may be entitled to 64 4 additional votes based on patronage criteria in section 64 5 501A.811. If nonpatron members are authorized by the patron 64 6 members and granted voting rights on any matter voted on by 64 7 the members of the cooperative, the entire patron members' 64 8 voting power shall be voted collectively based upon the vote 64 9 of the majority of patron members voting on the issue and the 64 10 collective vote of the patron members shall be a majority of 64 11 the vote cast unless otherwise provided in the bylaws. The 64 12 bylaws shall not reduce the collective patron member vote to 64 13 less than fifteen percent of the total vote on matters of the 64 14 cooperative. A nonpatron member has the voting rights in 64 15 accordance to the nonpatron member's nonpatron membership 64 16 interests as granted in the bylaws, subject to the provisions 64 17 of this chapter. 64 18 2. RIGHT TO VOTE AT MEETING. A member or delegate may 64 19 exercise voting rights on any matter that is before the 64 20 members as prescribed in the articles or bylaws at a members' 64 21 meeting from the time the member or delegate arrives at the 64 22 members' meeting, unless the articles or bylaws specify an 64 23 earlier and specific time for closing the right to vote. 64 24 3. VOTING METHOD. A member's vote at a members' meeting 64 25 shall be in person or by mail if a mail vote is authorized by 64 26 the board or by alternative method if authorized by the board 64 27 and not by proxy, except as provided in subsection 4. 64 28 4. MEMBERS REPRESENTED BY DELEGATES. 64 29 a. The provisions of this subsection apply to members 64 30 represented by delegates. 64 31 b. A cooperative may provide in the articles or bylaws 64 32 that units or districts of members are entitled to be 64 33 represented at members' meetings by delegates chosen by the 64 34 members of the unit or district. The delegates may vote on 64 35 matters at the members' meeting in the same manner as a 65 1 member. The delegates may only exercise the voting rights on 65 2 a basis and with the number of votes as prescribed in the 65 3 articles or bylaws. 65 4 c. If the approval of a certain portion of the members is 65 5 required for adoption of amendments, a dissolution, a merger, 65 6 a consolidation, or a sale of assets, the votes of delegates 65 7 shall be counted as votes by the members represented by the 65 8 delegate. 65 9 d. Patron members may be represented by the proxy of other 65 10 patron members. 65 11 e. Nonpatron members may be represented by proxy if 65 12 authorized in the bylaws. 65 13 5. ABSENTEE BALLOTS. 65 14 a. The provisions of this subsection apply to absentee 65 15 ballots. 65 16 b. A member who is or will be absent from a members' 65 17 meeting may vote by mail or by an approved alternative method 65 18 on the ballot prescribed in this subsection on any motion, 65 19 resolution, or amendment that the board submits for vote by 65 20 mail or alternative method to the members. 65 21 c. The ballot shall be in the form prescribed by the board 65 22 and contain all of the following: 65 23 (1) The exact text of the proposed motion, resolution, or 65 24 amendment to be acted on at the meeting. 65 25 (2) The text of the motion, resolution, or amendment for 65 26 which the member may indicate an affirmative or negative vote. 65 27 d. The member shall express a choice by marking an 65 28 appropriate choice on the ballot and mail, deliver, or 65 29 otherwise submit the ballot to the cooperative in a plain, 65 30 sealed envelope inside another envelope bearing the member's 65 31 name or by an alternative method approved by the board. 65 32 e. A properly executed ballot shall be accepted by the 65 33 board and counted as the vote of the absent member at the 65 34 meeting. 65 35 Sec. 60. NEW SECTION. 501A.811 PATRON MEMBER VOTING 66 1 BASED ON PATRONAGE. 66 2 1. PATRON MEMBERS TO HAVE AN ADDITIONAL VOTE. A 66 3 cooperative may authorize by the articles or the bylaws for 66 4 patron members to have an additional vote for all of the 66 5 following: 66 6 a. A stipulated amount of business transacted between the 66 7 patron member and cooperative. 66 8 b. A stipulated number of patron members in a member 66 9 cooperative. 66 10 c. A certain stipulated amount of equity allocated to or 66 11 held by a patron member in the cooperative's central 66 12 organization. 66 13 d. A combination of methods provided in this subsection. 66 14 2. DELEGATES ELECTED BY PATRONS TO HAVE AN ADDITIONAL 66 15 VOTE. A cooperative that is organized into units or districts 66 16 of patron members may, by the articles or the bylaws, 66 17 authorize the delegates elected by its patron members to have 66 18 an additional vote for any of the following: 66 19 a. A stipulated amount of business transacted between the 66 20 patron members in the units or districts and the cooperative. 66 21 b. A certain stipulated amount of equity allocated to or 66 22 held by the patron members of the units or districts of the 66 23 cooperative. 66 24 c. A combination of methods in this subsection. 66 25 Sec. 61. NEW SECTION. 501A.812 VOTING RIGHTS. 66 26 1. DETERMINATION. The board may fix a date not more than 66 27 sixty days, or a shorter time period provided in the articles 66 28 or bylaws, before the date of a meeting of members as the date 66 29 for the determination of the owners of membership interests 66 30 entitled to notice of and entitled to vote at the meeting. 66 31 When a date is so fixed, only members on that date are 66 32 entitled to notice of and permitted to vote at that meeting of 66 33 members. 66 34 2. VOTING POWER. Unless otherwise provided in the 66 35 articles, bylaws, or a member control agreement, members have 67 1 voting power as provided in section 501A.810. 67 2 3. NONMEMBERS. The articles or bylaws may give or 67 3 prescribe the manner of giving a creditor, security holder, or 67 4 other person a right to vote on patron membership interests 67 5 under this section. 67 6 4. JOINTLY OWNED MEMBERSHIP INTERESTS. Membership 67 7 interests owned by two or more members may be voted by any one 67 8 of them unless the cooperative receives written notice from 67 9 any one of them denying the authority of that person to vote 67 10 those membership interests. 67 11 5. MANNER OF VOTING AND PRESUMPTION. Except as provided 67 12 in subsection 4, an owner of a nonpatron membership interest 67 13 or a patron membership interest with more than one vote that 67 14 is entitled to vote may vote any portion of the membership 67 15 interest in any way the member chooses. If a member votes 67 16 without designating the proportion voted in a particular way, 67 17 the member is considered to have voted all of the membership 67 18 interest in that way. 67 19 Sec. 62. NEW SECTION. 501A.813 VOTING BY ORGANIZATIONS 67 20 AND LEGAL REPRESENTATIVES. 67 21 1. MEMBERSHIP INTERESTS HELD BY ANOTHER ORGANIZATION. 67 22 Membership interests of a cooperative reflected in the 67 23 required records as being owned by another domestic business 67 24 entity or foreign business entity may be voted by the 67 25 chairperson, chief executive officer, or another legal 67 26 representative of that organization. 67 27 2. MEMBERSHIP INTERESTS HELD BY SUBSIDIARY. Except as 67 28 provided in subsection 3, membership interests of a 67 29 cooperative reflected in the required records as being owned 67 30 by a subsidiary are not entitled to be voted on any matter. 67 31 3. MEMBERSHIP INTERESTS CONTROLLED IN A FIDUCIARY 67 32 CAPACITY. Membership interests of a cooperative in the name 67 33 of, or under the control of, the cooperative or a subsidiary 67 34 in a fiduciary capacity are not entitled to be voted on any 67 35 matter, except to the extent that the settler or beneficiary 68 1 possesses and exercises a right to vote or gives the 68 2 cooperative or, with respect to membership interests in the 68 3 name of or under control of a subsidiary, the subsidiary, 68 4 binding instructions on how to vote the membership interests. 68 5 4. VOTING BY CERTAIN REPRESENTATIVES. Subject to section 68 6 501A.810, membership interests under the control of a person 68 7 in a capacity as a personal representative, an administrator, 68 8 executor, guardian, conservator, or the like may be voted by 68 9 the person, either in person or by proxy, without reflecting 68 10 in the required records those membership interests in the name 68 11 of the person. 68 12 5. VOTING BY TRUSTEES IN BANKRUPTCY OR RECEIVER. 68 13 Membership interests reflected in the required records in the 68 14 name of a trustee in bankruptcy or a receiver may be voted by 68 15 the trustee or receiver either in person or by proxy. 68 16 Membership interests under the control of a trustee in 68 17 bankruptcy or a receiver may be voted by the trustee or 68 18 receiver without reflecting in the required records the name 68 19 of the trustee or receiver, if authority to do so is contained 68 20 in an appropriate order of the court by which the trustee or 68 21 receiver was appointed. The right to vote of trustees in 68 22 bankruptcy and receivers is subject to section 501A.810. 68 23 6. MEMBERSHIP INTERESTS HELD BY OTHER ORGANIZATIONS. 68 24 Membership interests reflected in the required records in the 68 25 name of a business entity not described in subsections 1 68 26 through 5 may be voted either in person or by proxy by the 68 27 legal representative of that business entity. 68 28 7. GRANT OF SECURITY INTEREST. The grant of a security 68 29 interest in a membership interest does not entitle the holders 68 30 of the security interest to vote. 68 31 Sec. 63. NEW SECTION. 501A.814 PROXIES. 68 32 1. AUTHORIZATION. 68 33 a. A patron member may only grant a proxy to vote to 68 34 another patron member. 68 35 b. A member may cast or authorize the casting of a vote by 69 1 any of the following: 69 2 (1) Filing a written appointment of a proxy with the board 69 3 at or before the meeting at which the appointment is to be 69 4 effective. 69 5 (2) Telephonic transmission or authenticated electronic 69 6 communication, whether or not accompanied by written 69 7 instructions of the member, of an appointment of a proxy with 69 8 the cooperative or the cooperative's duly authorized agent at 69 9 or before the meeting at which the appointment is to be 69 10 effective. 69 11 c. The telephonic transmission or authenticated electronic 69 12 communication must set forth or be submitted with information 69 13 from which it can be determined that the appointment was 69 14 authorized by the member. If it is reasonably concluded that 69 15 the telephonic transmission or authenticated electronic 69 16 communication is valid, the inspectors of election or, if 69 17 there are not inspectors, the other persons making that 69 18 determination shall specify the information upon which they 69 19 relied to make that determination. A proxy so appointed may 69 20 vote on behalf of the member, or otherwise participate, in a 69 21 meeting by remote communication under section 501A.807, to the 69 22 extent the member appointing the proxy would have been 69 23 entitled to participate by remote communication if the member 69 24 did not appoint the proxy. 69 25 d. A copy, facsimile, telecommunication, or other 69 26 reproduction of the original writing or transmission may be 69 27 substituted or used in lieu of the original writing or 69 28 transmission for any purpose for which the original 69 29 transmission could be used, if the copy, facsimile, 69 30 telecommunication, or other reproduction is a complete and 69 31 legible reproduction of the entire original writing or 69 32 transmission. 69 33 e. An appointment of a proxy for membership interests 69 34 owned jointly by two or more members is valid if signed or 69 35 consented to by authenticated electronic communication, by any 70 1 one of them, unless the cooperative receives from any one of 70 2 those members written notice or an authenticated electronic 70 3 communication either denying the authority of that person to 70 4 appoint a proxy or appointing a different proxy. 70 5 2. DURATION. The appointment of a proxy is valid for 70 6 eleven months unless a longer period is expressly provided in 70 7 the appointment. An appointment is not irrevocable unless the 70 8 appointment is coupled with an interest in the membership 70 9 interests or the cooperative. 70 10 3. TERMINATION. An appointment may be terminated at will 70 11 unless the appointment is coupled with an interest, in which 70 12 case the appointment shall not be terminated except in 70 13 accordance with the terms of an agreement, if any, between the 70 14 parties to the appointment. Termination may be made by filing 70 15 written notice of the termination of the appointment with a 70 16 manager of the cooperative or by filing a new written 70 17 appointment of a proxy with a manager of the cooperative. 70 18 Termination in either manner revokes all prior proxy 70 19 appointments and is effective when filed with a manager of the 70 20 cooperative. 70 21 4. REVOCATION BY DEATH OR INCAPACITY. The death or 70 22 incapacity of a person appointing a proxy does not revoke the 70 23 authority of the proxy, unless written notice of the death or 70 24 incapacity is received by a manager of the cooperative before 70 25 the proxy exercises the authority under that appointment. 70 26 5. MULTIPLE PROXIES. Unless the appointment specifically 70 27 provides otherwise, if two or more persons are appointed as 70 28 proxies for a member, all of the following apply: 70 29 a. Any one of them may vote the membership interests on 70 30 each item of business in accordance with specific instructions 70 31 contained in the appointment. 70 32 b. If no specific instructions are contained in the 70 33 appointment with respect to voting the membership interests on 70 34 a particular item of business, the membership interests must 70 35 be voted as a majority of the proxies determine. If the 71 1 proxies are equally divided, the membership interests must not 71 2 be voted. 71 3 6. VOTE OF PROXY ACCEPTED AND LIABILITY. Unless the 71 4 appointment of a proxy contains a restriction, limitation, or 71 5 specific reservation of authority, the cooperative may accept 71 6 a vote or action taken by a person named in the appointment. 71 7 The vote of a proxy is final, binding, and not subject to 71 8 challenge, but the proxy is liable to the member for damages 71 9 resulting from a failure to exercise the proxy or from an 71 10 exercise of the proxy in violation of the authority granted in 71 11 the appointment. 71 12 7. LIMITED AUTHORITY. If a proxy is given authority by a 71 13 member to vote on less than all items of business considered 71 14 at a meeting of members, the member is considered to be 71 15 present and entitled to vote by the proxy only with respect to 71 16 those items of business for which the proxy has authority to 71 17 vote. A proxy who is given authority by a member who abstains 71 18 with respect to an item of business is considered to have 71 19 authority to vote on the item of business for purposes of this 71 20 subsection. 71 21 Sec. 64. NEW SECTION. 501A.815 SALE OF PROPERTY AND 71 22 ASSETS. 71 23 1. MEMBER APPROVAL NOT REQUIRED. A cooperative may, by 71 24 affirmative vote of a majority of the board present, upon 71 25 those terms and conditions and for those considerations, which 71 26 may be money, securities, or other instruments for the payment 71 27 of money or other property, as the board considers expedient 71 28 and without member approval, do any of the following: 71 29 a. Sell, lease, transfer, or otherwise dispose of all or 71 30 substantially all of its property and assets in the usual and 71 31 regular course of its business. 71 32 b. Grant a security interest in all or substantially all 71 33 of its property and assets whether or not in the usual and 71 34 regular course of its business. 71 35 c. Transfer any or all of its property to a business 72 1 entity all the ownership interests of which are owned by the 72 2 cooperative. 72 3 d. For purposes of debt financing, transfer any or all of 72 4 its property to a special purpose entity owned or controlled 72 5 by the cooperative for an asset securitization. 72 6 2. MEMBER APPROVAL REQUIRED. Except as provided in 72 7 subsection 1, a cooperative, by affirmative vote of a majority 72 8 of the board present, may sell, lease, transfer, or otherwise 72 9 dispose of all or substantially all of its property and 72 10 assets, including its goodwill, not in the usual and regular 72 11 course of its business, upon those terms and conditions and 72 12 for those considerations, which may be money, securities, or 72 13 other instruments for the payment of money or other property, 72 14 as the board considers expedient, when approved at a regular 72 15 or special meeting of the members by the affirmative vote of 72 16 two-thirds of the voting power voting at the meeting. Ten 72 17 days' written notice of the meeting must be given to all 72 18 members whether or not they are entitled to vote at the 72 19 meeting. The written notice must state that a purpose of the 72 20 meeting is to consider the sale, lease, transfer, or other 72 21 disposition of all or substantially all of the property and 72 22 assets of the cooperative. 72 23 3. CONFIRMATORY DOCUMENTS. Confirmatory deeds, 72 24 assignments, or similar instruments to evidence a sale, lease, 72 25 transfer, or other disposition may be signed and delivered at 72 26 any time in the name of the transferor by its current 72 27 chairperson of the board or authorized agents. 72 28 4. LIABILITY OF TRANSFEREE. The transferee is liable for 72 29 the debts, obligations, and liabilities of the transferor only 72 30 to the extent provided in the contract or agreement between 72 31 the transferee and the transferor or to the extent provided by 72 32 law. 72 33 Sec. 65. NEW SECTION. 501A.816 VOTE OF OWNERSHIP 72 34 INTERESTS HELD BY COOPERATIVE. 72 35 A cooperative that holds ownership interests of another 73 1 business entity may, by direction of the cooperative's board, 73 2 elect or appoint a person to represent the cooperative at a 73 3 meeting of the business entity. The representative has 73 4 authority to represent the cooperative and may cast the 73 5 cooperative's vote at the business entity's meeting. 73 6 SUBCHAPTER 9 73 7 MEMBERSHIP INTERESTS 73 8 Sec. 66. NEW SECTION. 501A.901 MEMBERSHIP INTERESTS. 73 9 1. PATRON MEMBERSHIP INTERESTS. Patron membership 73 10 interests shall be the only membership interest of a 73 11 cooperative unless nonpatron memberships are authorized under 73 12 subsection 2. If nonpatron interests are authorized, the 73 13 patron membership interests collectively shall have not less 73 14 than fifty percent of the cooperative's financial rights to 73 15 profit allocations and distributions. However, the 73 16 cooperative's articles or bylaws may be amended by the 73 17 affirmative vote of patron members to allow the cooperative's 73 18 financial rights to profit allocations and distributions to 73 19 patron members collectively to be a lesser amount but in no 73 20 case less than fifteen percent. 73 21 2. NONPATRONAGE MEMBERSHIP INTERESTS. 73 22 a. In order for a cooperative to have nonpatron membership 73 23 interests, the patron members must approve articles or bylaw 73 24 provisions authorizing the terms and conditions of the 73 25 nonpatron membership interests, which may include authorizing 73 26 the board to determine the terms and conditions of the 73 27 nonpatron membership interests. 73 28 b. If nonpatron membership interests are authorized, the 73 29 cooperative may solicit and issue nonpatron membership 73 30 interests on terms and conditions determined by the board and 73 31 disclosed in the articles, bylaws, or by separate disclosure 73 32 to the members. Each member acquiring nonpatron membership 73 33 interests shall sign a member control agreement or otherwise 73 34 agree to the conditions of the bylaws. The control agreement 73 35 or the bylaws shall describe the rights and obligations of the 74 1 member as it relates to the nonpatron membership interests, 74 2 the financial and governance rights, the transferability of 74 3 the nonpatron membership interests, the division and 74 4 allocation of profits and losses among the membership 74 5 interests and membership classes, and financial rights upon 74 6 liquidation. If the articles or bylaws do not otherwise 74 7 provide for the allocation of the profits and losses between 74 8 patron membership interests and nonpatron membership 74 9 interests, then the allocation of profits and losses among 74 10 nonpatron membership interests individually and patron 74 11 membership interests collectively shall be allocated on the 74 12 basis of the value of contributions to capital made according 74 13 to the patron membership interests collectively and the 74 14 nonpatron memberships interests individually to the extent the 74 15 contributions have been accepted by the cooperative. 74 16 Distributions of cash or other assets of the cooperative shall 74 17 be allocated among the membership interests as provided in the 74 18 articles or bylaws, subject to the provisions of this chapter. 74 19 If not otherwise provided in the articles or bylaws, 74 20 distributions shall be made on the basis of value of the 74 21 capital contributions of the patron membership interests 74 22 collectively and the nonpatron membership interests to the 74 23 extent the contributions have been accepted by the 74 24 cooperative. 74 25 3. AMOUNTS AND DIVISIONS OF MEMBERSHIP INTERESTS. The 74 26 authorized amount and divisions of patron membership interests 74 27 and, if authorized by the patron members, nonpatron membership 74 28 interest, may be increased, decreased, established, or altered 74 29 in accordance with the restrictions in this chapter by 74 30 amending the articles or bylaws at a regular members' meeting 74 31 or at a special members' meeting called for the purpose of the 74 32 amendment. 74 33 4. ISSUANCE OF MEMBERSHIP INTERESTS. Authorized 74 34 membership interests may be issued on terms and conditions 74 35 prescribed in the articles, bylaws, or if authorized in the 75 1 articles or bylaws as determined by the board. The 75 2 cooperative shall disclose to any person acquiring membership 75 3 interests to be issued by the cooperative, the organization, 75 4 capital structure, and known business prospects and risks of 75 5 the cooperative, the nature of the governance and financial 75 6 rights of the membership interest being acquired and of other 75 7 classes of membership and membership interests. The 75 8 cooperative shall notify all members of the membership 75 9 interests being issued by the cooperative. A membership 75 10 interest shall not be issued until subscription price of the 75 11 membership interest has been paid for in money or property 75 12 with the value of the property to be contributed approved by 75 13 the board. 75 14 5. TRANSFERRING OR SELLING MEMBERSHIP INTERESTS. After 75 15 issuance by the cooperative, membership interests in a 75 16 cooperative may only be sold or transferred with the approval 75 17 of the board. The board may adopt resolutions prescribing 75 18 procedures to prospectively approve transfers. 75 19 6. COOPERATIVE FIRST RIGHT TO PURCHASE MEMBERSHIP 75 20 INTERESTS. The articles or bylaws may provide that the 75 21 cooperative or the patron members, individually or 75 22 collectively, have the first privilege of purchasing the 75 23 membership interests of any class of membership interests 75 24 offered for sale. The first privilege to purchase membership 75 25 interests may be satisfied by notice to other members that the 75 26 membership interests are for sale and a procedure by which 75 27 members may proceed to attempt to purchase and acquire the 75 28 membership interests. 75 29 7. PAYMENT FOR DISSENTING MEMBERSHIP INTERESTS. 75 30 a. Subject to the provisions in the articles and bylaws, a 75 31 member may dissent from and obtain payment for the fair value 75 32 of the member's membership interests in the cooperative if all 75 33 of the following apply: 75 34 (1) The majority of the cooperative's member voting power 75 35 is held by different classes of interests. 76 1 (2) The articles or bylaws are amended or the cooperative 76 2 is merged or otherwise combined with another entity in a 76 3 manner that materially and adversely affects the rights and 76 4 preferences of the membership interests of the dissenting 76 5 member. 76 6 b. The dissenting member shall file a notice of intent to 76 7 demand fair value of the membership interest with the records 76 8 officer of the cooperative within thirty days after the 76 9 amendment by the bylaws and notice of the amendment to 76 10 members; otherwise, the right of the dissenting member to 76 11 demand payment of fair value for the membership interest is 76 12 waived. If a proposed amendment of the articles or bylaws 76 13 must be approved by the members, a member who is entitled to 76 14 dissent and who wishes to exercise dissenter's rights shall 76 15 file a notice to demand fair value of the membership interest 76 16 with the records officer of the cooperative; otherwise, the 76 17 right to demand fair value for the membership interest by the 76 18 dissenting member is waived. After receipt of the dissenting 76 19 member's demand notice and approval of the amendment, the 76 20 cooperative has sixty days to rescind the amendment, or 76 21 otherwise the cooperative shall remit the fair value for the 76 22 member's interest to the dissenting member by one hundred 76 23 eighty days after receipt of the notice. Upon receipt of the 76 24 fair value for the membership interest, the member has no 76 25 further member rights in the cooperative. 76 26 Sec. 67. NEW SECTION. 501A.902 ASSIGNMENT OF FINANCIAL 76 27 RIGHTS. 76 28 1. ASSIGNMENT OF FINANCIAL RIGHTS PERMITTED. Except as 76 29 provided in subsection 3, a member's financial rights are 76 30 transferable in whole or in part. 76 31 2. EFFECT OF ASSIGNMENT OF FINANCIAL RIGHTS. An 76 32 assignment of a member's financial rights entitles the 76 33 assignee to receive, to the extent assigned, only the share of 76 34 profits and losses and the distributions to which the assignor 76 35 would otherwise be entitled. An assignment of a member's 77 1 financial rights does not dissolve the cooperative and does 77 2 not entitle or empower the assignee to become a member, to 77 3 exercise any governance rights, to receive any notices from 77 4 the cooperative, or to cause dissolution. The assignment 77 5 shall not allow the assignee to control the member's exercise 77 6 of governance or voting rights. 77 7 3. RESTRICTIONS OF ASSIGNMENT OF FINANCIAL RIGHTS. 77 8 a. A restriction on the assignment of financial rights may 77 9 be imposed in the articles, in the bylaws, in a member control 77 10 agreement, by a resolution adopted by the members, by an 77 11 agreement among or other written action by the members, or by 77 12 an agreement among or other written action by the members and 77 13 the cooperative. A restriction is not binding with respect to 77 14 financial rights reflected in the required records before the 77 15 adoption of the restriction, unless the owners of those 77 16 financial rights are parties to the agreement or voted in 77 17 favor of the restriction. 77 18 b. Subject to paragraph "c", a written restriction on the 77 19 assignment of financial rights that is not manifestly 77 20 unreasonable under the circumstances and is noted 77 21 conspicuously in the required records may be enforced against 77 22 the owner of the restricted financial rights or a successor or 77 23 transferee of the owner, including a pledgee or a legal 77 24 representative. Unless noted conspicuously in the required 77 25 records, a restriction, even though permitted by this section, 77 26 is ineffective against a person without knowledge of the 77 27 restriction. 77 28 c. With regard to restrictions on the assignment of 77 29 financial rights, a would-be assignee of financial rights is 77 30 entitled to rely on a statement of membership interest issued 77 31 by the cooperative under section 501A.903. A restriction on 77 32 the assignment of financial rights, which is otherwise valid 77 33 and in effect at the time of the issuance of a statement of 77 34 membership interest but which is not reflected in that 77 35 statement, is ineffective against an assignee who takes an 78 1 assignment in reliance on the statement. 78 2 d. Notwithstanding any provision of law, articles, bylaws, 78 3 member control agreement, other agreement, resolution, or 78 4 action to the contrary, a security interest in a member's 78 5 financial rights may be foreclosed and otherwise enforced, and 78 6 a secured party may assign a member's financial rights in 78 7 accordance with the uniform commercial code, chapter 554, 78 8 without the consent or approval of the member whose financial 78 9 rights are subject to the security interest. 78 10 Sec. 68. NEW SECTION. 501A.903 NATURE OF A MEMBERSHIP 78 11 INTEREST AND STATEMENT OF INTEREST OWNED. 78 12 1. GENERALLY. A membership interest is personal property. 78 13 A member has no interest in specific cooperative property. 78 14 All property of the cooperative is property of the 78 15 cooperative. 78 16 2. STATEMENT OF MEMBERSHIP INTEREST. At the request of 78 17 any member, the cooperative shall state in writing the 78 18 particular membership interest owned by that member as of the 78 19 date the cooperative makes the statement. The statement must 78 20 describe the member's rights to vote, if any, to share in 78 21 profits and losses, and to share in distributions, 78 22 restrictions on assignments of financial rights under section 78 23 501A.902, subsection 3, or voting rights under section 78 24 501A.810 then in effect, as well as any assignment of the 78 25 member's rights then in effect other than a security interest. 78 26 3. TERMS OF MEMBERSHIP INTERESTS. All the membership 78 27 interests of a cooperative are subject to all of the 78 28 following: 78 29 a. Membership interests shall be of one class, without 78 30 series, unless the articles or bylaws establish or authorize 78 31 the board to establish more than one class or series within 78 32 classes. 78 33 b. Ordinary patron membership interests and, if 78 34 authorized, nonpatron membership interest subject to this 78 35 chapter are entitled to vote as provided in section 501A.810, 79 1 and have equal rights and preferences in all matters not 79 2 otherwise provided for by the board and to the extent that the 79 3 articles or bylaws have fixed the relative rights and 79 4 preferences of different classes and series. 79 5 c. Membership interests share profits and losses and are 79 6 entitled to distributions as provided in sections 501A.1005 79 7 and 501A.1006. 79 8 4. RIGHTS OF JUDGMENT CREDITOR. On application to a court 79 9 of competent jurisdiction by any judgment creditor of a 79 10 member, the court may charge a member's or an assignee's 79 11 financial rights with payment of the unsatisfied amount of the 79 12 judgment with interest. To the extent so charged, the 79 13 judgment creditor has only the rights of an assignee of a 79 14 member's financial rights under section 501A.902. This 79 15 chapter does not deprive any member or assignee of financial 79 16 rights of the benefit of any exemption laws applicable to the 79 17 membership interest. This section is the sole and exclusive 79 18 remedy of a judgment creditor with respect to the judgment 79 19 debtor's membership interest. 79 20 5. a. Subject to any restrictions in the articles or 79 21 bylaws, the power granted in this subsection may be exercised 79 22 by a resolution or resolutions establishing a class or series, 79 23 setting forth the designation of the class or series, and 79 24 fixing the relative rights and preferences of the class or 79 25 series. Any of the rights and preferences of a class or 79 26 series established in the articles, bylaws, or by resolution 79 27 of the board may do any of the following: 79 28 (1) Be made dependent upon facts ascertainable outside the 79 29 articles or bylaws or outside the resolution or resolutions 79 30 establishing the class or series, if the manner in which the 79 31 facts operate upon the rights and preferences of the class or 79 32 series is clearly and expressly set forth in the articles or 79 33 bylaws or in the resolution or resolutions establishing the 79 34 class or series. 79 35 (2) Include by reference some or all of the terms of any 80 1 agreements, contracts, or other arrangements entered into by 80 2 the cooperative in connection with the establishment of the 80 3 class or series if the cooperative retains at its principal 80 4 executive office a copy of the agreements, contracts, or other 80 5 arrangements or the portions will be included by reference. 80 6 b. A statement setting forth the name of the cooperative 80 7 and the text of the resolution and certifying the adoption of 80 8 the resolution and the date of adoption must be given to the 80 9 members before the acceptance of any contributions for which 80 10 the resolution creates rights or preferences not set forth in 80 11 the articles or bylaws. Where the members have received 80 12 notice of the creation of membership interests with rights or 80 13 preferences not set forth in the articles or bylaws before the 80 14 acceptance of the contributions with respect to the membership 80 15 interests, the statement may be filed anytime within one year 80 16 after the acceptance of the contributions. The resolution is 80 17 effective three days after delivery to the members is deemed 80 18 effective by the board, or, if the statement is not required 80 19 to be given to the members before the acceptance of 80 20 contributions, on the date of its adoption by the directors. 80 21 6. SPECIFIC TERMS. Without limiting the authority granted 80 22 in this section, in regulating the membership interests of a 80 23 class or series, a cooperative may do any of the following: 80 24 a. Subject to the right of the cooperative to redeem any 80 25 of those membership interests at the price fixed for their 80 26 redemption by the articles or bylaws or by the board. 80 27 b. Entitle the members to receive cumulative, partially 80 28 cumulative, or noncumulative distributions. 80 29 c. Provide a preference over any class or series of 80 30 membership interests for the payment of distributions of any 80 31 or all kinds. 80 32 d. Convert into membership interests of any other class or 80 33 any series of the same or another class. 80 34 e. Provide full, partial, or no voting rights, except as 80 35 provided in section 501A.810. 81 1 7. GRANT OF A SECURITY INTEREST. For the purpose of any 81 2 law relating to security interests, membership interests, 81 3 governance or voting rights, and financial rights are each to 81 4 be characterized as provided in section 554.8103, subsection 81 5 3. 81 6 8. POWERS OF ESTATE OF A DECEASED OR INCOMPETENT MEMBER. 81 7 a. If a member who is an individual dies or a court of 81 8 competent jurisdiction adjudges the member to be incompetent 81 9 to manage the member's person or property, or an order for 81 10 relief under the bankruptcy code is entered with respect to 81 11 the member, the member's executor, administrator, guardian, 81 12 conservator, trustee, or other legal representative may 81 13 exercise all of the member's rights for the purpose of 81 14 settling the estate or administering the member's property. 81 15 If a member is a business entity, trust, or other entity and 81 16 is dissolved, terminated, or placed by a court in receivership 81 17 or bankruptcy, the powers of that member may be exercised by 81 18 its legal representative or successor. 81 19 b. If an event referred to in paragraph "a" causes the 81 20 termination of a member's membership interest and the 81 21 termination does not result in dissolution, then, subject to 81 22 the articles and bylaws, all of the following apply: 81 23 (1) As provided in section 501A.902, the terminated 81 24 member's interest will be considered to be merely that of an 81 25 assignee of the financial rights owned before the termination 81 26 of membership. 81 27 (2) The rights to be exercised by the legal representative 81 28 of the terminated member shall be limited accordingly. 81 29 9. LIABILITY OF SUBSCRIBERS AND MEMBERS WITH RESPECT TO 81 30 MEMBERSHIP INTERESTS. A person who subscribes to or owns a 81 31 membership interest in a cooperative is under no obligation to 81 32 the cooperative or its creditors with respect to the 81 33 membership interests subscribed for or owned, except to pay to 81 34 the cooperative the full consideration for which the 81 35 membership interests are issued or to be issued. 82 1 Sec. 69. NEW SECTION. 501A.904 CERTIFICATED MEMBERSHIP 82 2 INTERESTS. 82 3 1. CERTIFICATED – UNCERTIFICATED. The membership 82 4 interests of a cooperative shall be either certificated or 82 5 uncertificated. Each holder of certificated membership 82 6 interests issued is entitled to a certificate of membership 82 7 interest. 82 8 2. SIGNATURE REQUIRED. Certificates shall be signed by an 82 9 agent or officer authorized in the articles or bylaws to sign 82 10 share certificates or, in the absence of an authorization, by 82 11 the chairperson or records officer of the cooperative. 82 12 3. SIGNATURE VALID. If a person signs or has a facsimile 82 13 signature placed upon a certificate while the chairperson, an 82 14 officer, transfer agent, or records officer of a cooperative, 82 15 the certificate may be issued by the cooperative, even if the 82 16 person has ceased to have that capacity before the certificate 82 17 is issued, with the same effect as if the person had that 82 18 capacity at the date of its issue. 82 19 4. FORM OF CERTIFICATE. A certificate representing 82 20 membership interests of a cooperative shall contain on its 82 21 face all of the following: 82 22 a. The name of the cooperative. 82 23 b. A statement that the cooperative is organized under the 82 24 laws of this state and this chapter. 82 25 c. The name of the person to whom the certificate is 82 26 issued. 82 27 d. The number and class of membership interests, and the 82 28 designation of the series, if any, that the certificate 82 29 represents. 82 30 e. A statement that the membership interests in the 82 31 cooperative are subject to the articles and bylaws of the 82 32 cooperative. 82 33 f. Any restrictions on transfer, including approval of the 82 34 board, if applicable, first rights of purchase by the 82 35 cooperative, and other restrictions on transfer, which may be 83 1 stated by reference to the back of the certificate or to 83 2 another document. 83 3 5. LIMITATIONS SET FORTH. A certificate representing 83 4 membership interests issued by a cooperative authorized to 83 5 issue membership interests of more than one class or series 83 6 shall set forth upon the face or back of the certificate, or 83 7 shall state that the cooperative will furnish to any member 83 8 upon request and without charge, a full statement of the 83 9 designations, preferences, limitations, and relative rights of 83 10 the membership interests of each class or series authorized to 83 11 be issued, so far as they have been determined, and the 83 12 authority of the board to determine the relative rights and 83 13 preferences of subsequent classes or series. 83 14 6. PRIMA FACIE EVIDENCE. A certificate signed as provided 83 15 in subsection 2 is prima facie evidence of the ownership of 83 16 the membership interests referred to in the certificate. 83 17 7. UNCERTIFICATED MEMBERSHIP INTERESTS. Unless 83 18 uncertificated membership interests are prohibited by the 83 19 articles or bylaws, a resolution approved by the affirmative 83 20 vote of a majority of the directors present may provide that 83 21 some or all of any or all classes and series of its membership 83 22 interests will be uncertificated membership interests. 83 23 The resolution does not apply to membership interests 83 24 represented by a certificate until the certificate is 83 25 surrendered to the cooperative. Within a reasonable time 83 26 after the issuance or transfer of uncertificated membership 83 27 interests, the cooperative shall send to the new member the 83 28 information required by this section to be stated on 83 29 certificates. This information is not required to be sent to 83 30 the new holder by a publicly held cooperative that has adopted 83 31 a system of issuance, recordation, and transfer of its 83 32 membership interests by electronic or other means not 83 33 involving an issuance of certificates if the system complies 83 34 with section 17A of the Securities Exchange Act of 1934, 15 83 35 U.S.C. } 78a et seq. Except as otherwise expressly provided 84 1 by statute, the rights and obligations of the holders of 84 2 certificated and uncertificated membership interests of the 84 3 same class and series are identical. 84 4 Sec. 70. NEW SECTION. 501A.905 LOST CERTIFICATES – 84 5 REPLACEMENT. 84 6 1. ISSUANCE. A new membership interest certificate may be 84 7 issued under section 554.8405 in place of one that is alleged 84 8 to have been lost, stolen, or destroyed. 84 9 2. NOT OVERISSUE. The issuance of a new certificate under 84 10 this section does not constitute an overissue of the 84 11 membership interests the new certificate represents. 84 12 Sec. 71. NEW SECTION. 501A.906 RESTRICTION ON TRANSFER 84 13 OR REGISTRATION OF MEMBERSHIP INTERESTS. 84 14 1. HOW IMPOSED. A restriction on the transfer or 84 15 registration of transfer of membership interests of a 84 16 cooperative may be imposed in the articles, in the bylaws, by 84 17 a resolution adopted by the members, or by an agreement among 84 18 or other written action by a number of members or holders of 84 19 other membership interests or among them and the cooperative. 84 20 A restriction is not binding with respect to membership 84 21 interests issued prior to the adoption of the restriction, 84 22 unless the holders of those membership interests are parties 84 23 to the agreement or voted in favor of the restriction. 84 24 2. RESTRICTIONS PERMITTED. A written restriction on the 84 25 transfer or registration of transfer of membership interests 84 26 of a cooperative that is not manifestly unreasonable under the 84 27 circumstances may be enforced against the holder of the 84 28 restricted membership interests or a successor or transferee 84 29 of the holder, including a pledgee or a legal representative, 84 30 if the restriction is any of the following: 84 31 a. Noted conspicuously on the face or back of the 84 32 certificate. 84 33 b. Included in this chapter or the articles or bylaws. 84 34 c. Included in information sent to the holders of 84 35 uncertificated membership interests. 85 1 Unless otherwise restricted by this chapter, the articles, 85 2 bylaws, noted conspicuously on the face or back of the 85 3 certificate, or included in information sent to the holders of 85 4 uncertificated membership interests, a restriction, even 85 5 though permitted by this section, is ineffective against a 85 6 person without knowledge of the restriction. A restriction 85 7 under this section is deemed to be noted conspicuously and is 85 8 effective if the existence of the restriction is stated on the 85 9 certificate and reference is made to a separate document 85 10 creating or describing the restriction. 85 11 SUBCHAPTER 10 85 12 CONTRIBUTIONS, ALLOCATIONS, AND DISTRIBUTIONS 85 13 Sec. 72. NEW SECTION. 501A.1001 AUTHORIZATION, FORM, AND 85 14 ACCEPTANCE OF CONTRIBUTIONS. 85 15 1. Subject to any restrictions in this chapter regarding 85 16 patron and nonpatron membership interests or in the articles 85 17 or bylaws, and only when authorized by the board, a 85 18 cooperative may accept contributions, which may be patron or 85 19 nonpatron membership contributions as determined by the board 85 20 under subsections 2 and 3, make contribution agreements under 85 21 section 501A.1003, and make contribution rights agreements 85 22 under section 501A.1004. 85 23 2. PERMISSIBLE FORMS. A person may make a contribution to 85 24 a cooperative by any of following: 85 25 a. Paying money or transferring the ownership of an 85 26 interest in property to the cooperative or rendering services 85 27 to or for the benefit of the cooperative. 85 28 b. Executing a written obligation signed by the person to 85 29 pay money or transfer ownership of an interest in property to 85 30 the cooperative or to perform services to or for the benefit 85 31 of the cooperative. 85 32 3. A purported contribution shall not be treated or 85 33 considered as a contribution, unless all of the following 85 34 apply: 85 35 a. The board accepts the contribution on behalf of the 86 1 cooperative and in that acceptance describes the contribution, 86 2 including terms of future performance, if any, and states the 86 3 value being accorded to the contribution. 86 4 b. The fact of contribution and the contribution's 86 5 accorded value are both reflected in the required records of 86 6 the cooperative. 86 7 4. The determinations of the board as to the amount or 86 8 fair value or the fairness to the cooperative of the 86 9 contribution accepted or to be accepted by the cooperative or 86 10 the terms of payment or performance, including under a 86 11 contribution rights in section 501A.1003, and a contribution 86 12 rights agreement in section 501A.1004, are presumed to be 86 13 proper if they are made in good faith and on the basis of 86 14 accounting methods, or a fair valuation or other method, 86 15 reasonable in the circumstances. Directors who are present 86 16 and entitled to vote, and who, intentionally or without 86 17 reasonable investigation, fail to vote against approving a 86 18 consideration that is unfair to the cooperative, or overvalue 86 19 property or services received or to be received by the 86 20 cooperative as a contribution, are jointly and severally 86 21 liable to the cooperative for the benefit of the then members 86 22 who did not consent to and are damaged by the action to the 86 23 extent of the damages of those members. A director against 86 24 whom a claim is asserted under this subsection, except in case 86 25 of knowing participation in a deliberate fraud, is entitled to 86 26 contribution on an equitable basis from other directors who 86 27 are liable under this subsection. 86 28 Sec. 73. NEW SECTION. 501A.1002 RESTATEMENT OF VALUE OF 86 29 PREVIOUS CONTRIBUTIONS. 86 30 1. DEFINITION. As used in this section, an "old 86 31 contribution" is a contribution reflected in the required 86 32 records of a cooperative before the time the cooperative 86 33 accepts a new contribution. 86 34 2. RESTATEMENT REQUIRED. Whenever a cooperative accepts a 86 35 new contribution, the board shall restate, as required by this 87 1 section, the value of all old contributions. 87 2 3. RESTATEMENT AS TO PARTICULAR SERIES OR CLASS TO WHICH 87 3 NEW CONTRIBUTION PERTAINS. 87 4 a. Unless otherwise provided in a cooperative's articles 87 5 or bylaws, this subsection sets forth the method of restating 87 6 the value of old contributions that pertain to the same series 87 7 or class to which the new contribution pertains. In restating 87 8 the value, the cooperative shall do all of the following: 87 9 (1) State the value the cooperative has accorded to the 87 10 new contribution under section 504A.1001, subsection 3, 87 11 paragraph "a". 87 12 (2) Determine what percentage the value stated under 87 13 subparagraph (1) will constitute, after the restatement 87 14 required by this subsection, of the total value of all 87 15 contributions that pertain to the particular series or class 87 16 to which the new contribution pertains. 87 17 (3) Divide the value stated under subparagraph (1) by the 87 18 percentage determined under subparagraph (2), yielding the 87 19 total value, after the restatement required by this 87 20 subsection, of all contributions pertaining to the particular 87 21 series or class. 87 22 (4) Subtract the value stated under subparagraph (1) from 87 23 the value determined under subparagraph (3), yielding the 87 24 total value, after the restatement required by this 87 25 subsection, of all the old contributions pertaining to the 87 26 particular series or class. 87 27 (5) Subtract the value, as reflected in the required 87 28 records before the restatement required by this subsection, of 87 29 the old contributions from the value determined under 87 30 subparagraph (4), yielding the value to be allocated among and 87 31 added to the old contributions pertaining to the particular 87 32 series or class. 87 33 (6) Allocate the value determined under subparagraph (5) 87 34 proportionally among the old contributions pertaining to the 87 35 particular series or class, add the allocated values to those 88 1 old contributions, and change the required records 88 2 accordingly. 88 3 b. The values determined under paragraph "a", subparagraph 88 4 (5), and allocated and added under paragraph "a", subparagraph 88 5 (6), may be positive, negative, or zero. 88 6 4. RESTATEMENT METHOD FOR OTHER SERIES OR CLASS. Unless 88 7 otherwise provided in a cooperative's articles or bylaws, this 88 8 subsection sets forth the method of restating the value of old 88 9 contributions that do not pertain to the same series or class 88 10 to which the new contribution pertains. In restating the 88 11 value, the cooperative shall do all of the following: 88 12 a. Determine the percentage by which the restatement under 88 13 subsection 3 has changed the total contribution value 88 14 reflected in the required records for the series or class to 88 15 which the new contribution pertains. 88 16 b. As to each old contribution that does not pertain to 88 17 the same series or class to which the new contribution 88 18 pertains, change the value reflected in the required records 88 19 by the percentage determined under paragraph "a". The 88 20 percentage determined under paragraph "a" may be positive, 88 21 negative, or zero. 88 22 5. NEW CONTRIBUTIONS MAY BE AGGREGATED. If a cooperative 88 23 accepts more than one contribution pertaining to the same 88 24 series or class at the same time, then for the purpose of the 88 25 restatement required by this section, the cooperative may 88 26 consider all the new contributions a single contribution. 88 27 Sec. 74. NEW SECTION. 501A.1003 CONTRIBUTION AGREEMENTS. 88 28 1. SIGNED WRITING. A contribution agreement, whether made 88 29 before or after the formation of the cooperative, is not 88 30 enforceable against the would-be contributor unless it is in 88 31 writing and signed by the would-be contributor. 88 32 2. IRREVOCABLE PERIOD. Unless otherwise provided in the 88 33 contribution agreement, or unless all of the would-be 88 34 contributors and, if in existence, the cooperative, consent to 88 35 a shorter or longer period, a contribution agreement is 89 1 irrevocable for a period of six months. 89 2 3. CURRENT AND DEFERRED PAYMENT. A contribution 89 3 agreement, whether made before or after the formation of a 89 4 cooperative, must be paid or performed in full at the time or 89 5 times, or in the installments, if any, specified in the 89 6 contribution agreement. In the absence of a provision in the 89 7 contribution agreement specifying the time at which the 89 8 contribution is to be paid or performed, the contribution must 89 9 be paid or performed at the time or times determined by the 89 10 board. However, a call made by the board for payment or 89 11 performance on contributions must be uniform for all 89 12 membership interests of the same class or for all membership 89 13 interests of the same series. 89 14 4. FAILURE TO PAY REMEDIES. 89 15 a. Unless otherwise provided in the contribution 89 16 agreement, in the event of default in the payment or 89 17 performance of an installment or call when due, the 89 18 cooperative may proceed to collect the amount due in the same 89 19 manner as a debt due the cooperative. If a would-be 89 20 contributor does not make a required contribution of property 89 21 or services, the cooperative shall require the would-be 89 22 contributor to contribute cash equal to that portion of the 89 23 value, as stated in the cooperative's required records, of the 89 24 contribution that has not been made. 89 25 b. If the amount due under a contribution agreement 89 26 remains unpaid for a period of twenty days after written 89 27 notice of demand for payment has been given to the delinquent 89 28 would-be contributor, the membership interests that were 89 29 subject to the contribution agreement may be offered for sale 89 30 by the cooperative for a price in money equaling or exceeding 89 31 the sum of the full balance owed by the delinquent would-be 89 32 contributor plus the expenses incidental to the sale. 89 33 If the membership interests that were subject to the 89 34 contribution agreement are sold according to this paragraph 89 35 "b", the cooperative shall pay to the delinquent would-be 90 1 contributor or to the delinquent would-be contributor's legal 90 2 representative the lesser of one of the following: 90 3 (1) The excess of net proceeds realized by the cooperative 90 4 over the sum of the amount owed by the delinquent would-be 90 5 contributor plus the expenses incidental to the sale, less any 90 6 penalty stated in the contribution agreement, which may 90 7 include forfeiture of the partial contribution. 90 8 (2) The amount actually paid by the delinquent would-be 90 9 contributor. 90 10 If the membership interests that were subject to the 90 11 contribution agreement are not sold according to this 90 12 paragraph "b", the cooperative may collect the amount due in 90 13 the same manner as a debt due the cooperative or cancel the 90 14 contribution agreement according to paragraph "c". 90 15 c. If the amount due under a contribution agreement 90 16 remains unpaid for a period of twenty days after written 90 17 notice of demand for payment has been given to the delinquent 90 18 would-be contributor and the membership interests that were 90 19 subject to the defaulted contribution agreement have not been 90 20 sold according to paragraph "b", the cooperative may cancel 90 21 the contribution agreement. In addition, the cooperative may 90 22 retain any portion of the contribution agreement price 90 23 actually paid as provided in the contribution agreement. The 90 24 cooperative shall refund to the delinquent would-be 90 25 contributor or the delinquent would-be contributor's legal 90 26 representatives any portion of the contribution agreement 90 27 price as provided in the contribution agreement. 90 28 5. RESTRICTIONS ON ASSIGNMENT. Unless otherwise provided 90 29 in the articles or bylaws, a would-be contributor's rights 90 30 under a contribution agreement shall not be assigned, in whole 90 31 or in part, to a person who was not a member at the time of 90 32 the assignment, unless all the members approve the assignment 90 33 by unanimous written consent. 90 34 Sec. 75. NEW SECTION. 501A.1004 CONTRIBUTION RIGHTS 90 35 AGREEMENTS. 91 1 1. AGREEMENTS PERMITTED. Subject to any restrictions in a 91 2 cooperative's articles or bylaws, the cooperative may enter 91 3 into contribution rights agreements under the terms, 91 4 provisions, and conditions established by board resolution. 91 5 2. WRITING REQUIRED AND TERMS TO BE STATED. Any 91 6 contribution rights agreement must be in writing and the 91 7 writing must state in full, summarize, or include by reference 91 8 all the agreement's terms, provisions, and conditions of the 91 9 rights to make contributions. 91 10 3. RESTRICTIONS ON ASSIGNMENT. Unless otherwise provided 91 11 in a cooperative's articles or bylaws, a would-be 91 12 contributor's rights under a contribution rights agreement 91 13 shall not be assigned, in whole or in part, to a person who 91 14 was not a member at the time of the assignment, unless all the 91 15 members approve the assignment by unanimous written consent. 91 16 Sec. 76. NEW SECTION. 501A.1005 ALLOCATIONS AND 91 17 DISTRIBUTIONS TO MEMBERS. 91 18 1. ALLOCATION OF PROFITS AND LOSSES. If nonpatron 91 19 membership interests are authorized by the patrons, the bylaws 91 20 shall prescribe the allocation of profits and losses between 91 21 patron membership interests collectively and any other 91 22 membership interests. If the bylaws do not otherwise provide, 91 23 the profits and losses between patron membership interests 91 24 collectively and other membership interests shall be allocated 91 25 on the basis of the value of contributions to capital made by 91 26 the patron membership interests collectively and other 91 27 membership interests accepted by the cooperative. The 91 28 allocation of profits to the patron membership interests 91 29 collectively shall not be less than fifty percent of the total 91 30 profits in any fiscal year, except if authorized in the 91 31 original articles as filed, in the cooperative's articles or 91 32 bylaws that are adopted by an affirmative vote of the patron 91 33 members, or in the articles or bylaws as amended by the 91 34 affirmative vote of the patron members. However, the 91 35 allocation of profits to the patron membership interests 92 1 collectively shall not be less than fifteen percent of the 92 2 total profits in any fiscal year. 92 3 2. DISTRIBUTION OF CASH OR OTHER ASSETS. A cooperative's 92 4 bylaws shall prescribe the distribution of cash or other 92 5 assets of the cooperative among the membership interests of 92 6 the cooperative. If nonpatron membership interests are 92 7 authorized by the patrons and the bylaws do not provide 92 8 otherwise, distributions and allocations shall be made to the 92 9 patron membership interests collectively and other members on 92 10 the basis of the value of contributions to capital made and 92 11 accepted by the cooperative, by the patron membership 92 12 interests collectively, and other membership interests. The 92 13 distributions to patron membership interests collectively 92 14 shall not be less than fifty percent of the total 92 15 distributions in any fiscal year, except if authorized in the 92 16 articles or bylaws adopted by the affirmative vote of the 92 17 patron members, or the articles or bylaws as amended by the 92 18 affirmative vote of the patron members. However, the 92 19 distributions to patron membership interests collectively 92 20 shall not be less than fifteen percent of the total 92 21 distributions in any fiscal year. 92 22 Sec. 77. NEW SECTION. 501A.1006 ALLOCATIONS AND 92 23 DISTRIBUTIONS TO PATRON MEMBERS. 92 24 1. DISTRIBUTION OF NET INCOME. A cooperative may set 92 25 aside a portion of net income allocated to the patron 92 26 membership interests as the board determines advisable to 92 27 create or maintain a capital reserve. 92 28 2. RESERVES. In addition to a capital reserve, the board 92 29 may, for patron membership interests, do any of the following: 92 30 a. Set aside an amount not to exceed five percent of the 92 31 annual net income of the cooperative for promoting and 92 32 encouraging cooperative organization. 92 33 b. Establish and accumulate reserves for new buildings, 92 34 machinery and equipment, depreciation, losses, and other 92 35 proper purposes. 93 1 3. PATRONAGE DISTRIBUTIONS. Net income allocated to 93 2 patron members in excess of dividends on equity and additions 93 3 to reserves shall be distributed to patron members on the 93 4 basis of patronage. A cooperative may establish allocation 93 5 units, whether the units are functional, divisional, 93 6 departmental, geographic, or otherwise. The cooperative may 93 7 provide for pooling arrangements. The cooperative may account 93 8 for and distribute net income to patrons on the basis of 93 9 allocation units and pooling arrangements. A cooperative may 93 10 offset the net loss of an allocation unit or pooling 93 11 arrangement against the net income of other allocation units 93 12 or pooling arrangements. 93 13 4. FREQUENCY OF DISTRIBUTION. A distribution of net 93 14 income shall be made at least annually. The board shall 93 15 present to the members at their annual meeting a report 93 16 covering the operations of the cooperative during the 93 17 preceding fiscal year. 93 18 5. FORM OF DISTRIBUTION. A cooperative may distribute net 93 19 income to patron members in cash, capital credits, allocated 93 20 patronage equities, revolving fund certificates, or its own or 93 21 other securities. 93 22 6. ELIGIBLE NONMEMBER PATRONS. A cooperative may provide 93 23 in the bylaws that nonmember patrons are allowed to 93 24 participate in the distribution of net income, payable to 93 25 patron members on equal terms with patron members. 93 26 7. PATRONAGE CREDITS FOR INELIGIBLE MEMBERS. If a 93 27 nonmember patron with patronage credits is not qualified or 93 28 eligible for membership, a refund due may be credited to the 93 29 nonmember patron's individual account. The board may issue a 93 30 certificate of interest to reflect the credited amount. After 93 31 the nonmember patron is issued a certificate of interest, the 93 32 nonmember patron may participate in the distribution of income 93 33 on the same basis as a patron member. 93 34 Sec. 78. NEW SECTION. 501A.1007 MEMBER CONTROL 93 35 AGREEMENTS. 94 1 1. AUTHORIZATION. A written agreement among persons who 94 2 are then members, including a sole member, or who have signed 94 3 subscription or contribution agreements, relating to the 94 4 control of any phase of the business and affairs of the 94 5 cooperative, its liquidation, dissolution and termination, or 94 6 the relations among members or persons who have signed 94 7 subscription or contribution agreements is valid as provided 94 8 in subsection 2. Other than the authorization of nonpatron 94 9 membership interests as provided in section 501A.901 and 94 10 nonpatron voting rights as provided in section 501A.810, 94 11 whenever this chapter provides that a particular result may or 94 12 must be obtained through a provision in a cooperative's 94 13 articles or bylaws, the same result can be accomplished 94 14 through a member control agreement valid under this section or 94 15 through a procedure established by a member control agreement 94 16 valid under this section. Any result accomplished through a 94 17 membership control agreement under this section must be 94 18 properly disclosed as provided in section 501A.910. 94 19 2. VALID EXECUTION. Other than patron member voting 94 20 control under section 501A.810 and patron member allocation 94 21 and distribution provisions under sections 501A.1005 and 94 22 501A.1006, a written agreement among persons described in 94 23 subsection 1 that relates to the control of or the 94 24 liquidation, dissolution, and termination of the cooperative, 94 25 the relations among them, or any phase of the business and 94 26 affairs of the cooperative is valid if it meets the 94 27 requirements of this subsection. This includes but is not 94 28 limited to the management of its business, the declaration and 94 29 payment of distributions, the sharing of profits and losses, 94 30 the election of directors, the employment of members by the 94 31 cooperative, or the arbitration of disputes. The written 94 32 agreement must be signed by all persons who are then the 94 33 members of the cooperative, whether or not the members all 94 34 have voting power, and all those who have signed contribution 94 35 agreements, regardless of whether those signatories will, when 95 1 members, have voting power. 95 2 3. OTHER AGREEMENTS NOT AFFECTED. This section does not 95 3 apply to, limit, or restrict agreements otherwise valid, nor 95 4 is the procedure set forth in this section the exclusive 95 5 method of agreement among members or between the members and 95 6 the cooperative with respect to any of the matters described. 95 7 Sec. 79. NEW SECTION. 501A.1008 DISTRIBUTION OF 95 8 ABANDONED PROPERTY. 95 9 1. ALTERNATE PROCEDURE TO DISBURSE PROPERTY. A 95 10 cooperative may, in lieu of paying or delivering to the state 95 11 abandoned property specified in its report of abandoned 95 12 property as provided in chapter 556, distribute the abandoned 95 13 property to a business entity or organization that is exempt 95 14 from taxation. A cooperative making the election to 95 15 distribute unclaimed property shall file with the secretary 95 16 all of the following: 95 17 a. A verified written explanation of the proof of claim of 95 18 an owner establishing a right to receive the abandoned 95 19 property. 95 20 b. Any error in the presumption of abandonment. 95 21 c. The name, address, and exemption number of the business 95 22 entity or organization to which the property was or is to be 95 23 distributed. 95 24 d. The approximate date of distribution. 95 25 2. REPORTING AND CLAIMING PROCEDURE NOT AFFECTED. This 95 26 section does not alter the procedure provided by law for 95 27 cooperatives to report abandoned property to the treasurer of 95 28 state and the requirement that claims of owners are made to 95 29 the cooperatives for a period following the publication of 95 30 lists of abandoned property. 95 31 3. OWNER'S RIGHT EXTINGUISHED ON DISBURSEMENT. The right 95 32 of an owner to abandoned property held by a cooperative is 95 33 extinguished when the property is disbursed by the cooperative 95 34 to a tax-exempt organization in accordance with this section. 95 35 SUBCHAPTER 11 96 1 MERGER AND CONVERSION 96 2 Sec. 80. NEW SECTION. 501A.1101 MERGER AND 96 3 CONSOLIDATION. 96 4 1. AUTHORIZATION. Unless otherwise prohibited, 96 5 cooperatives organized under the laws of this state, including 96 6 cooperatives organized under this chapter or traditional 96 7 cooperatives, may merge or consolidate with each other, an 96 8 Iowa limited liability company under the provisions of section 96 9 490A.1207, or other business entities organized under the laws 96 10 of another state by complying with the provisions of this 96 11 section and the law of the state where the surviving or new 96 12 business entity will exist. A cooperative shall not merge or 96 13 consolidate with a business entity organized under the laws of 96 14 this state, other than a traditional cooperative unless the 96 15 law governing the business entity expressly authorizes merger 96 16 or consolidation with a cooperative. This subsection does not 96 17 authorize a foreign business entity to do any act not 96 18 authorized by the law governing the foreign business entity. 96 19 2. PLAN. To initiate a merger or consolidation of a 96 20 cooperative, a written plan of merger or consolidation shall 96 21 be prepared by the board or by a committee selected by the 96 22 board to prepare a plan. The plan shall state all of the 96 23 following: 96 24 a. The names of the constituent domestic cooperative, the 96 25 name of any Iowa limited liability company that is a party to 96 26 the merger, to the extent authorized under section 490A.1207, 96 27 and any foreign business entities. 96 28 b. The name of the surviving or new domestic cooperative, 96 29 Iowa limited liability company as required by section 96 30 490A.1207, or other foreign business entity. 96 31 c. The manner and basis of converting membership or 96 32 ownership interests of the constituent domestic cooperative, 96 33 the surviving Iowa limited liability company as provided in 96 34 section 490A.1207, or foreign business entity into membership 96 35 or ownership interests in the surviving or new domestic 97 1 cooperative, the surviving Iowa limited liability company as 97 2 authorized in section 490A.1207, or foreign business entity. 97 3 d. The terms of the merger or consolidation. 97 4 e. The proposed effect of the merger or consolidation on 97 5 the members and patron members of each constituent domestic 97 6 cooperative. 97 7 f. For a consolidation, the plan shall contain the 97 8 articles of the entity or organizational documents to be filed 97 9 with the state in which the entity is organized or, if the 97 10 surviving organization is an Iowa limited liability company, 97 11 the articles of organization. 97 12 3. NOTICE. The following shall apply to notice: 97 13 a. The board shall mail or otherwise transmit or deliver 97 14 notice of the merger or consolidation to each member. The 97 15 notice shall contain the full text of the plan, and the time 97 16 and place of the meeting at which the plan will be considered. 97 17 b. A cooperative with more than two hundred members may 97 18 provide the notice in the same manner as a regular members' 97 19 meeting notice. 97 20 4. ADOPTION OF PLAN. 97 21 a. A plan of merger or consolidation shall be adopted by a 97 22 domestic cooperative as provided in this subsection. 97 23 b. The plan of merger or consolidation is adopted if all 97 24 of the following apply: 97 25 (1) A quorum of the members eligible to vote is registered 97 26 as being present or represented by mail vote or alternative 97 27 ballot at the meeting. 97 28 (2) The plan is approved by the patron members, or if 97 29 otherwise provided in the articles or bylaws, is approved by a 97 30 majority of the votes cast in each class of votes cast. For a 97 31 domestic cooperative with articles or bylaws requiring more 97 32 than a majority of the votes cast or other conditions for 97 33 approval, the plan must be approved by a proportion of the 97 34 votes cast or a number of total members as required by the 97 35 articles or bylaws and the conditions for approval in the 98 1 articles or bylaws have been satisfied. 98 2 c. After the plan has been adopted, articles of merger or 98 3 consolidation stating the plan and that the plan was adopted 98 4 according to this subsection shall be signed by the 98 5 chairperson, vice chairperson, records officer, or documents 98 6 officer of each cooperative merging or consolidating. 98 7 d. The articles of merger or consolidation shall be filed 98 8 in the office of the secretary. 98 9 e. For a merger, the articles of the surviving domestic 98 10 cooperative subject to this chapter are deemed amended to the 98 11 extent provided in the articles of merger. 98 12 f. Unless a later date is provided in the plan, the merger 98 13 or consolidation is effective when the articles of merger or 98 14 consolidation are filed in the office of the secretary or the 98 15 appropriate office of another jurisdiction. 98 16 g. The secretary shall issue a certificate of organization 98 17 of the merged or consolidated cooperative. 98 18 5. EFFECT OF MERGER. For a merger that does not involve 98 19 an Iowa limited liability company, the following shall apply 98 20 to the effect of a merger: 98 21 a. After the effective date, the domestic cooperative, 98 22 Iowa limited liability company, if party to the plan, and any 98 23 foreign business entity that is a party to the plan become a 98 24 single entity. For a merger, the surviving business entity is 98 25 the business entity designated in the plan. For a 98 26 consolidation, the new domestic cooperative, the Iowa limited 98 27 liability company, if any, and any foreign business entity is 98 28 the business entity provided for in the plan. Except for the 98 29 surviving or new domestic cooperative, Iowa limited liability 98 30 company, or foreign business entity, the separate existence of 98 31 each merged or consolidated domestic or foreign business 98 32 entity that is a party to the plan ceases on the effective 98 33 date of the merger or consolidation. 98 34 b. The surviving or new domestic cooperative, Iowa limited 98 35 liability company, or foreign business entity possesses all of 99 1 the rights and property of each of the merged or consolidated 99 2 business entities and is responsible for all their 99 3 obligations. The title to property of the merged or 99 4 consolidated domestic cooperative, Iowa limited liability 99 5 company, or foreign business entity is vested in the surviving 99 6 or new domestic cooperative, Iowa limited liability company, 99 7 or foreign business entity without reversion or impairment of 99 8 the title caused by the merger or consolidation. 99 9 c. If a merger involves an Iowa limited liability company, 99 10 this subsection is subject to the provisions of section 99 11 490A.1207. 99 12 Sec. 81. NEW SECTION. 501A.1102 MERGER OF SUBSIDIARY. 99 13 1. WHEN AUTHORIZED – CONTENTS OF PLAN. For purposes of 99 14 this section, "subsidiary" means a domestic cooperative, an 99 15 Iowa limited liability company, or a foreign cooperative. 99 16 2. An Iowa limited liability company may only participate 99 17 in a merger under this section to the extent authorized under 99 18 section 490A.1207. A parent domestic cooperative or a 99 19 subsidiary that is a domestic cooperative may complete the 99 20 merger of a subsidiary as provided in this section. However, 99 21 if either the parent cooperative or the subsidiary is a 99 22 business entity organized under the laws of this state, the 99 23 merger of the subsidiary is not authorized under this section 99 24 unless the law governing the business entity expressly 99 25 authorizes merger with a cooperative. 99 26 a. A parent cooperative owning at least ninety percent of 99 27 the outstanding ownership interests of each class and series 99 28 of a subsidiary directly, or indirectly through related 99 29 organizations, other than classes or series that, absent this 99 30 section, would otherwise not be entitled to vote on the 99 31 merger, may merge the subsidiary into itself or into any other 99 32 subsidiary at least ninety percent of the outstanding 99 33 ownership interests of each class and series of which is owned 99 34 by the parent cooperative directly, or indirectly through 99 35 related organizations, other than classes or series that, 100 1 absent this section, would otherwise not be entitled to vote 100 2 on the merger, without a vote of the members of itself or any 100 3 subsidiary or may merge itself, or itself and one or more of 100 4 the subsidiaries, into one of the subsidiaries under this 100 5 section. A resolution approved by the affirmative vote of a 100 6 majority of the directors of the parent cooperative present 100 7 shall set forth a plan of merger that contains all of the 100 8 following: 100 9 (1) The name of the subsidiary or subsidiaries, the name 100 10 of the parent cooperative, and the name of the surviving 100 11 cooperative. 100 12 (2) The manner and basis of converting the membership 100 13 interests of the subsidiary or subsidiaries or parent 100 14 cooperative into securities of the parent cooperative, 100 15 subsidiary, or of another cooperative or, in whole or in part, 100 16 into money or other property. 100 17 (3) If the parent cooperative is a constituent cooperative 100 18 but is not the surviving cooperative in the merger, a 100 19 provision for the pro rata issuance of membership interests of 100 20 the surviving cooperative to the holders of membership 100 21 interests of the parent on surrender of any certificates for 100 22 shares or membership interests of the parent cooperative. 100 23 (4) If the surviving cooperative is a subsidiary, a 100 24 statement of any amendments to the articles of the surviving 100 25 cooperative that will be part of the merger. 100 26 b. If the parent is a constituent cooperative and the 100 27 surviving cooperative in the merger, the parent cooperative 100 28 may change its cooperative name, without a vote of its 100 29 members, by the inclusion of a provision to that effect in the 100 30 resolution of merger setting forth the plan of merger that is 100 31 approved by the affirmative vote of a majority of the 100 32 directors of the parent cooperative present. Upon the 100 33 effective date of the merger, the name of the parent 100 34 cooperative shall be changed. 100 35 c. If the parent cooperative is a constituent cooperative 101 1 but is not the surviving cooperative in the merger, the 101 2 resolution is not effective unless the resolution is also 101 3 approved by the affirmative vote of the holders of a majority 101 4 of the voting power of all membership interests of the parent 101 5 entitled to vote at a regular or special meeting if the parent 101 6 is a cooperative, or in accordance with the laws under which 101 7 the parent is organized if the parent is a foreign business 101 8 entity or foreign cooperative. 101 9 3. NOTICE TO MEMBERS OF SUBSIDIARY. Notice of the action, 101 10 including a copy of the plan of merger, shall be delivered to 101 11 each member, other than the parent cooperative and any 101 12 subsidiary of each subsidiary that is a constituent 101 13 cooperative in the merger before, or within ten days after, 101 14 the effective date of the merger. 101 15 4. ARTICLES OF MERGER – CONTENTS OF ARTICLES. Articles 101 16 of merger shall be prepared that contain all of the following: 101 17 a. The plan of merger. 101 18 b. The number of outstanding membership interests of each 101 19 series and class of each subsidiary that is a constituent 101 20 cooperative in the merger, other than the series or classes 101 21 that, absent this section, would otherwise not be entitled to 101 22 vote on the merger, and the number of membership interests of 101 23 each series and class of the subsidiary or subsidiaries, other 101 24 than series or classes that, absent this section, would 101 25 otherwise not be entitled to vote on the merger, owned by the 101 26 parent directly, or indirectly through related organizations. 101 27 c. A statement that the plan of merger has been approved 101 28 by the parent under this section. 101 29 5. ARTICLES SIGNED, FILED. The articles of merger shall 101 30 be signed on behalf of the parent and filed with the 101 31 secretary. 101 32 6. CERTIFICATE. The secretary shall issue a certificate 101 33 of merger to the parent or its legal representative or, if the 101 34 parent is a constituent cooperative but is not the surviving 101 35 cooperative in the merger, to the surviving cooperative or its 102 1 legal representative. 102 2 7. NONEXCLUSIVITY. A merger among a parent and one or 102 3 more subsidiaries or among two or more subsidiaries of a 102 4 parent may be accomplished under section 501A.1101 instead of 102 5 this section, in which case this section does not apply. 102 6 Sec. 82. NEW SECTION. 501A.1103 ABANDONMENT. 102 7 1. ABANDONMENT BY MEMBERS OF PLAN. After a plan of merger 102 8 has been approved by the members entitled to vote on the 102 9 approval of the plan and before the effective date of the 102 10 plan, the plan may be abandoned by the same vote that approved 102 11 the plan. 102 12 2. ABANDONMENT OF MERGER. 102 13 a. A merger may be abandoned upon any of the following: 102 14 (1) The members of each of the constituent domestic 102 15 cooperatives entitled to vote on the approval of the plan have 102 16 approved the abandonment at a meeting by the affirmative vote 102 17 of the holders of a majority of the voting power of the 102 18 membership interests entitled to vote. 102 19 (2) The merger is with a domestic cooperative and an Iowa 102 20 limited liability company or foreign business entity. 102 21 (3) The abandonment is approved in such manner as may be 102 22 required by section 490A.1207 for the involvement of an Iowa 102 23 limited liability company, or for a foreign business entity by 102 24 the laws of the state under which the foreign business entity 102 25 is organized. 102 26 (4) The members of a constituent domestic cooperative are 102 27 not entitled to vote on the approval of the plan, and the 102 28 board of the constituent domestic cooperative has approved the 102 29 abandonment by the affirmative vote of a majority of the 102 30 directors present. 102 31 (5) The plan provides for abandonment and all conditions 102 32 for abandonment set forth in the plan are met. 102 33 (6) The plan is abandoned before the effective date of the 102 34 plan by a resolution of the board of any constituent domestic 102 35 cooperative abandoning the plan of merger approved by the 103 1 affirmative vote of a majority of the directors present, 103 2 subject to the contract rights of any other person under the 103 3 plan. If a plan of merger is with a domestic business entity 103 4 or foreign business entity, the plan of merger may be 103 5 abandoned before the effective date of the plan by a 103 6 resolution of the foreign business entity adopted according to 103 7 the laws of the state under which the foreign business entity 103 8 is organized, subject to the contract rights of any other 103 9 person under the plan. If the plan of merger is with an Iowa 103 10 limited liability company, the plan of merger may be abandoned 103 11 by the Iowa limited liability company as provided in section 103 12 490A.1207, subject to the contractual rights of any other 103 13 person under the plan. 103 14 b. If articles of merger have been filed with the 103 15 secretary, but have not yet become effective, the constituent 103 16 organizations, in the case of abandonment under paragraph "a", 103 17 subparagraphs (1) through (4), the constituent organizations 103 18 or any one of them, in the case of abandonment under paragraph 103 19 "a", subparagraph (5), or the abandoning organization in the 103 20 case of abandonment under paragraph "a", subparagraph (6), 103 21 shall file with the secretary articles of abandonment that 103 22 include all of the following: 103 23 (1) The names of the constituent organizations. 103 24 (2) The provisions of this section under which the plan is 103 25 abandoned. 103 26 (3) If the plan is abandoned under paragraph "a", 103 27 subparagraph (6), the text of the resolution abandoning the 103 28 plan. 103 29 Sec. 83. NEW SECTION. 501A.1104 CONVERSION – AMENDMENT 103 30 OF ORGANIZATIONAL DOCUMENTS TO BE GOVERNED BY THIS CHAPTER. 103 31 1. AUTHORITY. 103 32 a. A traditional cooperative organized may convert to a 103 33 cooperative and become subject to this chapter by amending its 103 34 organizational documents to conform to the requirements of 103 35 this chapter. 104 1 b. A traditional cooperative becoming a converted 104 2 cooperative must provide its members with a disclosure 104 3 statement of the rights and obligations of the members and the 104 4 capital structure of the cooperative before becoming subject 104 5 to this chapter. A traditional cooperative, upon distribution 104 6 of the disclosure required in this subsection and approval of 104 7 its members as necessary for amending its articles under the 104 8 respective chapter of its organization, may amend its articles 104 9 to comply with this chapter. 104 10 c. A traditional cooperative becoming a converted 104 11 cooperative must prepare a certificate stating all of the 104 12 following: 104 13 (1) The date on which the traditional cooperative was 104 14 first organized. 104 15 (2) The name of the traditional cooperative and, if the 104 16 name is changed, the name of the cooperative becoming 104 17 converted. 104 18 (3) The future effective date and time, which must be a 104 19 date and time certain, that the traditional cooperative will 104 20 be governed by this chapter, if the effective date and time is 104 21 not to be the date and time of filing. 104 22 d. Upon filing with the secretary of the articles for 104 23 compliance with this chapter and the certificate required 104 24 under paragraph "c", a traditional cooperative is converted 104 25 and governed by this chapter unless a later date and time is 104 26 specified in the certificate under paragraph "c". 104 27 e. In connection with a conversion under which a 104 28 traditional cooperative becomes governed by this chapter, the 104 29 rights, securities, or interests of the traditional 104 30 cooperative as provided in chapter 497, 498, 499, or 501 may 104 31 be exchanged or converted into rights, property, securities, 104 32 or interests in the converted cooperative. 104 33 2. EFFECT OF BEING GOVERNED BY THIS CHAPTER. The 104 34 conversion of a traditional cooperative to a cooperative 104 35 governed by this chapter does not affect any obligations or 105 1 liabilities of the cooperative before the conversion or the 105 2 personal liability of any person incurred before the 105 3 conversion. 105 4 a. When the conversion is effective, the rights, 105 5 privileges, and powers of the cooperative, real and personal 105 6 property of the cooperative, debts due to the cooperative, and 105 7 causes of action belonging to the traditional cooperative 105 8 remain vested in the converted cooperative and are the 105 9 property of the converted cooperative and governed by this 105 10 chapter. Title to real property vested by deed or otherwise 105 11 in the traditional cooperative does not revert and is not 105 12 impaired by reason of the cooperative being converted and 105 13 governed by this chapter. 105 14 b. Rights of creditors and liens upon property of the 105 15 traditional cooperative are preserved unimpaired, and debts, 105 16 liabilities, and duties of the traditional cooperative remain 105 17 attached to the converted cooperative and may be enforced 105 18 against the converted cooperative to the same extent as if the 105 19 debts, liabilities, and duties had originally been incurred or 105 20 contracted by the cooperative as organized under this chapter. 105 21 c. The rights, privileges, powers, and interests in 105 22 property of the traditional cooperative as well as the debts, 105 23 liabilities, and duties of the traditional cooperative are not 105 24 deemed, as a consequence of the conversion, to have been 105 25 transferred for any purpose by the laws of this state. 105 26 SUBCHAPTER 12 105 27 DISSOLUTION 105 28 Sec. 84. NEW SECTION. 501A.1201 METHODS OF DISSOLUTION. 105 29 A cooperative may be dissolved by the members or by 105 30 administrative or court order as provided in this chapter. 105 31 Sec. 85. NEW SECTION. 501A.1202 WINDING UP. 105 32 1. COLLECTION AND PAYMENT OF DEBTS. After the notice of 105 33 intent to dissolve has been filed with the secretary, the 105 34 board, or the officers acting under the direction of the 105 35 board, shall proceed as soon as possible to do all of the 106 1 following: 106 2 a. Collect or make provision for the collection of all 106 3 debts due or owing to the cooperative, including unpaid 106 4 subscriptions for membership interests. 106 5 b. Pay or make provision for the payment of all debts, 106 6 obligations, and liabilities of the cooperative according to 106 7 their priorities. 106 8 2. TRANSFER OF ASSETS. After the notice of intent to 106 9 dissolve has been filed with the secretary, the board may 106 10 sell, lease, transfer, or otherwise dispose of all or 106 11 substantially all of the property and assets of the dissolving 106 12 cooperative without a vote of the members. 106 13 3. DISTRIBUTION TO MEMBERS. Tangible and intangible 106 14 property, including money, remaining after the discharge of 106 15 the debts, obligations, and liabilities of the cooperative 106 16 shall be distributed to the members and former members as 106 17 provided in the cooperative's articles or bylaws, unless 106 18 otherwise provided by law. If previously authorized by the 106 19 members, the tangible and intangible property of the 106 20 cooperative may be liquidated and disposed of at the 106 21 discretion of the board. 106 22 Sec. 86. NEW SECTION. 501A.1203 REVOCATION OF 106 23 DISSOLUTION PROCEEDINGS. 106 24 1. AUTHORITY TO REVOKE. Dissolution proceedings may be 106 25 revoked before the articles of dissolution are filed with the 106 26 secretary. 106 27 2. REVOCATION BY MEMBERS. The chairperson may call a 106 28 members' meeting to consider the advisability of revoking the 106 29 dissolution proceedings. The question of the proposed 106 30 revocation shall be submitted to the members at the members' 106 31 meeting called to consider the revocation. The dissolution 106 32 proceedings are revoked if the proposed revocation is approved 106 33 at the members' meeting by a majority of the members of the 106 34 cooperative or, for a cooperative with articles or bylaws 106 35 requiring a greater number of members, the number of members 107 1 required by the articles or bylaws. 107 2 3. FILING WITH THE SECRETARY. Revocation of dissolution 107 3 proceedings is effective when a notice of revocation is filed 107 4 with the secretary. After the notice is filed, the 107 5 cooperative may resume business. 107 6 Sec. 87. NEW SECTION. 501A.1204 STATUTE OF LIMITATIONS. 107 7 The claim of a creditor or claimant against a dissolving 107 8 cooperative is barred if the claim has not been enforced by 107 9 initiating legal, administrative, or arbitration proceedings 107 10 concerning the claim by two years after the date the notice of 107 11 intent to dissolve is filed with the secretary. 107 12 Sec. 88. NEW SECTION. 501A.1205 ARTICLES OF DISSOLUTION. 107 13 1. CONDITIONS TO FILE. Articles of dissolution of a 107 14 cooperative shall be filed with the secretary after payment of 107 15 the claims of all known creditors and claimants has been made 107 16 or provided for and the remaining property has been 107 17 distributed by the board. The articles of dissolution shall 107 18 state all of the following: 107 19 a. All debts, obligations, and liabilities of the 107 20 cooperative have been paid or discharged or adequate 107 21 provisions have been made for them or time periods allowing 107 22 claims have run and other claims are not outstanding. 107 23 b. The remaining property, assets, and claims of the 107 24 cooperative have been distributed among the members or under a 107 25 liquidation authorized by the members. 107 26 c. Legal, administrative, or arbitration proceedings by or 107 27 against the cooperative are not pending or adequate provision 107 28 has been made for the satisfaction of a judgment, order, or 107 29 decree that may be entered against the cooperative in a 107 30 pending proceeding. 107 31 2. DISSOLUTION EFFECTIVE ON FILING. The cooperative is 107 32 dissolved when the articles of dissolution have been filed 107 33 with the secretary. 107 34 3. CERTIFICATE. The secretary shall issue to the 107 35 dissolved cooperative or its legal representative a 108 1 certificate of dissolution that contains all of the following: 108 2 a. The name of the dissolved cooperative. 108 3 b. The date the articles of dissolution were filed with 108 4 the secretary. 108 5 c. A statement that the cooperative is dissolved. 108 6 Sec. 89. NEW SECTION. 501A.1206 APPLICATION FOR COURT- 108 7 SUPERVISED VOLUNTARY DISSOLUTION. 108 8 After a notice of intent to dissolve has been filed with 108 9 the secretary and before a certificate of dissolution has been 108 10 issued, the cooperative or, for good cause shown, a member or 108 11 creditor may apply to a court within the county where the 108 12 registered address is located to have the dissolution 108 13 conducted or continued under the supervision of the court. 108 14 Sec. 90. NEW SECTION. 501A.1207 COURT-ORDERED REMEDIES 108 15 FOR DISSOLUTION. 108 16 1. CONDITIONS FOR RELIEF. A court may grant equitable 108 17 relief that the court deems just and reasonable in the 108 18 circumstances or may dissolve a cooperative and liquidate its 108 19 assets and business as follows: 108 20 a. In a supervised voluntary dissolution that is applied 108 21 for by the cooperative. 108 22 b. In an action by a member when it is established that 108 23 any of the following apply: 108 24 (1) The directors or the persons having the authority 108 25 otherwise vested in the board are deadlocked in the management 108 26 of the cooperative's affairs and the members are unable to 108 27 break the deadlock. 108 28 (2) The directors or those in control of the cooperative 108 29 have acted fraudulently, illegally, or in a manner unfairly 108 30 prejudicial toward one or more members in their capacities as 108 31 members, directors, or officers. 108 32 (3) The members of the cooperative are so divided in 108 33 voting power that, for a period that includes the time when 108 34 two consecutive regular members' meetings were held, they have 108 35 failed to elect successors to directors whose terms have 109 1 expired or would have expired upon the election and 109 2 qualification of their successors. 109 3 (4) The cooperative assets are being misapplied or wasted. 109 4 (5) The period of duration as provided in the articles has 109 5 expired and has not been extended as provided in this chapter. 109 6 c. In an action by a creditor when any of the following 109 7 applies: 109 8 (1) The claim of the creditor against the cooperative has 109 9 been reduced to judgment and an execution on the judgment has 109 10 been returned unsatisfied. 109 11 (2) The cooperative has admitted in writing that the claim 109 12 of the creditor against the cooperative is due and owing and 109 13 it is established that the cooperative is unable to pay its 109 14 debts in the ordinary course of business. 109 15 (3) In an action by the attorney general to dissolve the 109 16 cooperative in accordance with this chapter when it is 109 17 established that a decree of dissolution is appropriate. 109 18 2. CONDITION OF COOPERATIVE OR ASSOCIATION. In 109 19 determining whether to order equitable relief or dissolution, 109 20 the court shall take into consideration the financial 109 21 condition of the cooperative, but shall not refuse to order 109 22 equitable relief or dissolution solely on the grounds that the 109 23 cooperative has accumulated operating net income or current 109 24 operating net income. 109 25 3. DISSOLUTION AS REMEDY. In deciding whether to order 109 26 dissolution of the cooperative, the court shall consider 109 27 whether lesser relief suggested by one or more parties, such 109 28 as a form of equitable relief or a partial liquidation, would 109 29 be adequate to permanently relieve the circumstances 109 30 established under subsection 1, paragraph "b", subparagraph 109 31 (1) or (2). Lesser relief may be ordered if it would be 109 32 appropriate under the facts and circumstances of the case. 109 33 4. EXPENSES. If the court finds that a party to a 109 34 proceeding brought under this section has acted arbitrarily, 109 35 vexatiously, or otherwise not in good faith, the court may in 110 1 its discretion award reasonable expenses, including attorney 110 2 fees and disbursements to any of the other parties. 110 3 5. VENUE. Proceedings under this section shall be brought 110 4 in a court within the county where the registered address of 110 5 the cooperative is located. 110 6 6. PARTIES. It is not necessary to make members parties 110 7 to the action or proceeding unless relief is sought against 110 8 them personally. 110 9 Sec. 91. NEW SECTION. 501A.1208 PROCEDURE IN INVOLUNTARY 110 10 OR COURT-SUPERVISED VOLUNTARY DISSOLUTION. 110 11 1. ACTION BEFORE HEARING. Before a hearing is completed 110 12 in dissolution proceedings, a court may do any of the 110 13 following: 110 14 a. Issue injunctions. 110 15 b. Appoint receivers with all powers and duties that the 110 16 court directs. 110 17 c. Take actions required to preserve the cooperative's 110 18 assets, wherever located. 110 19 d. Carry on the business of the cooperative. 110 20 2. ACTION AFTER HEARING. After a hearing is completed, 110 21 upon notice to parties to the proceedings and to other parties 110 22 in interest designated by the court, the court may appoint a 110 23 receiver to collect the cooperative's assets, including 110 24 amounts owing to the cooperative by subscribers on account of 110 25 an unpaid portion of the consideration for the issuance of 110 26 membership interests. A receiver has authority, subject to 110 27 the order of the court, to continue the business of the 110 28 cooperative and to sell, lease, transfer, or otherwise dispose 110 29 of the property and assets of the cooperative, either at 110 30 public or private sale. 110 31 3. DISCHARGE OF OBLIGATIONS. The assets of the 110 32 cooperative or the proceeds resulting from a sale, lease, 110 33 transfer, or other disposition shall be applied in the 110 34 following order of priority: 110 35 a. The costs and expense of the proceedings, including 111 1 attorney fees and disbursements. 111 2 b. Debts, taxes, and assessments due the United States, 111 3 this state, and other states in that order. 111 4 c. Claims duly proved and allowed to employees under the 111 5 provisions of the workers' compensation law, except that 111 6 claims under this paragraph shall not be allowed if the 111 7 cooperative carried workers' compensation insurance, as 111 8 provided by law, at the time the injury was sustained. 111 9 d. Claims, including the value of all compensation paid in 111 10 a medium other than money, proved and allowed to employees for 111 11 services performed within three months preceding the 111 12 appointment of the receiver. 111 13 e. Other claims that are proved and allowed by the court. 111 14 4. REMAINDER TO MEMBERS. After payment of the expenses of 111 15 receivership and claims of creditors are proved, the remaining 111 16 assets, if any, may be distributed to the members or 111 17 distributed under an approved liquidation plan. 111 18 Sec. 92. NEW SECTION. 501A.1209 RECEIVER QUALIFICATIONS 111 19 AND POWERS. 111 20 1. QUALIFICATIONS. A receiver shall be a natural person 111 21 or a domestic business entity or a foreign business entity 111 22 authorized to transact business in this state. A receiver 111 23 shall give a bond as directed by the court with the sureties 111 24 required by the court. 111 25 2. POWERS. A receiver may sue and defend in all courts as 111 26 receiver of the cooperative. The court appointing the 111 27 receiver has exclusive jurisdiction of the cooperative and its 111 28 property. 111 29 Sec. 93. NEW SECTION. 501A.1210 DISSOLUTION ACTION BY 111 30 ATTORNEY GENERAL – ADMINISTRATIVE DISSOLUTION. 111 31 1. CONDITIONS TO BEGIN ACTION. A cooperative may be 111 32 dissolved involuntarily by a decree of a court in this state 111 33 in an action filed by the attorney general if it is 111 34 established that any of the following applies: 111 35 a. The articles and certificate of organization were 112 1 procured through fraud. 112 2 b. The cooperative was organized for a purpose not 112 3 permitted by this chapter or prohibited by state law. 112 4 c. The cooperative has flagrantly violated a provision of 112 5 this chapter, has violated a provision of this chapter more 112 6 than once, or has violated more than one provision of this 112 7 chapter. 112 8 d. The cooperative has acted, or failed to act, in a 112 9 manner that constitutes surrender or abandonment of the 112 10 cooperative's franchise, privileges, or enterprise. 112 11 2. NOTICE TO COOPERATIVE. An action shall not be 112 12 commenced under subsection 1 until thirty days after notice to 112 13 the cooperative by the attorney general of the reason for the 112 14 filing of the action. If the reason for filing the action is 112 15 an act that the cooperative has done, or omitted to do, and 112 16 the act or omission may be corrected by an amendment of the 112 17 articles or bylaws or by performance of or abstention from the 112 18 act, the attorney general shall give the cooperative thirty 112 19 additional days to make the correction before filing the 112 20 action. 112 21 Sec. 94. NEW SECTION. 501A.1211 FILING CLAIMS IN COURT- 112 22 SUPERVISED DISSOLUTION PROCEEDINGS. 112 23 1. FILING UNDER OATH. In proceedings to dissolve a 112 24 cooperative, the court may require all creditors and claimants 112 25 of the cooperative to file their claims under oath with the 112 26 clerk of court or with the receiver in a form prescribed by 112 27 the court. 112 28 2. DATE TO FILE A CLAIM. If the court requires the filing 112 29 of claims, the court shall do all of the following: 112 30 a. Set a date, by order, at least one hundred twenty days 112 31 after the date the order is filed as the last day for the 112 32 filing of claims. 112 33 b. Prescribe the notice of the fixed date that shall be 112 34 given to creditors and claimants. 112 35 3. FIXED DATE OR EXTENSION FOR FILING. Before the fixed 113 1 date, the court may extend the time for filing claims. 113 2 Creditors and claimants failing to file claims on or before 113 3 the fixed date may be barred, by order of court, from claiming 113 4 an interest in or receiving payment out of the property or 113 5 assets of the cooperative. 113 6 Sec. 95. NEW SECTION. 501A.1212 DISCONTINUANCE OF COURT- 113 7 SUPERVISED DISSOLUTION PROCEEDINGS. 113 8 The involuntary or supervised voluntary dissolution of a 113 9 cooperative may be discontinued at any time during the 113 10 dissolution proceedings if it is established that cause for 113 11 dissolution does not exist. The court shall dismiss the 113 12 proceedings and direct the receiver, if any, to redeliver to 113 13 the cooperative its remaining property and assets. 113 14 Sec. 96. NEW SECTION. 501A.1213 COURT-SUPERVISED 113 15 DISSOLUTION ORDER. 113 16 1. CONDITIONS FOR DISSOLUTION ORDER. In an involuntary or 113 17 supervised voluntary dissolution the court shall enter an 113 18 order dissolving the cooperative upon the following 113 19 conditions: 113 20 a. After the costs and expenses of the proceedings and all 113 21 debts, obligations, and liabilities of the cooperative have 113 22 been paid or discharged and the remaining property and assets 113 23 have been distributed to its members. 113 24 b. If the property or other assets are not sufficient to 113 25 satisfy and discharge the costs, expenses, debts, obligations, 113 26 and liabilities, when all the property and assets have been 113 27 applied so far as they will go to their payment according to 113 28 their priorities. 113 29 2. DISSOLUTION EFFECTIVE ON FILING ORDER. When the order 113 30 dissolving the cooperative has been entered, the cooperative 113 31 is dissolved. 113 32 Sec. 97. NEW SECTION. 501A.1214 FILING COURT'S 113 33 DISSOLUTION ORDER. 113 34 After the court enters an order dissolving a cooperative, 113 35 the clerk of court shall cause a certified copy of the 114 1 dissolution order to be filed with the secretary. The 114 2 secretary shall not charge a fee for filing the dissolution 114 3 order. 114 4 Sec. 98. NEW SECTION. 501A.1215 BARRING OF CLAIMS. 114 5 1. CLAIMS BARRED. A person who is or becomes a creditor 114 6 or claimant before, during, or following the conclusion of 114 7 dissolution proceedings, who does not file a claim or pursue a 114 8 remedy in a legal, administrative, or arbitration proceeding 114 9 during the pendency of the dissolution proceeding or has not 114 10 initiated a legal, administrative, or arbitration proceeding 114 11 before the commencement of the dissolution proceedings and all 114 12 those claiming through or under the creditor or claimant, are 114 13 forever barred from suing on that claim or otherwise realizing 114 14 upon or enforcing it, except as provided in this section. 114 15 2. CERTAIN UNFILED CLAIMS ALLOWED. Within one year after 114 16 articles of dissolution have been filed with the secretary 114 17 under this chapter or a dissolution order has been entered, a 114 18 creditor or claimant who shows good cause for not having 114 19 previously filed the claim may apply to a court in this state 114 20 to allow a claim for any of the following: 114 21 a. Against the cooperative to the extent of undistributed 114 22 assets. 114 23 b. If the undistributed assets are not sufficient to 114 24 satisfy the claim, the claim may be allowed against a member 114 25 to the extent of the distributions to members in dissolution 114 26 received by the member. 114 27 3. OMITTED CLAIMS ALLOWED. Debts, obligations, and 114 28 liabilities incurred during dissolution proceedings shall be 114 29 paid or provided for by the cooperative before the 114 30 distribution of assets to a member. A person to whom this 114 31 kind of debt, obligation, or liability is owed but is not paid 114 32 may pursue any remedy against the offenders, directors, or 114 33 members of the cooperative before the expiration of the 114 34 applicable statute of limitations. This subsection does not 114 35 apply to dissolution under the supervision or order of a 115 1 court. 115 2 Sec. 99. NEW SECTION. 501A.1216 RIGHT TO SUE OR DEFEND 115 3 AFTER DISSOLUTION. 115 4 After a cooperative has been dissolved, any of its former 115 5 officers, directors, or members may assert or defend, in the 115 6 name of the cooperative, a claim by or against the 115 7 cooperative. 115 8 DIVISION II 115 9 CONFORMING CHANGES 115 10 Sec. 100. Section 10B.1, subsection 2, Code Supplement 115 11 2003, is amended to read as follows: 115 12 2. "Cooperative association" means any entity organized on 115 13 a cooperative basis, including an association of persons 115 14 organized under chapter 497, 498, or 499; an entity composed 115 15 of entities organized under those chapters; or a cooperative 115 16 organized under chapter 501 or 501A. 115 17 Sec. 101. Section 15.333, subsection 1, unnumbered 115 18 paragraph 1, Code Supplement 2003, is amended to read as 115 19 follows: 115 20 An eligible business may claim a corporate tax credit up to 115 21 a maximum of ten percent of the new investment which is 115 22 directly related to new jobs created by the location or 115 23 expansion of an eligible business under the program. Any 115 24 credit in excess of the tax liability for the tax year may be 115 25 credited to the tax liability for the following seven years or 115 26 until depleted, whichever occurs earlier. Subject to prior 115 27 approval by the department of economic development in 115 28 consultation with the department of revenue, an eligible 115 29 business whose project primarily involves the production of 115 30 value-added agricultural products may elect to receive a 115 31 refund of all or a portion of an unused tax credit. For 115 32 purposes of this section, an eligible business includes a 115 33 cooperative described in section 521 of the Internal Revenue 115 34 Code which is not required to file an Iowa corporate income 115 35 tax return. The refund may be used against a tax liability 116 1 imposed under chapter 422, division II, III, or V. If the 116 2 business is a partnership, S corporation, limited liability 116 3 company, cooperative organized under chapter 501 or 501A and 116 4 filing as a partnership for federal tax purposes, or estate or 116 5 trust electing to have the income taxed directly to the 116 6 individual, an individual may claim the tax credit allowed. 116 7 The amount claimed by the individual shall be based upon the 116 8 pro rata share of the individual's earnings of the 116 9 partnership, S corporation, limited liability company, 116 10 cooperative organized under chapter 501 or 501A and filing as 116 11 a partnership for federal tax purposes, or estate or trust. 116 12 Sec. 102. Section 15.385, subsection 3, paragraph a, Code 116 13 Supplement 2003, is amended to read as follows: 116 14 a. An eligible business may claim a tax credit equal to a 116 15 percentage of the new investment directly related to new jobs 116 16 created by the location or expansion of an eligible business 116 17 under the program. The tax credit shall be allowed against 116 18 taxes imposed under chapter 422, division II, III, or V. If 116 19 the business is a partnership, S corporation, limited 116 20 liability company, cooperative organized under chapter 501 and 116 21 filing as a partnership for federal tax purposes, or estate or 116 22 trust electing to have the income taxed directly to the 116 23 individual, an individual may claim the tax credit allowed. 116 24 The amount claimed by the individual shall be based upon the 116 25 pro rata share of the individual's earnings of the 116 26 partnership, S corporation, limited liability company, 116 27 cooperative organized under chapter 501 or 501A, and filing as 116 28 a partnership for federal tax purposes, or estate or trust. 116 29 The percentage shall be equal to the amount provided in 116 30 paragraph "d". Any tax credit in excess of the tax liability 116 31 for the tax year may be credited to the tax liability for the 116 32 following seven years or until depleted, whichever occurs 116 33 first. 116 34 Subject to prior approval by the department of economic 116 35 development, in consultation with the department of revenue, 117 1 an eligible business whose project primarily involves the 117 2 production of value-added agricultural products or uses 117 3 biotechnology-related processes may elect to receive a refund 117 4 of all or a portion of an unused tax credit. For purposes of 117 5 this subsection, such an eligible business includes a 117 6 cooperative described in section 521 of the Internal Revenue 117 7 Code which is not required to file an Iowa corporate income 117 8 tax return, and whose project primarily involves the 117 9 production of ethanol. The refund may be applied against a 117 10 tax liability imposed under chapter 422, division II, III, or 117 11 V. If the business is a partnership, S corporation, limited 117 12 liability company, cooperative organized under chapter 501 or 117 13 501A, and filing as a partnership for federal tax purposes, or 117 14 estate or trust electing to have the income taxed directly to 117 15 the individual, an individual may claim the tax credit 117 16 allowed. The amount claimed by the individual shall be based 117 17 upon the pro rata share of the individual's earnings of the 117 18 partnership, S corporation, limited liability company, 117 19 cooperative organized under chapter 501 and filing as a 117 20 partnership for federal tax purposes, or estate or trust. 117 21 Sec. 103. Section 15E.193C, subsection 7, paragraph a, 117 22 Code Supplement 2003, is amended to read as follows: 117 23 a. An eligible development business may claim a tax credit 117 24 up to a maximum of ten percent of the new investment that is 117 25 directly related to the construction, expansion, or 117 26 rehabilitation of building space to be used for manufacturing, 117 27 processing, cold storage, distribution, or office facilities. 117 28 For purposes of this section, "new investment" includes the 117 29 purchase price of land and the cost of improvements made to 117 30 real property. The tax credit may be claimed by an eligible 117 31 development business for the tax year in which the 117 32 construction, expansion, or rehabilitation is completed. The 117 33 tax credit may be used to reduce the tax liability imposed 117 34 under chapter 422, division II, III, or V, or chapter 432. 117 35 Any credit in excess of the tax liability for the tax year may 118 1 be credited to the tax liability for the following seven years 118 2 or until depleted, whichever occurs earlier. If the business 118 3 is a partnership, S corporation, limited liability company, 118 4 cooperative organized under chapter 501 or 501A and filing as 118 5 a partnership for federal tax purposes, or estate or trust 118 6 electing to have the income taxed directly to the individual, 118 7 an individual may claim the tax credit allowed. The amount 118 8 claimed by the individual shall be based upon the pro rata 118 9 share of the individual's earnings of the partnership, S 118 10 corporation, limited liability company, cooperative organized 118 11 under chapter 501 or 501A and filing as a partnership for 118 12 federal tax purposes, or estate or trust. 118 13 Sec. 104. Section 15E.202, subsection 17, paragraph b, 118 14 Code 2003, is amended to read as follows: 118 15 b. A cooperative organized under chapter 501 or 501A. 118 16 Sec. 105. Section 203.1, subsection 10, paragraph i, Code 118 17 Supplement 2003, is amended to read as follows: 118 18 i. A cooperative organized under chapter 501 or 501A, if 118 19 the cooperative only purchases grain from its members who are 118 20 producers or from a licensed grain dealer, and the cooperative 118 21 does not resell that grain. 118 22 Sec. 106. Section 490A.102, subsection 4, Code 2003, is 118 23 amended to read as follows: 118 24 4. "Constituent entity" means each limited liability 118 25 company, limited partnership,orcorporation, or domestic 118 26 cooperative which is party to a plan of merger pursuant to 118 27 subchapter XII. 118 28 Sec. 107. Section 490A.102, Code 2003, is amended by 118 29 adding the following new subsection: 118 30 NEW SUBSECTION. 7A. "Domestic cooperative" means a 118 31 cooperative organized under chapter 497, 498, 499, 501, or 118 32 501A. 118 33 Sec. 108. Section 490A.1201, Code 2003, is amended by 118 34 striking the section and inserting in lieu thereof of the 118 35 following: 119 1 490A.1201 CONSTITUENT ENTITY. 119 2 As used in this section, unless the context otherwise 119 3 requires, "constituent entity", as used in sections 490A.1202, 119 4 490A.1204, 490A.1205, and 490A.1207, includes a domestic 119 5 cooperative. However, as used in section 490A.1203, 119 6 "constituent entity" does not include a domestic cooperative. 119 7 Sec. 109. NEW SECTION. 490A.1201A MERGER. 119 8 With or without a business purpose, a limited liability 119 9 company may merge with any of the following: 119 10 1. Another domestic limited liability company pursuant to 119 11 a plan of merger approved in the manner provided in sections 119 12 490A.1202 through 490A.1205. 119 13 2. A domestic corporation under a plan of merger approved 119 14 in the manner provided in sections 490A.1202 through 119 15 490A.1205, and in chapter 490. 119 16 3. A domestic limited partnership pursuant to a plan of 119 17 merger approved in the manner provided in sections 490A.1202 119 18 through 490A.1207, and in chapter 487. 119 19 4. One or more cooperatives organized under chapter 497, 119 20 498, 499, 501, or 501A, in the manner provided by and subject 119 21 to the limitations in section 490A.1207. 119 22 5. A foreign corporation, foreign limited liability 119 23 company, or foreign limited partnership pursuant to a plan of 119 24 merger approved in the manner provided in section 490A.1206. 119 25 Sec. 110. Section 490A.1202, Code 2003, is amended by 119 26 adding the following new subsection: 119 27 NEW SUBSECTION. 01. As used in this section "interests" 119 28 includes but is not limited to membership interests in a 119 29 domestic cooperative. 119 30 Sec. 111. NEW SECTION. 490A.1207 MERGER OF DOMESTIC 119 31 COOPERATIVE INTO A DOMESTIC LIMITED LIABILITY COMPANY. 119 32 1. a. A limited liability company may merge with a 119 33 domestic cooperative only as provided by this section. A 119 34 limited liability company may merge with one or more domestic 119 35 cooperatives if all of the following apply: 120 1 (1) Only one limited liability company and one or more 120 2 domestic cooperatives are parties to the merger. 120 3 (2) When the merger becomes effective, the separate 120 4 existence of each domestic cooperative ceases and the limited 120 5 liability company is the surviving entity per organization. 120 6 (3) As to each domestic cooperative, the plan of merger is 120 7 initiated and adopted, and the merger is effectuated, as 120 8 provided in section 501A.1101. 120 9 (4) As to the limited liability company, the plan of 120 10 merger complies with section 490A.1202, the plan of merger is 120 11 approved as provided in section 490A.1203, and the articles of 120 12 merger are prepared, signed, and filed as provided in section 120 13 490A.1204. 120 14 (5) Notwithstanding section 490A.1202, 490A.1205, or 120 15 490A.1206, the surviving organization must be the limited 120 16 liability company. 120 17 3. Section 501A.1103 governs the abandonment by a domestic 120 18 cooperative of a merger authorized by this section. Section 120 19 490A.1203, subsection 2, governs the abandonment by a limited 120 20 liability company of a merger authorized by this section, 120 21 except that for the purposes of a merger authorized by this 120 22 section, the requirements stated in section 490A.1203, 120 23 subsection 2, paragraphs "b" and "c", do not apply and instead 120 24 the abandonment must have been approved by the domestic 120 25 cooperative. 120 26 Sec. 112. Section 499.4, unnumbered paragraph 1, Code 120 27 2003, is amended to read as follows: 120 28NoA personor firm, and noincluding a corporation 120 29 hereafter organized, which is not an association as defined in 120 30 this chapter or a cooperative as defined in chapter 501 or 120 31 501A, shall not use the word "cooperative" or any abbreviation 120 32 thereof in its name or advertising or in any connection with 120 33 its business, except foreign associations admitted under 120 34 section 499.54. The attorney general or any association or 120 35 any member thereof may sue and enjoin such use. 121 1 Sec. 113. Section 502.102, subsection 15, Code Supplement 121 2 2003, is amended to read as follows: 121 3 15. "Person" means an individual,; a corporation,; a 121 4 limited liability company,; a partnership,; an association,; a 121 5 joint stock company,; a trust,; a fiduciary,; an 121 6 unincorporated organization, including but not limited to a 121 7 cooperative as provided in chapter 501A; a government,; or a 121 8 political subdivision of a government. 121 9 Sec. 114. Section 502.102, subsection 16, paragraph f, 121 10 Code Supplement 2003, is amended by adding the following new 121 11 subparagraph: 121 12 NEW SUBSECTION. (3) A dividend on equity distributed by 121 13 an agricultural cooperative association organized under 121 14 chapter 501A. 121 15 Sec. 115. Section 502.202, Code Supplement 2003, is 121 16 amended by adding the following new subsection: 121 17 NEW SUBSECTION. 20. a. Any offer or sale by a 121 18 cooperative organized under chapter 501A of its securities 121 19 when the securities are offered and sold only to its existing 121 20 members or when the purchase of the securities is necessary or 121 21 incidental to establishing patron membership in the 121 22 cooperative, or when such securities are issued as patronage 121 23 dividends. This subsection shall apply to offers and sales of 121 24 securities, other than the issuance of securities as patronage 121 25 dividends, only when the issuer, prior to the completion of 121 26 the sale of such securities, provides each offeree or 121 27 purchaser disclosure materials which, to the extent material 121 28 to an understanding of the issuer, its business, and the 121 29 securities being offered, substantially meet the disclosure 121 30 conditions and limitations found in Rule 502(b) of Regulation 121 31 D, promulgated by the securities and exchange commission, 17 121 32 C.F.R., pt. 17, } 230.502. 121 33 b. An agricultural cooperative association organized under 121 34 chapter 501A may, at or about the same time as offers or sales 121 35 are being completed in reliance upon this exemption from 122 1 registration and as part of a common plan of financing, offer 122 2 or sell its securities in reliance upon any other exemption 122 3 from registration available under this chapter. The offer or 122 4 sale of securities in reliance upon this subsection shall not 122 5 be considered or deemed a part of or be integrated with any 122 6 offer or sale of securities conducted by the agricultural 122 7 cooperative association in reliance upon any other exemption 122 8 from registration available under this chapter, nor shall 122 9 offers or sales of securities by the agricultural cooperative 122 10 association in reliance upon any other exemption from 122 11 registration available under this chapter be considered or 122 12 deemed a part of or be integrated with any offer or sale of 122 13 securities conducted by the agricultural cooperative 122 14 association in reliance upon this subsection. 122 15 Sec. 116. Section 556.1, subsection 3, Code Supplement 122 16 2003, is amended to read as follows: 122 17 3. "Cooperative association" meansanany of the 122 18 following: 122 19 a. An entity which is structured and operated on a 122 20 cooperative basis, including an association of persons 122 21 organized under chapter 497, 498, or 499; or an entity 122 22 composed of entities organized under those chapters; a. 122 23 b. A cooperative organized under chapter 501;. 122 24 c. A cooperative organized under chapter 501A. 122 25 d.aA cooperative association organized under chapter 122 26 490; or any. 122 27 e. Any other entity recognized pursuant to 26 U.S.C. } 122 28 1381(a) which meets the definitional requirements of an 122 29 association as provided in 12 U.S.C. } 1141(j)(a) or 7 U.S.C. 122 30 } 291. 122 31 Sec. 117. Section 556.5, subsection 4, paragraph b, Code 122 32 2003, is amended to read as follows: 122 33 b. A disbursement held by a cooperative association shall 122 34 not be deemed abandoned under this chapter if the disbursement 122 35 is retained by a cooperative association organized under 123 1 chapter 490 as provided in section 490.629,orby a 123 2 cooperative association organized under chapter 499 as 123 3 provided in section 499.30A, or by a cooperative as provided 123 4 in section 501A.1008. 123 5 EXPLANATION 123 6 This bill creates a new Code chapter 501A authorizing 123 7 persons to organize as a new form of cooperative. Generally, 123 8 cooperatives or cooperative associations in Iowa are formed 123 9 under Code chapter 499 (older Code chapters include 497 and 123 10 498). Traditionally, a cooperative is a business association 123 11 organized for purposes of providing economic services to its 123 12 members (sometimes referred to as shareholders) that does 123 13 business with patrons on a nonprofit or "cooperative" basis 123 14 and is taxed under special provisions. 123 15 Cooperatives are usually formed for agricultural purposes 123 16 or for providing utilities. Code chapter 501 provides for a 123 17 hybrid between a cooperative and corporation which is 123 18 organized for purposes of attracting outside capital. The 123 19 bill establishes another hybrid organization which includes 123 20 provisions and terms common to both cooperative associations 123 21 and limited liability companies. Its purpose is to allow the 123 22 formation of these types of business associations which are 123 23 organized and may be taxed as a limited liability company. 123 24 DIVISION I. The bill provides for administrative 123 25 provisions (governing the state's administration of 123 26 cooperative associations organized under the bill), its powers 123 27 and duties, including the powers and duties of its members and 123 28 directors, the equity interests (or membership interests) of 123 29 its members, the allocations and distributions of profits and 123 30 losses, mergers and conversions, and dissolution. 123 31 Specifically, the bill divides members up into investors 123 32 who do not patronize the cooperative and patrons who do. It 123 33 provides that an outside investor member may hold an equity 123 34 position in a cooperative, and to receive profits from its 123 35 business endeavors. Generally, patrons are provided control 124 1 of the cooperative (provided governance and financial rights) 124 2 unless the patrons grant equal control or greater financial 124 3 rights to nonpatron members. A patron member is entitled to 124 4 one vote on issues. However, the cooperative may allow patron 124 5 members additional votes based on patronage criteria. 124 6 The bill requires the allocations and distributions to 124 7 patron members to be not less than 50 percent of the total 124 8 profits or distributions in any fiscal year unless the patron 124 9 members authorize a lesser amount which may not be less than 124 10 15 percent. The bill provides that a cooperative may be 124 11 formed to grant voting rights to members or directors who are 124 12 patrons and nonpatrons (bloc voting). It also provides that, 124 13 collectively, nonpatron members may control up to 85 percent 124 14 of the voting, if provided in its bylaws. Under subchapter T 124 15 of the federal Internal Revenue Code, income generated by an 124 16 agricultural cooperative may be taxed at the cooperative level 124 17 or the patron level. The bill enables a cooperative to elect 124 18 to be taxed as a partnership under subchapter K or under 124 19 subchapter T. The bill also provides that a cooperative 124 20 organized under another chapter may elect to convert to a 124 21 cooperative organized under Code chapter 501A, assuming that 124 22 it meets the requirement of federal antitrust provisions. 124 23 The bill provides for mergers between cooperatives into 124 24 Code chapter 501A business entities or into Iowa limited 124 25 liability companies or foreign business entities. The bill 124 26 does not specifically provide for dissenters' rights as 124 27 ordinarily provided under cooperative law. 124 28 DIVISION II. The bill also provides a number of changes to 124 29 other provisions of the Code. It makes changes to economic 124 30 development provisions, including those in Code section 124 31 15.333, which provides that an eligible business under the new 124 32 jobs and income program may claim a tax credit of up to 10 124 33 percent of a new investment that involves the creation of new 124 34 jobs, and provisions in Code section 15E.193C, which provides 124 35 that an eligible development business may claim a tax credit 125 1 up to a maximum of 10 percent of the new investment. The bill 125 2 amends provisions in Code chapter 15E, which includes the Iowa 125 3 agricultural industry finance Act, by allowing Code chapter 125 4 501A cooperatives to participate in loans extended by an 125 5 agricultural industry finance corporation. 125 6 The bill amends various provisions in Code chapter 490A, 125 7 which provides for limited liability companies, by providing 125 8 for mergers between such companies and cooperatives organized 125 9 under Code chapter 501A. 125 10 The bill amends Iowa's "Blue Sky Law", codified in Code 125 11 chapter 502, by providing for the regulation of cooperatives. 125 12 It also amends Code chapter 556, which provides for abandoned 125 13 property by providing special provisions for the distribution 125 14 of such property by Code chapter 501A cooperatives. 125 15 LSB 5655HC 80 125 16 da/pj/5
Text: HSB00681 Text: HSB00683 Text: HSB00600 - HSB00699 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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