HOUSE FILE 476

BY  IVERSON

A BILL FOR

An Act relating to agricultural associations, by providing for a community investment board.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  NEW SECTION.  499.5B  Agricultural associations —— special requirements for small communities.
   1.  As used in this section:
   a.  “Community” means a city where an agricultural association operates a principal business location if the city has a population of less than two thousand residents. Otherwise, a“community” is a township where the association operates a principal business location if the township has a population of less than two thousand residents. The population of a community shall be determined according to the latest decennial census conducted by the United States bureau of the census.
   b.  “Qualified agricultural association” means an agricultural association that operates a business in a community.
   2.  A qualified agricultural association shall be subject to the oversight of a community investment board which is managed by trustees. The trustees must be members of the association who reside within the community. The trustees shall be elected by members of the association who reside in the community. At least three trustees shall serve on the community investment board.
   a.  Those directors of the board of directors residing in the community may nominate candidates to serve on the community investment board. Any member who is a resident of the community may submit a petition to nominate a candidate. A candidate’s name shall be placed on the ballot if the petition is signed by fifteen percent of the members residing in the community.
   b.  The board of directors shall conduct the initial election for trustees in substantially the same manner as provided for the election of the directors. The board of directors may create additional procedures to ensure the residency of candidates and voters. A trustee shall be elected at a meeting of qualified members who are entitled to vote at which a majority of all shares entitled to cast a vote do vote.
   c.  After the initial trustees are elected, the community investment board or the members of the association who are qualified to vote for the trustees may adopt amendments to the association’s articles or bylaws that affect the terms of office and management, as provided by amendments to the articles or bylaws. However, the requirements of this chapter that govern the board of directors or a director shall also govern the community investment board and trustees, including but not limited to the selection of officers, the removal of officers and directors, voting procedures, and standards of conduct. A trustee shall be compensated in the same manner as a director.
   3.  The community investment board must approve all of the following:
   a.  The acquisition of shares or other interest in the association by persons who do not reside in the community, as determined by the board. However, the board shall not approve the acquisition of shares or other interest in the association by such person if any of the following applies:
   (1)  The acquisition equals more than two-hundred and fifty thousand dollars.
   (2)  Less than eighty percent of all shares or other interests in the association are held by persons who reside within twenty miles of the principal location of the association’s business in the community.
   b.  The merger or consolidation of the association as otherwise provided in this chapter.
   Sec. 2.  NEW SECTION.  499.64A  Requirements for qualified agricultural associations.
   The board of directors of a qualified agricultural association, as defined in section 499.5B, shall not take action upon a merger or consolidation as provided in this chapter until the community investment board for the association approves the plan of merger or consolidation.
EXPLANATION
   This bill relates to agricultural associations organized under Code chapter 499 which are located in a city or township with a population of less than 2,000 residents. The association is required to have a board of trustees who are members of the association, who must reside in the community, and who are elected from members of the association who reside in the community. Any member who is a resident of the community may submit a petition to nominate a candidate. A candidate must be placed on the ballot upon petition of members residing in the community. The community investment board must approve the acquisition of shares or other interest in the association by persons who do not reside in the community. The board cannot approve an acquisition which equals more $250,000 or if less than 80 percent of all shares or other interests in the association are held by persons who reside within 20 miles of the principal location of the association’s business.