AB327: Bill Text

AB327,100,2 (11) Analyzing and understanding the current cooperative business environment.

AB327,100,3 Subchapter v

AB327,100,4 members

AB327,100,8 193.501 Members. (1) Requirement. A cooperative shall have at least one patron member. A cooperative may have nonpatron members if the patron members by majority vote approve an article, bylaw provision, or amendment provision authorizing nonpatron members.

AB327,100,11 (2) Grouping of members. (a) A cooperative may group members in districts or units, or on another basis, to the extent authorized in the articles or bylaws. The articles or bylaws may authorize the board to determine the grouping of members.

AB327,100,15 (b) The board may take all steps necessary to implement the use of groupings established under par. (a), including setting the time and place and prescribing the rules of conduct for holding meetings by group to elect delegates to members' meetings.

AB327,100,20 (3) Member violations. (a) A member who knowingly, intentionally, or repeatedly violates a provision of the articles or bylaws, or a member control agreement or marketing contract with the cooperative, may be required by the board to surrender the member's membership interest in the cooperative or any of the following portions of the member's membership interest:

AB327,100,21 1. Governance rights and right to assign governance rights.

AB327,100,22 2. Financial rights and right to assign financial rights.

AB327,101,2 (b) 1. Except as provided in subd. 2., if the board requires a member to surrender the member's membership interest or the rights described in par. (a) 2., the cooperative shall refund to the member the lesser of the book value or market value of the membership interest or rights, as applicable, payable in not more than 7 years from the date of surrender.

AB327,101,7 2. If the board requires a patron member to surrender the patron member's rights described in par. (a) 2., the board may transfer all of those rights to a class of financial rights held by members who are not patron members, or to a certificate of interest that carries liquidation rights on par with membership interests and that must be redeemed within 7 years after the transfer as provided in the certificate.

AB327,101,9 (c) The board may reissue or retire and cancel any membership interests required to be surrendered under par. (a).

AB327,101,21 (4) Inspection of cooperative records by member. (a) Except as otherwise provided in this paragraph and pars. (d) and (e), a member may inspect and copy any of the records described in s. 193.245 if the member meets the requirements of par. (b). A member's agent or attorney has the same inspection and copying rights under this paragraph as the member. No member may inspect or copy any records of the cooperative relating to the amount of equity capital in the cooperative held by any person or any accounts receivable or other amounts due the cooperative from any person, or any personnel records or employment records relating to any employee of the cooperative, unless the member is a director or officer acting pursuant to authority of the board. Except as provided under par. (e), records shall be inspected and copied under this paragraph during regular business hours at a reasonable location specified by the cooperative.

AB327,101,23 (b) A member may inspect and copy records under par. (a) if all of the following apply:

AB327,102,3 1. The member has been a member for at least one year immediately preceding the demand to inspect or copy or holds at least 5 percent of all of the outstanding equity interests in the cooperative as of the date the demand is made.

AB327,102,6 2. The member gives the cooperative a written demand to inspect or copy at least 5 business days before the date on which the member wishes to inspect or copy the records.

AB327,102,8 3. The written demand describes with reasonable particularity the purpose for which the demand is made and the records the member desires to inspect or copy.

AB327,102,10 4. The demand is made in good faith and for a proper cooperative business purpose.

AB327,102,11 5. The records are directly connected with the described purpose.

AB327,102,12 (d) This section does not affect any of the following:

AB327,102,14 1. The right of a member to inspect records to the same extent as any other litigant if the member is in litigation with the cooperative.

AB327,102,16 2. The power of a court to compel the production of the cooperative's records for examination.

AB327,102,21 (e) If records to be inspected or copied under par. (a) are in active use or storage and, therefore, not available at the time otherwise provided under par. (a) for inspection or copying, the cooperative shall so notify the member and establish a date and time for the inspection or copying that is within 3 business days of the date otherwise provided under par. (a) for inspection or copying.

AB327,103,2 (f) The right to copy records under par. (a) includes, if reasonable, the right to receive copies from the cooperative. The cooperative may impose a reasonable charge for copies of any records provided to the member. The charge may not exceed the estimated cost of production and reproduction of the records. Any copies made by the member shall be made at the member's expense.

AB327,103,14 (g) If a cooperative refuses to allow a person to inspect or copy records that the person is entitled to inspect or copy under par. (a) within any time period prescribed under par. (e) or, if none, within a reasonable time, the person may petition the circuit court for the county where the cooperative's principal office is located or, if it has no principal office in this state, for the county in which the cooperative's registered office is located, for an order compelling the cooperative to permit the inspection or copying. A court that issues an order under this paragraph may impose reasonable restrictions on the use or distribution of the records by the person. A court that issues an order under this paragraph may do any of the following, unless the cooperative proves that it refused inspection or copying in good faith because it had a reasonable basis for doubt about the right of the person to inspect or copy the records under par. (a):

AB327,103,16 1. Order the cooperative to pay the person's reasonable costs in obtaining the order, including reasonable attorney fees.

AB327,103,18 2. Order the cooperative to pay the person for any damages the person incurred by reason of the cooperative's refusal to permit inspection or copying.

AB327,103,20 3. Order the cooperative to pay the member's inspection and copying expenses, notwithstanding par. (f).

AB327,103,22 5. Impose reasonable restrictions on the use or distribution of the records by the person.

AB327,104,2 193.505 Member liability. A person is not personally liable for the acts, debts, liabilities, or obligations of a cooperative merely because of the person's status as a member. A member is liable for any unpaid subscription for the member's membership interest, unpaid membership fees, or any debt for which the member has separately contracted with the cooperative.

AB327,104,5 193.511 Regular members' meetings. (1) Annual meeting. A regular members' meeting shall be held annually at a time determined by the board, unless the articles or bylaws provide otherwise.

AB327,104,8 (2) Location. The regular members' meeting shall be held at the principal place of business of the cooperative or at another conveniently located place as determined by the board or under the articles or bylaws.

AB327,104,12 (3) Business and fiscal reports. The officers shall submit reports to the members at the regular members' meeting covering the business of the cooperative for the previous fiscal year and indicating the condition of the cooperative at the close of the fiscal year.

AB327,104,20 (5) Notice. Except as otherwise provided in this subsection, sub. (6), and s. 193.553, the cooperative shall mail a notice of the regular members' meeting to each member at the member's last known address. The cooperative shall deposit the notice in the mail at least 15 days before the date of the meeting. In lieu of mailing, the cooperative may provide notice of the meeting by any means approved by the board and agreed to by the members. The cooperative shall provide any such notice at least 2 weeks before the date of the meeting. Any notice provided to an entity under this subsection shall be addressed or directed to an officer of the entity.

AB327,105,4 (6) Waiver and objection. A member may waive notice of a regular members' meeting. A waiver is effective whether given before, at, or after the meeting, and whether given in writing, orally, or by attendance. Attendance by a member at a regular members' meeting is a waiver of notice of that meeting, except where the member objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened and does not participate in the meeting after the objection, or objects before a vote on an item of business at the meeting because the item may not lawfully be considered at the meeting and does not participate in the consideration of the item at the meeting.

AB327,105,6 193.515 Special members' meetings. (1) Calling a meeting. A special members' meeting may be called by any of the following means:

AB327,105,7 (a) By the board.

AB327,105,19 (b) By petition of the members under this paragraph. Except as otherwise provided in this paragraph, the chairperson of the board shall call a special members' meeting if a written petition requesting the meeting is signed by at least 20 percent of the patron members and is submitted to the chairperson. Unless the articles or bylaws provide otherwise and except as otherwise provided in this paragraph, the chairperson of the board shall call a special members' meeting if a written petition requesting the meeting is signed by at least 20 percent of the nonpatron members, 20 percent of all members, or members representing 20 percent of all membership interests and is submitted to the chairperson. A special members' meeting held under this paragraph shall be held within 30 days after submission of the petition to the chairperson. This paragraph does not authorize any meeting that is unrelated to a proper cooperative purpose.

AB327,106,3 (2) Notice. Except as otherwise provided in this subsection, sub. (3), and s. 193.553, the cooperative shall mail a notice of any special members' meeting to each member at the member's last known address. In lieu of mailing, the cooperative may provide notice of the meeting by any means approved by the board and agreed to by the members. Any notice provided to an entity under this subsection shall be addressed or directed to an officer of the entity. Any notice provided under this subsection shall state the time, place, and purpose of the meeting. Any notice provided under this subsection shall be given at least 10 days before the date of the meeting.

AB327,106,12 (3) Waiver and objection. A member may waive notice of a special members' meeting. A waiver is effective whether given before, at, or after the meeting, and whether given in writing, orally, or by attendance. Attendance by a member at a special members' meeting is a waiver of notice of that meeting, except where the member objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened and does not participate in the meeting after the objection, or objects before a vote on an item of business at the meeting because the item may not lawfully be considered at the meeting and does not participate in the consideration of the item at the meeting.

AB327,106,15 193.518 Effect of insufficient notice. Failure of a member to receive a notice required under s. 193.511 (5) or 193.515 (2) does not invalidate any action that is taken at the applicable meeting.

AB327,106,20 193.521 Certification of notice. (1) Certificate required. After mailing or otherwise providing notices required under s. 193.511 (5) or 193.515 (2), the cooperative shall execute a certificate containing the date of mailing or provision of the notices and a statement that the notices were mailed or provided as required under s. 193.511 (5) or 193.515 (2), as applicable.

AB327,106,22 (2) Matter of record. The cooperative shall include the certificate under sub. (1) in the record of the meeting to which the certificate relates.

AB327,106,24 193.523 Electronic notice. (1) Effective date of electronic notice. Any notice given by a cooperative to members in electronic format takes effect as follows:

AB327,107,2 (a) If by facsimile communication, when directed to a telephone number at which the member has consented to receive notice.

AB327,107,4 (b) If by electronic mail, when directed to an electronic mail address at which the member has consented to receive notice.

AB327,107,7 (c) If by a posting on an electronic network on which the member has consented to receive notice, upon the later to occur of the posting and the giving of a separate notice to the member of the specific posting.

AB327,107,9 (d) If by any other means to which the member has consented, when directed to the member pursuant to that means.

AB327,107,13 (2) Affidavit. An affidavit of the secretary of the board, other authorized officer, or authorized agent of the cooperative, indicating that a notice has been given in electronic format under sub. (1) is, in the absence of fraud, prima facie evidence that the notice was so given.

AB327,107,18 (3) Consent. If a member consents to the receipt of notice in electronic format, the member shall deliver a statement to that effect in writing to the cooperative. A statement under this subsection is effective until it is revoked by the member. A revocation under this subsection does not affect the validity of any notice given before receipt by the cooperative of the revocation.

AB327,107,23 193.524 Revocation of electronic communication. A member may revoke any vote, authorization, or consent submitted in electronic format by the member to a cooperative under this chapter by delivering a notice of revocation to a director or the chief executive officer of the cooperative before the vote is counted or the authorization or consent is relied upon.

AB327,108,11 193.525 Quorum at members' meeting. (1) Generally; presence of objecting member. Unless the articles or bylaws provide otherwise and except as provided in sub. (2m), a quorum for the transaction of business at a members' meeting is 10 percent of the total number of members for a cooperative with 100 or less members and 15 percent of the total number of members for all other cooperatives. The attendance of a sufficient number of members to constitute a quorum shall be established by a registration of the members present at the meeting. The registration shall be verified by the chairperson of the board or the records officer of the cooperative and shall be reported in the minutes of the meeting. Any member who objects at the beginning of a members' meeting to the transaction of business because the meeting is not lawfully called or convened and who fails to participate in the meeting after the objection may not be considered as present at the meeting for purposes of determining whether a quorum is present.

AB327,108,16 (2) Quorum for voting by mail or alternative ballot. Except as provided in s. 193.531 (2), in determining whether a quorum is present at a members' meeting for purposes of conducting a vote on a question that members may vote on by mail or alternative ballot, the number of members physically present at the meeting shall be added to the number of members voting by mail or alternative ballot.

AB327,108,23 (2m) Quorum for votes by class or series. Except as otherwise provided in the articles or bylaws or a member control agreement, if a vote at a members' meeting is open only to holders of a particular class or series of membership interests, a quorum for conducting the vote is a number of members holding 10 percent of the voting power of the class or series for a cooperative with 100 or less members and a number of members holding 15 percent of the voting power of the class or series for all other cooperatives.

AB327,109,2 (3) Meeting action invalid without quorum. An action taken or approved at a members' meeting by vote of the members is invalid if a quorum is not present at the time of the vote, unless approval of the members is not required under this chapter, the articles, or the bylaws.

AB327,109,4 193.531 Virtual members' meetings and attendance. (1) Construction and application. This section shall be construed and applied as follows:

AB327,109,5 (a) To facilitate remote communication consistent with other applicable law.

AB327,109,7 (b) To be consistent with reasonable practices concerning remote communication and with the continued expansion of those practices.

AB327,109,25 (2) Virtual members' meetings and attendance. To the extent authorized in the articles or bylaws or, unless prohibited by the articles or bylaws, in a member control agreement, and as determined by the board, a members' meeting may be held such that all members participate in the meeting by a means of communication rather than by being physically present at the meeting. To the extent authorized in the articles or bylaws or, unless prohibited by the articles or bylaws, in a member control agreement, and as determined by the board, a member may participate in a members' meeting at which other members are physically present by a means of communication rather than by being physically present at the meeting. A meeting may be held or a member may participate in a meeting as authorized under this subsection only if the requirements of sub. (4) are satisfied. The number of members physically present at a meeting, if any, shall be added to the number of members otherwise participating in the meeting under this subsection to determine whether a quorum is present under s. 193.525, except that any member who objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened and who fails to participate in the meeting after the objection may not be considered as present at the meeting for purposes of determining whether a quorum is present.

AB327,110,2 (4) Requirements for virtual meetings and attendance. All of the following apply to any meeting held under sub. (2):

AB327,110,4 (a) The cooperative shall implement reasonable measures to verify that each person participating in the meeting by a means of communication is a member.

AB327,110,8 (b) The cooperative shall implement reasonable measures to provide each member participating in the meeting by a means of communication with a reasonable opportunity to actively participate, including an opportunity to do all of the following:

AB327,110,10 1. Read or hear the proceedings of the meeting substantially concurrently with those proceedings.

AB327,110,13 2. If allowed by the procedures governing the meeting, have the member's remarks heard or read by other participants in the meeting substantially concurrently with the making of those remarks.

AB327,110,14 3. If otherwise entitled, vote on matters submitted to the members.

AB327,110,17 193.535 Actions of the members. (1) Generally. Unless this chapter provides otherwise and except as provided in sub. (2m) and s. 193.545 (1) (a) and (4), the members shall take action by the affirmative vote of the greater of the following:

AB327,110,19 (a) A majority of the voting power of the membership interests present and entitled to vote on that item of business.

AB327,110,21 (b) A majority of the voting power that would constitute a quorum for the transaction of business at the meeting or for conducting the vote.

AB327,110,23 (c) The proportion of voting power specified in this chapter, the articles or bylaws, or a member control agreement as necessary for that item of business.

AB327,111,3 (2m) Exception for objecting member. Any member who objects at the beginning of a members' meeting to the transaction of business because the meeting is not lawfully called or convened and who fails to participate in the meeting after the objection may not be considered as present at the meeting for purposes of sub. (1).

AB327,111,11 193.541 Actions without a members' meeting. (1) Generally. (a) Unless the articles or bylaws provide otherwise, any action required or permitted by this chapter to be authorized at a members' meeting may be authorized without a meeting if that action is authorized by all members and is evidenced by one or more written statements, signed by each member, describing and consenting to the action. Such an action has the same effect as an action authorized by unanimous vote at a members' meeting at which all members are present and may be described as such in any document.

AB327,111,20 (b) The articles or bylaws may allow the members to authorize any other action on behalf of the cooperative, other than an action requiring board approval, without a members' meeting, if the action is authorized by the number of members that would be required to approve the action at a members' meeting at which all members were present and if the action is evidenced by one or more written statements, signed by each authorizing member, describing and consenting to the action. Such an action has the same effect as an action authorized by vote of the number of authorizing members at a meeting at which all members are present and may be described as such in any document.

AB327,111,23 (2) Effective date. Any action authorized under sub. (1) is effective when the last member necessary for authorization signs the statement evidencing his or her consent, unless the statement specifies a different effective date.

AB327,112,3 (3) Notice and liability. When an action is taken under sub. (1) (b) with the authorization of less than all members, the board shall ensure that all other members are notified immediately of the action and its effective date. Failure to provide the notice does not invalidate the action. A member who does not authorize an action taken under sub. (1) (b) may not be held liable as a result of the action.

AB327,112,5 (4) Records. A cooperative shall retain all statements signed by its members under sub. (1).

AB327,112,20 193.545 Member voting rights. (1) Generally. (a) Each patron member has one vote on each issue that patron members may vote upon. Nonpatron members, if authorized by the patron members, may or may not have voting rights relating to being a nonpatron member or holding nonpatron membership interests. If voting rights are granted to nonpatron members or to nonpatron membership interests, patron members may not have less voting rights than provided in this section. The collective vote of the patron members shall be determined by the vote of the majority of patron members voting on the issue. Except as provided under s. 193.551, in determining the collective vote of patron members, each patron member has one vote on the issue. Unless the articles or bylaws provide otherwise, no issue that patron members may vote upon may be approved unless, in determining the collective vote of the patron members, the number of patron members voting to approve the issue is a majority of all members voting on the issue. The articles or bylaws may not reduce the collective patron member vote to less than 51 percent of the total member vote.

AB327,112,23 (b) Except as otherwise provided in this chapter, a nonpatron member has the voting rights granted to members holding nonpatron membership interests in the articles or bylaws.

AB327,113,3 (2) Voting at a members' meeting. A member may vote at a members' meeting at any time from the time the member arrives at the meeting to the time the meeting is adjourned, unless the articles or bylaws specify an earlier time for closing the vote.

AB327,113,7 (3) Voting method. (a) Except as otherwise provided in this paragraph, a member may vote only by casting a ballot at a meeting, by delegate as provided under sub. (4), by proxy as provided under s. 193.565, or, if authorized by the board, by mailing a ballot or by using an alternative ballot.

AB327,113,8 (b) The ballot shall be in a form prescribed by the board.

AB327,113,13 (c) To cast a ballot by mail, a member shall mark the member's choice on the ballot, seal the ballot in a plain envelope bearing the member's name and the words "BALLOT ENCLOSED," or similar words, and enclose that envelope in another envelope addressed to the cooperative. To cast an alternative ballot, a member shall follow the procedure prescribed by the board.

AB327,113,17 (d) If the ballot of a member is received by the cooperative on or before the date of the election, or as otherwise prescribed for alternative ballots, and if all other applicable requirements are satisfied, the cooperative shall accept and count the ballot as the vote of the absent member.

AB327,113,24 (4) Members represented by delegates. For a cooperative with districts or other units, the articles or bylaws may provide that members from the districts or other units be represented at members' meetings by delegates chosen by those members. A delegate representing patron members shall be a patron member. Except as provided in s. 193.551 (2) and as otherwise provided in this subsection, a delegate may vote in the same manner as and to the same extent as the members collectively whom the delegate represents are otherwise authorized to vote.

AB327,114,4 193.551 Patron member voting based on patronage. (1) Additional vote permitted. (a) The articles or bylaws may authorize patron members to have an additional vote in determining the collective vote of patron members under s. 193.545 (1) (a) as provided in this subsection.

AB327,114,7 (b) The articles or bylaws may grant a patron member an additional vote under par. (a) if the issue to be voted upon relates to a specified amount of business transacted between the patron member and the cooperative.

AB327,114,10 (c) The articles or bylaws may grant additional votes under par. (a) to a specified number of patron members who are also patron members of another cooperative that is itself a member of the cooperative.

AB327,114,13 (d) The articles or bylaws may grant additional votes under par. (a) to a patron member that is a cooperative, based on the amount of equity allocated to or held by the patron member in the cooperative.

AB327,114,17 (2) Additional votes for delegates. (a) For a cooperative with districts or other units of patron members, the articles or bylaws may authorize a delegate elected by patron members to have additional votes as provided in this subsection in determining the collective vote of patron members under s. 193.545 (1) (a).

AB327,114,20 (b) The articles or bylaws may grant a delegate an additional vote under par. (a) based on a specified amount of business transacted between the patron members represented by the delegate and the cooperative.