AB327: Bill Text

AB327,72,12 (b) A cooperative may act as trustee or in any fiduciary capacity for any purpose not inconsistent with the purposes of the cooperative, subject to any applicable requirements of s. 223.105.

AB327,72,14 (6) Debt instruments, borrowing, security, and investing. A cooperative may do any of the following:

AB327,72,15 (a) Issue bonds, debentures, or other evidence of indebtedness.

AB327,72,16 (b) Borrow money to finance the business of the cooperative.

AB327,72,19 (c) Secure any of its obligations by mortgage of, creation of a security interest in, or other encumbrance or assignment of all or any of its property, franchises, or income.

AB327,72,20 (d) Form special purpose business entities to secure assets of the cooperative.

AB327,72,21 (e) Invest its funds.

AB327,72,23 (f) Acquire, hold, and dispose of evidences of indebtedness of any business entity.

AB327,73,3 (7) Advances to patrons. A cooperative may make advances to the cooperative's members or patrons on products delivered by the members or patrons to the cooperative.

AB327,73,5 (8) Donations. A cooperative may accept donations of money and donations of real or personal property from its members.

AB327,73,9 (9) Lending to and borrowing from members. A cooperative may loan money to its members with security that it considers sufficient, whether or not any property taken as security is of the kind dealt in by the cooperative, and may borrow money from its members.

AB327,73,11 (10) Pensions and benefits. (a) A cooperative may pay pensions, retirement benefits, and compensation for past services to or for the benefit of the cooperative.

AB327,73,19 (b) A cooperative may establish and carry out employee benefit plans and provisions for the benefit of any or all of its and its affiliates, officers, managers, directors, governors, employees, and agents. In the case of an affiliate that is a cooperative, a cooperative may establish and carry out provisions for the benefit of the affiliate's members who provide services to the cooperative, and the families, dependents, and beneficiaries of any of them. A cooperative may indemnify a fiduciary of any employee benefit plan or provisions established under this paragraph and purchase insurance for or on behalf of such a fiduciary.

AB327,73,24 (11) Insurance. A cooperative may purchase for its benefit life insurance and other insurance with respect to the services of any of its members, managers, directors, employees, and agents, and may purchase insurance on the life of a member for the purpose of facilitating the cooperative's acquisition of any of the member's membership interests in the cooperative at the death of the member.

AB327,74,9 (12) Ownership interests in other entities. (a) A cooperative may acquire, hold, or dispose of ownership interests in another business entity and, if a cooperative acquires ownership interests under this paragraph, assume all rights, interests, privileges, responsibilities, and obligations arising out of the ownership interests. A cooperative that holds an ownership interest in another business entity may, by direction of the board, elect or appoint an individual to represent the cooperative at a meeting of the business entity. The representative may represent the cooperative at such a meeting and may cast any vote the cooperative is entitled to cast at the meeting.

AB327,74,10 (b) A cooperative may organize business entities.

AB327,74,12 (c) A cooperative may acquire ownership interests in or organize an entity to which any of the following apply:

AB327,74,13 1. The entity is organized as a federation of associations.

AB327,74,15 2. The entity is organized for the purpose of forming a district, state, or national marketing, sales, or service agency.

AB327,74,17 3. The entity is organized for the purpose of acquiring marketing facilities at terminal or other markets in this state or other states.

AB327,74,22 (14) Forfeiture. (a) Notwithstanding ch. 177, a cooperative may effect the forfeiture to the cooperative of unclaimed allocations, distributions, or credits under this chapter or under s. 185.45 (2) (b) and (c), (3) (a) and (b), and (4) (b), unclaimed stock issued by the cooperative, and unclaimed deposits held by the cooperative, if all of the following conditions are met:

AB327,75,2 1. No earlier than 3 years and no later than 5 years after the allocation, distribution, or credit is first made available to its owner, the board declares that the allocation, distribution, or credit will be forfeited to the cooperative unless claimed by a date determined by the board, which date shall be a business day at least 60 days after the date of mailing under subd. 2.

AB327,75,5 2. The cooperative mails a written notice of the declaration under subd. 1. to the owner of the allocation, distribution, or credit at the owner's last-known address, as reflected in the records of the cooperative.

AB327,75,8 3. The cooperative publishes the notice under subd. 2. as a class 1 notice under ch. 985, on or before the date on which the notice is mailed, in a newspaper published in a municipality having territory within the service area of the cooperative.

AB327,75,10 4. The allocation, distribution, or credit remains unclaimed after the date determined by the board under subd. 1.

AB327,75,14 (b) A cooperative that effects a forfeiture under par. (a) shall use any forfeited moneys within one year after the date on which the funds are forfeited for providing scholarships or educational loans to students or for charitable purposes, as determined by the board.

AB327,75,15 (c) Property forfeited under this subsection is not subject to ch. 177.

AB327,75,17 193.305 Emergency powers. (1) In anticipation of or during an emergency, as defined in sub. (4), the board may do any of the following:

AB327,75,19 (a) Modify lines of succession to accommodate the incapacity of any director, officer, employee, or agent.

AB327,75,21 (b) Relocate the principal office, designate alternative principal offices or regional offices, or authorize the officers to do so.

AB327,75,23 (2) All of the following apply during an emergency, as defined in sub. (4), unless emergency bylaws under s. 193.241 (7) provide otherwise:

AB327,75,25 (a) Notice of a meeting of the board need be given only to those directors whom it is practicable to reach and may be given in any practicable manner.

AB327,76,3 (b) One or more officers of the cooperative present at a meeting of the board may be deemed to be directors for the meeting, in order of rank and within the same rank in order of seniority, as necessary to achieve a quorum.

AB327,76,5 (3) Action taken in good faith during an emergency under this section to further the ordinary business affairs of the cooperative:

AB327,76,6 (a) Binds the cooperative.

AB327,76,9 (b) May not be the basis for the imposition of liability on any director, officer, employee, or agent of the cooperative on the ground that the action was not authorized cooperative action.

AB327,76,11 (4) An emergency exists for purposes of this section if a quorum of the directors cannot readily be obtained because of a catastrophic event.

AB327,76,17 193.311 Agricultural product and commodity marketing contracts. (1) Authority. A cooperative and its patron member or patron may enter into a marketing contract, requiring the patron member or patron to sell a specified portion of the patron member's or patron's agricultural product or specified commodity produced from a specified area exclusively to or through the cooperative or a facility established by the cooperative.

AB327,76,25 (2) Title to products. If an agricultural product or commodity is sold to a cooperative under a contract under sub. (1), the sale transfers title to the product or commodity absolutely, subject to any valid lien or security interest in the product or commodity, to the cooperative on delivery of the product or commodity or at another time specified in the contract. A contract under sub. (1) may allow a cooperative to sell agricultural products or commodities with or without taking title to the products or commodities, and pay the sales price to the applicable patron member or patron, after deducting amounts specified in the contract.

AB327,77,4 (3) Term of contract. The term of a contract under sub. (1) may not exceed 10 years, except that a contract may be renewed for periods not exceeding 5 years each, subject to the right of either party to immediately terminate the contract by giving written notice of the termination to the other party.

AB327,77,10 (4) Liquidated damages for breach of contract. A contract under sub. (1) may require the patron member or patron to pay an amount to the cooperative as liquidated damages for the patron member's or patron's breach of any provision of the contract regarding the sale, delivery, or withholding of a product or commodity. The amount of liquidated damages shall be specified by including the specified amount in the contract.

AB327,77,13 (5) Injunction against breach of contract. If a patron member or patron breaches or threatens to breach a contract under sub. (1), the cooperative may commence an action for specific performance and injunctive relief under ch. 813.

AB327,77,16 (6) Criminal penalty for contract interference and false reports. (a) No person may knowingly induce or attempt to induce a patron member or patron of a cooperative to breach a contract under sub. (1).

AB327,77,18 (b) No person may maliciously and knowingly publish false reports about the finances or management of a cooperative.

AB327,77,20 (c) Any person who violates par. (a) or (b) may be fined not more than $1,000 or imprisoned for not more than 6 months, or both.

AB327,77,23 (7) Civil liability for contract interference and false reports. In addition to the penalty provided in sub. (6) (c), any person who violates sub. (6) (a) or (b) may be liable to the cooperative for damages caused by the violation.

AB327,78,3 193.315 Indemnification and insurance against securities law claims. Section 185.042 applies to a cooperative to the same extent as if the cooperative was organized under ch. 185.

AB327,78,4 subchapter Iv

AB327,78,5 directors and officers

AB327,78,12 193.401 Board governs cooperative. A cooperative shall be governed by its board which shall take all action for and on behalf of the cooperative except those actions reserved or granted to members. No director or group of directors may act for or on behalf of the cooperative unless authorized by the board or this chapter. A director may advocate interests of members or member groups to the board, but the fiduciary duty of each director is to represent the best interests of the cooperative and all members collectively.

AB327,78,15 193.405 Number of directors. The board shall have at least 5 directors, except that the board of a cooperative with 50 or fewer members may have as few as 3 directors.

AB327,78,20 193.411 Election of directors. (1) Initial board. The initial board shall be established as provided under s. 193.205 (2) and, except as provided in s. 193.205 (2), shall serve until directors are elected by members. The initial board shall appoint directors to fill any vacancies on the initial board, until the directors are elected by the members.

AB327,78,22 (2) Generally. (a) Directors shall be elected or appointed for the term, at the time, and in the manner provided in this section and the articles and bylaws.

AB327,79,3 (b) If nonpatron members or nonpatron membership interest are granted voting rights, a majority of the directors shall be members and a majority of the directors shall be elected exclusively by patron members, unless otherwise provided in the articles or bylaws. The patron members may also elect an outside director who is an expert in financial matters but who has no financial interest in the cooperative. Unless the articles or bylaws provide otherwise, the outside director may not vote.

AB327,79,6 (d) A director holds office for the term for which the director was elected and until a successor is elected and has qualified, unless the director is removed or a vacancy in the office of the director occurs.

AB327,79,8 (g) Directors may be divided into, designated, and elected by class or other distinction as provided in the articles or bylaws.

AB327,79,11 (3) Election at regular meeting. Except as provided under sub. (1) or (4) or s. 193.415 (4) or 193.421, all directors shall be elected at the regular members' meeting.

AB327,79,19 (4) District or local unit election of directors. For a cooperative with districts or other units, directors may be elected by members on a district or unit basis if the articles or bylaws so provide. Directors elected on a district or unit basis may be nominated or elected at district member meetings if the articles or bylaws so provide. Directors who are nominated at district meetings shall be elected at the regular members' meeting by vote of the entire membership, unless the articles or bylaws provide that such directors are to be elected at a district member meeting or the regular members' meeting by vote of the members of the district.

AB327,79,22 (4m) Cumulative voting. Unless the articles or bylaws so provide, directors may not be elected through the use of any system of voting that permits a voter to allocate multiple votes among eligible candidates.

AB327,79,23 (5) Ballots. All of the following apply to voting under this section:

AB327,79,25 (a) A member may vote only by casting a ballot as provided under s. 193.545 (3).

AB327,80,1 (b) The ballot shall be in a form prescribed by the board.

AB327,80,6 (c) To cast a ballot by mail, a member shall mark the ballot for the candidate chosen, 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.

AB327,80,10 (d) If the ballot of the 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.

AB327,80,14 (6) Business entity members may nominate persons for director. Any member that is not an individual may nominate one or more individuals as candidates for election as a director of the cooperative, unless the cooperative's articles or bylaws provide otherwise.

AB327,80,18 (9) Compensation. Subject to any limitation in the articles or bylaws, the board may fix the compensation of the directors, except that any outside director elected under sub. (2) (b) may not receive any compensation other than authorized per diem reimbursements.

AB327,80,20 193.415 Removal of directors. All of the following apply, unless the articles or bylaws provide otherwise:

AB327,80,23 (2) Removal of temporary directors by board. A director who was appointed by the board to fill a vacancy may be removed by the board at any time, with or without cause, if all of the following apply:

AB327,80,25 (a) The members have not elected directors in the interval between the time of the appointment to fill the vacancy and the time of the removal.

AB327,81,2 (b) A majority of the remaining directors present affirmatively vote to remove the director.

AB327,81,10 (3) Removal of directors by members. A director may be removed at any time, with or without cause, by the affirmative vote of the holders of a majority of the voting power of membership interests entitled to vote at an election of directors, except that a director who was elected solely by the patron members or the holders of a class or series of membership interests, as provided in the articles or bylaws, may be removed only by the affirmative vote of the holders of a majority of the voting power of the patron members or of all membership interests of the class or series entitled to vote at an election of that director, respectively.

AB327,81,13 (4) Election of replacement directors. Notwithstanding s. 193.421, a replacement director may be elected to serve out the remaining term of the removed director at a meeting at which the director was removed.

AB327,81,17 193.417 Resignation of directors. A director may resign by giving notice to the board or the chairperson of the board. The resignation is effective without acceptance upon receipt by the board or the chairperson of the board, unless the notice specifies a later effective date.

AB327,82,3 193.421 Filling vacancies. (1) Patron directors. If a vacancy occurs in the office of a director who was elected solely by the patron members, as provided in the articles or bylaws, or a new office of director is created for such a director, the board, in consultation with the other directors elected solely by the patron members, as provided in the articles or bylaws, shall appoint a patron member of the cooperative to temporarily fill the vacancy until a successor is elected at the next regular or special members' meeting. An appointment under this subsection shall be by majority vote of the remaining directors, regardless of whether there is a quorum present. If there are no other directors elected solely by the patron members, as provided in the articles or bylaws, at the time of the vacancy, the office shall remain vacant and a special patron members' meeting shall be called to elect a successor.

AB327,82,9 (2) Nonpatron directors. Unless otherwise provided in the articles or bylaws, if a vacancy occurs in the office of any director other than a director described in sub. (1) or if a new office of director is created other than a new office described in sub. (1), the board shall appoint a director to temporarily fill the vacancy by majority vote of the remaining directors, regardless of whether there is a quorum present. A successor shall be elected at the next regular or special members' meeting.

AB327,82,12 (3) Term of successor. Any successor elected under this section is elected for the remainder of the unexpired term of the director whose vacancy the successor was elected to fill.

AB327,82,15 193.423 Allocation of voting authority among directors. (1) The voting authority of the directors may be allocated according to allocation units or equity classifications of the cooperative if any of the following conditions is satisfied:

AB327,82,17 (a) The directors elected by patron members have collectively at least 51 percent of the voting authority of the board on general matters of the cooperative.

AB327,82,19 (b) The directors elected by patron members do not have, collectively, minority voting authority on the board on general matters of the cooperative.

AB327,82,22 (2) The patron board directors' vote shall be voted collectively as determined by a majority vote of the patron directors. A tie in the number of patron board director votes shall be construed as a vote against the matter.

AB327,82,25 193.425 Board meetings. (1) Time and place. Meetings of the board may be held from time to time as provided in the articles or bylaws at any location that the board selects or by any means described in sub. (2).

AB327,83,13 (2) Virtual meetings and attendance. Meetings of the board may be held by any means of communication through which the directors may simultaneously hear each other during the meeting. A director may participate in a meeting of the board at which other directors are physically present by any means of communication through which the director, all other directors so participating, and all directors physically present may simultaneously hear each other during the meeting. The number of directors physically present at a meeting, if any, shall be added to the number of directors otherwise participating in the meeting under this subsection to determine whether a quorum is present under s. 193.431, except that any director 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.

AB327,83,20 (3) Calling meetings and notice. Unless the articles or bylaws provide for a different time period and except as provided in s. 193.205 (3) and subs. (4) and (5), a director may call a board meeting by giving at least 10 days' notice. The notice shall state the date, time, and place of the meeting, except that, if the meeting is held under sub. (2) and if no physical presence of directors at the meeting is intended, the notice shall so state. If required under this chapter, the articles, or the bylaws, the notice shall state the purpose of the meeting.

AB327,83,25 (4) Previously scheduled or adjourned meetings. If the day, time, and place of a board meeting are provided in the articles or bylaws, or announced at a previous board meeting, no notice of the meeting is required. Notice that an adjourned meeting will be reconvened need not be given other than by announcement at the meeting at which adjournment is taken.

AB327,84,7 (5) Waiver of notice and objection. A director may waive notice of a board 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 director at a board meeting is a waiver of notice of that meeting, unless the director 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.

AB327,84,16 (6) Voting by absent directors. If the articles or bylaws so provide, a director may give advance written consent or opposition to a proposal to be acted on at a board meeting. If the director is not present at the meeting, consent or opposition to a proposal does not constitute presence for purposes of determining the existence of a quorum. If the proposal to be acted on at the meeting is substantially the same or has substantially the same effect as the proposal to which the director has consented or opposed, the consent or opposition shall be counted as the vote of a director present at the meeting in favor of or against the proposal and shall be entered in the minutes or other record of action at the meeting.

AB327,85,2 193.431 Quorum; presence of objecting director. Unless otherwise provided in the articles or bylaws, a majority of the directors currently holding office is a quorum for the transaction of business. Any director who objects at the beginning of a board 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. In the absence of a quorum, a majority of the directors present may adjourn a meeting from time to time until a quorum is present. If a quorum is present when a meeting is properly convened, the directors present may continue to transact business until adjournment, even though the withdrawal of a number of directors originally present leaves less than a quorum.

AB327,85,5 193.435 Actions of the board. (1) Generally. Unless this chapter or the articles or bylaws provide otherwise and except as provided in sub. (2), the board shall take action by the affirmative vote of the greater of the following:

AB327,85,6 (a) A majority of directors present at a meeting at the time the action is taken.