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92_HB4438eng HB4438 Engrossed LRB9210220DJgc 1 AN ACT in relation to agriculture. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Agricultural Co-Operative Act is amended 5 by changing Sections 2, 5, 8, 9, 13, 21, 25, 32, and 33 as 6 follows: 7 (805 ILCS 315/2) (from Ch. 32, par. 441) 8 Sec. 2. Definitions and short title. 9 (a) As used in this Act: 10 The term "Director of Agriculture" means the Director of 11 the Illinois Department of Agriculture. 12 The term "agricultural products" shall include 13 horticultural, viticultural, forestry, dairy, live stock, 14 poultry, bee and any farm and aquatic products and fur 15 bearing animals raised in captivity and their products. 16 The term "member" shall include actual members of 17 associations without capital stock, and holders of common 18 stock in associations organized with capital stock. 19 The term "association" means any corporation organized 20 under this Act, or any corporation formed under any general 21 or special act of this or any other state as a co-operative 22 association, organized for the mutual benefit of its members, 23 and in which the returns on the stock or membership capital 24 is limited to an amount not to exceed 8% per annum, and in 25 which during any fiscal year thereof the value of business 26 done with non-members shall not exceed the business done with 27 members during the same period, and in which substantially 28 all of the issued and outstanding shares of capital stock or 29 memberships are owned, held and controlled directly or 30 indirectly, by producers of agricultural products. 31 The term "person", except when used in reference to an HB4438 Engrossed -2- LRB9210220DJgc 1 officer or member of the board of directors, in which case it 2 means an individual, shall include any individual or any 3 entity, including but not limited to a sole proprietorship, a 4 partnership, a corporation, a cooperative, an association, a 5 limited liability company, an estate, or a trustindividuals,6firms, partnerships, corporations and associations. 7 (b) Associations organized hereunder shall be deemed 8 "non-profit", inasmuch as they are not organized to make 9 profit for themselves, as such, or for their members, as 10 such, but only for their members as producers. 11 (c) This Act may be cited as the Agricultural 12 Co-Operative Act. 13 (Source: P.A. 85-856; 86-1475.) 14 (805 ILCS 315/5) (from Ch. 32, par. 444) 15 Sec. 5. Every group of persons contemplating the 16 organization of an association under this Act is urged to 17 communicate with the Director of Agriculture, who will share 18 any information the Department may have regardinginform them19whatever a survey ofthe marketing conditions affecting the 20 commodities proposed to be handledmay indicate regarding21probable success. 22 It is here recognized that agriculture is characterized 23 by individual production in contrast to the group or factory 24 system that characterizes other forms of industrial 25 production; and that the ordinary form of corporate 26 organization permits industrial groups to combine for the 27 purpose of group production and the ensuing group marketing 28 and that the public has an interest in permitting farmers to 29 bring their industry to the high degree of efficiency and 30 merchandising skill evidenced in the manufacturing 31 industries; and that the public interest urgently needs to 32 prevent the migration from the farm to the city in order to 33 keep up farm production and to preserve the agricultural HB4438 Engrossed -3- LRB9210220DJgc 1 supply of the nation; and that the public interest demands 2 that the farmer be encouraged to attain a superior and more 3 direct system of marketing in the substitution of 4 merchandising for the blind, unscientific and speculative 5 selling of crops; and that for this purpose, the farmers 6 should secure special guidance and instructive data from the 7 Director of Agriculture. 8 (Source: Laws 1923, p. 286.) 9 (805 ILCS 315/8) (from Ch. 32, par. 447) 10 Sec. 8. Each association organized under this Act, shall 11 prepare and file articles of incorporation, setting forth: 12 (a) The name of the association which may or may not 13 include the word co-operative or any abbreviation thereof. 14 (b) The purpose for which it is formed. 15 (c) The place where its principal office within the 16 State will be located. 17 (d) The term for which it is to exist, which may be 18 perpetual. 19 (e) The minimum number of directors thereof, which must 20 be not less than 5 and may be any number in excess thereof; 21 the term of office of such directors, and the names and 22 addresses of those who are to serve as incorporating 23 directors for the first term, and/or until the election and 24 qualification of their successors. 25 (f) If organized without capital stock, whether the 26 property rights and interest of each member shall be equal or 27 unequal; if unequal the general rule or rules applicable to 28 all members by which the property rights and interest, 29 respectively of each member may and shall be determined and 30 fixed, and provision for the admission of new members, who 31 shall be entitled to share in the property of the association 32 with the old members, in accordance with such general rule or 33 rules. This provision or paragraph of the articles of HB4438 Engrossed -4- LRB9210220DJgc 1 incorporation may not be altered, amended or repealed, except 2 by the written consent or vote of 3/4 of the members. 3 (g) If organized with capital stock, the amount of such 4 stock and the number of shares into which the capital stock 5 is to be divided; whether all or part of the same shall have 6 par value, and if so, the par value thereof, which shall not 7 be less than one dollar, nor more than $1,000 per share, and 8 whether all or part of the same shall have no par value, and 9 if there is to be more than one class of stock created, a 10 description of the different classes, the number of shares in 11 each class, and the relative rights, interest and preferences 12 each class shall represent; and if the same shall be desired, 13 a provision that any or all classes of preferred stock may be 14 issued in series and that dividends shall be payable with 15 respect to any such series at such rate not exceeding 8% per 16 annum, or such lesser amount as may be fixed in the articles 17 of incorporation, or any amendment thereof, and that the 18 shares of such series may be reduced at such redemption price 19 and bear such particular designation as the board of 20 directors, subject to such restrictions as may be imposed in 21 the articles of incorporation, or any amendment thereof, 22 shall by resolution, determine and fix prior to the issue of 23 any stock of such series. Such articles of incorporation or 24 any amendment thereto, may provide, that in the case of any 25 share of stock in such association, issued thereby, to any 26 bona fide producer of agricultural products, or to any 27 co-operative association as defined in this Act, that such 28 share is subject to the condition, that the directors of such 29 association shall be trustees of such share of stock upon 30 such producer becoming a non-producer of agricultural 31 products, or such co-operative association ceasing to be 32 operated as a co-operative association; and that in the case 33 of any share of stock issued in the first instance to any 34 non-producer of agricultural products, or to any corporation HB4438 Engrossed -5- LRB9210220DJgc 1 not operating as a co-operative association, that such share 2 is subject to the condition that the directors of such 3 association shall be the trustees of such share of stock; and 4 that in either of such cases, thereupon the trustees of such 5 share of stock shall be vested with the legal and equitable 6 title thereto, and the stock certificate held by such 7 producer who has become a non-producer, or such non-producer, 8 or such corporation, not operating as a co-operative 9 association, as the case may be, shall legally become or be a 10 participation certificate entitling the holder thereof to any 11 dividends provided for in such certificate, any moneys 12 accruing by virtue thereof, and any pecuniary rights accruing 13 thereunder, under the provisions of this Act; that the 14 trustees of such certificate shall pay over all such 15 dividends and moneys to the certificate holder and protect 16 and execute all such pecuniary rights; that the voting power, 17 and all other legal and beneficial interests, other than 18 those given to the certificate holder as hereinabove 19 provided, shall be held by such trustees and exercised and 20 managed by them by vote of a majority of such trustees; and 21 that in case such certificate holder, thereafter, becomes a 22 bona fide producer of agricultural products, or a 23 co-operative association, that affidavit be made to such 24 effect and filed with the directors thereof, and thereupon, 25 such trustees shall be discharged and the legal and equitable 26 title to such share and all other interests whatsoever, shall 27 vest in such certificate holder and all the powers and 28 privileges pertaining to such share of stock may be exercised 29 thereby. 30 (h) In addition to the foregoing, the articles of 31 incorporation of any association incorporated hereunder may 32 contain any provision consistent with law with respect to 33 management, regulation, government, financing, indebtedness, 34 membership, the establishment of voting districts and the HB4438 Engrossed -6- LRB9210220DJgc 1 election of delegates for representative purposes, the 2 issuance, retirement, and transfer of the stock, if formed 3 with capital stock, or any provisions relative to the way or 4 manner in which it shall operate or with respect to its 5 members, officers or directors and any other provisions 6 relating to its affairs. 7 The articles shall be subscribed by the incorporators and 8 acknowledged by one of them before an officer authorized by 9 law to take and certify acknowledgments of deeds and 10 conveyances, and shall be filed in the office of the 11 Secretary of State; when so filed, the articles of 12 incorporation, or certified copies thereof, shall be received 13 in all the courts of this State, and other places, as prima 14 facie evidence of the facts contained therein, and of the due 15 incorporation of such association. A certified copy of the 16 articles of incorporation shall also be filed with the 17 Director of Agriculture by the Secretary of State. 18 (Source: P.A. 79-207.) 19 (805 ILCS 315/9) (from Ch. 32, par. 448) 20 Sec. 9. The articles of incorporation may be altered or 21 amended at any regular meeting, or any special meeting called 22 for that purpose. An amendment may be adopted by the approval 23 of two-thirds of the directors followed by a favorable vote 24 or the written consent thereto representing a majority of all 25 the members and/or shareholders of the association, or by the 26 written consent of two-thirds of all the members of the 27 association without the approval of the directors. Amendments 28 to the articles of incorporation when so adopted, shall be 29 filed in the office of the Secretary of State. A certified 30 copy of every amendment shall be filed with the Director of 31 Agriculture by the Secretary of State. 32 (Source: Laws 1931, p. 390.) HB4438 Engrossed -7- LRB9210220DJgc 1 (805 ILCS 315/13) (from Ch. 32, par. 452) 2 Sec. 13. The directors shall elect from their number, a 3 president, and one or more vice-presidents. They shall also 4 elect a secretary and treasurer, who need not be directors or 5 members of the association, and they may combine the two 6 latter offices and designate the combined office as 7 secretary-treasurer, or unite both functions and titles in 8 one person. The treasurer may be a bank or any depository, 9 and as such, shall not be considered as an officer, but as a 10 function of the board of directors. In such case, the 11 secretary shall perform the usual accounting duties of the 12 treasurer, except that the funds shall be deposited only as 13 and where authorized by the board of directors. The by-laws 14 may provide for the election of the president and 15 vice-presidents by the members at annual meetings. 16 Within 30 days after the first election of officers, the 17 association shall file a report with the Director of 18 Agriculture on forms to be furnished by the Director of 19 Agriculture. The report shall contain the following: 20 (1) The name of the association. 21 (2) The names and addresses of the association's 22 principal officers and directors. 23 (3) The association's principal place of business. 24 (4) A general statement of the association's 25 proposed business operations. 26 (5) The end of the association's proposed fiscal 27 year. 28 (Source: Laws 1929, p. 280.) 29 (805 ILCS 315/21) (from Ch. 32, par. 460) 30 Sec. 21. Each association formed or authorized to do 31 business in Illinois under this Act shall prepare and make 32 out an annual report on forms to be furnished by the Director 33 of Agriculture containing the name of the association; the HB4438 Engrossed -8- LRB9210220DJgc 1 names and addresses of its principal officers and directors; 2 its principal place of business; and a general statement of 3 its business operations during the fiscal year, showing the 4 amount of capital stock paid up and the number of 5 stockholders of a stock association or the number of members 6 and amount of membership fees received, if a non-stock 7 association;the total expenses of operations; the amount of8its indebtedness or liabilities,and its balance sheets and 9 income statement for the most recently completed fiscal year 10 before the filing of the report. 11 (Source: Laws 1923, p. 286.) 12 (805 ILCS 315/25) (from Ch. 32, par. 464) 13 Sec. 25. Any co-operative association with or without 14 capital stock as defined in this Act heretofore or hereafter 15 organized under laws of another State shall be allowed to 16 carry on any proper activities, operations and functions in 17 this State upon filing with the Secretary of State all 18 necessary certificates as required under the general 19 regulations applicable to foreign corporations, and upon 20 payment of a filing fee of ten dollars ($10.00) and an annual 21 fee of ten dollars ($10.00) in lieu of all franchise, license 22 or corporation taxes as required of associations organized 23 hereunder, and all contracts which could be made by any 24 association organized hereunder, made by or with such 25 association shall be legal and valid and enforceable in this 26 State with all of the remedies set forth in this Act. Any 27 foreign co-operative association having qualified to do 28 business within this Stateshall file with the Director of29Agriculture duplicate certificates as filed with the30Secretary of State, andshall file annual reports with the 31 Director of Agriculture in the manner and form provided for 32 in Section 21 of this Act. The Secretary of State shall file 33 with the Director of Agriculture duplicate certificates as HB4438 Engrossed -9- LRB9210220DJgc 1 filed with the Secretary of State by a foreign co-operative 2 association qualified to do business within this State under 3 this Act. 4 (Source: Laws 1931, p. 390.) 5 (805 ILCS 315/32) (from Ch. 32, par. 471) 6 Sec. 32.On or before the first day of July ofEach year, 7 within 6 months after the end of the association's fiscal 8 year, each association organizedhereunderor qualified to do 9 business within this State under this Act shall file an 10 annual report with the Director of Agriculture as required in 11 Section 21 of this Act, and pay the fees hereinafter 12 required. If the fee is not paid by August first a penalty of13five per centum per month shall be required until it is paid; 14 provided that an association, associationsorganized,or 15 qualified to do business in this State under this Actbetween16January first and June thirtieth of each yearshall not be 17 required to file a balance sheet or income statement with its 18anannual report until the association has completed one full 19 fiscal yearsecond July following, but associations20organized, or qualified, between January first and February21twenty-eighth, inclusive, shall be required to pay a fee on22July first following. 23 Each association organized hereunder or qualified to do 24 business within this State shall pay an annual fee of ten 25 dollars ($10.00) only, to the Department of Agriculture, in 26 lieu of all franchise or license or corporation taxes or 27 charges upon reserves held by it for members, and in case of 28 failure, neglect or refusal of any such association to either 29 file the annual report or pay the fee as required by this 30 Act, it shall be certified by the Director ofthe Department31ofAgriculture to the Secretary of State 9 months after the 32 end of the associations's fiscal yearAttorney General by33November the fifteenthfor dissolution in the same manner as HB4438 Engrossed -10- LRB9210220DJgc 1 is required under the provisions of the general corporation 2 lawsActof this State, and the Secretary of StateAttorney3Generalshall proceed in like manner to dissolve such 4 association or oust it from doing business within the State 5 as is required under the general corporation laws of this 6 State. 7 (Source: Laws 1931, p. 390.) 8 (805 ILCS 315/33) (from Ch. 32, par. 472) 9 Sec. 33. For filing articles of incorporation, an 10 association organized hereunder shall pay $100; and for 11 filing an amendment to the articles, $25. Fees for filing 12 articles of incorporation or an amendment to the articles 13 shall be paid to the Secretary of State. 14 (Source: P.A. 81-997.) 15 Section 99. Effective date. This Act takes effect upon 16 becoming law.