HF 1460

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to ethanol; clarifying shareholder rights in 
  1.3             certain business associations; prohibiting ethanol 
  1.4             producer payments for associations not in compliance; 
  1.5             amending Minnesota Statutes 2002, section 41A.09, by 
  1.6             adding subdivisions.  
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2002, section 41A.09, is 
  1.9   amended by adding a subdivision to read: 
  1.10     Subd. 3b.  [LIMITATION ON ELIGIBILITY FOR PAYMENTS.] A 
  1.11  producer of ethanol, anhydrous alcohol, or wet alcohol is 
  1.12  eligible for ethanol producer payments under subdivision 3a only 
  1.13  while the producer is in compliance with the shareholder rights 
  1.14  provisions of subdivision 3c. 
  1.15     Sec. 2.  Minnesota Statutes 2002, section 41A.09, is 
  1.16  amended by adding a subdivision to read: 
  1.17     Subd. 3c.  [BUSINESS ASSOCIATIONS PRODUCING ETHANOL; 
  1.18  SHAREHOLDER RIGHTS.] (a) A business association organized under 
  1.19  Minnesota Statutes, chapter 302A, 308A, or 322B that receives 25 
  1.20  percent or more of its gross revenues from the sale of fuel 
  1.21  grade ethanol must comply with this subdivision in addition to 
  1.22  other applicable state and federal laws. 
  1.23     (b) The provisions of the chapter of Minnesota Statutes 
  1.24  under which the business organization is established and any 
  1.25  amendments or successor requirements to that chapter apply to 
  1.26  every business association identified in paragraph (a).  The 
  2.1   rights granted in this subdivision also apply to the spouse of 
  2.2   the shareholder.  In addition to other requirements of law, a 
  2.3   business association must maintain records of all proceedings of 
  2.4   meetings of shareholders and directors during the previous 
  2.5   three-year period, including the vote of each director on roll 
  2.6   call votes.  Roll call votes are required on actions that 
  2.7   directly establish marketing agreements, operational contracts, 
  2.8   and shareholder dividend payments.  Roll call voting is also 
  2.9   required on any matter upon the request of one or more 
  2.10  directors.  Every duly elected director of a business 
  2.11  association identified in paragraph (a) has the right to 
  2.12  inspect, in person and at any reasonable time, the business 
  2.13  records required by this paragraph. 
  2.14     (c) Meetings of the board of directors must be open to the 
  2.15  shareholders of the business and the shareholders' spouses.  
  2.16  Shareholders must be given notice of all scheduled meetings 
  2.17  except those of an emergency nature.  Portions of meetings 
  2.18  relating to labor negotiations, current litigation, and 
  2.19  personnel matters are excluded from the provisions of this 
  2.20  paragraph. 
  2.21     (d) Notwithstanding the provisions of other law, upon 
  2.22  receipt of a written petition concerning governance matters 
  2.23  signed by at least 50 shareholders or five percent of the 
  2.24  shareholders, whichever is less, of a business association, the 
  2.25  matter in the petition must be presented to the shareholders for 
  2.26  a vote at the next annual or special meeting.  A shareholder 
  2.27  wishing to have a matter heard at an annual or special meeting 
  2.28  must submit the petition to the business association not less 
  2.29  than 60 days prior to the scheduled annual meeting or special 
  2.30  meeting.  For purposes of this subdivision, "governance matters" 
  2.31  means matters properly contained in the articles of 
  2.32  incorporation or bylaws by adopting, amending, or repealing 
  2.33  bylaws or the articles of incorporation. 
  2.34     (e) If the directors of a business association provide 
  2.35  information to shareholders to influence their votes on a matter 
  2.36  to be decided by a vote of the shareholders under a successful 
  3.1   petition submitted under paragraph (d), the directors must 
  3.2   provide the organizers of the petition or person presenting the 
  3.3   petition equal time and opportunity to include their position on 
  3.4   the matter to the shareholders in a substantially similar mode 
  3.5   and range of distribution.  The organizers of the petition must 
  3.6   pay the costs of inclusion of their position. 
  3.7      (f) A business association subject to this subdivision must 
  3.8   include in its bylaws a provision allowing each duly elected 
  3.9   board member access to each current ethanol marketing contract 
  3.10  or operating contract entered into by the business association 
  3.11  and transactions conducted under the marketing contract.  
  3.12  Further, the bylaws must provide that each current ethanol 
  3.13  marketing or operating contract, and all ethanol marketing and 
  3.14  operating contracts in effect during the previous two years, and 
  3.15  transactions conducted under the marketing contracts, be made 
  3.16  available for examination by the commissioner of agriculture or 
  3.17  the commissioner's designated representative.  Marketing and 
  3.18  operating information examined by the commissioner or the 
  3.19  commissioner's designated representative is nonpublic data under 
  3.20  section 13.02, subdivision 9. 
  3.21     (g) A business association subject to this subdivision that 
  3.22  is organized after the effective date of this section must 
  3.23  include the provisions of this section in its bylaws or articles 
  3.24  of incorporation.  A business association in existence prior to 
  3.25  the effective date of this subdivision must adopt amendments to 
  3.26  its bylaws or articles of incorporation in compliance with these 
  3.27  provisions not later than 12 months after the effective date. 
  3.28     Sec. 3.  [EFFECTIVE DATE.] 
  3.29     Sections 1 and 2 are effective the day following final 
  3.30  enactment.